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What Does The Future Hold for Furniture Dealers

This article will examine these questions, exploring recent failures and successes for dealers in the world of commercial furniture, to help understand exactly what the future holds for the industry

What Does The Future Hold for Furniture Dealers

Is The Furniture Industry In the Hot Seat?

The landscape for the furniture industry and furniture dealers has been significantly altered by the outbreak of the COVID-19 pandemic. The current global situation has left many important questions in its wake for dealers that rely on supplying furnishings to places like office buildings, schools and hospitals. Will there be a strong pivot towards the healthcare industry and away from the traditional office for furniture dealers? Will companies make a strong shift to using furniture dealers to help employees create better home offices? This article will examine these questions, exploring recent failures and successes for dealers in the world of commercial furniture, to help understand exactly what the future holds for the industry.

What Does The Future Hold for Furniture Dealers

The Challenges

As has been evidenced the world over, the COVID-19 pandemic has had a drastic financial impact on many industries. As offices and educational institutions were forced to close their doors in favour of remote operations, the companies that supplied their furnishings have of course been resultantly affected. For example, Steelcase Inc, one of the top 5 office, education and healthcare suppliers, saw a 41% quarterly decrease in revenue in June, 2020. As Marc Klerer, a Marketing Manager at Harkel Office Furniture Limited describes:

“Currently a lot of challenges are that businesses are closed, so a lot of companies are not purchasing furniture for their spaces. People have sort of put that on hold because there are a lot of unknowns: if they’re going to open, when they’re going to open… Businesses aren’t buying anything because they’re not sure what’s going to happen.”

Very few companies are currently planning the types of expansions or renovations that would drive revenue for commercial furniture dealers. Twitter was one of the first major organizations to announce that it expects up to two-thirds of its employees to remain working from home permanently, greatly reducing the company’s need for office furniture in the future. Meanwhile, a study by IBM of 25,000 office workers found that 54% of desk workers want to continue to work from home full time, while 75% would like to do so part time. If these companies serve as any indication, the future of the office could see a very dramatic shift toward permanent “WFH” situations for many modern employees, which will inevitably continue to impact the commercial furniture industry.

Another challenge to commercial furniture dealers is that many possible solutions for increasing the safety of office buildings and other institutions cannot be implemented while these spaces remain closed. Marc Klerer has described how many furniture vendors have started offering items like sneeze-guard dividers and Plexi-glas, and while companies have asked for quotes, the purchases remain unnecessary while their spaces are shut:

“One of the problems we’ve noticed is that there really isn’t any government mandate on how businesses should open, so people are questioning whether they need to make an investment in these types of changes. There are a lot of products available, but at the moment people aren’t necessarily purchasing those products.”

A final challenge comes in the form of the modern office set-up itself. There has been a strong push in recent years towards a more open concept office, which clearly is not the best set-up for social distancing and avoiding viruses. This will inevitably be another factor that furniture dealers will have to consider for the post-pandemic world. Will there be a shift back towards cubicle style employees desk spaces? It remains to be seen.

What Does The Future Hold for Furniture Dealers

Possible Opportunities

As furniture dealers look toward a post-pandemic world, they will likely have to uncover new realms of possibility for supplying workspace items to the modern worker. One such opportunity is presented by the new exponential growth of employees working from home. As the pandemic hit, many companies began to offer their employees expense reimbursement packages for putting together a more productive home office space – the average of which is around $1,000. So while furniture dealers face the issues of order postponement and cancellations for office furniture, the demand for home office furniture is surging.

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To adapt to this influx of demand in home office furniture, many furniture dealers have adopted online retail strategies to reduce cost and increase their profit margins. With the growth in the number of online furniture stores, furniture dealers may have the opportunity to reduce the costs of rental spaces and boost the efficiency of inventory management. The challenge here is that commercial furniture dealers have long seen online purchasing as their natural enemy, with companies like Wayfair, Ikea and Structube dominating online sales of furniture for the average at-home consumer.

Before the pandemic, company furniture decisions were usually made by a small committee of people, including facilities managers, architects and interior designers, HR and Finance representatives. With much larger numbers of people working from home, this historical trend has seen a dramatic shift, as purchase decisions are now being made by individual employees for what best suits their homes and lifestyles. As commercial furniture is typically professionally put together and does not come with handy instructions for at-home assembly, furniture dealers will likely need to make some adjustments in order to compete with online giants like the IKEAs of the world. Some commercial furniture dealers have already begun this push towards better e-commerce, including Knoll, which acquired the pioneering ergonomics ecommerce player Fully.com in 2019.

Of course, not all commercial furniture dealers currently have the capacity to make a move on the same scale as Knoll. As Marc Klerer describes:

“It’s a challenge. We’re not Amazon. We’re not Staples. We can do it, but if you’re talking about twenty one-off desks and chairs dropped off at an apartment building, we aren’t really set up to do that. But we have worked out programs [with our clients] to have that as an option… but people are still not necessarily willing to make this investment with so much uncertainty [regarding how long employees will be working at home].”

Aside from a shift toward a more online and WFH-friendly approach, another area where furniture dealers could weather the pandemic is in the healthcare sector. Of course institutions like hospitals and clinics have stayed open during the pandemic, as they remain crucial spaces for maintaining public health and safety. And now more than ever, these types of institutions will require proper furniture. Marc Klerer offered a specific example of how Harkel was able to collaborate with Global Furniture Group to furnish a hospital in the midst of the pandemic:

“We had an 11 floor hospital that had to be installed by the end of August. We still managed to work through that, we still managed to get our product on time, and deliver and install. Everything is installed and looks great… So far what we’ve ordered we’ve been able to install.”

What Does The Future Hold for Furniture Dealers

Looking Forward

Clearly the coronavirus pandemic has shaken up the commercial furniture industry in a very big way. For time being, it looks as though “WFH” is here to stay for a very long time. And as more and more companies make this shift permanent, commercial furniture dealers will have to continue expanding their online offerings and developing more intricate contracts with their clients for supplying and delivering home-office equipment. Though it will be difficult to compete with titans like IKEA and Amazon, furniture manufacturers are rapidly investing in digital technology and automation solutions.

Aside from the home-office movement, furniture dealers will have the possibility to shift their focuses more fully toward the healthcare sector. Healthcare institutions are among the few that will continue to remain open throughout the pandemic and beyond, and they will always need to be supplied with the right furnishings to remain safe and operational. While boosting online availability for home-office solutions may serve as more of a long-term goal, a focus shift toward hospitals and health clinics may be a better short term solution for the commercial furniture industry. In any case, it seems clear that the commercial furniture industry will likely never be quite the same.

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