The Push

Commercial furniture manufacturers are being pushed toward retail

For many years, commercial furniture manufacturers have been teetering on the cliff that drops from contract to retail. Now the pandemic has pushed some of them over the edge. What will it take for them to soar rather than crash? Many companies have spent decades going after large, global corporate clients. They now need to adjust their strategy to account for a mass market. Even when not directly pursuing a retail channel, WFH approaches look a lot more like consumer sales. Marketing modes, competitive sets, product mix, and customer experiences are all under review.

The Push Toward Retail

Social Selling

One of the biggest jumps for marketing is moving more wholeheartedly into social selling. To start, consider targeting a customer who does not think about office furniture. A small business owner rarely thinks about office spaces in general. They likely don’t know your brand or why your products cost more than IKEA. Focus for a moment on what it means for your social selling and digital marketing strategy (though when we’re back to flying regularly, never underestimate the power of an in-flight magazine).

Do furniture companies need to dive into TickTock? Probably not. Or at least not yet. The channels are not new, but you may use them differently.

Most B2B companies have a poorly-thought-out social strategy, if they have one at all. They haven’t taken the time to think through which channel aligns with their respective target audiences and how that impacts content; how their goals may change from Instagram to LinkedIn to Facebook. Some manufacturers may need to consider how their B2B channel is represented compared with a retail-centric brand – and what it means for these two voices to co-exist.

What are we asking the potential customer to do? Unlike the large corporate clients, retail, small-, and medium-sized businesses have different priorities, fewer resources, and different ways of making decisions. They rarely think about office spaces and buy even less frequently. Furniture companies will need to create marketing systems that favor the long game while inspiring shoppers to act with retail incentives like seasonal promotions.

Competitive Sets

Beyond targeting smaller businesses and individuals, your competitive set just grew exponentially. Manufacturers that lack retail brand awareness are starting from scratch to get their name out there in a meaningful way. The perceived difference between a well-known brand within the industry and a startup may be negligible. It may be more about the retailer than the manufacturer. Should I buy from Amazon? Staples? Costco? Maybe I should work with a local interior designer? What comes up when I search for “office furniture near me,” and who has the highest Google review?

The expectations for quality and service are different in this market. Fast and easy may be more important than product life or durability.

Product Mix

A lot of work goes into commercial furniture products. World-class performance and durability paired with thought leadership result in items that cost significantly more than retail. Corporate clients take advantage of complex discounting approaches, but the difference is difficult to understand to the layman. Why does the ergonomic chair from Staples cost $150 and is ready the next day, while the one from the “major manufacturer” costs $800 and takes three weeks to deliver?

To win in this space, it will take more than offering the same products with different marketing. It will require new offerings and supply chain efficiencies. For comparison, Branch, an office furniture startup, sells an “ergonomic package” that includes an electronic, height-adjustable desk with presets and a mesh ergonomic task chair with 7 points of adjustment for $940 and is ready to ship within 3-5 business days. This offer may be challenging for many commercial manufacturers to match with current offerings.

Customer Experience

There are always new products in this marketplace, but there is also much product parity. Memorable experiences will give both manufacturers and sellers a competitive edge. The experience of the customer may be where your strategy needs to shift the most. If we assume that a furniture brand isn’t known and the buyer may see products as indistinguishable except for the price, CX is an opportunity for differentiation.

As it stands today, many dealers hold relationships as much as the manufacturer. Furniture companies need to consider how they want to approach the market and what this means for their dealers and reps. Do they carve out a section of the market to go directly to buyers, drive all leads to local dealers, or find a solution in the middle? If the goal is to drive business to a local seller, the challenge is twofold. First, the manufacturer needs to help the dealer stand out. Second, the manufacturer will need to strive for McDonald’s-like consistency from one dealer to the next. Online, no business is only local, and buyers will complain or praise both the product and seller. In their minds, there isn’t a distinction. Losing control of the experience means losing control of the brand narrative.

Consider how a focus on experience is bringing change to the auto industry. Not long ago, CarFax changed the game by offering a deeper level of transparency to the market and set a goal to empower consumers. More recently, Carvana upped the ante by buying, selling, delivering, and picking up cars from the consumer's home. Auto manufacturers have started to launch subscription services. From Ford to Porsche, consumers now have the option to subscribe instead of lease or buy.

Fight or Flight

Now that COVID has pushed commercial furniture off the cliff, leaders will take advantage and find new ways to win. There will be some early successes and misfires, but our industry is resilient. A willingness to collaborate and learn from each other and our knowledge on how work truly happens will help us find a way. We may have entered a volatile few years, but the pivot is exciting. Innovation emerging from a crisis will mark a new era.

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