June 1, 2009
Plan B: For Rent
Struggling contract-furniture companies experiment with the idea of selling space instead of furniture.
Kris Yates, of Allsteel, calls it “downsizing.” Mark Greiner, of Workspring, uses the phrase “sending more workers home.” Jason Heredia, of Steelcase’s Coalesse division, drops the pretense and refers to it simply as “the economic collapse.” The contract-furniture companies have been hit with a whammy of a reality check as this pink-slip–heavy global mess of an economic meltdown continues. Whereas banks might once have blinked for half a second before signing off on 13 floors of slick new Steelcase furniture, now their CEOs are blinking away the tears as they fire yet another subset of long-standing employees. Whereas back in the heady days of 2007, a small start-up might have leased 2,000 square feet of office space and fitted and kitted it out with the latest line from Allsteel, they’re now more likely to meet at the local Starbucks.
It’s a fractured freelance world out there, and that means fewer contract-furniture sales and more experimental economies. “There’s really no one out there that’s doing well enough to say, ‘Let’s buy new office furniture right now,’” says Rob Kirkbride, associate editor of The Monday Morning Quarterback, which tracks the industry. Instead, companies like Steelcase and Allsteel are exploring what else, besides extensive furniture collections, they can offer existing, potential, and, most of all, shrinking clients. Coalesse, a Steelcase line that already straddles the increasingly blurry line between work and life, is expanding into client services with a San Francisco design studio that also operates as a showroom. Half a country away but under the same corporate umbrella, Greiner has come up with Workspring, a rentable collaborative office unit in Chicago that offers everything from morning Internet access and a desk and fax to evening wine-and-cheese events. Meanwhile, the usually straightforward Allsteel has entered the viral-buzz game with the Stride Gallery, an invitation-only space in downtown Chicago that will give designers, architects, and dealers an exclusive first look at the Stride line right up until NeoCon.
“The trend is for corporations to reduce their fixed real estate costs,” says Greiner, senior vice president of Steelcase’s WorkSpace Futures team and the brains behind Workspring. “What I was seeing was a shift toward elements that weren’t necessarily playing to our strengths.” His solution was to give customers the office experience, not necessarily an office. And so Workspring was born. The rentable office unit opened last November in Chicago. Outfitted partly with Steelcase furniture—“Absolutely there’s a synergy between the two,” he concedes—it’s a well-designed and well-laid-out space, but clients don’t come to spec furniture. “This gives them the opportunity to say, ‘Let’s not create a large fixed central office with all the costs that are incumbent with that. Let’s try to look at spreading these out across various settings.’” At the same time, even bare-bones start-ups have physical needs: a place to host a videoconference presentation or meet with potential clients, a desk, a printer, Internet access.
More from Metropolis
Greiner had the idea for Workspring years ago, but it was only recently that Steelcase decided to make the investment. In better times, it was difficult to convince his superiors to go from selling furniture to selling space; it seemed to them, he says, like jumping from manufacturing Ping-Pong tables to opening up an oil refinery. “To a manufacturer, it’s a big difference to say that they’re going to go into experience design and get paid for use,” he says. A realistic look at the market made what Greiner describes as a “hard head twist” a little softer. “One of the things that sold it is that they could see what was happening, hear the demand from customers who said, ‘I’m not going to be buying as much furniture.’”
So far, Greiner says, the alternative model has proved successful, and the company is contemplating a second location. The mix of people who rent the space—it costs $140 per person for a four-hour session, which covers everything from printing costs and conference-room use to the incidental snack or full meal—includes lawyers looking for a few quiet hours to get through their mail, creative-design firms from San Francisco in need of a well-supplied Chicago meeting, and the consultant who doesn’t want to put off his client by pitching a million-dollar proposal around his kitchen table. “I don’t know if it’s as much a shift toward the new economy as it is a shift toward the new way people work,” Kirkbride says. “These efforts are really addressing our mobile work styles.”
The San Francisco Design Center, as the Coalesse space is called, isn’t a formal showroom but rather a place where, Heredia explains, “We’re doing live design collaboratively with the client.” Breaking the mold of the typical trade-only contract-furniture showroom, the Design Center is on street level, right around the corner from the industry luminaries Frog Design, with “a ground floor we could drive a truck into.”
“We’re trying to break down that wall between pristine showrooms and design studios,” says Heredia, explaining the motivation for devoting this much space to something he describes, quite ambiguously, as a “user-observation nongraphical type of research.” What it means, unambiguously, is that Heredia and his colleagues invite people—from the neighborhood, the community, and their client base—into the design center and, while their guests go about their business, observe how they use Coalesse products. Recently, a large East Coast financial institution expressed interest in working with the design center to figure out how to reconcile its “torn position”—caught between the need to reduce staff and the desire to give something of value to the workers that remained. In other words, how do they make sure that uneasy employees feel good about coming to work?
The ones that are still around still need furniture, and that’s why Allsteel has been playing the image game for all it’s worth. The company launched its latest product, the ever-flexible Stride, with the introduction of the Stride Gallery, an R & D/exhibition space. Yates says Allsteel put the gallery together for a few purposes: as an experiential lab where the company could develop the Stride prototype as potential clients tested it, as a place for the company to train its sales force and dealers, and as a preview space for Stride. Sharing the economic burden with the building’s broker, who covered the outfitting costs, took some of the strain off of Allsteel, and creating this early R & D operation makes it more likely that Stride, once it launches in June, will succeed. “We’ve always integrated feedback into our development process,” Yates explains. “But this was a new level for us.”
Keeping everything under literal lock and key rather than in an easily accessible showroom also kept the access controlled, which is, Yates says, “a little bit of strategy on our part. You’re being taken to this secret location to see the private preview. It’s very much an event.” Part of this, of course, is about creating buzz, but part is purely practical: it isn’t economically viable to fly in clients from all over the country to check out something in-process; better to have a dedicated space to fully realize a product, and then launch it. And Stride’s flexibility is perfect. Survivor guilt is rampant among those who haven’t been laid off, let go, or sent home, and there’s nothing like a hushed hallway full of empty desks to remind employees that they could be next. “As the workstations to their right and left become vacant, you have to keep morale up,” Yates says. “At the same time, we’re able to come to market with a great new product in a year in which most people are scrambling to maintain.”