Andersch study in collaboration with RWTH Aachen
The Influence of Digitalization on Traditional Companies in the Furniture Industry and the Logistics Sector – Disruptive Market Trends and Options of Action
Established players strongly focused on the existing surroundings and achieved success – they prioritized their own technologies, products, or their own companies. In doing so, they often neglected the increasingly important contact to the customer and their increasing demand for transparency, comfort, and individualization. Here lies the advantage of digital platforms: they position themselves as problem-solvers and more increasingly, they are becoming the first point of contact. The digital-based player is characterized by its strong customer focus and delivers tailor-made offers that they don’t necessarily produce themselves. In many sectors, they are triggering a disruptive change or are strengthening an already existing one. What dangers do they present to established players? To what extent can these new, successful business models be transferred to traditional companies? What chances and risks lie in digital change? Our current study examines these questions in a case study on the furniture industry and the logistics sector.
New Perspectives in the Furniture Industry
Furniture manufacturers are dependent on stationary dealers due to their lower market presence. Nonetheless, price competition and the consolidation of dealers have increased the pressure placed on manufactures. At the same time, the information search practices and purchasing habits of the end-customer are changing. These developments offer manufactures new perspectives. For example, online offers enable immediate interaction. The manufacturers of small and ready-to-assemble furniture in particular open new communications and sales channels. The purchase of advisory and planning intensive furniture is also increasingly taking place online. As furniture manufacturers have only had limited points of contacts with end-customers up until now, a strategic realignment is necessary.
A targeted focus on the end-customer is the first important step to a short-term approach to the new market situations, but on its own, it is not an independent business model. On the contrary, a fundamental change in thinking with regards to the existing market strategies and internal processes is necessary. The future could lie in the differentiation of production and (customer) service-orientated manufacturers that participate in the market as either a cost-efficient producer or as a networked solution provider. Dealers also currently have individual chances in the new market situation as furniture manufacturers can hardly (for the time being) meet the specific requirements of online retailing. Multi-channel retailing is a multi-stage process for manufacturers – it is important to perceive the dealers as customer whose loyalty is to be won and to expand on competitive advantages.
New Focus in the Logistics Sector
The comprehensive optimization potential that data analysis processes offer logistics will change processes and value-added chains. This is why logistics belongs to the main application field of Industry 4.0. The efficiency margins here are much larger than those in production which have already been optimized down to the smallest details several times.
A large part of logistics companies are, however, currently insisting on conservative models when it comes using the information obtained. In particular, smaller companies are still characterized by traditional work methods without a digital approach.
The commodity-transport business often runs on platforms – the standardized service is under increased price pressure. Large logistics groups operate an active outsourcing of last-mile deliveries through crowd-sourcing while Big-Data approaches and telematics are used for the real-time optimization of routes that are already underway. The goal is a concentration of customized business where a part of the commodity business can be farmed out.
It is here that various start-ups have begun to build bridges. To what extent will they become competitors in a price-dominated market? What will the business models of the future look like?
Learn more in our study: