Give Con­sumers What They Want: Card­board Fur­ni­ture

ForbesWeekly - - NEWS - BY RICHARD KESTENBAUM, FORBES CON­TRIB­U­TOR

I re­cently met with Dara Schaier, a soon-to-be grad­u­ate of Goizueta Busi­ness School at Emory Univer­sity who is start­ing a com­pany that builds fur­ni­ture out of card­board (called, ap­pro­pri­ately enough, Built Out Of Pa­per). I’m writ­ing about this not be­cause the busi­ness it­self has been im­pact­ful since it hasn’t even started. I’m writ­ing about it be­cause what it means is im­por­tant.

Schaier ex­plains that cor­ru­gated card­board (if you don’t know the term, the pic­ture be­low will re­mind you that you’ve seen it mil­lions of times) has fan­tas­tic strength. The cor­ru­ga­tion struc­ture makes the card­board strong in the same way that form­ing steel into an I-beam or a bridge truss en­hances the strength of the ma­te­rial. Ex­cept for when it comes in con­tact with wa­ter, cor­ru­gated card­board is very durable. Schaier’s first prod­uct will be the book­shelf in the pic­ture above.

Schaier is tar­get­ing her prod­uct at re­cent col­lege grad­u­ates, set­ting up their first home, get­ting their first job, seek­ing to es­tab­lish them­selves on an in­de­pen­dent path, de­vel­op­ing their adult lives. She is ad­dress­ing the mar­ket of younger mil­len­ni­als, peo­ple ages 2126.

Defin­ing An Im­por­tant De­mo­graphic Group

Michael Par­rish DuDell, Chief Strat­egy Of­fi­cer of Coupon Fol­low, has been study­ing that group ex­ten­sively for the last 10 years. He cites the work of Psy­chol­ogy Pro­fes­sor Jef­frey Ar­nett who iden­ti­fied peo­ple be­tween the ages of 18 and 25 as emerg­ing adults. They are phys­i­cally adults but they are not truly in­de­pen­dent. They are not ready

to make the com­mit­ments that full adults make to re­la­tion­ships, ca­reers, homes and their own iden­tity. Schaier is us­ing what Ar­nett calls the in-be­tween­ness of that group to of­fer them a prod­uct that works well for the tran­sient na­ture of their lives. Par­rish says that when boomers were young, they were ea­ger to make their first, en­dur­ing pur­chases of fur­ni­ture and es­tab­lish heir­looms and tra­di­tions. Emerg­ing adults aren’t ready for that. They want to live com­fort­able lives with­out mak­ing the kinds com­mit­ments their par­ents made when they were in their early 20s. Where boomers wanted prod­ucts that lasted, their emerg­ing adult chil­dren know that what they do and what they buy now will not be per­ma­nent.

Card­board fur­ni­ture has other at­tributes that appeal to mil­len­nial and Gen-Z con­sumers. It’s not just suited to their out­look and life­style, it’s en­vi­ron­men­tally re­spon­si­ble. Card­board is made of 70% re­cy­cled ma­te­ri­als and the en­tire prod­uct can be dropped in the re­cy­cle bin when it’s no longer wanted. It’s light­weight so an Emerg­ing Adult doesn’t have to bor­row a car to bring it home. It can be as­sem­bled eas­ily with­out any tools, giv­ing the con­sumer a pos­i­tive, re­lat­able ex­pe­ri­ence with the prod­uct.

Es­tab­lish­ing a brand based on card­board fur­ni­ture al­lows for in­ter­est­ing brand ex­pan­sion. If the prod­uct and the brand gain ac­cep­tance, the busi­ness can ex­pand into other types of en­vi­ron­men­tally-friendly prod­ucts for the home be­yond card­board fur­ni­ture.

What’s in­ter­est­ing about the idea of card­board fur­ni­ture isn’t so much the fur­ni­ture it­self. It’s the idea that the prod­uct is in align­ment with the life stage and value sys­tem of a cer­tain kind of con­sumer that is only now be­ing rec­og­nized. When the align­ment be­tween a per­son’s life and a prod­uct works, the con­sumer sees value and doesn’t need dis­counts or liq­ui­da­tion sales to be mo­ti­vated to buy.

Where New Ideas Come From

With all the tur­moil go­ing on in re­tail, you’d think the world of le­gacy re­tail­ers and brands would be ex­per­i­ment­ing like crazy. But the only ma­jor re­tail­ers we see cre­at­ing dras­tic ex­per­i­ments are Ama­zon and Wal­mart. Wal­mart has come late to the game of rad­i­cal change but they are hard at it now fol­low­ing their pur­chase of Jet.com and the mul­ti­ple ac­qui­si­tions that have fol­lowed. Ama­zon’s most profitable busi­ness, Ama­zon Web Ser­vices, had pre­vi­ously been an in­ter­nal divi­sion pro­vid­ing ser­vices only to Ama­zon. Ama­zon had the silly idea to of­fer it to cus­tomers and in 2016 that gen­er­ated over $4 bil­lion in op­er­at­ing in­come and sup­ported all of Ama­zon’s other ex­per­i­men­ta­tion in re­tail.

Think­ing rad­i­cally has gone out of re­tail in the last 20 years. As fi­nan­cial pres­sure has mounted, re­tail­ers and fash­ion brands have done what they can to re­duce risk, not to in­crease it. With the change in con­sumer tastes hap­pen­ing so fast now, the ap­proach of re­duc­ing risk is lim­it­ing re­tail­ers to tin­ker­ing while calamity hov­ers above their heads.

Change al­ways comes from the out­side, we keep see­ing that over and over. The per­son who in­vented wheeled luggage wasn’t in the luggage busi­ness, he was a pi­lot. Al­bert Ein­stein was a patent of­fice clerk when he de­vel­oped his most im­pact­ful the­o­ries. Now a newly-minted MBA stu­dent is com­ing up with rad­i­cal ideas for the fur­ni­ture busi­ness. I’m not say­ing that card­board fur­ni­ture will be suc­cess­ful, I don’t know. I’m say­ing that now is the time to turn re­tail on its head and try ev­ery­thing new that might res­onate with con­sumers. The al­ter­na­tive isn’t re­duced risk, it’s the end of many es­tab­lished busi­nesses.

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