How R&D can become a profit center

News today is that Ikea “has teamed up with Marriott International to develop a chain of hotels in the same affordable, compact, and stylish vein as the furniture store”. Also happening in Europe, Ford is announcing a car sharing service in Germany.

Increasingly, interactions between brands and clients are not limited to the controlled atmosphere of stores. They happen in many other places, via friends, at work, through countless channels. It becomes strategic for companies to get involved in this “outside world”, and influence those experience clients and prospects will get with the products.

There is also a lot of value in seeing products in situation, gathering feedback on current and future usages in the process. Just like some CEOs like to take customer service calls every once in a while, the hotels will make the boundaries that separate product makers and product users disappear.


Fans have already explored a new business for IKEA: clothing!

What we have here is a mix of lab (co-creation, feedback on products), showcase, and service. It is like R&D mixed with marketing mixed with a business that generates money.

And this is where it becomes interesting. Are we witnessing the birth of R&D 2.0, which instead of being a cost center generates money? Are services the missing piece, the one that makes co-creation profitable? It looks like it, and this is a very key development, one that could completely change the way research and development is approached by companies around the world.

This is a forward thinking move by Ikea and Ford, one that will surely be replicated in the near future. Now the challenge is to make sure clients don’t notice the fact that the average IKEA’s bed planned obsolescence is kicking in after only a few years…

4 comments

  1. Norman Lewis

    Interesting thought Laurent. but I can’t see how a marketing team up represents a shift in R&D? The trend, as I understand it, is that overall R&D spending is going up but the ‘R’ is declining relative to the ‘D’. What you are talking about is the outcomes of rising ‘D’ – the concentration on marketing what can be commercialised. This is not R&D2.0, but short-term, risk averse D1.0. :-)

    • Laurent

      I think that adding a service component to the mix is really what makes a difference. You’re not only researching, but also making money out of that research. That looks like a smart move to me, one that doesn’t take anything away from existing efforts. Imagine how much value Ikea will get just by sending their designers to the hotel, to see how the furnitures evolve over time, what breaks, what people use and don’t use. You can also imagine Ikea staff simply talking to customers about their experiences, what they liked, didn’t like, etc. This is a form of “field research” (perhaps R&D is not the right word) that will be invaluable.

  2. Ivo

    This shift from business models based on selling to business models based on renting may actually lead to better products, as planned obsolescence will not be in the interest of producers anymore. Ikea and Ford will be more ready to invest in developing durable products if the success of their service business relies on it.

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