March 25, 2021

The future of furniture: sustainable design from start to finish

By Evli Growth Partners
Kicking off our Impact Stories -blog series with the story of Tylko - paving the way towards a new era of furniture design. Across the industry, fast furniture has dominated the way we live and consume. Tylko is a great example of driving the push towards conscious consumption by designing products that will last a lifetime. In doing so Tylko aims to set new standards with the way furniture is designed, sourced, produced and delivered. We at Evli Growth Partners are proud to partner with Tylko in supporting their highly impact-driven vision.

At Evli Growth Partners, impact is a strong driver behind what we do – guiding the way we work, the companies we meet and eventually, the investments we make. When we first met Tylko, the company struck us with their strong transformative vision: to offer a whole new approach to sustainable furniture design. What does this mean in practice? Let us dig deeper into the Tylko story and their key steps from design to delivery and beyond.

Premium design and customization to the very last detail

At Tylko it all starts with design. When a customer enters Tylko’s platform they are guided through a design process to customize their own furniture, down to the very last detail. Be it in terms of color, style, size, storage capacity or all of the above. Why is customization important one may ask? Firstly, to maximize the lifetime of the product – both in terms of design and durability. Secondly, to optimize for material use. Thanks to Tylko’s proprietary software the company is able to optimize the precise amount of wood required given the customer’s specified dimensions. Why is this important? With 60,000 customers so far, the economies of scale will eventually build up.

Responsible sourcing and optimized production to minimize climate cost

So what happens next? After the design process is complete Tylko's proprietary software automates the manufacturing process for its production partners. When it comes to responsible production - key questions to ask are where is the material sourced from? And where and how does production take place? At Tylko all production takes place locally in Europe and the plywood, Tylko's core component, is sourced from Northern and North-eastern Europe with standard certifications such as FSC and PEFC. Same goes for coatings, glues and laminates. In fact, the first sourcing partners from Tylko's early years have been from the most liveable country - Finland.

Looking at the material itself - plywood is generally 3x more durable and stronger than alternatives such as particle board, MDF and even solid wood. Why is this important? Simply, to ensure high load bearing capacity and the possibility to disassemble and reassemble multiple times without risking damage. This is key in turning away from fast furniture and designing pieces that can follow you across the stages of life.

Shift towards biodegradable packaging and local delivery across Europe

Moving on from production to packaging - optimization is again key. Overall at Tylko material use is optimized by product design and panel size to minimize waste. Leftover panels are used to create customer samples among others. Further nesting optimization is used to arrange multiple orders in single production batches, saving roughly 15% of material. When it comes to packaging, already in the product design and ordering process Tylko's software automatically designs each product's package according to the specified dimensions. This way unnecessary air space is removed.

In 2020 several updates were introduced including CNC cutters for made-to-measure boxes, decreasing cardboard material loss by a further 30%. In packaging Tylko switched to one-color ink and biodegradable natural cardboard materials. As said before - when the orders scale up it is the small things can have a huge impact.

As a final note on Tylko's made-to-order business model, the direct-to-consumer logistics allows for zero unnecessary storage facilities, middlemen, retail channels or logistics hurdles. Home deliveries are optimized by regional groupings across Europe while automated reproduction flows allow for quick repairs where needed. All of these actions evidently limit the environmental burden and support fast, efficient delivery. Given the furniture industry's climate risks and the accelerated trends of urbanization and overall consumption - optimization to the very last detail is key in shifting the way the market operates.

On an innovative path to managing returns and end-of-life

From the pieces of furniture that get delivered, assembled and finally taken into use - there will no doubt be some share of returns. At Tylko this share is extremely low, at roughly 1%. Looking at the market as a whole, online home furnishing generally sees higher return rates than other retail segments. Why? The offering is rarely a perfect fit with customer expectations. Pair this with the urge for maximized lifetime - a perfect match will be hard to find. To combat this challenge, at Tylko all products are customized and personalized for each and every customer.

Another thing that stands out in Tylko's model is the 100 days free return policy. For customized product categories this rarely is the case. From Tylko's point of view - this ensures the product will be in use, not only today but over years and hopefully even decades.

Reflecting back at Tylko's business model and a single shelf's road from design to delivery and beyond - it is evident that the company has taken a huge leap in optimizing parts of its value chain. While much has been achieved - since founded in 2015 - there evidently is still a long road ahead to further a large-scale transition.

We will be working closely with Tylko in supporting the next steps of their sustainability journey, be it in terms of launching new product categories or scaled delivery across continents. Stay tuned!

Read more on our Tylko investment here, our sustainability approach here and our other portfolio companies' sustainability initiatives here.

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