Temple & Webster's profits have dropped and it may be because customers are looking towards 'value products' as opposed to premium.
👉 Background: Temple & Webster was one of the OG online furniture retailers, when it started back in 2011. In 2016, they listed on the ASX and had one of the worst floats of the year, losing around 90% of its share value.
👉 What happened: When COVID hit and online shopping was all the rage, Temple and Webster became the rage too. Buuuuut now Temple & Webster’s CEO has released some pretty ugly results for the past six months.
👉 What else: Its net profit dropped 46.7% as well as a drop of active customers by 100,000. The CEO reckons with cost of living rising, customers are looking towards 'value products' as opposed to premium…ish.
💡 While in the past, consumers were attracted to buying quality products from quality brands, now many consumers are driven by good value - because when cost of living pressures bite, it’s all about getting a good deal.
💡A value-driven customer is someone that wants to get their money's worth. They select products based on two simple factors: price and convenience. “I want it now and i want it cheap”.
💡And naturally, retailers with higher-end or fancier products often experience a downturn during these times. Case in point: Temple & Webster.
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