NEW YORK— The home and small office furniture segment is going through a metamorphosis of sorts, one that has been accelerated by the coronavirus pandemic in the U.S. but that has its roots in consumer lifestyle transitions and professional workstyle transformations that have been progressing for a generation.
The excitement that has driven the home and small office segment over the past few months has been evident, and HOMEWORLD BUSINESS®ꪪ, in research including on and off the record interviews with retailers and vendors, has traced developments that identify how the COVID-19 crisis has acted as a catalyst that has propelled trends in the sector and that signal where developments may lead over the next few years.
Much of the change in how consumers approach their small and home office organization has been facilitated by advances in electronics that have given people a greater ability to communicate and share data, as well as in audio, image and video technology that allows remote workers access to more sophisticated professional applications. Those working from places such as home and small commercial and satellite offices have become enabled to an extent that may have been thought impossible a generation ago. In the course of the COVID-19 outbreak, people who work in many if not most office functions, and even in jobs where personal interactions and transactions used to seem crucial, have built on know-how they’ve accumulated to switch from actual to virtual spaces, and at a pace that, under normal circumstances, might have taken a decade. Now, the personal and professional realities are immersed in an unintended experiment that will determine how and what work can be accomplished at home and other remote locations as readily or even more readily than can be performed in a traditional office.
Consumer purchasing patterns as demonstrated in the coronavirus crisis support the idea that consumers believe they’ll be doing more work at home. The tremendous run on office products that occurred across mass-market retail as coronavirus-prompted government-mandated restrictions on consumer movement and the store retail operations was certain evidence of consumers preparing to work from home in a more thorough manner. However, given the range and depth of purchasing, the demand surge also affirmed that consumers believed preparing the home for additional professional and, in many cases, scholastic endeavors was an investment in the future.
At the same time, the market was adjusting to a new reality, and not without difficulty.
In late February and early March, as consumers faced the reality that workplaces, schools and stores would be closing or restricting access as a means of suppressing the COVID-19 pandemic, an Amazon spokesperson identified office products, with desks and chairs prominent among them, as seeing rapidly increasing sales.
During Amazon’s first quarter conference call, Brian Olsavsky, Amazon’s CFO, noted, “In early March, we experienced a major surge in customer demand. Particularly for household staples and other essential products, across categories such as health, and personal care, groceries and even home office supplies. This large demand spike created major challenges in our operations network.”
Amazon began to shift its focus to essential needs products, including household necessities and cleaning items, limiting the ability of suppliers focused on other goods to replenish supplies in its fulfillment system. Amazon continued to allow purchasing from existing inventory, and those suppliers who could drop ship orders themselves, which included most major ready-to-assemble furniture producers, kept addressing consumer demand. Amazon also changed the algorithms on its site so that, in searches, the company’s marketplace and other customers who could deliver products more quickly than it could out of the stressed fulfillment network came up higher in the results.
Although the story was pretty much the same among online-focused retailers, who gained as store closures became more common in late winter and early spring, the details about how home office fared were somewhat different from one case to another.
Niraj Shah, in Wayfair’s first quarter conference call, said mid-March to mid-April, when customers were settling down under shelter at home restrictions, saw home office sales build rapidly but not alone, as cookware and kitchen appliances, children’s furniture and play items also took off. Sales demonstrated that consumers were beginning to reconstitute homes, initiating projects to align household spaces such as home office with new or more intense uses.
Although a number of product categories began to accelerate as March shifted into April, some took off earlier than others.
“These are ones you associate with staying at home and working at home, and the kids being at home, home office, and cooking at home, home office, kitchen, large appliances, small electrics,” Shah said.
He also identified storage and organization, children’s playroom, children’s furniture and outdoor recreation as early beneficiaries of consumer restrictions. Even by the time of the conference call in early May, and as other Wayfair product categories gained, those that took off early continued to sell at a significantly faster rate year over year. What was happening in Wayfair’s consumer business was also evident in its operations serving interior designers and related professionals.
Jonathan Johnson, Overstock CEO, said during a first quarter conference call on April 30 that in the period from March 13 through 31, sales grew in key categories as consumers started focusing on making their homes more functional as shopping and moving restrictions proliferated.
“We saw over 100% growth in office furniture, outdoor play equipment like swing sets and exercise equipment,” he said. “That growth accelerated as the stay at home mandate reached the entire country by April 1. Since then we’ve seen accelerated growth in home furnishing as people have shifted their shopping behavior from brick and mortar to online in response to the current restrictions. As a result, year-over-year sales in April are up over 120%.”
