ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Mariano J. Pérez Campos Spain

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

CONTENTS 1. NEW WAYS OF LIVING: HOUSEHOLD EVOLUTION 2. FURNITURE TOWARDS A GREEN ECONOMY: INNOVATION IN PRODUCTS AND BUSINESS

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

1. NEW WAYS OF LIVING & HOUSEHOLD EVOLUTION

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

1. Ancient history: Sedentary lifestyle

2. S XII-XVIII

around fireplace.

Convection chimneys as revolutionary tecnology that allows kitchens to expand space for human activities at home.

4. S. XXI Open concept: social activity at home.

3. 1923-1930 “Frankfurt kitchen” as reflection of modern, technical and efficient society. www.aidima.eu

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

AIDIMA Furniture Business Intelligent System

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

SHORT-TERM ANALYSIS IN THE FURNITURE INDUSTRY •

Current and past situation of key variables in the furniture manufacturing industry of Spain.

•

Analysis of furniture consumption and retailing in Spain.

•

Business model analysis of leading furniture manufacturer and retailer companies (identification of best practices.

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Furniture trade balance in Spain.

Evolution of furniture production in Spain. 8.378

8.468

8.492

8.419

228%

8.642

8.531

8.516

227%

8.607

207%

7.891 7.092

7.274

11,5% 8,7%

8,6%

6.245

3,5%

170%

6,2%

13,6% 11,3%

5.601

0,9%

5.157

0,3%

4.742 1,1%

161%

153%

5.522

-0,41%

138%

1,3%

-0,6%

0,2%

107%

-15,48%

83%

74%

68%

58%

62%

66%

2007

2008

2009

-24,1% 1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

1996

Millions €

1997

1998

Exports (Mll €)

% Interannual rate

1999

2000

2001

2002

2003

2004

2005

Imports (Mll €)

Rate (%) Source: ICEX

Source: Spanish Observatory Furniture Market. AIDIMA

Quarterly evolution of furniture production in Spain Sales evolution

2006

Market share of the different types of retail in Spain

Prospects evolution

10

4,4 1,5

0,4

2,1 1,2

1,8

2,2 3,3 4,5 3,7

0

0,6

0,8 0,3 -0,2 -1,3 1,8 0,2

0,6

0,2

1,4 0,8

2,9

3,9 1,0

0,9

1,9 2,1 1,5

1,0 -3,7

-1,4 -4,3

-9,7

-8,1

-10

-13,3 -12,5

-17,9 -17,0 -19,6

-12,4

-14,4 -17,4 -14,1

-20

-18,9

Unconcentrated channel 47%

Concentrated channel 53%

Unconcentrated channel 39%

Concentrated channel 61%

-22,98 -25,0

-25,4

-30

-33,9 -40 I04

II04 III04 IV04 I05

II05 III05 IV05 I06

II06

III06 IV06 I07

II07

III07 IV07

I08

II08 III08 IV08

I09

II09

III09 IV09 I10

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Source: Spanish Observatory Furniture Market. AIDIMA

Source: Spanish Observatory Furniture Market. AIDIMA

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

TREND ANALYSIS IN THE FURNITURE/ HABITAT INDUSTRY: •

Mid-term evolution of consumers and implications for furniture supply chain.

•

Mid-term evolution of values and lifestyles in Europe and Spain

•

Mid-term socio-demographic trends in Spain.

•

Mid-term retail trends worldwide.

•

Mid-term habitat products trends worldwide.

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

FORESIGHT RESEARCH IN THE FURNITURE INDUSTRY: •

Foresight of global macro-trends: globalization, retailing consolidation and consumption evolution.

•

Foresight of furniture Business Models: identification of key variables and definition of future scenarios.

•

Foresight of variables related to supporting processes (planning and management) and business processes (marketing, etc) in furniture companies.

•

Sustainable development of furniture industry: definition of desirable future.

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

2016 FURNITURE INDUSTRY SCENARIOS

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

SOCIOCULTURAL DRIVING FACTORS 2013 Three kind of responses to Economic Crisis

• Grasp to Consumption (when affordable) • Life is game (escapism) • Vital Alternatives & Supportive Responses (lifestyle change) New habits & behaviour due to Digital Revolution:

• Digital Reality (Internet pervades real life) • Massive Creativity (collaborative projects) • Augmented Human-Being (personal widgets for living)

… + DEMOGRAPHIC CHANGES… www.aidima.eu

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Grasp to consumption • Keep the consumption paradigm previous to the economic crisis. • Used to consumism, difficult to rationalize consumption behaviour. • If affordable, people keep consuming in spite of crisis. • Even when decreasing household budget, still selected indulging purchases.

