Ask the Expert: Luke Thornton

Tony Cassar: Hi Luke, welcome! Thank you for being part of the WFA Ask the Expert Series

Luke Thornton:  Thank you, Tony. It’s a privilege. I think your interviews are a highlight of the magazine. 

Tony Cassar: Luke, your company exclusively supplies Costco customers with their window covering requirements, how did this come about?

Luke Thornton: I was approached by the Masters Hardware chain to provide hardware and installation services for plantation shutters. There was a bit of affiliation and some introductions to Costco at the time. Costco Australia was looking to replicate the same kind of kiosk that I currently run. This is how I came about the opportunity to present how it could work in Melbourne and subsequently Australia.

Tony Cassar: Please tell us more about the operation and how it works. For example, how do the kiosks function?

Luke Thornton: The kiosks are embedded in most Costco stores. They are either light boxes or physical display kiosks. There is a six-page brochure on the stands for members to take. It is based on passive marketing, so it mainly targets foot traffic.

They would then either QR code, email, or call our 1300 number. That’s a national service so lead would be sent to each region. The region would qualify the lead, book a meeting, and provide a quote.

From there, if the order is made in-store or online through EFT, Costco takes full payment and holds it in trust. We supply and install to a certain standard and provide a warranty installation form. Then, the money is released to us

Tony Cassar: Have you ever had any personnel on the kiosk stand itself?

Luke Thornton: We do have opportunities to do roadshows and table events to showcase our product. This is subject to allocated resources; we try to roll out as many as possible. Due to the high foot traffic at Costco, we don’t always have personnel available, but it’s still a great opportunity for marketing.

Tony Cassar: How many Costco stores are you in physically?

Luke Thornton: We are in Victoria, New South Wales, Queensland, Adelaide, and the ACT. This makes up 12 stores that were embedded in.

Tony Cassar:  What services do you offer? Are they custom products, DIY, or full service?

Luke Thornton: It’s a full measure and quote service, made to measure and install. 

I based it off my commercial experience. So, we wanted to put in a product that was uncompromised in terms of quality. I didn’t want to have an after-service department, so I made sure the product was good. It was all based on that, both internally and externally. We offer a wide range of products for our members.

Tony Cassar:  Is there a DIY?

Luke Thornton: No, no DIY. In a big box environment, there are opportunities to put products on the floor. However, this is a different department and buyer. It may have warranty implications, and it probably doesn’t align with the quality of our products. Our products are of a commercial  standard so not off your shelf or a DIY product. 

Tony Cassar: So, what other marketing activities do you undertake with Costco? You have a very captive market.

Luke Thornton: There are a number of different marketing opportunities that could be accessed. 

I touched on the tabletop during the roadshow, which is very important. It gives us the opportunity to qualify leads better and talk to the members and demonstrate the product. Other marketing options are available, such as direct email and TV ads. The Costco Connection magazine is also a major avenue for advertising. We have previously featured a double page spread in the magazine.

Tony Cassar: Is there any opportunity for expansion outside of Australia? And if there was, would you be interested?

Luke Thornton: I’ve been asked to go to New Zealand to launch a store in Auckland. It’s probably at this stage the same logistics as Perth which is challenging. You really have to be on the ground to support it.

Costco is looking at probably 10 more stores over the next five years, which will increase membership and opportunity to expand further. 

Tony Cassar: What were you doing before entering the window furnishings industry, Luke?

Luke Thornton: I was a manager in the Quarantine discipline at Melbourne Airport.

One of the other managers introduced me to his brother who was a manufacturer in Airport West who was in the industry. He was looking for a BDM at the time for his commercial objectives and we had a chat. We clicked and I hit the ground running. I was sick of shift work, to be honest.

We worked together for a couple of years and had a really good relationship. I did have some really good highlights, like getting a majority share of a Sunland development, which was the Balencea building in Saint Kilda Road. It’s a really nice looking building, ahead of its time. It was predominantly in the commercial sector.

Tony Cassar: Luke, what is your main role in the organisation now?

Luke Thornton: I am the sole owner and self made MD, mind you. It sort of varies, you know. I oversee the Costco program. I also oversee the commercial side of it.

Tony Cassar: What are your greatest challenges within the business at the moment?

Luke Thornton: I think I’m very lucky to be surrounded by a lot of good people, like my team. Probably the greatest challenge is when my staff go on leave, it’s really hard to replace their skill set. I have to take their workload on so that that does take a toll on me. 

Tony Cassar: Can you tell us a little bit more about the commercial work you undertook?

Luke Thornton: That’s where I started. So, I built really good relationships with independent builders, not necessarily the bigger builders. You really had to use a lot of resources to finish the job, not necessarily land the job. It was a difficult cash flow exercise. I found that independent builders were better at doing 10 townhouses and similar projects. Strata companies and real estate agents were also good options.