As he compared shopper behavior in spring to what the post-coronavirus days might bring, Johnson noted, “We’ve seen a meaningful increase in new customers this year particularly in April. We can see that new customer growth in April alone increased nearly 250% versus the year-ago period. These new customers demographically mirror our existing customer base. Our brand values and our value proposition resonate with them evidenced by demand being almost entirely from home furnishings. Things like area rugs, office furniture, patio, beds and other home related items. These are exactly what people are buying. As a percentage of sales, home goods now represent 87% of the total. Given what they’re buying, we don’t believe these new customers are just one-time customers. Overstock retail is well positioned to capture and convert the shifting online home furnishing traffic. We’re providing products people need and enabling them to buy from the safety of their homes.”
E-commerce gained all around in the COVID-19 crisis. Lamps Plus had to lock up its 36 stores as the coronavirus crisis hit, with store reopenings beginning in early May, but it kept selling on its larger digital platform.
Despite its stores being closed, Dennis Swanson, Lamps Plus founder and CEO, told HomeWorld Business, “Our sales grew double digits during
Workspace was a part of the home Lamps Plus customers wanted to fit out as stay at home appeals began, although the company also saw action in furnishings related to comfort.
“The areas of customer homes with the most spending have been home office, kitchen and outdoor,” he said.
Walmart’s business in home office, including in household essentials, food and other products required to keep a household working and cozy in the COVID-19 pandemic was almost too good. Doug McMillon, Walmart’s CEO, said in a May 19 conference call, “Items such as laptops, office chairs and fabric have been cleared out in some of our stores and online.”
Of course, Walmart stores remained open through the stay-at-home period, even if it had to restrict the number of shoppers in its buildings to maintain social distancing. In its first quarter conference call, Target CEO Brian Cornell said that office products not only boosted furnishings sales but electronics as well.
Some retail channels have benefited from the COVID-19 outbreak because an essential-business designation allowed them to keep serving consumers even as other sectors suffered closure orders. In food retailing, supermarkets and warehouse clubs got a boost not only in terms of sales but also because consumers essentially familiarized themselves with their current array of products and services during shopping restrictions, some of which they might never have used otherwise. In a similar vein, office superstores could see longer term benefits from the fact they were allowed to remain open.
Gerry Smith, Office Depot CEO, told a first quarter conference call audience that, although the effect on operations of the coronavirus outbreak was mixed, hurting demand in the business to business side of the operation, it did push consumer sales significantly, with demand for essential products such as cleaning supplies, technology, and home office products advancing in brick and mortar and the company’s digital store. The heightened demand in those segment products was behind a 2% increase in retail division comparable sales for the quarter, versus the year-previous period. The number may not seem huge, but the quarter ended March 28, only partly through the period of greatest consumer restrictions, and would include consumers and professionals who may have little awareness of the various services office superstores offer today, which they may want to employ as they conduct more work at home.
Although the pandemic accelerated trends, home and, in many cases, small business offices have been changing since the 1990s as the notion of needing a big desk with expansive drawer storage and an imposing silhouette began giving way to more functional thinking. The advent of the personal then the laptop computer drove the trend. The evolution of home lifestyles, and office workstyles, guided it. Change hasn’t been linear but, rather, has proceeded as professionals and consumers both tried new things when technology and social acceptance permitted. Over time, the main home office gave way to temporary workplaces that could function for different purposes. Writing tables that could support someone doing a little work but could function as a game station and even a buffet when company was over became popular. On the professional front, open office plans and shared space created a need for workstations that could support various demands for personal and group work, or even multiple users. At the same time, the proliferation of professional and personal electronics prompted greater integration between workstation and digital devices.
Even as coronavirus-related restrictions to movement and shopping ramped up, Euromonitor detected the surge in home office product purchasing. In its March Passport report, the market research firm stated that the short-term jump on purchasing should level off medium term, especially as the economy copes with, then begins to emerge from recession. At that point, Euromonitor expects a consumer reset and reevaluation of how remote workers want to address home office needs, including exploring options such as furniture rental. In the report, “How Will Consumer Markets Evolve After Coronavirus?,” Euromonitor noted that wellbeing would be an increased consideration for consumers working and entertaining at home. The observation is consistent with the consumer desire for personally satisfying aesthetics and ergonomic furnishings.
Home Office Surges
Although the surge in home office product sales that began late this winter was extraordinary it isn’t altogether unprecedented. Some trends may have gone out the window as vendor and retailer inventories emptied and consumers took what they could get, but, in most cases, the same product developments that have attracted consumer attention recently continued to generate demand.
