[dropcap size=small]T[/dropcap]he tech revolution is fast conquering one of the last bastions of brick and mortar shopping, or traditional manufacturing – the furniture and furnishing business, a sector usually associated with big stores, or traditional tools and craftsmanship.
How is the digital trend shaking up the industry? Will this mean a new dawn or a deepening dusk for the industry?
How is the digital tide changing furniture?
Gone are the days when household items must be confined to static and singular functions.
The world’s first digitally transformable sofa – the Lift-Bit, for instance, is already in the works by Italian design studio Carlo Ratti Associati. It uses a series of motorised, hexagonal stools that can be lowered or raised via a smartphone app, transforming the Lift-Bit into a chair or bed at the flick of a button. This multi-function capability of the Lift-Bit is made possible using technology.
Sleep Number, an American furniture manufacturer, has already released a mattress that can be deployed (via a smartphone app) to monitor one’s health and adjust itself to maximise individual comfort levels.
An office table that monitors your use and wellbeing, adjusting its height at regular intervals to “teach” you to work in your optimal ergonomic position, thereby raising productivity and preventing health issues that arise as a result of prolonged sitting.
Increasingly, the Internet of Things tide is sweeping into the furniture world. We now see more furniture pieces with network connectivity and intelligent devices to help monitor health statistics, regulating temperatures for comfort, or providing feedback on furniture-use preferences. It is now no longer unthinkable that a piece of furniture can help save lives, improve one’s health, or uplift your spirits.
The digital tide has also changed the aspirations and mindsets of customers. Today, consumers are more design and tech savvy, health-conscious and affluent – and Singaporeans are now among the wealthiest in the world. They expect more out of the furniture they can afford. Millennials are also living in smaller homes with fewer family members.
Why pay for a bed and a sofa when you can buy a transformable furniture piece that can be both as and when you wish? “Future Furniture” will be more compact, more efficient, greener, and smarter with multiple functions – allowing consumers to save both money and space, and not compromising on design and comfort.
How and where we buy and sell furniture will also change. Indeed, we are becoming more inclined to buy furniture or furnishings online without even stepping into a furniture store. And manufacturers can sell their products directly to homeowners without any retail outfit. Such game-changing phenomena is the new normal.
Are furniture businesses rising to the digital challenge or are they increasingly pressured by technology?
Furniture businesses are not going away anytime soon. As long as there are humans, there will be a need for furniture. In fact, both furniture manufacturers and retailers are now presented with a whole new set of tools to boost their trade.
Furniture manufacturers use technology on their factory floors to boost equipment optimisation, energy efficiency, safety, materials tracking and manufacturing agility, as well as life-cycle product traceability. This could enhance productivity while cutting costs.
Technology is also transforming the types of materials for furniture production. New materials (such as polymers, epoxy and silicone) give rise to innovations such as self-healing surfaces, “healthy furniture” and greener furniture. Safe bio-cultures create hardy materials to replace traditional sources such as timber; furniture panels that help deodorise the air; or furniture that is completely bio-compostable at the end of their life cycles.
Technology such as 3-D printing has also given rise to furniture production on demand. So, furniture production will become more “instant”, and increasingly customised with more bespoke designs. 3-D printing also helps with the prototyping process, or the printing of fittings and connectors, so that the design and development of furniture pieces are now on a shorter cycle than ever.
For furniture retailers, technology brings new toys to the table.
Virtual reality (VR) devices let users cherry-pick from numerous furniture/furnishing options to help them design their dream homes – without having to be physically in the space that they are fitting out. This enables retailers to shrink their shopfronts and slash operating costs while giving their businesses a novel and experiential twist. With VR tools, their offerings to customers can now be exponentially multiplied. They no longer need to limit their offerings to only what they can physically display in their stores.
More significantly, the digital age has spawned the rise of e-retailers. Increasingly, furniture players will move out of their brick-and-mortar shells completely, or turn their stores into flagship click-and-mortar experience centres – and gain market share globally through borderless digital trading.
What are the risks that furniture players face looking ahead?
Consumer attitudes towards furniture are changing and furniture companies that fail to keep pace with these changes will be left behind. The real risk for furniture companies is stasis; the inability to transform and stay abreast of market trends.
Supply chain dynamics in a digital economy also pose risks for furniture brands.
With online shopping, consumers can possibly change furniture or furnishings like they do clothes – they replace them on a whim, per seasonal or mood swings. We have all heard of fast fashion, but fast furniture and furnishings are coming within our grasp.
Many in the business never thought they would see the day when furniture – a crafted, tactile product – would be bought online. Internet furniture sale platforms have not only replaced many brick-and-mortar stores, but changed the way consumers buy: more small, one-piece orders full of character and bought on impulse instead of larger ticket items meticulously curated into a home with Stepford precision.
With the “E-commerce revolution”, consumers also expect faster delivery, with a turnover time of days instead of weeks. Fickle consumer demand also increases volatility as online shopping has resulted in more returns.
Furniture suppliers must develop production and supply chains to accommodate such volatility, as well as the economic and regulatory changes that impact sourcing and sales strategies. Therefore, how companies manage their inventories and supply chain at the best speed and cost will be key for survival.
What does the future hold for the furniture industry?
The world furniture market is chugging along – with a forecast CAGR (compound annual growth rate) of about 4.2 per cent from 2016 to 2020. But global e-commerce furniture and homewares market revenue is set to double in in the next five years.
According to Fung Global Retail Tech, global online furniture and homewares revenues totalled some US$110 billion in 2015. And much of the revenues is clocked in Asia – with China generating almost half of the total global market revenues. Online furniture sales is expected to increase by a five-year CAGR of 15 per cent to US$220 billion in 2020.
So, it is an easy decision for furniture brands to take the virtual route towards greater success. Indeed, “Future Furniture” is not just about that snazzy conversation piece – loaded with gimmicky Smart functions – but those that can appeal to our fancy, be functional, and be delivered to us on demand and at the best price.
“Future Furniture” signals the start of a new dawn in the furniture industry, one which we hope will see Singapore, with its excellent IT infrastructure and vast connectivity, leading the way.
This piece first appeared in The Business Times. The writer is president of the Singapore Furniture Industries Council; he also recently launched the new “Smart SFIC” initiative