People waiting for purchasing new iPhone5 in front of Apple store in New York. Picture: Steve Rhodes. www.aidima.eu

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Life is game • Escapism versus crisis. • Ignore bad times. • Gamification of life: videogames, online games, games for adults, APPs... • Return to domestic hobbies: cooking, garage beer, camping...

Lunch Beat (Berlín). Informal meetings for dancing during lunchtime at work. Picture: goStockholmGoeteborg. www.aidima.eu

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING Spanish 15-M movement street protesters.

Vital Alternatives • Need for lifestyle change towards responsible consumption and citizenship. • Institutional mistrust. • Search of alternative ways of consuming. • Increasing social participation. • Welfare State defence.

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Supportive Responses • Implementation of social solutions when institutional assistance fails. • Social movements for assisting people in economic trouble (Platform of People Affected by Mortgage, food banks, etc.) • Unknown heroes against economic crisis.

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Digital Reality • Internet is not a parallel world anymore. • Internet invasion of real life. • Social initiatives and entrepreneurship in Internet as economic emerging forces. • Mixing real life with Interet possibilities (foursquare, twitter, etc.).

Social Rehab Toolkit for simulating online actions in real life. www.aidima.eu

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Massive Creativity • Collaborative projects. • Internet as field for experimenting in group. • Open Data and Collective Intelligence (i.e. Wikipedia). • Change in paradigm of copyright exploitation. • Crowdfunding: projects funded by individuals’ contribution.

“El Cosmonauta”: movie funded with crowdfunding.

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Augmented Human-Being • Immersive and interactive technology allows new human skills. • Microelectronic widgets for personal use (Google glasses, health sensors…). • World as a interactive playground. • Medical uses for diagnosis and prevention.

‘A day made of glass 2’ (video). Corming. www.aidima.eu

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

… + EUROPEAN DEMOGRAPHIC CHANGES… EU POPULATION 2004-2050 490.000 470.000 450.000

456.815

467.307

470.057 449.831

430.000 410.000 390.000

394.727

398.780

382.674

384.356

370.000 350.000 2004

2015

2025

2050

Population scale: x1000 inhabitants Source: Eurostat Press Office. http://europa.eu/rapid/press-release_STAT-05-48_en.htm

INMIGRATION and POPULATION LOSS

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

AGEING and ELDERLY SOCIETY Source: EPC and European Commission (2005)

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

EUROPEAN HOUSEHOLDS LIFESTYLES CHANGES INCREASING PRESENCE IN SPANISH CONTEXT

Negotiator families

Single households

Lone mothers by choice

Couples

Reconstructed families

Shared houses

Source: Home Trends Observatory. AIDIMA-ITC-AITEX, 2009.

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Single households

1 out of 4 households in Europe.

People living on their own at will and independently.

+ 54 million

Young people between 25 and 35, mainly men. 13% of Spanish expenditure of mass consumption products. Source: TNS World Panel

of Europeans live alone. Source: Familiy evolution in Europe. 2008. Instituto de Política Familiar.

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Lone mothers by choice

+ 40% in between 1991-2001 in Spain

Women driven by willingness of being mother.

+ 1,3 mill.

Lone mothers, between 35 and 45 years, with university studies and economic solvency.

x 10% births and

Source: Spanish Census 1991 y 2001, INE.

Superior income than lone parents who didn’t choose it.

adoptions out of marriage in last 30 years.

Source: Jiménez, González y Morgado, 2005

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Source: Home Trends Observatory. AIDIMA-ITC-AITEX, 2009.

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Couples

+ 25% between

Couples between 25 and 40 years, medium-high purchasing power, looking for self-fulfilment, professional and economic success. Being parents as an option, not a destiny for the couple. dinkies = double-income no kids yet

1991-2001 (couples with no kids).

1/5

almost of households.

+ 2 millones. Source: Spanish Census 1991 y 2001, INE

Source: Wikipedia

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Negotiator families

43,5% of Spanish

Couples with children where familiar relationship is based on trust and communication. Loss of family hierarchy, children taking part in decisions. + 60% children influence in families consumption decisions. Fuente: Trend Survey. Kids Today. By Mark Kurth and Jennifer Dewing. October-2008

households. Source: Spanish Census 1991 y 2001, INE.

13%: European households with 1 child. 52,3% of Spaniards between 25-29 years living with parents.

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Reconstructed families

Couple where at least one comes from a former relationship and brings noncommon children to the household. Between 35 and 55 years. Families with larger proportion of working women with paid jobs.

8% of Spanish families with children correspond to women in second mating. Source: Spanish Survey on Fertility, Family and Values. CIS, 2006.

