Made.com is an online furniture retailer that was founded in March 2010. The company is UK based and has expanded to Ireland, France, Italy, Germany, Belgium and The Netherlands in eight years (Sunderland, 2016). Even though Made.com primarily operates through their online channel, they do have great relationships with a large network of experimental showrooms across Europe, in which they showcase their furniture and designs (Milbrath, 2016). With a sales growth of nearly 50% annually, Made.com has become quit a success. Their unique business model has disrupted the supply chain and revolutionized the playing field of furniture retailers for good (Cassidy, 2017).
How does Made.com create value for their customers?
Made.com has a customer centric business model, in which their customers are put in the center of everything that goes on. The customers get full control when it comes to deciding which furniture goes into production. By giving their customers this power, they have addressed and filled a void in the existing furniture market. Other companies, such as Ikea, have addressed the need for functional and affordable furniture. Made.com however, disrupted the market by successfully addressing the need for unique and affordable furniture (Aba Research, 2017). The customers get to decide, by voting on their favorite designs, which design ideas go from sketches into production. Furthermore, Made.com organizes a yearly “Made Emerging Talent Award” contest in which upcoming designers get to submit their unique designs and Made.com’s Unboxed online community get to vote on their favorite designs. If a design gets enough votes and wins the contest, the item gets produced and sold on Made.com within a period of approximately 12 months. The winning designer(s) get the well-deserved attention, which boosts their beginning careers, and more importantly, the designer(s) get royalties for their item(s). The unboxed community also allows for the customers to feel more connected to the brand and find likeminded peers. For unboxed community member, the ability to ‘co-create’ is a way for them to express their creativity and to incorporate their personal style into the product line of an existing company (Milbrath, 2016).
Efficiency Criteria
Made.com has been able to set itself apart from other (online) furniture retailers. They have a close relationship with several independent designers, and in addition also have an in house design team. An advantage of their business model is that it allows them to quickly react to new trends and allows for trial and error. As a result of the designs being crowdsourced, the company is able to tailor their supply to customer demand. All of this enables the company to release new collections often and quickly. It also allows them make quick decisions with regards to the discontinuation of certain collections if they do not live up to the company’s expectations. In addition, the company tries to minimize its costs by primarily operating online, outsourcing their production and by creating close relationships with their suppliers. Also, the pieces that are sold by Made.com have a longer lead-time. This allows Made.com place orders in bulk, which further reduces their costs.
Another great way in which the company was able to set itself apart is by establishing their Unboxed community. It started off with Made.com contacting their customers and asking whether they were allowed to ‘come over and take pictures of the unique items in their houses’. Now it has turned into their own equivalent of Pinterest, in which their customers can upload pictures of their Made.com pieces. This is a great strategy that Made.com has to create user generated buzz and strengthen the community ties (Aba Research, 2017; Made.com, 2018). In addition, it is extra and free promotion of their products, because potential buyers can see the items in more real life settings and get even more inspiration.
In conclusion, by creating a customer centric business model, Made.com has been able to set itself apart from other furniture retailers. Made.com provides the consumer and independent designers with a platform that allows them to out their creativity and express themselves. The company has changed the game by not just focusing on functionality and affordability, but by putting the customer in the middle. By involving them with design ideas and giving them a community of likeminded peers they proof that they have been really listening to the needs of their customers.
References
Aba Research (March 22nd, 2017). ‘Made.com – carving out a distinctive furniture-business model’. Retrieved from: https://www.abaresearch.co.uk/single-post/2017/03/22/Madecom-%E2%80%93-carving-out-a-distinctive-furniture-business-model
Cassidy, A. (September 18th, 2017). ‘Made.com founder: ‘We want to be the new Ikea’’. Retrieved from: https://www.theguardian.com/small-business-network/2017/sep/18/madecom-founder-we-want-to-be-the-new-ikea
Milbrath, S. (August 5th, 2016). ‘Co-creation: 5 examples of brands driving customer-driven innovation’. Retrieved from: https://www.visioncritical.com/5-examples-how-brands-are-using-co-creation/
Sunderland, R., ( July 6th, 2016). ‘Online furniture boss gunning for Ikea: He set up shop just six years ago, but man behind Made.com is thinking big’. Retrieved from: http://www.thisismoney.co.uk/money/markets/article-3677591/The-online-furniture-boss-gunning-Ikea-setting-shop-London-just-6-years-ago-man-com-thinking-big.html
Consumer Value Creation 