Project “End-to- end digitization”
The product defines the process and the solution
In the furniture industry, the use of digital technologies can be profitable in many ways: with virtual reality, Big data analytics or online configurations, it is possible to open up new sales channels and attract new customers. The challenge is to find the right mix of technologies in relation to customer needs and the Value stream design. ROI realised an ‘end-to-end’ digitization project with a worldwide furniture manufacturer that took into account all relevant stations of Value creation: from the customer experience via ordering to manufacturing and logistics.
Understanding and evaluating the different ‘customer journeys’ of the various top brands to implement a consistent strategy and approach to digitization.MORE
Development of a valid project structure for all corporate brands. Evaluation of the technical structure to ensure added value for the respective ‘customer journey’. Build understanding for the process steps of the end-to-end solution with brand managers.MORE
Not everything that is technically feasible is also accepted by the customers in the respective segments. Every brand has its own ‘customer experience’. Digitization only works as a differentiator if the customer is on board and accepts the offer.MORE
ROI success model
Front-end and back-end teams working in parallel make sure that product customisation functions properly from the point of sale via production up to delivery of the product.MORE
The group sells a variety of established brands under one roof and is represented in various European markets. The broad range of the product portfolio ranges from luxury to discount furniture. Each brand also has its own specific sales channels and very different types of customers. This segmentation was something the company wanted to reshape together with ROI. The approach: a unified and integrated ‘end-to-end’ process from the customer request to the delivered product was to be defined and used together with new technologies for all brands. Here there were two risk areas: for one, no one knew how the customers at the point of sale would take to the technologies. On the other hand, it still remained unclear how the processes in the value chain would be changed by the digital sales channel.
To find this out, two ROI teams were used. One of these took care of the back-end integration of the IT and thus everything that happens from the merchandise management ERP system all the way to production. The second team accelerated the development of the digital channel, starting with the customer experience at the point of sale, working through the ordering process and on to the factory itself.
The premium brands of the company were the starting point for the digitization project, because here it was possible to deploy and test all important processes and digital features in a very compact form. Starting with high-end soft- and hardware solutions for visualising the new customer experience using 3D technology and Augmented Reality solutions, up to the virtual furniture configurator for sales support and the ordering system. The results obtained here and process potentials were then to be gradually adapted for use by the other group brands. For this purpose, ROI and the group’s brand managers first created a concept for the branding strategy that incorporated the key elements of the new ‘customer experience’ in the premium segment.
It quickly transpired that not everything that is technologically feasible is also sensible or attractive to customers in the premium price segment. At the beginning of the project, each brand manager already had clear ideas about how he wanted to use the technology for his brand and create a digital ‘customer journey’. This high affinity for digital tools was, of course, a very good starting point for the work of the project team. Together with ROI, the brand managers were thus able to quickly come to a common understanding of what the processes across the entire digital sales channel needed to look like for all brands in order to achieve appropriate scale effects.
But, of course, when it comes down to it, sales do not increase due the fact that salespeople are crazy about VR goggles or touch screens – it’s about the customers. So the project team focused on precisely identifying the customers’ expectations and needs. Which tools do customers accept? How tech savvy are they? What do they expect from a new buying experience? To answer these questions, prior to the development of the corresponding digital tools, a requirement analysis was needed to understand the needs of retailers and end users of the different brands and to translate them into corresponding solutions to support the shopping experience. The result was a modular ‘digital tool set’ for the point of sale. With identical basic functions to a bed configurator or automatic ordering processes, it can be used for all brands.
The solution that ROI developed with the company is an innovative mix of a visual 3D space and experience and an intelligent configurator. Moving between OLED screens, the customer finds himself in a virtual, photorealistic, 3D-animated room. There, he is able to consider his desired piece of furniture – rendered as a 3D model – from all perspectives. In addition, an ‘intelligent’ configurator is used, similar to the car configurators used in the automotive industry. While the customer ‘tests out’ his virtual product, the salesperson can configure different variants, e.g. the frame of a bed, material or back supports, and visualize these via the screens. In the future, the salesperson will be able to call on several different room settings with plant arrangements, parquet or carpet floors. Ambient Lighting effects, i.e. different lighting scenarios for day and night will enhance the customer experience. This mix of digital and real world makes buying an experience with ‘wow factor’.
If the customer has preconfigured his furniture, the order can be done at the press of a button. The process for this is automatic. Product customisation via the configurator at the point of sale changes the supply chain, of course – more variants result in smaller batches. Parallel to the developments in the front-end area, ROI therefore merged the ERP systems of the different brands so that the data of all production and logistics processes are available in real time.
The next steps
The project team is gradually transferring the results of the new digital applications in the premium sector to the company’s other bed brands. The medium-price segment can particularly benefit, because here the variety is extremely high. The setting for the order process is already in place, there will merely be cuts in the hardware requirements for the purchasing experience. The OLED screens will be replaced in the furniture store by tablets at the point of sale, for example. But of course, new tools will open up quite different opportunities in future, making the ‘customer journey’ even more perfect. In the above case, virtual reality applications or interactive power walls are already envisaged, for example.