“While there is definitely a surge in home office needs, we have been watching a steady uptick over the last several years and our current assortment reflects this,” said Joy Raccagno-Bond, marketing direct for the Dorel Industries Ameriwood Home brand. “The desire for flex-space living items has increased as living rooms and bedrooms double as home offices and classrooms. Creating collections to work nicely together and provide a seamless look is exactly what many families are turning to. More than ever home is our sanctuary, and we strive to make it a beautiful, functional and affordable place to shelter.”
In preparation for the post-coronavirus future, the Ameriwood Home lineup will emphasize a holistic approach to home office.
“Looking forward, we believe that a new normal within the household will be having a designated workspace, for adults and children alike,” Raccagno-Bond said. “Whether that is a specific office space or updating your coffee table to a lift-top coffee table, we can provide either. There are often, if not always, several of these items included in our collections, and we plan to continue growing these categories.”
At Bush Industries, dealing with the coronavirus outbreak has been a complex effort, given it has a residential and commercial business with manufacturing resources it counts on in the U.S. and Canada, since its merger with Bestar, as well as Asia. The company had to manage its trans-Pacific supply chain as impacted by COVID-19 then its North American manufacturing as coronavirus caused problems closer to home. As well as keeping product moving to customers, office furniture demand took off, said Mark Weppner, svp/marketing, design and engineering, but Bush recognized that, although it was experiencing something unprecedented, the company had both residential and commercial product experience to make the most of it. He said that professionals and office workers who suddenly had to cope with movement restrictions also realized that modern technology provides the means to work from home full time more easily. However, at the same time, remote work requires sufficiently functioning hardware, WiFi, electrical connections and other gear including furnishings items that provide, for instance, secure storage.
Yet while they could address fundamental home office needs, Bush products also addressed another critical concern. As consumers have, for the past decade, shifted their purchasing of task-related furniture from utilitarian items meant for the basement to pieces that could physically and aesthetically fit into the home, the company has built its ability to meet consumer interior design expectations. Commercial clients have, at the same time, become more conscious of style and interior fashion, which has prompted Bush to provide those customers more designs and finishes.
At the moment, Weppner said, Bush is watching to see how the initial rush to get some kind of office furniture for the home translates as conditions evolve.
“Going forward, we predict a continued increase in home office furniture orders,” he said. “Businesses and employees came up with quick solutions for their current environments, but will they go back to the office full-time, part-time or continue to work from home for good? Real estate forecasts show higher commercial vacancies as leases come up and businesses realize they don’t need as much office space. They’re more likely to invest in permanent, commercial-grade home offices for their employees at that point. We did not miss a beat working from home and believe a lot of companies with appropriate workstations and technology feel the same way.”
Consumers who are learning what they need to do their jobs at home now have to weigh what kind of investment they should make in their home offices.
“Whether you’re an executive or an intern, we’ve been working from home long enough now that we know what our workstation needs are,” he said. “Everyone’s home is different. For some the home office is an entire room; for others it’s a corner of the bedroom. It’s not a one-size-fits-all approach. If you’re in a situation where you’re going to be working from home long-term or permanently, make sure your team is set up for success with furniture that fits their space.”
As consumer work on the technical demands of working at home, they are looking at how they can physically accommodate what’s needed in the home footprint, even as they deal with the aesthetic issues. In an interesting twist, developments on the commercial end, including expansion of finishes and development of seating that exactly matches desks, now are helping Bush consider how it should approach product going forward as it looks to satisfy professional requirements as they are applied to the home space. The function and aesthetics approach Bush has taken in the commercial business are generating sales to those working from home who want for professional quality products.
To drive home the benefits its products offer, Bush has developed marketing that puts products in front of the consumer in the best light, no matter which side of the business.
“We’re taking our commercial-grade products and instead of showing them in a business environment, we’re now rendering them in home settings,” he said. “We want to help our customers imagine our furniture in their homes because of the style and then also sell businesses on the ANSI/BIFMA quality and safety. Once companies get a moment to breathe, they’ll understand it’s still important to provide safe and sturdy desks, bookcases and file cabinets, and ergonomically correct chairs for their employees in their own homes. OSHA safety issues and workers compensation liability still apply. For these reasons, we think work from home furniture buying is really just beginning.”
Weppner said that coffee tables with adjustable lift-tops had seen significant demand as people were forced to find ways to labor from home, but he pointed out that products and spaces that can temporarily support laptop and other device use aren’t long-term solutions for the remote worker.
