Technology advancements in product development and manufacturing have lowered the entry barrier to this market. The logistics technological advancements are making selling furniture and home furnishing online easier than before. Coupled with the rise of e-commerce, which existing players like IKEA was late to the game,
it has created a new playground for newcomers.
Needs of millennials
And then comes the mismatch between established players’ offerings and millennials’ needs for function, aesthetics, and design.
- They are accustomed to well-designed products (think iPhone).
- They want simplicity not just in the products but also the selection. (After all, we’re also in the age of curation.)
- They want brands they can connect with.
- They want transparency: what is it made from, how is it designed and made, and who made it.
- They want products aligned with the beliefs about diversity/inclusion. (For example, gender-neutral design.)
In other words, honesty and authenticity is key, and the value proposition must be simple and clear.
The newcomers’ game plan
In the midst of these market conditions here comes the challengers. The newcomers fully embrace Internet and e-commerce and place the D2C business model at its core. The business model of the D2C disrupters in general have two things going for them:
- They sell direct and thus eliminate the middlemen (wholesalers and retailers), which allows them to lower prices and offer higher quality goods.
- The have a direct connection with the customer and thus are able to better learn their needs and adapt to them.
They further complement the above with two more elements:
- A streamlined hassle free experience from communicating, purchasing, and to returns.
- Creating a brand where people can connect to and resonate with.
What about stores and physical presence? Although e-commerce is at the core, these D2C also leverage popup stores and physical outlets as a showroom that communicates the worldview of the brand as well as a portal to the Instagram accounts of its visitors.
With that, let’s meet some of the courageous challengers and see what they stand for.