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jerryking : home_furnishing   1

Ikea dismantles tradition to seek inspiration from car industry
October 2, 2019 | Financial Times Richard Milne in Oslo.

Sometimes the complexity of their own companies can surprise top managers. Torbjorn Loof, chief executive of the owner of the Ikea brand, looks wide-eyed as he describes how the furniture retailer has nearly 100 different cabinets, sometimes with only 4-5 millimetres difference between models.

In storage solutions it has Pax wardrobes, Godmorgon bathroom cabinets, Metod in the kitchen and Besta in the living room — similar products but with subtly different heights or widths, making things difficult not just for the customer but also for Ikea itself.

So the world’s largest furniture retailer has looked to the car industry for inspiration. Platforms have dramatically changed the process of making cars — different models with vastly different pricing can be built on the same basic chassis. Changes are made between models on the things customers see — like the dashboard and entertainment systems — but much of the back-end that is invisible to drivers can be common.

Now Ikea is looking to bring platforms into home furnishing....Ikea is experimenting with city-centre and smaller shops as well as services such as home delivery and assembly. It is looking into renting out furniture instead of selling it, and smart home technology that brings it up against Silicon Valley.

Its platform initiative is one of its most important, albeit largely invisible to customers. Much still remains to be worked out such as just how much is common between different products — a dilemma recognisable from the car industry where Volkswagen faced complaints that there was little difference between VW and Skoda models except for the price.....standardisation should lead to lower prices for both it and customers. ....“How can we scale up in an efficient way? It’s difficult if we make each product uniquely. With platforms, it’s easier to adjust to new markets,” ...The new approach is not without risks though. Developing new platforms can be a costly business and in the car industry has often led to just as much complexity as before, particularly in companies like VW that are known for overengineering their vehicles, or confusion among consumers as to how big a difference there is between supposedly rival products.

Mr Loof is aware of the problem. “We need to define what makes sense to have on the platform and what not,” he says. “If you go too far you can arguably say you have decreased your range offer.”....for the furniture group, facing the same rapid changes in the retail landscape that have caused dozens of brands to fail, there is a feeling that it needs to do as much as it can even if it is likely to have failures on the way.
automotive_industry  CEOs  complexity  furniture  home_furnishing  Ikea  inspiration  platforms  retailers  risks  small_spaces  standardization  Torbjörn_Lööf 
october 2019 by jerryking

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