The furniture industry is one of those where the bulk of manufacturing is outsourced overseas. On the Indian subcontinent and the Far East, low labour costs on mass produced products undercut the manufacturing sector in Europe and North America. Despite favourable market conditions in the West for the industry, there is significant uncertainty about the future of domestic production on the mass production model.
Whilst the competition from overseas manufacturing currently offers a price advantage down to consumer level, pricing is not the only factor affecting customer purchasing habits. Indeed, other factors, such as delivery time, service, quality, and - as we are most concerned with - customisation of the product, all affect consumer satisfaction.
Mass customisation offers an opportunity to compete successfully with the mass production model, and bring manufacturing back to Western domestic markets. Mass produced furniture may be made more cheaply abroad, there is a sustainable competitive advantage to customising furniture domestically.
As we have touched on in previous articles, there is a true cost-reduction advantage to replacing the standardised mass production model with the customisation model. Combined with flow manufacturing, mass customisation offers the opportunity to reduce wastage, excess inventory, and processing time. All these factors have cost-saving benefits.
Equally, for a company that already mass produces furniture, adding a mass customised line of products to the mass produced lines is a solution. This will allow the manufacturer to evolve the popular product mix with evolving customer needs.
A broader range of products can be offered with the mass customisation model, allowing the manufacturer to meet a range of different customer needs. Often, such variety can be achieved with very simple tweaks to the existing production line, such as adding colour options, or items to a collection.
Simply adding different finishing types to a line, or similar accessories, customisable core modules to an existing line of furniture products is another option to consider. The customer chooses from a specified set of options, and thus easily integrated into the mass production model - injecting a customisation element that leans the brand towards this additional service.
Going one stage further, the potential to offer a real personalised service will reap strong ROI benefits. The customer can work closely with the brand to tailor a product to specification. This removes the necessity to adhere to a predefined set of components, but retains certain limits within the boundaries of what can be successfully manufactured. This can be offered directly to end-user, or - alternatively - to a retailer who can select a choice of furniture options to display for sale in-store.
A service-focused furniture brand can offer bespoke furniture products along with the opportunity to work with a professional designer. From there, the customer can create a full room or home design concept, complementing their bespoke furniture products with accessories, mouldings, colours, or wallpaper to match her tastes.
On a more hands-off mass customisation model, consumer configuration of bespoke furniture products through the use of software tools direct from the brand website. This combines the customisation model with an automated process of product ordering direct to the factory floor, where items are made to order with low-level customer interaction.
A side benefit of the configuration model is the ability to capture data. This allows a company to analyse the evolving needs of the customer to inform the design offerings for new lines. Such data collection can also nail down demographic targeting, and identifying life stages at which a customer is likely to wish to evolve their interior style to meet their changing lifestyle. This will aid both the Design department and Marketing.
A study of Japanese consumer goods brand, Muji, demonstrated significant profit advantages to user-generated product offerings. The study showed that:
“...user-generated products perform better on the market than their (professional) designer-generated counterparts.”
“User-generated products in the furniture category, which are found to generally contain higher novelty outperformed their designer-generated counterparts on key market performance metrics.”
In terms of profit performance, the study also identified significant benefits:
“Specifically, in the first year after introduction, sales revenues from user-generated products were three times higher and gross margins were four times greater than those of designer-generated products… after three years, the aggregate sales revenues of user-generated products were, on average, 1.25 billion yen (approximately 16 million dollars) higher, or five times greater, than the sales of designer-generated products. The corresponding average margin was an impressive 619 million yen (approximately 8 million dollars) higher, or six times greater, than the margin for designer-generated products. Finally, user-generated products were more likely to survive the three-year observation period than designer-generated products (i.e., were still on the market three years after introduction).”
Adoption of the mass customisation model is growing. Furniture companies are increasingly offering an option for bespoke furniture products to their existing mass produced lines. However, there are still relatively few who have given over their entire business model to mass customisation yet.
One company is, nonetheless, offering bespoke furniture products in the mass customisation model perfectly. Tylko gives customers the opportunity to design shelving and tables with an array of options. It is a beautiful example of how well mass customisation can apply to the production of bespoke furniture products for the consumer market. Whilst the prices aren’t as low as modular flat-pack giant, Ikea, the price premium afforded by offering customised products still keeps Tylko’s products within reach of middle-income consumers.
The company also goes a stage further into the future by offering an augmented reality smartphone app. This allows customers to see the bespoke furniture products they design within their own home before purchasing. This more immersive form of purchasing is exactly what the next stage holds for the furniture industry; any savvy furniture company will already be on it.
Unlike many custom furniture producers, who tend to be more craftspeople than manufacturers, there is less customer interaction with the company necessary. Though it is offered, the hands-off approach will appeal to many consumers who simply want to get the job done.
Along with fashion, furniture is the industry most likely to benefit from a movement to mass customisation. Our culture is increasingly focused on identity and self-expression. Consumers do not simply want to dress in a way that reflects their sense of identity and lifestyle, they want their homes to reflect this, too. This makes bespoke furniture products an obvious fit, particularly when they can be created digitally, configured by the end user via 3D rendering software integrated into the brand website.
Taking Muji’s study into account, plus the array of methods of implementation and cost-reduction benefits, we can see a clear path to mass adoption. As technology continues to blossom in ways that will transform the way we live and the way we shop, there is little doubt that a more customised, personalised future awaits.