Taking the digital transition step by step; How product configurators can ease furniture brands into the online era
Yes, physical shops still exist. And no, your fridge still does not order milk when it’s out. Yet we are all perfectly aware that a digital transition is happening, and it's changing our way of doing business. Maybe it doesn’t spring up with a big bang, but it's happening, surely and steadily. As Bill Gates put it, "We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don't let yourself be lulled into inaction."
26 February 2018
This could be precisely the treacherous kind of situation the high-end furniture business is now in. It might be tempting to think that a market for luxury goods will get away with inaction. After all, those fine designs and exquisite fabrics will always need real-life scrutiny to make the sale. Well, for now maybe. But things are changing, even in markets where online sales seemed not to get a foothold so far. For instance in the eminently innovative automotive industry, where the introduction series of the Volvo XC90 and the Tesla Model 3 were diligently pre-ordered and quickly sold out. Even though none of these 50 to 100 thousand Euro cars had actually left the assembly line.
Customer-centred mindset Traditional business models are under pressure in any market. New disruptive, online-only players don’t have a legacy of old habits and structures to carry. They understand that digital transition does not only mean tapping into new sales channels. It involves sometimes radical changes in the whole organisation, from resource management to customer care. And most of all: it requires a truly customer-centred mindset. The digital age asks for clarity and transparency. About your motives, your processes, your service, and of course your prices. At the same time, there is a clear drive towards tailoring products and their marketing to the individual needs of consumers. At the front of this development we find of course ‘Industry 4.0’ production methods like 3D printing which make individualized production more and more feasible on a large scale. You think bespoke furniture will always be a hand-made product? Think again. Mass customization is already taking off for other laborious goods, like shoes. Adidas, for instance, is working rapidly towards mass-producing individually 3D printed shoes in collaboration with Sillicon Valley start-up Carbon. Configurators fulfil demands for transparency and customization Non digitally native businesses that want to stay relevant clearly face a real challenge. Realizing that the digital transition is not going to blow over any time soon, many are weighing their options. Adopting a disruptive strategy is often considered a bit too… Well, disruptive. ‘Let’s see which way the wind blows’ still seems the default option. But realizing that a successful digital transition is not something you do overnight at the last minute, more and more brands are trying to find a middle ground. It is this gradual approach that puts visual product configurators at the forefront of the digital surge. Not only in sales and marketing, but as a spearhead in a company’s digital transition. Indeed, configurators can fulfil the pressing demands for customization as well as for transparency. Not only do they take What You See Is What You Get to a whole new level, they also put the customer literally in control of the customization process. An agile approach to challenges ahead Several progressive brands in the furniture industry are starting to find out that configuration technology can keep them in the director’s seat as the digital drama unfolds. Some are building flexible visual product configurators right at the core of their business model. Not to go digital with a bang, but precisely because they want to take it step by step. The key here is versatility. When a visual product configurator is designed and built in a flexible and scalable way, it is not exclusively tailored to certain technology standards. Neither is it suited only for online sales channels. This means that dealer networks can still fulfil a vital role in the customer journey, when product configurators are used to optimize the consumer’s decision process.
A flexible and scalable solution can improve current business processes. But it can also deal with future technological developments and brand strategies. Potentially, this makes a product configurator a powerful tool to explore new digital business opportunities at your own pace, without ignoring the current offline channels and even enhancing their effectiveness. For instance, it can support dealers and sales personnel as an in-store tool, helping them in guiding customers towards a purchase. At the same time, the company is gaining experience and it’s tuning its organization and systems to the new digital ways. Linking all the steps of the customer journey Once you’re there, it’s not hard to see how to take it some steps further. In fact, some brands are already taking those steps. Imagine a customer configuring a couch at home, before visiting a selected dealer or brand experience centre to confirm her choice. No need to despair if the customer walks out without closing the deal. She might come home, virtually place the piece of furniture in her living room with Augmented Reality on her smart phone, and decide to purchase the item there and then. This is the (near) future of the new customer journey and integrates all steps into a seamless digital experience. Of course, such a pivotal role for product configuration urges profound changes, organizational, in IT systems and business models. For instance: in a distributed sales model, it might work better to pay commissions based not on the point of sale but on the region in which a sale is made, assuming that online and offline contributed proportionally. Further consequential developments may involve product databases, the coupling with ERP systems and an increasing demand for multi-channel customer care. Helping furniture brands to transition at their own pace The digital transition will hardly leave any stone untouched. But what the implications will be on specific businesses is hard to tell. Especially because the transition will not have a clear-cut final result – or beginning, for that matter. It’s a fundamentally open-end process. That’s why highly versatile, adaptable and expandable solutions are vital in helping furniture brands to transition at their own pace. Only technology that can adapt and evolve allows brands to be optimally fit for an increasingly digital environment, while staying manoeuvrable to seize new opportunities. Companies reluctant to plunge into the digital depths head-on, will discover that lingering at the brim is not an option. But they will also realize that when confidently getting in, cold feet will quickly start to feel more comfortable. So just start your journey, but don’t tie yourself up with rigid solutions. On a quest with such an uncertain destination, the ones who make it to the end are companies that stay lean and agile, allowing progressive insights to be adapted while new understanding and vision inevitably evolve along the road.
We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don't let yourself be lulled into inaction.