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How Digital Transformation Lead to Lorraine Lea Turning Their 30 Year Old Business into an Online Retail Powerhouse

Clearwater Staff

We sat down with Lorraine Lea’s CEO, Anne Petracca, who was kind enough to share her thoughts and insights into the year that was 2020. We discussed the company’s deep Australian roots and empowering business model, and how they were able to overcome challenges of globalisation and disruption in the past. Why Lorraine Lea’s 2020 digital transformation was critical to the survival of the business and finally plans for growth in 2021 and beyond. 

Recently Lorraine Lea and Clearwater were winners at the 2020 SEMrush Search Awards, taking home’ Best Online Breakthrough’. Lorraine Lea was also nominated for best advertising campaign, best online marketing campaign (retail) and best B2C campaign.

There is no doubt that this is a reflection of the successful digital transformation Lorraine Lea undertook this year. Lorraine Lea is an Australian linen and homewares company that changed the game over 30 years ago using a unique business model to build and empower a community of passionate Australians who wanted the flexibility to start their own independent business from home.

Are you able to briefly tell us about the Lorraine Lea story over the last 30+ years, including when you first started thinking about a transition to an online business?

Lorraine Lea is an Australian, family-owned and operated bedlinen and homeware company, built on family values and entrepreneurial spirit. Peter and Heather Ryan founded Lorraine Lea in the backyard of their south-east Melbourne home in 1986.

While our brand originated as a party plan linen company over 30 years ago, traditionally our range of affordable bedlinen and homewares could only be purchased exclusively through home-styling events.

In 2016 we identified that we were at a crossroad. The lines between the physical and digital world were becoming blurred, and our traditional party plan model which had served us well for decades was becoming less relevant. In this fast-moving economy and the ever-shifting global market, we were slowly losing relevance and experiencing a downturn in sales.  We knew to make real change and maintain relevance in the market we needed renewed thinking within our organisation, and a renewed approach to business and how we engaged our customer and independent stylist community.

This set us on the path to embracing new technology, specifically digital and social innovation to blend our traditional in-home party model with the modern technology of digital and e-commerce to expand our presence as an omni-channel retailer.

Being in business for over 30 years, what significant industry disruptions or challenges has Lorraine Lea had to overcome in the past?

Globalisation has radically increased the competitor landscape. Technology innovations such as Apps, smartphones, BNPL platforms are accelerating the shopping experience, service, and payment options. At the same time, social media and social influencers are influencing the purchase decision. All of this combined, it has reshaped consumer expectations and their buying behaviours.

For more than 30 years, we have been providing women with a flexible and rewarding career option as a Lorraine Lea Independent Stylist. We recognise for many mums, the lack of flexibility in the workplace can become a barrier. Running a little biz to earn extra income around a busy family and lifestyle as a Lorraine Lea Stylist is the solution so many women are seeking today.

One of the significant disruptions to our industry was the introduction of smartphone apps. We were now competing with a new stream of businesses such as Uber, Etsy, Airtasker and Airbnb who was now also offering a way for people to start their side hustle and earn an income working from home.

As previously mentioned, we recently combined the in-home party model with the modern technology of digital and e-commerce to expand our presence as an omnichannel retailer. The technological shift has been a game-changer for Lorraine Lea unlocking new opportunities and attracting new, younger and tech-savvy millennials to our community.

A Lorraine Lea Independent Stylist or Stylepreneur can run their business online from their phone, their personalised website, on social media, and through in-home and online events. Our digital transformation has contributed to almost doubling our salesforce. In real terms, that’s more than 1,600 busy mums/wives/boss babes/entrepreneurs running their own Lorraine Lea biz.

Can you tell us about the key milestones that have shaped the success of the business during this period?

A couple of years back, we invested in working with a Market Research company. A high cost for a family-owned business, but well worth it. This research helped us to identify our target customer, to find out what they think about us, our products, our home styling events, and to help us gather insights around brand awareness and trust in the market. This not only helped us in the design and UX of our new digital platform, but it also led to the introduction of a new premium product line in our range in 2017 – NOOK by Lorraine Lea.

