Sep 23 2020

Established and innovative solutions: How the furniture industry can change

Times change. And no, it's not going to be the same. And it has only partly to do with Corona. Economic change is also rolling through the furniture industry, constantly and irreversibly. And if you disagree, take a look at the steel and automotive industries. The good thing about this is that Möbelians can learn and benefit from the experiences and changes in other sectors - if the signs of the times are recognised.

Where the tried and tested can help and new things have to come 

The long tradition of furniture production in the D-A-CH region with a focus on Germany is a solid economic basis. In terms of resources, the woodworking industry is generally well positioned within the industry. Versatility in production, efficiency in company organisation and production processes result in advantages in terms of design options for programme widths and depths.  

The fulfilment of the different needs in the market is given from special productions to small series, large batch sizes and flexible renewal of the product range. At the same time, certified manufacturing processes according to norms and standards give the customer a promise of quality.  

In order to ensure the furniture industry in general an economic survival and also new growth, the focus is therefore not primarily on the production possibilities. 

The development of customer generations and the resulting changes in consumer behaviour are forcing the furniture industry to realign its business processes from raw material suppliers to producers and trading partners.

Possibilities for cooperation in its own competitive environment must be examined, as must the structural positioning between the trade and industry-related service sectors in order to exploit synergies, for example in the economic and demographic conurbations. 

The economic opportunities which arise for all those involved in this transformation process with an option "Rent the Furniture" - an offer to "rent and hire" furniture products - will be outlined below in two concrete fields of action.

Coopetition - Together instead of alone 

The magic word is no longer entirely new, but it has enormous potential for crisis management and the reorientation of economic sectors, including the furniture industry.  

Coopetition stands for the combination of cooperation and competition and has its origins in the book of the same name written by economists Barry Nalebuff and Adam Brandenburger in 1996. 

What would have been unthinkable in the past has now become the norm: supposedly bitter opponents join forces and make common cause. But they don't have to merge completely for that to happen, individual joint projects do. In its issue of 16 September 2019, the Handelsblatt describes a classic case of coopetition using the example of mobility. Here Volkswagen, Ford, Amazon, Microsoft and the Google subsidiary Waymo are working together on the topic of autonomous driving.  

What would be, if in our today's permanently changing times, a demand for solid wood tables of all sizes and shapes would arise due to new target groups and thus possibilities of use?  

Carpenters, joiners, manufacturers could jointly develop a separate offer for rental - a first approach for coopetition. Online portals in the retail sector would open up for this marketing and provide appropriate market access for the customer groups, and would establish and organise joint sales, logistics and preparation processes.

Everyone would compete with their brand under a common roof. Rent as a Service. If one takes up this idea, it would lead to a second concrete field of action.

Coopetition stands for the combination of cooperation and competition. © Unsplash

Urban Manufacturing - The musketeer effect 

Basically, the topic of urban manufacturing is an "old hat". But in the here and now it goes deep into all areas of the economy. Cities continue to grow and with them the need to bring the consumer experience back into the living environment.

Initial concepts in the furniture industry are already beginning to respond to this trend. Furniture stores are returning to the city centres, opening up to cooperation work providers in the B2B sector (e.g. coworking spaces) or to shop-in-shop systems. 

The example of solid wood tables is taken up here again. this would have far-reaching options for long-term new structures for trade and the associated services. The woodworking trades are long-established in the cities, have know-how and customer acceptance. However, the order situation is an issue.  

However, if this potential is used for the return, recycling of products, the first "win-win" is given. Short distances, competent partners, fast reaction times to customer requirements - everything on the doorstep. 

In a further step, it is worth considering the possibility of integrating the spatial capacities of the trade partners for showrooms and/or DIY customer offers. Even the difficult issue of logistics for return and delivery as well as on-site care is an option in the joint thinking process due to the partners' professional competence. 

One for all. All for one. Customer proximity par excellence.  

This one selected example shows the potential of new offer options via "rent / lease" in addition to existing activities. Everything is available. All it takes is the willingness to open up to new considerations. Rent as a Service does not displace existing structures, it expands the range of offers - and clearly follows the contemporary requirements of the customers. 

Opportunities must be seized. Always. Especially in these times. And the pressure on the economy in general continues to grow, including on the furniture industry. What the newly adopted German resource efficiency programme ProgRess 3 has to do with this - more on this topic in a moment.

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Andre Hempel standard.toggle-bookmark Senior Management
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