PSA INTERIOR DESIGNERS🚨, TECH IS HERE FOR YOUR LUNCH
Digital native Interior firms like Livspace will disrupt the interior design industry especially in India through e-commerce.Today we are going to discuss why it is happening.
Disclaimer : These article is my observations rather than the absolute truth,It is bound to have mistakes.Let me know if you find any.
Most of you will think what on earth is an digital native interior firm
Let’s define the digital native Interior firms (DIF) as one
- Which works across various geographic locations
- Works with an distributed workforce
- Leveraging the power of internet
such as Livspace , Homelane for the sake of discussion.
Jobs to be done
Remember we are paid for outcomes for customers rather than the product.This principle or theory or concept, whatever you wish to call it is called as ‘Jobs to be done’.
In simple terms,if we are buying a camera.We don’t pay because we need a better camera,we pay because we need better photos.If that better photos are provided by a mobile phone,you would buy the damn mobile phone itself.The customer doesn’t care whether you are a camera company or mobile company or the technicalities of manufacturing or you business model or your employees.All he/she wants is to take better photos.
If you understand this concept, Let’s now get of crux/core of the discussion today.For those of you who still didn’t understand what the hell is ‘Jobs to be done’ concept,Just take it as looking through the eyes of an cold blooded customer.
There are four major requirements from customer needs from an interior firm in addition to good design and they are
- Discovery
- Convenience
- Economics/budget
- Trust
Digital interior firms excel in this factors right now and they are modelled around these requirements predominantly.For example, DIFs considers itself as a sandwich company with layers of eCommerce,Design & Construction.
DISCOVERY
How many of you can recommend three interior firms for friend/family based on their budget & taste ?
Even people in the spacemaking industry including myself won’t be able to recommend even two interior firms because we are taught with the notion that if we have a good product and network well in social settings,the customer will come to us.
- One of the major pain points of a customer who want to have his space Interior designed is to find the right firm for his budget and taste.*Remember the customer wants the right firm not necessarily the best firm.
Product & distribution
First time founders are obsessed with product,Second time founders are obsessed with distribution -Justin Kan
I am not saying that you need a good distribution model but not a good product.Product will be the base but a distribution model will amplify it’s reach.For example,an restaurant can have a great distribution model with dominant social media presence,Integration with food portals like Swiggy & Zomato ,Well designed delivery boxes with good ergonomics and great graphic design but if the food is not good enough,you won’t order from them.
Brand awareness
DIFs creates brand awareness through various social media channels like Instagram, Pinterest, YouTube etc.Some of you may wonder what is brand awareness,It simply means that you know there is a brand XYZ and it does a specific set of activities in a specific manner.For those of you who still doesn’t get it, I’ll elaborate with an example.Let’s take KFC.You know there is a entity called KFC (Presence) and it is chicken based fast food restaurant (activities) and their food will be delicious (emotion).
Community engagement
DIFs develops an community through providing valuable content like ‘how to choose a bedroom curtains’ free of cost.But it doesn’t just produce valuable content but also engaging content like ’10 beautiful child bedrooms’.They catch & retains potential customers by these two hooks i.e Engaging content which appeals to our emotional side and Valuable content which appeals to our logical side.
So when a customer wants a Interior designed space, they would already be a part of the community or they know the brand or some friend/family will recommend the brand.
Brand awareness and community engagement won’t make the customer choose you but it will definitely brings you to the door of the customer.
CONVENIENCE
As human beings,we are wired to choose the easiest & fastest option provided they meet our standards.Would you buy from food a good enough restaurant in Swiggy or travel to a great restaurant to eat food.Most people will choose the former option most of the time.
User experience
An conventional interior firm will onboard potential customers with an static form with multiple follow ups while digital native interior firms (DIF) will onboard potential customers with an user friendly dynamic form with fewer follow ups with help of their propitiatory CRM (Customer relationship management) & Design software.Since everything from design to installation is handled by a single entity,there will less miscommunication between stakeholders and your queries would be resolved in a quicker manner.