As the company considers ways to integrate commercial-grade Bush Business Furniture into its consumer presentation, Weppner said the company doesn’t want to promote it as resimercial, as the designation has more to do with design and aesthetics than it does with addressing OHSA and ANSI BIFMA commercial standards. Rather, Bush is working on furniture that has BBF construction advantages but also conforms stylistically and proportionately into a household footprint. In effect, Bush is creating merchandise to suit an emerging third market, as Weppner put it, for the growing work-at-home market. Commercial quality furniture already appeals to some professionals in businesses where work-at-home offices have long been common, but now it could appeal to customer service employees who, for the first time, have to take care of business remotely.
Weppner said people now working at home, often in conditions not conducive to creating sprawling office spaces, represent an opportunity for Bush in that it has experience in what people need to do their jobs and in refining products to meet changing trends in the consumer marketplace. As they’ve looked to purchase to meet immediate needs, a broader range of consumers has engaged with Bush. As a result, the company has the chance to apply experience and creativity to serve new customers who will be assembling and updating home office spaces as their working conditions evolve.
Weppner said Bush is looking forward to a new population who will be working from home and who will need creative solutions for a very small footprint. He expects that a lot of growth will come from the need for highly efficient, small footprint, productive office spaces. To create them, he said, remote workers will look for products that are safe and durable.
Lisa Cody, svp/marketing at Twin Star Home, said the company has seen big gains in its home office product line including the company’s adjustable sit/stand desks and accessory pieces. Twin Star has been fortunate, she noted, because it has furniture items that have a more traditional workspace design for those who prefer to build more traditional home offices, but the company also developed a large proportion of its product line to be both multi-function and multi-purpose. Its sit/stand desks can offer multiple benefits, such as charging options, that make them first-class workstations but also can fit in multiple rooms of a house. People now working and studying at home recognize that they may be doing more of that in the future as well, but also understand that they don’t have a space they want to dedicate to full-time home office use. As a result, they have to consider how home office products suit the spaces they occupy and the lifestyle they favor.
Twin Star is doubling down on its data gathering and analysis functions, watching what consumers are doing week in and week out as they continue to fully figure out just what working at home means. The efforts don’t start at traditional market research but include reviewing what consumers are doing in social media to see what they’re interested in purchasing and how they stage products at home once they buy them. It’s evident, Cody observed, that some consumers want more complete home office setups, but she also noted that consumers still want or need to work in swing spaces, particularly when households have more than one person engaged in daily tasks at home. Under those conditions, they may prefer products that they can use for more than one purpose, as has been the case with simple and writing tables recently, but that are serviceable enough in form and function to stand up to a complete workweek.
Going forward, Twin-Star is going to keep close tabs on consumers to see how the trends that have been occurring carry forward as they decide just what they need to work from home in the post-coronavirus environment. She pointed to corporate initiatives that provide workers with allowances to set up remote offices as an example of what kind of developments may drive home and small office purchasing. Evidence exists that what has happened as consumers quickly adjusted to working and schooling at home may evolve into a new phase of home office spending, subsidized or not.
“These are dynamic times,” Cody said. “As people are trying to navigate through the uncertainty, they are nesting at home. We want to make sure we are playing a relevant role in the way we connect with consumers through our products as well as our content. Right now, understanding their needs and mindset is more important than ever. It’s all about listening to the voice of the consumer and reacting quickly.”
Across the board, vendors have seen the home office segment take off as a key beneficiary of the coronavirus shift to remote working. Walker Edison spokesperson Brittany Smart said, “Our home office category has done extremely well during this time. We have seen sales in this category of 350% more than we would typically see during March and April.”
The lessons mass-market vendors have learned about changes in how consumers view home office have served them in good stead in the coronavirus crisis. They understand that consumers have specific needs they want addressed but weigh purchases based on a variety of factors. They want function, on the one hand, particularly as to ensuring they can work with electronics effectively, but they are looking at ancillary to address related concerns such as wellness, which involves products such as adjustable sit/stand desks and quality, ergonomic seating. Yet, simultaneously, consumers aren’t afraid to repurpose products. Crafting furniture became more popular for its dedicated purpose, especially as users discovered they peruse online videos that help them accomplish more elaborate projects. However, some professionals who like lots of open storage recognized craft desks as an alternative to traditional workstations. Gaming desks became not only a place to play but also to view, but also to support the array of electronics some remote workers need to do their jobs.
Recent products developed under the OSP brand demonstrate how vendors have been developing products that are function-specific even if today’s consumer may not use them exactly as intended.