With the popularity of reality home renovation shows on television, Australians have never been so interested in home decorating as they are today. Responding to this growing trend over the past few years, we have continued to strengthen our range, expand categories and introduce new product lines.

We see our Stylist community as our business partners, and they hold the critical piece in delivering our brand, our products, and our core values to our customers. We have a strong presence in regional and rural parts of Australia, and therefore getting to face-to-face training sessions or meetings can be difficult.

What were the key factors that triggered the transition to move into a digital business model?

The need to remain relevant. Unfortunately, we were experiencing a decline in sales and a high turnover of our independent sales force. People were becoming less interested in hosting a home-styling event as their lives were becoming busier, and other more conventional methods like online shopping were starting to become available.

Relying on traditional print media for our marketing and promotional campaigns, we were unable to apply an agile approach and respond to the competitor market in a timely manner. For the first time in our history, we’ve been running a series of flash sales, $1 Shipping campaigns and participating in the online mega sales which have brought about incredible results never experienced before. With access to the sales revenue data from every promotion, we learn and refine to perfection – offering our customers what they value most.

Technology has and is the enabler in doing business differently.

What did you see as the biggest challenges that would come with transitioning to an online business model and was this an easy decision to make?

The biggest challenge was replacing our ERP system, which the business had been operating on for more than 20 years. A fully customised solution that was not built to meet the current or future demands of our business. It was stifling our ability to change. The type of change we needed was ‘all-encompassing’. Nothing was sacred, except the one key ingredient our business was built on, independent Stylists offering a personalised, exceptional shopping experience for every customer.

Finding the right IT solution to help us transition to an online business model was not easy. The challenge was that we were re-inventing our business, so the scope of work was not pre-set. We needed an agile and iteractive process, and an ERP vendor who would be willing to work collaboratively with our team and not apply a cookie-cutter approach.

Were there any things that surprised you along the way?

Yes. A digital transformation like this is not for the faint-hearted. This project was four years in the making, and we’re continuing to make changes and enhancement every day. 

What do think are the key factors that have led to the strong and successful partnership between Clearwater and Lorraine Lea?

We partnered with Clearwater to help us to do onsite SEO on the website 6-months before we went live with it. Knowing that Lorraine Lea was on a journey, they took the time to understand our unique business model before helping us to map out our SEO campaign. The flexibility of being able to scale up or down, as opposed to a locked-in contract has been beneficial.

We knew that the first three to six months would be critical in getting measurable results. Their experience and expertise to develop and test digital campaigns/strategies in the search network, Google, and Facebook retargeting to see what’s working for us have been beneficial.

The Clearwater team have become an extension to our Marketing team, offering their insight and guidance when needed.  We have plans to optimise and increase advertising spend across all social and digital channels, paid search (PPC) campaigns, Google Ads, SEO, and Display Ads. We also expanded our influencer outreach, blog posts, eDMs and IG Stories.

What has been the main challenge of transitioning existing stylists from offline to online? What do you see as the potential benefits of now having access to a much larger online audience in regards to the continuation of Lorraine Lea’s party hosting model?

It was only in Feb 2020, three weeks before the pandemic hit that we entered the digital and e-commerce market for the first time. I think it’s fair to say; this modernising move couldn’t have come at a more appropriate time.

Social distancing restrictions meant we were no longer able to do in-home events, so the pandemic helped to accelerate the digital transformation of our business model, forcing our independent stylist community to embrace the eCommerce model.

The fact that we had the foresight to develop our eCommerce platform to integrate with Facebook, our independent stylist community pivoted to using Facebook Group Events, and many have begun to optimise with the use of App platforms such as CinchShare and Trello to assist in amplifying the online and mobile revenue streams available.