Customer will always want a quicker and better option for a good budget.They don’t care about status quo.
BUDGET
The budget is a double edged sword,it should be feasible for both the customer and the firm .Livspace reduces the budget required by their advantages in economics of scale and Realm principle
Economics of scale
Economics of scale is the theory that as an business it would get certain inherent advantages by the virtue of its size.I’ll elaborate with the example of Livspace itself.
DIFs can have a massive advertising budget since it could provide services to wide variety of people irrespective of geographic location (Opportunity) but also because it has a huge cash trunk (Means).DIFs will have reduced operating cost per project in terms of employees since it has a distributed workforce powered by Division of labour,Knowledge sharing,High productivity due to demand aggregation.
You may not know the above terms,I’ll explain each term with an example
Division of labour is the principle that as more people specialise in a activity in a team,the productivity of the team increases.
Knowledge sharing is the principle that when employees learn during each activity of the buisness and develop best practices.The best practices implemented will make every employee better. Knowledge sharing will essentially create a system for doing things better complimenting the employees talent/ability rather than completely depending on the employes.You can create and share a SOP (Standard Operating Procedure) like change request form for effectively managing changes from Client.Knowledge sharing will be like to a company what regular updates to a software.
High productivity due to demand aggregation is the theory when you have large volume of demand you could effectively do it in less time and cost by effectively routing it your employees.For example,Let’s talk Domino’s for a minute.Let’s assume they get 50 delivery orders in a hour.In this scenario,the per hour wage of the delivery person and vehicle cost (Fixed cost — Cost which doesn’t varies with the number of activities) will be same even if it is two or 20 orders.Only the fuel cost will vary (Marginal cost — Cost that varies with the number of activities).After certain threshold,even the marginal cost will reduce.You’ll send the delivery person in his bike in a way such that each delivery person go to a specific neighbourhood and delivers around it so that it increases the fuel efficiency.
Realm principle
Let’s talk about the realm principle,It is the theory that the activities determines the realm (Atoms,bit & memes) in which it operate.For example,The optimal solution to a business meeting would be a zoom call(Bits — Digital solution) rather than a physical netting in a conman location for stakeholders (Atoms — Physical solution) in most scenarios.
In the interior space,the optimum solution for on boarding would be dynamic form rather than a static form with a series of follow ups.
DIFs uses the realm theory and does few tweaks like the above one and makes the process of providing service cheaper for itself while making it easier for the customer thereby creating a win-win situation.
TRUST
DIFs earn their trust by three strategies,
- Too big to fail
- Complete responsibility
- Experience center
Too big to fail
We humans are trained to trust large institutions rather than individuals over the course of history. We will trust large institutions since it has more at stake rather than us (Skin in the game).For example : If DIFs is unable to complete projects due to extraordinary circumstances,then it would be a huge financial loss for the DIFs rather than the customer comparatively.
Complete responsibility
We tend to and should believe if a company accepts complete/comprehensive responsibility for a product.That is why apple has a higher trust factor than dell since apple is responsible for both the hardware and software.The game of abdicating responsibility will stop.Since DIFs provides end to end solution it can reasonably take and is taking comprehensive responsibility for the product.
Experience centre
Most DIFs has physical experience centres in tier 1 cities in India and are in the process of expanding them.The experience centre provides two things for the potential customer.
- It provides a tangible physical presence for the customer to trust the firm
- It allows the customer to experience the quality of services and products in a real world setting.
At the end of the day, economy runs on the trust only
FINAL THOUGHTS
Digital Native interior firms will be a formidable player in the interior scene.They are no longer the underdogs in the space,conventional interior firms are the underdogs and they are the big bulls right now.
The interior design industry won’t develop like web browsers industry where only a handful of firms wins,It would be more like the fast food Industry where large number of brands thrives regardless of size.
Let me know if you have any doubts or disagreements.I would love to have a constructive discussion.
