David Rosenthal: preference

Transcript context

…Yup, and it’s apocryphal. I am sure something along the lines of this insight happened. There were many other companies that were doing flat-pack furniture before this, including the company we’ve talked about multiple times on this episode, Sears Roebuck, was flat-packing their catalog distribution in America. But certainly the company that gets credit for popularizing and growing the volume of flat-pack furniture being shipped 100x, 1000x around the world is IKEA. And it’s a nice little story. But I think what IKEA does is they go all-in on this. The first flat-pack product that they design is the max table in the mid-1950s. But by the end of the 1950s, flat-pack and then self-assembly by the customer is expanded across the entire range, all of IKEA’s furniture. Obviously, some stuff you can’t flat-pack, but as much as possible. And because they had, for separate reasons, started doing their own designs with manufacturers, they can do this. Flashing forward a little bit to today, it’s interesting to look at all the downstream things that happen from flat-packing. (1) It enables this space-saving in trucks. It enables you to do more volume for the same cost. (2) There’s a cost reduction since customers can do the labor and transport. Before, you had to have someone at your company put the chair together, and that costs a lot of labor. Now you’re putting that on the customer. You’re also making it so the customer has the capability to transport the merchandise in a way that they couldn’t before. They had to have a truck.…

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