How this Australian Furniture Business Doubled Its Employees During COVID-19 Winston Tu, CEO, Luxo Living shares how his furniture company not only survived but thrived the Covid-19 pandemic by clocking a revenue growth of 70 per cent compared to August last year

By Rashmi Goyal

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Luxo Living

The outbreak of COVID-19 pandemic earlier this year disrupted businesses across sectors. Six months later, many businesses have not only survived but some have even thrived. A case in point is video conferencing platform Zoom.

But what about the companies that weren't fortunate enough to be in an essential industry? For these businesses, it all came down to strategy.

Australian furniture company Luxo Living is one such company. Like every other retail business, they were worried at the outbreak of the pandemic.

"I can remember that first weekend when the NSW premier told everyone to stay home. Our showroom was empty. It was eerie," says CEO Winston Tu. "I knew we needed to do something if we were going to get through this."

Luxo Living: From Strength to Strength

There were a few changes that Luxo Living quickly put in place. First off, the company increased its product's prices by 5 per cent (a small increase in comparison to some of their competitors) to minimise the impact of the falling Australian dollar.

The company also began working with alternative suppliers, both locally and in other countries, that were still operating. This was critical to ensure business continuity and an area that is still rife with a lot of uncertainty as countries move in and out of various stages of lockdown.

When it came to products with high stock levels, the company made sure to promote them across its various digital marketing channels. This strategy ensured the company could still bring in revenue throughout this difficult period.

Some of the key items that saw an increase in demand were:

● Bed sheets, with sales increasing by 1150 per cent.

● Bunk beds, increasing by over 400 per cent.

● Saunas, tripling in sales.

Tu shared a few theories as to why these products increased in demand.

First, people were home more, so the money that they would've otherwise spent on going out could now be used to purchase goods that normally would have been put off, like bed sheets. Second, those working from home needed a home office, so kids needed to bunk together to make some room in the case of bunk beds.

For saunas? Well, what else are you going to do with all that spare time?

Tu attributes the increase in sales simply to having the stock on hand. With the entire industry's supply chain facing shortages, Luxo Living was able to capitalise on its current inventory levels, meeting a need its competitors couldn't for these particular products.

Whatever the case may be, it certainly helped the company move from strength to strength in the past six months. But it wasn't their only strategy to see them through to the other side of the pandemic.

Maintaining a Positive Customer Experience

Keeping customers interested in purchasing furniture is more than having stock available online. There's a reason why going to IKEA has become a family outing, or even a preferred date for some young couples. The same can be said for Luxo Living.

The showroom experience is a key component to their brand's business model. And with people either unable or unwilling to leave their homes, it was something that needed a change and that too fast.

Taking a leaf from the books of other businesses, such as the property market, Luxo Living began offering a virtual showroom experience. This meant customers could book an appointment and a staff member would show them through to the various items they were interested in via video feed.

Not only did this allow for a more personal service for customers but it also ensured showroom employees kept their jobs.

"We did have to reduce staff hours at the start of the pandemic," admits Tu. "But by the end of April, everyone was back on full-time hours."

This could also be attributed to the increase in promotions and discounts from the company. Luxo Living began offering free delivery in different states to offset the cost of the furniture. Most recently, it had a promotion running for Melbourne and regional Victoria.

The company is also currently offering free returns in Sydney to minimise the inferred risk of people buying furniture online. This offer will launch in other areas once logistics are confirmed. Last, the company also offers Click & Collect within 30 minutes—one of the fastest turnaround times in the country for this service.

"We just thought of ways in which we could help people during this time," says Tu. "And accessibility was one of the key changes we could make."

Keeping up the Momentum

As restrictions eased in Sydney and businesses were able to open their doors once more, Luxo Living knew that to truly come out of this pandemic on top, it needed to maintain momentum. The company's marketing is all online, so it switched some of its advertising from eCommerce to visit in-store, which helped to increase foot traffic and offline sales.

But while its showroom is busier than ever, the company still continues free delivery promotions and virtual showroom appointments for the more risk-averse customers in Sydney and for other states.

Last, as issues with the supply chain improve and the Australian dollar steadies, the company has also been able to reduce prices once more.

So, what is the company's biggest challenge now?

"It's the uncertainty," says Tu. "Any interruptions with the supply chain definitely affects business continuity. But we'll continue to invest in our people and provide a personal service to ensure our customers get the experience they've come to expect from Luxo Living."

Investing in people in certainly a fair statement, as the company has doubled its number of employees since the start of the pandemic, while also doubling its expenditure in the Australian economy.

With a revenue growth of 70 per cent compared to August last year, Luxo Living is certainly a company that's thriving despite the pandemic.

Wavy Line
Rashmi Goyal

Startup Consultant

Rashmi Goyal is continuously working towards uplifting startups from around the world by providing them guidance, research and strategic solutions. Her expertise lays in digitalisation and strategic scaling of operations.

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