The feature-rich Glitch Battlestation Gaming Desk, under the Designlab by OSP Furniture designation, incorporates a raised monitor shelf for ideal viewing position, 3-port magnetic smart power USB hub, power-strip bracket and cable management, and a steel frame. The desk also offers Bluetooth controlled RGB LED lights for optimum game immersion, but OSP Home identified it as multifunctional and fitting for use as an office desk for at least some potential buyers who just may not activate the LED lights.
In a different approach to task furniture, OSP Home’s the Ravel Crafting Stand-up Desk With Pull-out Storage offers a 42-standing height for comfort in vertical activity, a 48-inch durable work surface, an accessible desktop power port, large pull-out storage cart that keeps supplies within reach and, as an accessory item, a 30-inch stool. The construction makes the desk handy for crafting but also appropriate for office work.
In some cases, it’s a matter of recasting a traditional product to suit today’s lifestyles. L-desks faded a bit a few years ago as consumers looked to build smaller or flexible workspaces, but they’ve made a comeback as mass-market furniture vendors have developed a broader range of products in different proportions. A studio apartment dweller could accomplish a full days work with the right scaled down but feature rich L-desks incorporating, for example swing-out returns, not to mention low-back office chairs and wheeled files that could slip under the core desk when not in use.
Sauder Woodworking has been a driver in the L-desk revival. It’s recently previewed Willow Place prototype collection, featuring a clean and contemporary/transitional aesthetic for today’s home fashion-conscious consumer with an L-desk among the dozen items in a group that includes bedroom, home office and living room furniture. As it realizes that consumers want home office choices, Sauder hasn’t just included single desks in its recently developed and expanded product collections but at times more than one piece that supports electronic or other secondary uses, such as the adjustable riser top on the Willow Place coffee table. Overall, Sauder is marrying trending style to evolving consumer demand for function.
One vendor noted that the almost desperate demand for functional professional workstations likely played a role in the surge of gaming desk sales during the peak of the coronavirus crisis. Still, that doesn’t mean consumers have ignored the purpose as intended. As multiple retailers noted in comments on first quarter results, gaming-related sales in general jumped as stay at home restrictions extended into spring.
In a larger sense, what happened to home office and some other categories as the COVID-19 pandemic hit has been good for mass-market furniture retailers and vendors. Mass-market retailers and vendors generally noted that their furniture sales gained in the crisis across the board. In some cases, items that consumers could repurpose for use as home offices got a lift including casual dining, which offers products that can substitute at need or in preference for more traditional workstations.
LumiSource has recently featured products consumers can use to build relatively compact home offices with clean modern looks enhanced by a touch of glam. The Folio Desk, Folia Corner Desk and Folio Bookcase, for instance, pair gold metal and white wood.
Aesthetics are critical. The Linon Powell Group has been pairing small, simple but stylized desks with its popular line of rolling accent-style office chairs to create attractive, sometimes whimsical home office workstations, with its Draper office chairs.
Linon Powell, said merchandising manager Morgan March, had “a lot of success selling home office during this quarantine and we have a few new styles already selling. Our Draper office chairs do well, especially the new novelty patterns.”
It should be noted that products across the home office horizon benefited from the coronavirus-related surge.
“We have been seeing increases in the desk lamp business since the beginning of this whole situation,” said Amanda Schaak, Adesso product development and marketing coordinator. “People are setting up their home offices and we are definitely seeing the demand there. We have seen floor lamps pick up recently as well. So our online business is doing well.”
Again, functional products may have an edge attracting the remote workers figuring out how they might manage full-full time home employments, but aesthetics and other factors count.
On the office accessories side, Holly Bohn vp/Thinkspace Brands, a marketer of home and office workspace organizers, said, “Our office supply business, especially See Jane Work, has been very fortunate during the pandemic. Demand is up for office supplies that people want in their home offices. We have seen an increase in online sales. See Jane Work is exclusive to Office Depot, and as you know Office Depot is an essential business so has remained open.”
In its other brands, Thinkspace supplies various major-market retailers, many of which were essential and continued operating in their store capacity as well as online, which supported the company through the worst of the pandemic.
“Organizational products are still in demand, especially with people spending so much time at home. In some products, we’ve traded in store sales for online sales, but any products that are not online are down,” she said.
As the country emerges from the coronavirus, Bohn said odds are that companies that provide home office products that enhance the domestic work experience will thrive.
“I do think the work from home situation is here to stay in a bigger way than it has been in the past,” she said. “Which is good news for See Jane Work. What you will allow on your desk in the office, is a lot different than what you want in your home.”