2’3% of Spanish households. Source: estimates based on CIS, 2006. Lence y Guzmán, 2007

Source: Gerardo Meil, sociologist.

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Shared houses

x2 in between

People living together with no family relationship. Usually, a temporary situation due to work, studies, elder necessities, etc. Intergenerational between elder people.

cooperation and young

1991 - 2001 in Spain.

3% of Spanish households (almost 400.000). Source: Spanish Census 1991 y 2001, INE.

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

2. FURNITURE TOWARDS A GREEN ECONOMY: INNOVATION IN PRODUCTS AND BUSINESS

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

There is a time lag between social/ technology change and firm response. Change usually goes ahead of business innovation. SOCIAL CHANGE

TECHNOLOGY TRENDS

ADVERTISING

PRODUCT INNOVATION

BUSINESS INNOVATION

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What if we stand up? Coca-Cola’s advertising campaign in Spain, Spring 2013, two years after 15-M street protests. 29

ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

multifuntional and versatile products

Bulthaup B2. www.aidima.eu

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Creative and non usual products

Intuitive and facilitator products

Crater Lake de 24º Studio, wood instalation in Kobe (Japan). www.24d-studio.com

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Miss Sissi bio-on Lamp (Philippe Starck). www.starck.com 31

ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Interactive and participative products

Efficient and responsible products

W+W. Roca. Innovation Lab de Roca y diseñada por Gabriele y Oscar Buratti.

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Spline Chair (Unto This Last) 32

ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Easy and remade products

Newspaperwood (Vij5). Wood made from newspapers. www.vij5.nl

Trash Me Lamp (Victor Vetterlein for &Tradition). Egg packaging lamp. www.victorvetterlein.com www.aidima.eu

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Furniture Business Model Innovation

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Furniture Business Model Innovation STEP 2 PROBLEM DEFINITION

STEP 3 Targets TARGET definition DEFINITION

STEP 4 VALUE PROPOSAL definition DEFINITION

STEP 1 MOTIVATION TO CHANGE

step STEP 5 5 INNOVATIVE BUSINESS MODEL DEVELOPMENT

FURNITURE BUSINESS MODEL INNOVATION IN 10 STEPS STEP 10 MONITORING Control and THE CHANGE management of change process

STEP 9 BUSINESS MODEL PLANNING

STEP 8 Solutions SOLUTIONS identificacion IDENTIFICATION

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STEP step 6 6 RESILIENT BUSINESS MODEL STEP STEP77 Obstacles : OBSTACLES: Identification IDENTIFICATION and & classification CLASSIFICATION

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Furniture Business Model Innovation CASE: UPHOLSTERY MANUFACTURER

Who is the target user? - Families, 35-45 years with children over 10 years. - Renovation of sofa. - Values design. - Large dining-rooms. - Willing to pay for quality. - Stressed life, need for relax and leisure at home.

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Furniture Business Model Innovation CASE: UPHOLSTERY MANUFACTURER

What could be an innovative value proposal for this target? - Quality of contract furniture for home use. - Technology components for leisure (i.e. home cinema and music inside the sofa). - Offering services during sofa life cycle (redecorating, maintenance, etc.). - Complements collections (cushions, blankets, etc.).

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

RESEARCH CENTERS

R&D EMOTIONAL DESIGN ENGINEERING ENSAMBLING LOGISTICS MARKETING

ELECTRONICS FIRMS MOVIES PROVIDER

ELECTRONICS/ PROGRAMMING

…

MARKET INTELLIGENCE

SMART USERFOCUSED SOFA WITH LEISURE INTEGRATED TECHNOLOGY

OFFERING SERVICES ALONG SOFA LIFE CYCLE AT HOME

FOCUS ON NICHES’ LATENT NEEDS: FAMILIES WITH RELAX NEEDS AT HOME

BRICK’N’MORTAR & E-COMMERCE HYBRIDIZATION

COMMUNITY MANAGER R&D PROJECTS HUMAN RESOURCES LOGISTICS MARKET INFORMATION SOCIAL NETWORKING CUSTOMER CENTRE …

PRODUCTS SALES (furniture, complements…) SERVICES FEES (maintenance, renovation…)

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Business Innovation

Flexa chair

Red Dot Design Award 2013

• LEED® Certification • The Building Exchange BEX Award (Germany) • Green Good Design (Chicago) Interactive used-centred prototype couch

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ADAPTING FURNITURE BUSINESS MODELS TO NEW WAYS OF LIVING

Mariano J. Pérez Campos

Thank you!

Director AIDIMA (Furniture, Wood, Packaging and Related Industries Technology Institute) SPAIN

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