The future of the furniture market with Daniel Aram
Daniel Aram of the Aram Store, says the future’s bright for the best full-service contract furniture dealers
Words by Daniel Aram
In a market for quality, modern, contract furniture that is increasingly becoming commoditised with low operating margins, only the best full-service dealers will survive in the long run.
When Aram started supplying the London contract market with high-quality modern designs in 1964, there was a clear need for a full-service dealer. These products and their manufacturers were not well known to the A&D community and their clients. There were no showrooms and it was more complex to source products in a pre-EU Europe. To fill the gap, Aram provided product knowledge and experience, a venue for sampling and an international sourcing capability.
Fast forward 50 years and the environment is dramatically different, with the disintermediation of the dealers within the supply chain and an increased capacity of supply the two main drivers of change.
The middleman is being cut out (disintermediation). Manufacturers are increasingly setting up their own showrooms in London, with many selling direct as well as through dealers. Customer knowledge about products, pricing and sourcing options is also often very extensive, largely thanks to the internet.
The capacity of supply has increased as more dealers have entered the market. Previous barriers to entry, such as the need for a showroom and samples, have now receded and sourcing around Europe has become easier, resulting in more small back-office dealers with low overheads.
In addition, dealers and contractors that previously focused solely on fit-outs, system desking and storage are increasingly providing a buying service on larger projects for the other items, including loose furniture.
Both of these key drivers are commoditising the supply of quality, modern, loose furniture and therefore driving down margins. In this environment, it's worth asking if there is still a place for a full-service dealer of quality, modern designs? If not we can all change our business models and compete on a lowest-cost basis.
Our experience at Aram today is that there is still a real demand from both manufacturers and clients for the services that full-service dealers offer. A thorough knowledge and experience of products and their functional performance, the ability to source from a wide range of high-quality manufacturers, and showrooms with the stock to be able to provide samples are all important to the buying experience. These benefits are all uniquely available from full-service dealers, not to forget after-sales support.
After 50 years, our commitment to providing a full service to our suppliers and clients is the same, but at the same time we are working harder than ever to streamline our operations to increase efficiency and productivity. A lot has changed over the past half a century, but a low-cost, full-service dealer model is still possible and will increasingly be a necessity.
