This past summer, Gumtree became an independent company after completing a carve-out from our previous owners, eBay. The process was complex but allowed us to reshape some core elements of the business. Now that the carve-out is complete, the year ahead will be significantly different as we build towards other strategic goals.
With living and business costs expected to remain unsustainably high in 2024, Gumtree – like its users – will need to be savvy with its cash. After two years of funding enormous infrastructural changes in our journey to independence, how and where we spend our money will naturally change. We will continue to be lean and efficient, but will build upon the investment made in our technology, tools and team over the past year.
Our strategic focus on our users and our product remains unchanged. Gumtree is a 23-year-old business, so continuing to modernise our tech stack is imperative if we are to keep driving and supporting local trading. We’re investing in a new app due to launch this summer, making it even easier to buy, sell and trade locally.
We have also invested heavily in our trust and safety tools and, thanks to this, our platform’s fraud levels are at an all-time low. Still, we will continue to emphasise security on our platform in the year ahead.
Although cost is the driving force of consumer purchasing decisions right now, our recent research found that 48% of people plan to reduce their carbon footprint in 2024. For those individuals, Gumtree offers simple access to a circular economy. We will continue to combat overconsumption with our ‘reuse, reduce, recycle’ messaging and challenge people to think ‘why?’ before they buy.
Finally, we hired hard in 2023, so our focus will move from attraction to talent retention. We will invest heavily in developing our current teams with individual training budgets and a business-wide mentorship programme. And, in addition to maintaining an active calendar of internal events, we plan to recognise employee contributions through quarterly awards, and roll out company-wide diversity and inclusion training.
The current reality is that, even though inflation has started to come down, we’re still feeling tough macroeconomic headwinds, and consumers are still incredibly cost-conscious. In the coming year we’ll be focusing on driving profitable transaction growth, by which I mean business that will create value for customers, but will still be profitable for our franchisees.
We’re not willing to cut the quality of our product and we don’t believe that straight discounts will resonate. Consumers want innovation-led value and they want it at a good price. We’ll be delivering this through special partnerships and product innovation. Last year we did a partnership with Teenage Mutant Ninja Turtles, offering themed pizzas. That didn’t provide price discounts, but still created something special.
The second priority is attracting and retaining high-performing talent, who have a growth mindset and can collaborate across functions. Coming out of Covid, we’ve had to adapt to new expectations and ways of working, and it’s forced us to hit the ‘update’ button in a sense. We must be able to fail fast to adapt to all the changes we’re seeing, and we need employees that will be agile enough to do that.
When I look at potential candidates, I focus heavily on their culture add, not just their culture fit. This also fuels a lot of efforts that we’re making around DE&I and ESG. In almost every interview, irrespective of level, candidates ask about our sustainability and DE&I goals. Our talent strategy is a driver for these.
The third priority is customer engagement across all channels. Although many UK consumers think of Pizza Hut as a dine-in experience, we also have a huge delivery estate and, coming out of Covid, we need to think about how we adapt to aggregators (like Uber Eats, for example) and integrate them into our own technology.
The majority of our customers engage with us through some type of digital platform, so we’re leaning into becoming digital-first. The consumer-facing tech is the most visible, but it also requires driving cost-effective operations behind the scenes.
Our first priority for 2024 is to grow our customer base across every market in which we operate: the UK, Europe and the US. Obviously we also want to improve the service we offer to customers, so we’ve spent a lot of time developing our that through technology and data.
We’ve been focusing on digital engagement for about five years, and in that time we built a full-stack digital solution for the UK market – the ‘MyAccount’ platform. Our goal is to build the best online appliance-service solution in the world. We’re not trying to force people online, but we do want to offer customers a choice in how they engage with us. Domestic & General has always operated a phone-based service model, and while we still have customers who prefer to conduct their business over the phone, about 50% of our UK customers are now using the MyAccount platform.
From a finance perspective, the main consideration is that developing a world-class digital solution requires a lot of up-front investment. You have to be brave and commit to the investment needed to back your vision. It’s worked out well for us so far, but we’re still on the journey, and we’ll continue to invest in tech and data in the year ahead.
Digital solutions such as these also make it easier to enter into new territories. Last year, we launched in the US, and growing those operations has become an overriding priority for us. We’ve already been able to scale our presence in the US market through a strong partnership with Whirlpool. A priority for 2024 will be trying to replicate our success in the UK and build more fruitful partnerships to help us scale further.
We’re also facing a very challenging macroeconomic environment, so a final priority for 2024 is controlling the effects of high inflation, but with an eye to maintaining growth. Controlling our own cost inflation is a big part of that. We’re also controlling our input costs by driving efficiencies through digital investments. Technology cuts across all of these themes; it really is the bedrock of what we do.
Finally, we’ll need to pass on residual cost inflation through price, but we need to make sure we’re doing that in a fair way and not putting up our prices any more than we really need to.