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Digital Flat pack: Between A Lack and a Hard Place

Flat Pack furniture is a simple idea that has had wide ranging ramifications for our world. By designing furniture in such as way as to make it easy to ship, considerable costs are saved. Shipping from the manufacturing site to the retailer is much cheaper.

The company also saves significantly on storage costs in warehouses and in stores. If the customer then assembles it at home, further gains in efficiency occur. The efficient commercialization of flat pack furniture by IKEA has even lead to the company being the predominant furniture manufacturer on the planet. IKEA has over $35 billion in revenue and manufactures over 100,000,000 pieces of furniture per year. The company uses around 1% of the world’s wood production. Through the use of MDF (Medium Density Fiberboard, a compressed wood fiber, resin, water and wax product) and flat pack, IKEA was able to industrialize affordable design furniture globally.

Its furniture mega stores, the largest of which is 59,000 square meters, brought low priced design goods to millions worldwide. Meandering walks through the cavernous IKEA interior through meticulously designed rooms filled with fake plastic televisions followed by some meatballs is something that punctuates life for many. Your parents may have taken you there for the first kids furniture that you got to pick, then later again for your first desk. In college it is likely to be the first store where you bought furniture for yourself. At significant moments in your relationships, you’ll find yourself at an IKEA. Late night head scratching over a deceptively simple IKEA assembly instruction is a touchstone for many millions of people.

The things that IKEA managed to do through its sheer scale and innovation are still astounding. Yet, we grow accustomed to $8 tables and $5 chairs. The blue IKEA bags have been on our shoulders but what else is out there for us? Very little. Beyond the vast selection of umlaut ridden self assembly furniture there is little to be had. There are many high end furniture brands and local furniture manufacturers but strangely for such a large company IKEA has very little to no direct competition. Its vastness and efficiency have deterred anyone from trying to at scale compete directly with the company. Innovations in digital manufacturing and supply chains have now made it possible for people to for the first time compete directly with IKEA. However even though fast growing startups sell mattresses at a growing pace, as well as other products that IKEA sells, there has been little direct start up competition to IKEA as a whole. Whereas it could be possible to compete with IKEA through digital flat pack furniture it seems few companies are that ambitious.

Digital Flat Pack

Digital Flat pack furniture has been around for a number of years. Designers, start ups and ecommerce firms have all tried to break into a mass consumer market with digitally manufactured flat pack furniture. Whereas ecommerce competition in clothing, shoes and consumer electronics have put enormous pressure on traditional retailers, the furniture market has been left unassailed.


Waterjetting, laser cutting and automated saws have become significantly cheaper. MDF manufacturers are to be found in many countries and prices for the material seem to be edging lower. Outsourced furniture manufacturing, shipping and warehousing are widely available. It costs between $500 and $2000 to send a shipping container across the world. IKEA has educated us as to how we assemble furniture, so copying them would seem to be obvious and perhaps uncomplicated? It would seem to be a rather simple business that plays right into the hands of ecommerce. Most furniture items would be prohibitively expensive for last mile deliveries with UPS and other packaging companies. New shipping contractors and models would have to be set up. It is this main issue that has held a lot of players back. Despite this however it also seems rather difficult to decode IKEA’s secret sauce. Cutting edge design for niche markets which out “cools” IKEA seems like a straightforward play but it has been anything but for people who have tried to do this.

Greycork was a hipster love darling of a start up but closed due to not being able to get its pricing, margins and scale right. Tylco shelving, CrissCross, Floyd and Burrow couches have all had comparatively low success in expanding into mainstream furniture. Hem was much hyped but has not managed to turn this into a huge success. Design Within Reach did grow but stumbled not finding sustainable long term profits and growth. OpenDesk has many people oohing and aahing over their concept but lower sales than this admiration would suggest. There are a number of issues that these and other companies face when trying to tackle the design furniture market. These so far have kept them from truly competing with IKEA but, as we explain there are possible solutions out there.

IKEA Wedge dowel

IKEA Wedge dowel

Between A Lack and a Hard Place: 5 Difficulties Delaying Significant Market Entry at Scale in Digitally Manufactured Flat Pack Furniture and their Solutions.