One of the main challenges over the past 9-months has been in educating and upskilling our stylists. There have been a couple of trailblazers in our business who have helped us to continue to refine the online party model and helped others to transition.  Zoom meetings, webinars, and regular training delivered via Facebook have been our go-to’s.

Expanding our presence as an omnichannel retailer, was about combining high touch with high tech, blending the tradition in-home party plan model with online. The personalised attention of a home styling event is still very much a part of our business model, only now the enabling of sharing and shopping with Facebook and mobile technology has created a higher-income earning potential for the stylist and greater sales rewards for the host.

Are there any plans to expand to new markets now you have made the transition to online?

We have a bold vision for international expansion in the future.

Do you see the online business model as a more accessible or attractive option for people looking to create their own independent small business?

Yes, absolutely. Sharing Lorraine Lea product with your friends, family, and social connections on your personal website and social media and earning 20% profit on all sales; plus receive a generous personal discount as a reward has never been easier.

Since the introduction of ‘Stylepreneur’ and during these unprecedented times it’s becoming increasingly apparent that more and more people are seeking a super easy, fun and flexible way to earn extra income around a busy family and lifestyle.

When we first launched Stylepreneur, we experienced a real surge in the number of millennials joining our business. It made perfect sense. They’ve grown up with technology, their phones are an extension of their hand, they’re all socially connected online, and many are making their mark as a social influencer.

However, more recently, we’ve experienced the second generation of new people joining. The pandemic has meant we’ve all needed to adapt and learn how to use technology. Gen X and Baby Boomers in particular have become better equipped and comfortable using technology and social media to stay connected, and as such are more are open to dip their toe in the water and see if a Lorraine Lea business is for them.

 No-one could have foreseen what would happen in 2020 with a global pandemic and following recession. Looking back over the last 12 months, where do you think Lorraine Lea would be now if they hadn’t made the move online?

That’s a question that has caused many sleepless nights. Being a Melbourne based company we have been at the mercy of our State government Covid-19 policies and restrictions – never knowing from one public announcement to the next what lay ahead for people and our business.

We were extremely fortunate that we launched our online platform when we did. Had that move to online not occurred, there’s every chance we would have needed to close our doors like so many other businesses. It’s been a tragic and challenging time for so many. While we’re one of the success stories, my heart goes out to all of the people and companies who have not been so fortunate.

Where do you see the business in 12 months from now?

In 12-months time, I see us a lot more grounded and comfortable with our new way of doing business. We will continue to help our independent stylist community pivot to combining high touch with high tech, enabling sharing & shopping with technology, and creating high income earning potential for new and existing Stylists and Stylepreneurs. 

2020 has been pivotal for the growth of Lorraine Lea, what does growth in 2021 look like?

Our business will have grown by accelerating our digital and eCommerce to reach a wider audience and open up new online and mobile revenue streams for Lorraine Lea. We will have expanded our marketing execution around product photography, dynamic content, email & social media campaigns, and interactive experiences to improve the customer experience and engagement.

Why do you think the homewares market will choose Lorraine Lea over your competitors? 

 We are a proud Australian specialty retailer of linen and homewares. A company built on family values, every purchase supports an independent person in business and their local community.

We exist primarily so women can run their own business, are empowered to make their own choices, and have the freedom to live in the moments that matter.

Our pride and joy is our renowned reputation for quality and affordability. We are passionate about giving our customers the confidence and creativity to style a home that they love.

You have been leading Lorraine Lea for the past 6 years, can you share with us the core reasons for your success and that of your team?

I love what I do, and I think that comes across in the way that I lead. As a leader, you need to be brave and have the courage to take risks and make the decisions that others aren’t willing to make. I never see myself as too senior to do tasks that need to be done. I believe my enthusiasm and combination of creativity and entrepreneurial thinking is what helps to move an organisation in the right direction.

We have a real family culture at Lorraine Lea, we all share a common passion and obsess about our stylist community and our customers. It’s been the many small actions and how we’ve conducted ourselves in the micro-moments that have built our strong reputation and success at Lorraine Lea.

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