The retail brand started out as a small presence in Costco, but eventually expanded on its own. It was originally under a company name, but my wife and daughter’s names inspired the name “Ella Lifestyle”. 

A couple of years ago, I was able to start networking again, which I really enjoy. I am part of the Essendon Football Club network, which has put me on a different platform. There are about 50 people involved, all executives. So it’s the decision makers in there. The platform is completely different. It’s showcased my brand a little bit better, which is exciting and that’s the path I’m trying to push a little bit more.

There are probably eight events during the year. There is a round table where you sit with about 10 out of the 50 people and get grouped together. A recent experience was really good; we all went down to the Peninsula together.

I am slowly getting the opportunity to present the business and what I can offer as a commercial and project manager. 

Tony Cassar: How many years ago did you start the Costco program?

Luke Thornton: We started in Melbourne, probably about eight years ago and I spent three months on the ground collecting and analysing a heap of data to test its effectiveness. 

It was under a different brand, affiliated with an American company at the time. I suppose it was an American brand, no one really cared. We were paying a royalty to get nothing from it. So, that’s when we decided to start our own brand. 

The model we developed was that whoever is the salesperson is also the installer. We went this way probably because I come from the commercial side and it was a very good way to offer a different service out of a big box store. It worked a lot better without any check measure requirements. So there was a lot more knowledge on the ground.

Tony Cassar:  How many team members do you have?

Currently, we have about 12 individuals who are all playing a significant role in maintaining Ella Lifestyle. 

Most of them have been with us from the beginning, so retention really hasn’t been a problem. We’ve got a mutual respect for each other and are more friends than work colleagues. We’re just trying to work together so everyone can survive in the industry.

Tony Cassar: How has your year been to date? How are you finding the current market?

Luke Thornton: The new financial year started slowly for us, like everyone else. But I think we have built some really good traction as of the last couple of months. There’s a lot of confidence in the Costco brand. The members have a lot of confidence in that brand. I found that due to the cost of living and other factors, that lead quality is a bit more genuine.

I suppose we’ve gone from “maybe” or a “want” sort of product to “definitely need” product and that’s where the genuine leads are coming from.

Tony Cassar:  I would assume that your conversion rate would be quite high because of the loyalty factor?

Luke Thornton: It has gone up compared to a few years ago, but that may be due to experience. 

Tony Cassar: Does Costco give you any instructions on whether you have to be at a particular price point or are they giving you the freedom to run your own business essentially?

Luke Thornton: They give me the freedom to run it the way I want which is very important. I just need to bring value to the members. I have a lot of market data and we bring a unique service and value for the product we offer.

That’s probably the brand model. All you need to do is bring value to the member. They make different memberships now, including executive memberships. They earn points towards a purchase for our lifestyle. At the end of the year, they receive cash back and other promos as part of our program.

Tony Cassar:  What does the future look like for you and Ella lifestyle?

Luke Thornton: I think the brand itself is still in its infancy. I want to take it to the next level. So, I will be actively looking for a retail partner to take over the Costco program. They can implement processes in a retail environment and utilise resources. This will enable me to concentrate on commercial market growth.

Tony Cassar: So, what would your thoughts be if someone wanted to buy Ella Lifestyle?

Luke Thornton: It’d have to be the right fit, no doubt. You know, I think that would be what I would be as someone taking over as a retail side of it. I think that’s inevitable. It’s just a matter of the right partner and the right fit and my role and the transition.

Tony Cassar: What do you see as your greatest achievements throughout your career?

Luke Thornton: I think creating the Ella Lifestyle brand from scratch, embedded in a big box store, has been a huge opportunity for growth.

Tony Cassar: You must have been doing something right because I’m sure many other window covering companies would have been trying to get the Costco business.

Luke Thornton: Many have tried, however relationships are everything. 

Tony Cassar: Luke, which people have been the greatest influences in your personal life?

Luke Thornton:  The most influential would be my wife. She’s my best friend. We grew up together in our twenties and traveled the world. She probably made me a better man, to be honest.

Tony Cassar: Very good, and the greatest influence in your business life?

Luke Thornton: I’d have to say Ross Lava. Early on he gave me the confidence that I was heading in the right direction. There were a lot of doubters that it wasn’t going to work, especially trying to run a program like that. But he was going to back me all the way.

Tony Cassar: Could you please tell us about your family and your interests outside of the window covering industry?

Luke Thornton: I’ve got an amazing family and friends, and I’m very lucky to have my wife and daughter. My daughter has given me a bit more purpose. She lights up the room when people walk in. I enjoy playing golf, love my football club, and love watching test cricket. I also love to travel, although not as much as I used to.

Tony Cassar: Fantastic, Luke, I’d like to thank you very much for being our expert for this issue. 

Luke Thornton: Thank you Tony, it was a pleasure.