What you need to know

• Freedom Furniture implemented Coveo’s AI-powered search to improve customer experience and search relevance after expanding its online SKU count by five times.

• It is already clocking early wins from AI search: Despite launching just before Christmas, early indicators show increased return visits and a rise in average order value.

•  The AI search upgrade is part of a broader five-year digital transformation that has included an ecommerce re-platforming, an “Endless Aisle” initiative, and the introduction of Drop-Shipping via Mirakl.

• Freedom chose a Drop-Ship model over a marketplace approach to maintain control over customer experience, adding 45,000 SKUs in two years and enabling in-store returns for online purchases.

• The company moved beyond its legacy SAP search indexing tool after it struggled with scalability, opting for AI-powered Coveo to speed up indexing and improve conversion rates.

• The next phase includes integrating generative AI to allow customers to use natural language search for support queries, product recommendations, and content discovery.

• Marketing Tech Overhaul in Progress: Freedom is in the midst of a new RFP process to revamp its marketing tech stack, marking the final stage of its transformation.

After a major overhaul in its omnichannel strategy that saw it increase SKUs by almost 5 times, Freedom Furniture turned to AI search from Coveo to ensure customers received fast relevant answers that reflected the context of the consumers’ behaviour.

Even though the system was only turned on for customers just before Christmas, growing return visits and a solid early increase in average order value suggest this latest chapter in Freedom’s digital transformation is working well.

The next big ticket item on the agenda is an overhaul of the marketing tech stack. Paula Mitchell, digital general manager says she is currently in the thick managing the RFP.

It’s the last remaining piece in a 5 year-long digital transformation.

The 6 percent solution

When Freedom’s most recently re-platformed for ecommerce, its online sales only represented about 6 per cent of the total.

“And the experience wasn’t great,” says Paula Mitchell, digital general manages who was hired by the firm late in 2020 and who brought with her a wide breadth of retail experience having spent the last 20 years working for brands by Rebel Sport, Dan Murphy’s Bendon, and General Pants.

“We moved on to SAP commerce, and we’ve been chipping away at building up that customer experience over time. We put in what we refer to as an Endless Aisle  – all our first-party, Freedom-branded products, of which there are 10,000. We sorted out our fulfilment, and we started to build on what was a really nice customer experience.”

“The problem is our stores don’t have rubber walls, and we can only fit in so many products. However, when you look at the scope of what’s available for a furniture and home retailer, there are hundreds and hundreds of 1000s of products.”

The challenge Mitchell and her team faced was to enable Freedom’s customers to access those products seamlessly.

Aligning to strategy

Freedom has high brand awareness, and it is also a mid-market player that has the advantage of price elasticity, says Mitchell.

It’s a market position that means it can flex up and down from entry-level products up to much more expensive pieces.

“But then again, on the flip side, we also have quite a strong brand aesthetic, which we wanted to be true to, and to stay true to the brand.”

One of the earlier initiatives in the transformation was a request for Proposal (RFP) to add a drop-ship channel on our website.

“We chose dropship over marketplace because we wanted to own the customer experience. We didn’t want to hand it over to a vendor and let them speak to our customers.”

That approach meant Freedom’s  could handle the last mile from a delivery and customer-contact perspective.

“It t was all about making sure that we stay true to the brand and we uphold  the strong reputation that it’s built over time.”

After what she describes as an extensive RFP process her team landed on a tool called Mirakl (pronounced Miracle), which connects retailers with the companies that sell their products.

With Mirakl, Manufacturers can load up their products which then flow into the front end of the Freedom Furniture website.

“We have to tweak and make a little bit prettier and customer-facing. And then when an order is taken on the website, the order passes back into Mirakl and then out to the wholesaler, and vendor to pick pack, and ship directly to the customer. We definitely made the right choice on that platform.”

Over the last two years Freedom has added an additional 45,000 SKUs through the Mirakl model onto the website, “and that’s helped drive some tremendous growth.

“The next thing we did was we built a module where the store teams can now access what we call Endless Choice, not Endless Aisle. We now have endless choices.

Never Lose a Sale

The team also created a module for use in stores called NLS (never lose a sale),

“A customer comes in and says, ‘I’ve seen this green lamp on your website, you know, can you show it to me? If it’s a drop ship product, you can’t touch but they can show them on the website, and they can talk them through the features and benefits of that product and help facilitate a sale.”

Freedom is also believed to be the first Australian omnichannel retailer to allow its customers to buy and return dropship products in any of its 47 stores in Australia.

“That’s part of our omnichannel focus around having that seamless journey between the two.”

The project was going well but the feedback from customers and from the stores about search and discovery suggested it could be done better.

Its core SAP ecommerce platform had a built-in search indexing tool called Solar searching index in a tool called Solar that was fit for purpose until Freedom started pushing against the limits of that purpose.

“We kind of broke out of that mould, and we were really struggling to get to index fast enough to provide speedy and relevant results.”

That meant they were not seeing the kinds of conversions they expected.

“I think if my CEO had sent me one more email with a picture of a search result that wasn’t relevant, I was probably going to cry.”

In mid 2024 Freedom started a new RFP process specifically to address this issue.

“What was important for me in that process was obviously the technology.  But we definitely wanted to explore the AI space. With the catalogue growing we didn’t want the headcount to have to grow at the same rate”

Mitchell says that throughout the RFP process, it was obvious that Coveo, which was ultimately successful was the right partner for Furniture. (And it helps that both Coveo and Mirakl are SAP ecosystem partners)

“That was just from how quickly they understood our business and were able to replay our problems back to us and show us functional solutions for how we were going to solve it.”

“We pushed forward, and we were able to implement the back end quite quickly It was less than three months before we had it running in the back end. It was learning and it was starting to build up the learnings within the model. The back end went live in October, and then we turned it on for the customers in December… You know, we always do crazy things and turn things on right before Christmas.”

On the Coveo project,  Mitchell says, the most interesting thing for her is what the content team has been able to achieve. “ it’s not a huge team. I have four in the content team managing 50,000 SKUs, and we’ve got over 1000 product listing pages on the website.

Under the previous approach there was have been a lot of manual work she says. “You’re dragging around and you’re resetting, but now it’s all automated.

“And it’s so clever. As you are browsing,  you’re looking at a particular profile, so if you start clicking on either white sofas or two-seater sofas the page is dynamically changing to show you more of what you’re seeing.”

As she has become more familiar with the way Coveo works, and with the results it is delivering, Mitchell says Freedom has become more trusting of the algorithm.

“In all honesty, when we first launched, we put quite a few rules in place from a change management perspective.  We’ve been able to relax those rules, over the last four weeks, and let the system do its things.”

What’s next

“We’re in retail. We don’t relax. It’s illegal. Stage one for us with Coveo was to index the catalogue which is done. It’s now driving a search box, and driving merchandising. The pieces that are missing from that is around content indexing. The next phase is indexing our content pages, our blogs and help articles, our store locator, and any other information we have on site.”

That’s the precursor to a significant investment in generative AI capabilities.

“[That involves] allowing customers to ask natural language questions in the search box and get a relevant result. ‘How do I clean my sofa is the most obvious one?’ Or, ‘What’s the warranty on a sofa frame?’ Or,’ How do I wash my rug? So now we will be able to put up articles or support content to help you answer that question, backed up by product recommendations if you want to keep browsing or supplement the product. So that’s phase two, where we’re heading in the next three months.”