A fully digital business model

Challenge

To create an unique, custom-designed product and service for customers worldwide in a diverse market and make the right decisions about product design and marketing. 

Solutions

A fully digital business model based on online configurators, digital interface, order-flow, marketing and social media.

Costs

Hiring local PR consultants to develop a digital platform and reach customers in different markets.

Result

Direct dialogue with customers world-wide. No inventory costs of finished goods.

Introduction

Bemz is a business to consumer (B2C) company that designs and manufactures home textile products for IKEA sofas, armchairs, bed frames and more.

The company entered the market in 2005 with the business idea of designing, producing and selling unique, custom-made covers to fit the most popular IKEA furnitures. Over the years, Bemz has increased their portfolio of cover textile to cover a large range of different IKEA products. Today, Bemz has over 250 textile choices and delivers to 42 countries worldwide.

The entire production process is managed from the global head office in Stockholm, but Bemz uses subcontractors in the Baltics for cleaning, washing, printing, cutting, sewing, inspection and shipping.

It was never an option to open a store

When Bemz entered the market in 2005, the company was looking for a way to rethink the traditional shopping experience with a retailer or a shop that presents a small selection of standard products and services. Instead, Bemz has worked on a business concept to offer individualised products and services exclusively online through new digital solutions in customer dialogue and in their marketing efforts. The core business idea is to make consumers able to take a relatively low cost mass-market product, like an IKEA sofa, and tweak it to reflect a more unique and custom-designed style.

 “I had the idea in 2005 to offer sofa covers for IKEA furniture, but because my background is from the technology industry, it was never an option for me just to open a store on the high street. I always saw this company as an internet company, that it should be global and that we should provide our products to customers worldwide”

- Lesley Pennington,
Founder and CEO of Bemz AB

Though Bemz designs and produces textile covers for IKEA furniture, Bemz is an independent B2C company and is not part of the IKEA corporation. This also means that the company is unable to use IKEA’s presence to reach customers through existing IKEA stores, why Bemz from the very beginning have had to think in online and digital sales and marketing solutions to reach customers world wide.

Digital technology in mass-customization

One of the most important factors for Bemz in entering the market has been to build their business on the concept of mass-customization and online configurators. This is a way to combine the flexibility and personalisation of custom-made products with the low unit costs associated with mass production in IKEA products.

The founder, Lesley Pennington previously started a business in Canada, providing computer training to the design industry and therefore, knew that digital technology, such as online configurators and 3D preview features, can provide a custom-design experience despite the lack of a physical store experience.

“Actually, one of the most important factors around mass-customization is that your customers co-create with you. I believe this actually creates a closer relationship with customers”

- Lesley Pennington,
Founder and CEO of Bemz AB

Through online configurators, CEO of Bemz, Lesley Pennington states, Bemz is able to utilize IKEA’s mass production of home interior in a flexible and collaborative way. The service and dialogue with customers is exclusively handled online on the webpage. Customers can design the style of their cover for the IKEA-furniture by selecting specific fabrics, patterns, colours etc. from their own preferences. Through 3D preview features, the product is automatically visualised for the customer. Since Bemz entered the market in 2005, the company has developed their design-portfolio and today, their online configurators can handle more than 250 kinds of fabrics, colours, quality and design.

When a customer places an order, it goes directly to the manufacturing process without manual overview of the custom design. The actual manufacturing is carried out by subcontractors in the Baltics: they clean, wash, print, cut, sew, inspect and ship the orders. 

“The digital interface is at the heart of mass-customization because it provides a user-friendly and speedy way to gather the consumer’s customization preference”

- Lesley Pennington,
Founder and CEO of Bemz AB

Creating a better digital marketing strategy

Since they began in 2005, Bemz has put a lot of effort into digital marketing. The company oversees marketing from their head office in Stockholm, but has always used local PR consultants to reach customers and to understand the market where they are operating. For example, the company found out that safety is very important for German consumers, while other aspects are important in other markets.

Today, Bemz has a broad digital marketing strategy that makes use of multiple channels to reach markets worldwide. Bemz has invested in search engine optimization (SEO) and search engine marketing (SEM) since they entered the market. The head office in Stockholm has a marketing department focused on improving and maintaining their search position. 

How SEM/SEO works

Search Engine Marketing (SEM) is a form of internet marketing that involves the promotion of websites by increasing their visibility in search engine results pages primarily through paid advertising. SEM incorporates Search Engine Ooptimization (SEO), which adjusts or rewrites website content and site architecture to achieve a higher ranking in search engine results pages.

Besides search optimization and advertising, Bemz also works actively with the so-called recommendation based marketing, which enables customers to recommend products to other individuals through different channels.

“I believe very much in recommendation-based marketing, which is essentially what PR is. Other people, experts, influencers are recommending your products, which has a much more powerful effect than us going out there and recommending our products.”

- Lesley Pennington
Founder and CEO of Bemz AB.

Recommendation-based marketing, blogs and social media such as Facebook, Instagram and Pinterest are also interconnecting Bemz with customers worldwide. Consumers are able to upload and share images of their creation, which in turn is a marketing channel where other potential customers can get inspiration. Occasionally, Bemz organizes special events for its customers where they can post photos of their creations on social media using the hashtag #bemzathome. Social media also empowers customers to broadcast their creations to a larger network, which is essentially free marketing for Bemz whose products are being promoted.

“We have experienced that social media has a wave-effect because our customers are involving themselves in our products – they are writing about our products, sharing and showing their interest and enthusiasm – they are carrying the message for us”

- Lesley Pennington
Funder and CEO of Bemz AB.

Fast delivery time and low manufacturing costs

On-demand custom-design orders often challenge companies with unpredictable spikes in demand and result in long wait times to produce custom made products, which in turn can be a potential deal breaker for customers. In order to face these challenges, Bemz has invested in a fully digital business model, meaning that they have enabled a digital interface with customers worldwide and put a big effort into digital marketing through social media.

Digital technology such as online configurators, 3D preview features and their strategic use of social media means that they can reach customers worldwide without time-consuming dialogue with customers and high production costs.  More specifically, the company can see that they have reduced manufacturing costs over time. Digital mass-customization means they can produce on demand, thus reducing inventory costs.

” Because we produce on demand, we don’t have any inventory costs – we have only inventory in stock, which means every fabric is sold to the customer. We do not have any unsold products”

- Lesley Pennington
Funder and CEO of Bemz AB.

Bemz has managed to lower their manufacturing costs because the products are made to order, directly after a customer places an order online. This has minimized stock holding and handling costs. By using online configurators and 3D preview features, Bemz is also able to collaborate with customers and give a co-designed feeling. Digital modelling through 3D preview lets customers envision the final product without the costs of physical stores.

Another result of Bemz’ strategy to run their business online, is that the company can respond to customers’ needs by analysing customers’ purchase behaviour.

“I think we are extremely close to our customers, their interest and needs. We track their behavior and know exactly how they came to our website and what they are looking for and we use this to improve our dialogue and service”

- Lesley Pennington
Funder and CEO of Bemz AB.

According to Lesley, Bemz’s ability to utilize data from social media, customers’ purchases, search history and traffic to their webpage, has allowed them to better understand their customer’s preferences and needs. The data they have collected allows them to analyse what values consumers attach to existing or proposed designs of new covers.