Leo Lübke has been serving as managing director of seating manufacturer COR since 1995. From 2006 to 2014 he also headed up management of system furniture supplier Interlübke following the death of his father, becoming the third generation in his family to run the company. Founded in 1954 by Helmut Lübke, COR manufactures its furniture exclusively at its production facility in Rheda-Wiedenbrück, located in the district of Gütersloh, Germany.
A conversation with Leo Lübke about the design process today, new living spaces, and the challenges of e-commerce.
Mr Lübke, sofas and chairs are clearly very analogue products. But despite this, what impact is digitalisation having at COR?
Digitalisation has certainly accelerated our processes. But faster doesn’t necessarily mean better. Of course another effect is that we now have a lot more products than we used to. But as part of our portfolio strategy, we always try to pick the right time to bring a product to market. We look at what is the right thing to do strategically, and whether we might be hurting the performance of other models in our collection by placing a product on the market too soon. We didn’t have to make considerations such as these in the past, but today they are extremely important. Our logistics and sales processes have also become faster, more reliable and more professional. This in itself doesn’t give you a competitive advantage, but if you want to stay competitive, there’s no getting around digitalising your processes. It’s the same with the mobile phones that our field workers use. Before, if they were running late, they had to find the nearest phone booth and call the customer. Today, they can do everything without even getting out of the car. When the first mobile phones came out, our field workers didn’t want them because they thought they were going to be monitored. Today if you took their phone away, they’d probably quit.
So the basic logic behind your business model and your value creation chain hasn’t changed, is that right?
When I look beyond the world of upholstered furniture, the biggest changes I see happening are in household furniture. I’m talking about shelves, wardrobes, living room furniture. There have been quite a few changes in the manufacturing process – brought about by new machines, which have also improved thanks to digitalisation, but first and foremost because the market has completely changed. Digitalisation has changed how people live, it’s changed domestic life. People no longer own encyclopaedias or have huge shelves of books to show that they’re a member of the educated middle class. They don’t have record collections – their media is in digital form.
The layout of the living room is going to change as well.
So digitalisation is bringing about new developments in domestic culture?
That’s right. I image the layout of the living room – where everything is organised around the television – is going to change as well. Many young people don’t even own a television today; instead, they watch content on their computer. And if they want to see a film on a big screen, they go to the cinema. In the future the living room is going to be arranged differently to reflect this.
On the topic of customer information and one-on-one communication with customers: would you say you know more about your customers today than you did before?
We don’t sell to end customers directly; we use retailers. But we certainly know more about our retailers than we did in the past. With our software, we can see how many models of each type and colour our customers have sold, and we can see how each model ranks.
These days we can gather an awful lot of information, but the question is whether this knowledge is really of any use. For a mid-size company such ourselves, manufacturing a niche product which is all about having edges and angles and being different, inspiration, listening and empathising are perhaps much more important.
Is there a reason why you don’t actively use e-commerce platforms such as Westwing, Connox and Home24?
We’ve tried it. Then we realised that customers weren’t biting because they’re not prepared to simply buy furniture online in our price range without first giving it a lot of thought and thoroughly comparing prices. They want to know why we’re so much more expensive than IKEA. We rely on our retailers to guide customers, to explain what makes our sofas so great. And we have customers that want more than just a sofa – they want to furnish their whole living room. They show up with carpet samples, and they want advice on curtains, colours and materials. And even though they can find all of this online and we try to provide transparent information about our materials, they still have an awful lot of questions.
We rely on our retailers to guide customers, to explain what makes our sofas so great.
So, we try to use the Internet as a way to prepare customers for their visit to one of our retailers, because they really want to visit these shops in person and browse at their leisure. The role that our vendors play is sometimes almost psychological. When a couple can’t agree on what to get – he wants leather, she wants fabric – sometimes they need the retailer to act as an arbitrator or consultant, or as a neutral party.
Plus, we have so many product variants – you need to see them and touch them in person. Classic pieces like Conseta have four different cushion fillings, for example. If you write that one variant is more firm than the other, the customer needs to be able to feel what that means. And that’s probably the main reason why we aren’t so present online. But that could change as consumer behaviour changes.
On the topic of brand management: what impact does not being on platforms such as Westwing and Connox have on your brand? This must mean that you are less visible than similar brands, is this correct?
According to that principle you would expect us to also have our products out on the sales floor at XXL-Lutz and other large stores – there is tons of visibility to be had there. But it’s an entirely different target group. And that goes for the Internet as well. But you’re right. The issue of visibility has become more complex. We’re also seeing circulation numbers decline dramatically for house & home magazines. But we still have a presence there. Beyond this, you clearly also need to have an active presence online and promote your brand there, whether through Google Adwords or through ads on websites such as “Schöner Wohnen”, Stylepark and Archtonic. Of course, our budget for such promotional measures hasn’t grown at the same rate as the opportunities they offer. That’s the challenge. You need to always have one foot in the online world and the other in print advertising.
In the past we used to have a catalogue, and merely having an online presence was enough. Today it’s the exact opposite. Everything revolves around the Internet; it’s where you convey your brand and make it known to the world. All communication is done through the website. But retailers still want to have catalogues – because customers want to have them, to take home like a trophy. And it serves another purpose as well: our catalogue conveys the quality of our products and the value of our brand. We use creative printing techniques to communicate to the customer the idea that a company which produces catalogues as beautiful as these must certainly also manufacture high-quality furniture.
Everything revolves around the Internet; it’s where you convey your brand and make it known to the world.
What area of digitalisation has been the most difficult for your team?
Digital marketing in particular – the question of our image as a brand – is still a big issue for us. Platforms like Westwing make companies known to the public. And in the past there weren’t large retail stores like there are today. So, generating public awareness of the COR brand is significantly more difficult today than it used to be. When the Internet came along, everyone was saying that niche manufacturers would finally be able to create a presence for themselves and be able to establish themselves as brands. But with the abundance of brands today, it’s not that easy.
Is AI or Internet of Things at all relevant for you at this point in time?
As of yet, no. That’s still a way off for us. But that’s going to start playing a role in manufacturing too.
We are very much focused on craftsmanship, and we have a lot of high-tech machines that we use. When it comes to leather, for example, we use waterjet cutters, and we scan each hide. It’s all very modern. It’s conceivable that at some point these cutters are going to be able to tell us themselves when they need new nozzles, or even order them online for automatic delivery. We’re going to see this in the not too distant future – technological developments which are increasingly Web-based, moving away from the traditional mechanical approach.
Thank you very much for the interview, Mr Lübke.