1. Shipping

Shipping rates have been created by companies such as FedEx and UPS who started by delivering documents for lawyers. They’ve moved into heavier objects as ecommerce has grown but their pricing models still mean that a 20 Kg item would be cost prohibitive to ship door to door via these services.

Possible solutions:

– Distributed manufacturing whereby local manufacturing partners are found for each of the territories that the company wishes to sell into would significantly reduce shipping costs.

– Hyper local manufacturing where the furniture item would be laser cut or made in each city or area is also a possibility. This is the model OpenDesk chose to circumvent this problem and make in a more sustainable way.

– Setting up networks of freight forwarders and local truck based distribution companies to deliver on pallet would also significantly reduce costs.

– Dutch ecommerce company CoolBlue has its own delivery trucks that have let it enter the ecommerce market for fridges and other white goods. This is a costly solution but one that could help differentiate a firm.

– A complete redesign of furniture as a concept eg tubular telescopic frames or inflatable furniture could also help a company overcome shipping issues. Online sales of mattresses were a non starter until companies realized the potential of memory foam to make an easy to roll up mattress that was inexpensive to ship.



2. Design is hard.

Companies that have tried to explore online furniture sales have touted design as a key element to their offering. They have however not used design to design themselves out of their problems. Often their offerings have not been cutting edge or very exciting.

They’ve done little to differentiate themselves in overall materiality or through the designs themselves. Often their furniture was overly expensive reissues or rather hum drum design items. They haven’t used design to solve the shipping problems or to really create solutions to modern day living issues that other companies have not done.

Possible solutions:

– Being more design lead as firms and focussing more on design solutions for living would aid them in making their offerings more unique and worthwhile.

– By using design as a tool to solve problems they could perhaps deploy innovative new materials or technologies to making their furniture better.

– By employing more designers directly and creating truly inspiring new design they could find ways of more effectively sustaining their businesses.

– Herman Miller and Vitra are examples of firms that through high level manufacturing innovation and close collaboration with designers have made iconic work for decades sustaining their businesses. An online firm could become their counterpart by sufficiently trusting designers.

– These companies have not really tried a ‘moon shot’ type of approach whereby a significantly talented and equally famous designer was asked to do a deep dive into a future form of a chair, desk or similar. Such an approach may put them on a path to more recognition and sustainable sales in furniture.   

3. Furniture is an experience.

As IKEA does well with its ersatz living rooms in its stores an online method has to be found whereby a consumer can truly experience a furniture piece. Touch and feel and the ability to test if one sits well on a chair will always make online sales of furniture problematic.

Possible solutions:

– AR, VR and other virtual ways of displaying products could ameliorate this issue.

– Creative ways of letting people experience and test the furniture would lead to more sales. If chairs were available in an airport lounge for example people could take the time to experience them during a layover and then buy.

– Swatches of materials sent out could let people feel a product before they buy it as well as convey some of the quality of the product.

– Virtual fit tools and mass customization could let people experience and be more inclined to buy furniture online.

– Generally accepted opinion maintained that online shoe sales would never work. Many people thought that online clothing sales would be an impossibility also. The solution was to offer liberal return policies which has lead to Zappos, Zalando, H&M and ASOS growing at incredibly high rates. The problem was that people would not be able to see if a shoe fit, the solution was for them to order five pairs of shoes and return

– This has created a significant returns problem for these retailers (as well as making their revenues wonky) but it did make it possible for them to sell shoes at scale. What is the equivalent solution for couches? Risk free returns? “Sofa parties” where you can test out a couch locally?

4. A Lack costs $7.99.

An IKEA Lack side table now costs $7.99. The Mamut Children’s stool has recently been reduced from $7.99 to $5.99. IKEA relentlessly and continually lowers prices as newer ways are being invented to make things more cheaply. Yes, the company’s scale and integration make a lot of low pricing possible but this is not the only trick up IKEA’s sleeve. Value engineering is a concept that is well used in many areas. IKEA excels at value engineering furniture so that it is inexpensive. It is still the only company that truly value engineers furniture well. New materials, new manufacturing processes and new assembly technologies are being continually developed to make existing products cheaper.

