Quotes like these from a company chairman are always somewhat worrying. I see a lot of annual reports where CEOs or chairmen make statements along the lines of “we’ll continue doing what we’ve done in the past since it seems to still be working just fine”.
One that caught my eye recently (and this is not to target any company in particular but just happened to be in a category that I think is in the throes of being disrupted in a big way) was from a global furniture company called JYSK.
Now, while I’m glad the original founder of the company is still happy with the way things are going, I think there are a couple of key trends in this category that all the established players should be worrying about:
- Online retail
- Rental rather than outright purchase of furniture
While the online furniture is still only 5% of the total, that 5% is dominated by ecommerce specialists rather than furniture companies. I’m sure people working in the industry will argue that you have to go to a store and see the stuff before you buy it – today’s online marketplaces don’t necessarily replicate that experience, but the technology to do so clearly exists.
Between the startups experimenting with different retail models and rental rather than outright sales, there’ll be some that focus on delivering a consumer experience comparable to or even better than going to the store.
Once that happens, the online share of total furniture sales / revenue will start changing quite rapidly.
Will one of the existing players get in front of this fast enough to harness the disruption? Or will it be someone new? That depends on how seriously the big players of today consider the impact of technology, consumer trends and the start-up economy on their business.