The Landscape of Furniture and Work

Trends shape the industry landscape. Competitors will need to mind the waves.

All business is built on an unmet need. For decades, contract furniture has been focused on work as an industry theme. However, like waves shaping a sandy beach, customer needs evolve. The industry narrative of "work" in contract furniture has benefits and risks as the customer landscape changes.

Companies with similar offerings comprise an industry. Contract furniture is no different, where organizations compete in seating, systems, and other office peripherals. An industry name emerges, like "contract furniture," which reflects the products and how they're sold. This process makes sense, but it risks looking back when you should be looking ahead.

Category labels are a lagging indicator of history, not a leading indicator of change. We live in an era of economic and social change and the future begs questions about market fundamentals. Looking ahead, will office furniture be sold on contract? What do we consider furniture?

In the search for resonant brand themes, many in the industry make the jump from furniture to talk about "work" more broadly. Many industry competitors make claims about productivity improvements through workstyle support, employee engagement and brand signaling, work health and ergonomics, and so forth. They make investments in specialists and thought leadership in these areas, employing workstyle consultants and ergonomists, and commissioning primary research to support their claims and knowledge beyond furniture. The industry sandcastle is about work.

As a general rule, it's a good idea to aim higher than your concrete offering for your brand. Many B2B manufacturers think about features and benefits, but finding an aspirational seed beyond products can organize the benefit narrative. At Peopledesign, we overtly encourage our clients to find a meaningful connection with their customers which goes beyond the specific definition of the offering. The evolution from furniture to work is logical and helpful.

Not surprisingly, the theme of work has been the leading industry narrative over the last few decades. Furniture companies talk a lot about workplaces and work styles, but the industry is still pretty rooted in furniture. Most contract furniture companies think more about casters than work. The gap between aspiration (work) and reality (furniture) can be a risk for an industry because competitors can miss the future while being focused on the present.

Stepping back a little, it's clear that the subject of work goes well beyond furniture. It's impossible to ignore how technology innovation is changing the work landscape. Twenty years ago, we might've made a compelling argument that a desk plays an important role in work. Today, if you had to choose between a table or a laptop as your primary work tool, I don't think the furniture would win. Furthermore, much exploration on the nature of work processes, motivation theory, personal meaning, and purpose has entered public business discourse. All these ideas pull work away from furniture.

So, what's next for furniture? The answer lies in defining the right problem.

All business is built on an unmet customer need. For a time, furniture was a big part of the answer to the work problem. If more solutions beyond furniture answer the work problem, the first goal for furniture makers is not to double down on work nor furniture per se. Furniture risks being a solution looking for a problem.

A brand meaning which connects with customers more directly can outlast any specific offering. There is a reason why Apple removed "Computer" from their name, and Nike doesn't promote the brand "Nike Shoes." If Ford had viewed itself as a transportation company (rather than a car company) twenty years ago, how might it have invested differently? Sustainable organizations are on a journey to forever refine their understanding of unmet needs in a marketplace.

Innovative competitors will find a new focus through customer meaning. What do customers need today? Then they will realign their organization and its capabilities to serve these emerging needs.

All this may sound abstract and unrealistic. It can be abstract, and it is hard, but it's also a reality. Consider how photography industry leader Kodak decided to pass on digital technology, opting to double down on lucrative camera film, only to be surpassed by others. Consider how Xerox overlooked its insights about computer graphical user interfaces, choosing to double down on the profitable paper copier business. The business landscape has many examples of companies and whole industries which have been eliminated or transformed by shifts in technology and customer preference. Change doesn't take place overnight, but it can be hard to recognize and can sneak up on you. Kodak and Xerox were unstoppable industry leaders – until they weren't.

Contract furniture is experiencing change. The rise of WeWork, regardless of its future, is one indicator. It suggests a model for supporting work beyond buying furniture on contract. It's pretty clear that their emphasis isn't on furniture at all. Even before WeWork, wifi-enabled coffee shops were emerging as third-place office alternatives. Contract furniture competitors should ask themselves: What unmet customer need is WeWork filling?

Industry roles are shifting. The rise of corporate real estate, dealer designers, and direct-to-consumer plays are changing how we think about the value chain. Many innovative competitors in other industries find new sources of value by deliberately adding or removing pieces on the market chessboard.

As the Internet of Things (IoT) becomes more of a reality, technology innovators will find their way into physical environments. Industry incumbents will seek to stay ahead by finding new value propositions. Honeywell, observing the digital thermostat startup Nest (acquired by Google), recently launched its own home technology brand called Resideo. From powered desks to wireless charging tables at Starbucks, there is little doubt that smart furniture will become part of the work landscape. Who are the new competitors? What is the offering? How will it be sold or leased?

Often, significant changes come from outside an industry. This pattern isn't guaranteed, but industry competitors tend to stay in the rut of past success. Furniture has been around for a long time and is here to stay. However, the future of work may not be furniture as we know it. The future of furniture may not be part of work as we know it. The answer lies in asking the right questions. Innovators will find emerging customer needs and make the hard choices to orient their organizations to serve future customers.

Work will be part of the contract furniture value propositions for years to come, but sandcastles are subject to tides. Trends shape the industry landscape and competitors will need to mind the waves.