Who Owns the Specification Journey?

How the built environment sales and specification model is being rewritten.

The way products get specified in the built environment has been changing for decades. Most companies know it. Fewer have figured out what to do about it.

How We Got Here

The auto industry pioneered the manufacturer-dealer model in the late 1800s. The system emerged as product companies became more specialized and needed scalable ways to sell their products. Direct sales couldn’t keep up, and manufacturers wanted to distribute risk, so independent, aligned dealers took on a customer-facing sales role. The dealer model allowed makers to focus on production while outsourcing sales to partners closer to the market.

The BE (built environment) industry adopted dealer networks during its rapid growth from the 1960s through the 1980s. As competition increased and margins tightened, the model evolved. Like car dealers, furniture dealers shifted from product-driven revenue to more service-based income, including installation, replacement parts, repairs, warranties, and upgrades.

In many ways, the dealer is the manufacturer's face to customers. A burgeoning experience economy created tension between the two. Who was the brand – the dealer or the manufacturer? The 1990s and 2000s revealed some of the biggest challenges for product companies trying to coerce dealers into adopting their standardized dealer-brand programs. As smaller, independent businesses, dealers had their own localized, personal relationships and brands to support. While the majority of their product sales came from a single aligned manufacturer, some did not.

The debate over who owns the customer experience was ongoing even before the internet arrived. Then the web provided easy access, greater transparency, and new service expectations. The dealer’s geographic moat became less reliable. Emerging workstyles accelerated by COVID and other market shifts catalyzed further change.

What’s Happening Now

The marketplace continues to change. A mature industry has led many of the largest furniture manufacturers to merge and acquire smaller players, confusing their dealer relationships. Past rules about territory exclusivity are being rewritten.

Dealer growth strategies have led those businesses to expand their product and service offerings. Many are offering other ingredients of the built environment, including lighting, technology, construction, and management. Many are even developing their own white-labeled product lines. It used to be that a large majority of a furniture dealer’s business came from one manufacturer, but today, aligned relationships often account for less than half their sales. Dealers used to have a few dozen manufacturer relationships. Because of their diversification, now they have hundreds. The individual manufacturer’s sway over these dealer businesses is waning.

Dealers have grown through consolidation as well. The combination of new market dynamics and generational turnover among family-owned, localized dealerships has created entrepreneurial opportunities. Large “megadealers” (as we call them) are starting to compete beyond a single metro area to an entire region. Megadealers are already larger than many manufacturers. As they become broader BE providers, it’s hard to view them narrowly as furniture dealers.

Dealer designers play a critical role in specification, partly because of their familiarity with the products and also because of shifting specification trends. Technology-oriented BIM (building information modeling) specification is becoming a reality. Broadly adopted by major product firms, Configura’s CET platform has become a vital pathway for specification, providing the most robust toolset for the office furniture market. But independent A&D firms (architects and interior designers) don’t use CET as readily, opting for less-niche, widely used BIM programs like AutoCAD, Revit, and SketchUp. For now, the CET-enabled dealer designer is a kind of specification gatekeeper.

As the entities that carry the paperwork and financial transactions, dealers remain the funnel for most purchasing. However, digital transactions are changing business models. How important is your local bank branch to your bank account? In an effort to grow and meet customers where they are, manufacturers are facilitating more financial transactions and selling products directly online, confusing the dealer model. Of course, dealers are also selling online, further confusing the brand story.

In the meantime, smaller manufacturers see opportunities. Even as the largest trees consume much of the sunlight and rainfall, life can thrive under the canopy. They, too, are adopting new technologies, including BIM, CET, and e-commerce. While they have fewer resources, they can be more agile. Dealer diversification has given smaller manufacturers greater visibility, enabling a wider range of brands, styles, and pricing options. As dealer portfolios grow and aligned relationships weaken, open-line (non-aligned) product lines see new life.

Independent reps are the unsung heroes of smaller manufacturers. Their role, particularly when the major manufacturers ruled the day, was to fight for attention among dealers. Dealers looking to diversify open more doors, but increase competition for these companies. Well-run independent rep groups are brands in and of themselves, viewing their manufacturers as their “factories” to support their own BE brand.

Successful independent rep groups have moved beyond the “trunk slammers” stage and become sophisticated businesses. As the dealer business becomes more complex and less dependent on traditional furniture channels, reps are bearing more of the load. Furniture specification design, once led by A&D, now by dealer designers, is also being completed by rep groups. Like dealers, larger rep firms are expanding geographically with their own robust portfolios and go-to-market strategies.

Where This Is Headed

We don’t know the future, but strategy is based on a hypothesis of what might happen. We are compelled to look at the facts, evaluate the current state, and imagine a future state.

We know there are too many people in the room. You don’t have to look beyond your local bookstore (can you find one?) to recognize how disintermediation is changing every marketplace. What can be automated will be automated. It will require more technology, fewer manual processes, and more integration and coordination. Somewhere between manufacturers, designers, dealers, and reps, and the long tail of specialists and decision makers in the typical BE project, there will be fewer steps.

We know that despite the power of the strongest product brands, the influence of megadealers is on the rise. Dealers interface with the customer directly. Over time, dealers will look less and less like the manufacturers that may have birthed them a generation ago, growing into sophisticated service providers. The largest product firms will not be ignored and will devise strategies to drive their businesses and best complement dealer offerings. And we know that modern, powerful niche product brands play an important role in a world that craves novelty and diversity.

We know that CRE (commercial real estate) is the industry's sleeping giant. If the contents of buildings weren’t so complicated, they might’ve been more bullish than they already have been, scooping up product firms. Like manufacturers pushing sales and distribution to dealers, and dealers pushing design to rep groups, CRE doesn’t have an appetite for product complexity. Late industrial business thinking focuses on optimization – outsourcing anything that isn’t a core competency. A singular focus makes sense on its face, but pushing complexity onto customers is old thinking.

We know technology should make things easier. It doesn’t always feel that way, but that’s what happens when user-centered approaches succeed. AI is already beginning to reshape how products get discovered, evaluated, and specified. The implications for the built environment are significant: brands with clear value propositions, consistent performance records, and verifiable claims will have an advantage in a world where AI agents increasingly do the first round of evaluation before a human ever gets involved. The companies that make their offerings easy to find, understand, and compare will win that round. Today's BIM tools are early evidence of where specification is heading. Whatever comes next will make current processes look Byzantine.

Succeeding in today’s experience economy requires absorbing complexity to simplify the customer experience. The well-known usability mantra “don’t make me think!” applies equally to e-commerce shopping carts and product specification. But making an easy button isn’t easy. That simple switch on your car dashboard or “buy now” button on the website you love has a lot of complexity under the hood that you are thankfully unaware of. That’s how your specifiers will see it, too.

In an increasingly complex world, providers who improve experiences win the long game. It’s time for product manufacturers to relearn and rethink how specification is changing, where it’s headed, and how your team will evolve. Maybe we can even make specification fun.