If I was IKEA right now, I'd be worried; there's a new technology in town that's going to change their world just as much as the move to digital changed the music industry. That technology is 3D printing.
3D printing is a relatively recent innovation that, much like a normal printer prints a very fine layer of ink upon some paper, 3D printers print multiple layers of melted plastic on top of each other, building up a solid object one layer at a time.
An astounding array of objects, from basic things like cups and vases to extravagant ladies shoes, exact copies of Stradivarius violins and even bicycles can be made this way and while most 3D printing has been done industrially to date, the first home printers are starting to make their way onto the market. As these printers spread into our homes over the next few years, the average computer-using household will be able to print a virtually limitless array of objects, based on designs downloaded from the internet for just the cost of the raw materials.
Much like how music is no longer tied to the physical medium of CDs or records, this means that the cost to produce and distribute copies of new designs (whether egg cups or wardrobes) will be virtually zero. For IKEA and its competitors, this will be a big problem. Any company that's current business model is to sell at the lowest possible price is going to find it very hard to stay relevant in a world where households themselves can match the production costs.
You might argue that IKEA will be fine, as it maintains its place in the market by the merits of its designs as well as its modest pricing. That's all very well but if the costs of the manufacture are the same, why wouldn't you shop at John Lewis or even Harrods? Or better yet, if you really prefer IKEA's designs, why not simply download them for free via peer-to-peer filesharing - it may sound far-fetched right now but you might be surprised to find out that 3D printed designs are already making their way onto The Pirate Bay.
But let's say our consumers are a little more honest - there'll be plenty of free, cheaper or more ethical alternatives online. From 'bedroom producers' to the "open source" communities, an astounding diversity of choice will be just a few clicks away. IKEA, just like the major record companies, is going to start having to compete directly with thousands of new creators.
The online boom in furniture and household goods to self-print will further affect IKEA in that there'll be no more Saturday afternoons spent lost in its labyrinthine depths, picking up new purchases left, right and centre. Once shoppers can buy online from wherever they choose, without having to worry about multiple delivery dates from different companies, they'll find better ways to spend their weekends than lost in one of IKEA's stores. You only have to look at the fate of high street music retailers like HMV to see the effect online trade can have on physical sales revenues.
So, how does IKEA survive this doom and gloom-laden assessment of its future? How does it avoid the fate of its increasingly archaic looking fellows in the music industry and other old-media empires?
The answer is to embrace the change rather than fight it. The old music industry's problem has been that rather than seeing new technology as a way to grow their business, they've seen it as a threat. That's not to say that the challenges they have and continue to face aren't complex and difficult but that by obstinately trying to fight the flow of an ever diversified market and open internet, they're only isolating themselves further. It's probably unlikely that IKEA will create the 3D printing equivalent of iTunes due to the physical nature of its stores, but there are definitely lessons out there to be learned.
To come back to the example of HMV, it never seems to have understood two basic things about its business: that the vast majority of its potential customers only want to buy music digitally (and in many cases don't even own a CD or record player) and that most of its customers are walk-in trade, it's a music stop-off on a trip down the high street or retail park.
They never seem to have linked these two ideas together and as a consequence, it's impossible to buy music in digital form in any of their stores. For your general music consumer, smartphone in hand, by directing them to the CD section you might as well be directing them straight outside. It seems insane that HMV would alienate so many potential customers over a simple choice of digital versus physical format - can you imagine the impact on their business in the 1990s if they'd refused to stock CDs?
While it might be harder for HMV to change this now, as no doubt Apple prefers the situation as it is, HMV's loss doesn't have to be IKEA's too. IKEA could get an early start by integrating its online and physical worlds, enabling customers to wander the store, find something they like and simply scan the item's QR code straight to their smartphone, to be printed on their return home. Customers can then impulse buy to their heart's content, without having to worry about transport or deliveries. In terms of change, is this really so much of a step away from their current pick-it-up-as-you-leave-and-assemble-at-home model?
Another thing IKEA can fall back on is its massive brand power. When making the choice to shop at IKEA, consumers are often simply making the choice to shop with the brand, knowing there'll be an array of suitable products from which to choose, rather than going there with a specific range in mind. This is a similar way to how brands like ADIDAS or Nike operate, rarely advertising a specific new product line but rather the brand itself. As IKEA's ability to compete on price lessens with the effect of 3D printing, perhaps it should make up the slack by focusing on its neat, space-saving, functional designs. Perhaps a boost in quality is what's needed?
This still leaves us with the problem of online piracy. Undoubtedly, copyright infringement is not going to suddenly disappear and it seems unlikely that ever-stricter legislation would be capable of dramatically slowing the tide, as new technologies enable different ways to share data at far faster rates than the law can reasonably keep up. It seems IKEA (and this applies to the music industry too) will probably have to counter piracy with good business, rather than entirely with legal force.
Perhaps IKEA should simply aim to offer a good, reliable and honest service at a reasonable price? Although the media tends to report otherwise, most consumers aren't usually inclined to break the law and aren't averse to paying for things if they perceive they have value. The current problems are more symptomatic of consumers not being able to access what they want, when and how they want it, or believing they're being over-charged.
Why do TV companies advertise their new series but then restrict when it can be watched to a certain time on a certain day, without any way to otherwise legitimately access the content, or why in a globalised world, do things get released in different countries at different times? Similarly, one could wonder why DVDs drop in price so much in the year after their release - a film costing £17 on release might cost just a few pounds several months later - what does this suggest about the content's true value and what it should be worth online? Why would users pay to download a song they can stream as much as they like from their subscription music service or even watch for free on YouTube? It is questions like this that these industries, as well as IKEA, should think about if they want consumers to be willing to pay up.
So, as 3D printing alters not only the contents of our houses but the landscapes of our high streets and economies as well, whether businesses like IKEA survive the forthcoming changes will depend on how they react. The music industry was in the unenviable position of being the first major industry affected by the move to digital distribution methods and, as a result, it suffered the consequences of its inexperience and resistance. With the forthcoming 3D printing revolution however, this time there's something to look back on, some lessons to be learned and, with the sea of new business opportunities this will bring, whether the older companies survive or not will depend on whether they've been paying attention.
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