The core frugality in the firm and their focus on affordability is not something that one can easily copy. This is a discipline that comes straight from the founder on down. This is not a company that looks at making a $4 chair. This is a company that looks at soft serve ice cream and concludes that it can offer this cost effectively if people soft serve themselves ice cream. IKEA looks at the world through the prism of affordability. IKEA truly does believe in Democratic Design and looks at the form, function, quality, sustainability and low price of each of the things it makes. It also uses the same philosophy throughout its supply chain. It recently switched to cardboard pellets to save on shipping weight for example and also uses recycled PET bottles for protective film applications.

The company a few years ago developed the wedged dowel, a new way to click fit and screw furniture together. This not only will make assembly easier but also saves on machining and parts costs. The company is now increasingly rolling out wedged dowel assembly in more furniture items. IKEA is not a company that by coincidence came upon MDF and flat pack and then casually conquered the furniture retail and manufacturing world. IKEA is a company where value engineering is a goal throughout design and business operations. The reason the Lack table is $8, is that they haven’t been able to make it for $7. A few hipsters stroking their well groomed mustaches is not going to outcompete a company such as that.

Possible solutions:

– If a start up made value engineering a core part of their business and had the extreme cost focus that IKEA has they may find ways to outcompete them.

– If a company developed new materials or new manufacturing processes then they could also find ways to, at least temporarily, best IKEA in some cost areas. Inflatable furniture may sound like a fanciful idea but only because no one has been able to come up with inflatable furniture that is sufficiently rigid and comfortable yet. Extruded aluminium rails for windows could point to a new way to construct load bearing frames very cost effectively by adding sail cloth spans in between, new types of couches could be made which would be cheap to transport.

– Innovation isn’t a few guys in sneakers Instagramming lunch. Innovation in hardware is the development of new materials and production processes at scale that manufacture items to spec while outperforming in cost. This should be a much higher focus for start ups in this area.

5. USPs, nice to have.

Amazon has all the books in the world, online electronics retailers have significantly lower prices. Vitra has a uniquely admired brand. What exactly are the unique selling propositions or unique value propositions of online digitally manufactured furniture? What can these companies offer as an idea or product that outperforms current furniture? OpenDesk’s idea to let local makers laser cut their desks means that potentially the furniture could be very inexpensive to make. They sell a meeting table for $1000 though, giving you lots of competing offerings in that price range.



Possible solutions:

– Generally the potential can be there to sell extremely low cost if shipping optimization is coupled with value engineering. So far this has not been attempted directly by these companies.

– Materials, design or functionally unique characteristics could differentiate a furniture item sufficiently enough to bring in sustainable growth.

– Business model innovation such as rent your furniture or furniture exchanges could also bring growth.

– A complete rethink of furniture could also let them compete. Eg large soft Lego like blocks that could let people build their own furniture, complete custom memory foam furniture, large scale 3D printing processes for inexpensive furniture etc..

Billy Instructions

Billy Instructions

As of today the giant Blue and Yellow fortress that is IKEA looks formidable. Even though there have been a number of online digital flatpack start ups, no one seems poised at the moment to worry the frugal Swedes. Newspapers looked unassailable too, as did television. Blackberry was huge until it wasn’t. The internet is a hungry creature voraciously gobbling up bricks and mortar, spitting out ones and zeros. The digitization of manufacturing and design is ongoing. Online digital flatpack companies have so far faltered. They’ve not made cutting edge inspiring work worthy of Vitra and other design companies nor have they made true innovations in the furniture space.

The Thonet tubular furniture is not a design footnote, it opened up a new way to make chairs. Similar innovations will have to be delivered in order to make digital flat pack a mass consumer reality. The technology to digitally manufacture at low cost is there, but there has been insufficient design done to bring new materials and designs to market which push the furniture market forward. Until true cost innovation and design innovation are successfully implemented by digital flatpack companies, it seems that all is peace and play in Småland. With the right designers and technology however, there could be teams out there that could seriously challenge IKEA by creating even more democratic furniture.



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