New Economic Realities   //   September 13, 2024

Commercial furniture gets a makeover as companies tell workers to return to work

Even as furniture sales continue to slump, the return to work is proving to be a bright spot for the industry as companies look to revamp their office aesthetic.

The furniture sector hit record highs in 2021 and 2022, including an all-time high of $12.7 billion. However, sales started decreasing in 2023 due to pulled-forward demand during the pandemic and a slowing housing market. Furniture and home sales are still down 6.2% compared to this time last year, U.S. Census data show, and hit $11.1 million in July.

But one bright spot for brands in the space comes from companies bringing people back to the office. From major corporations like Amazon to law firms like DLA Piper, in-office work or hybrid policies are becoming more common. Looking ahead, as many as one-quarter of business say they will be bringing employees back to the office more often next year, according to a survey from ResumeBuilder.com.

That shift means creating modern office spaces that are a far cry from the drab, high-walled. cubicles of decades back, or even the ultra-sleek glass of the Silicon Valley heyday. And design-focused furniture companies are growing in response.

On Thursday, design firm MillerKnoll, which includes high-end workplace brands like Herman Miller and Knoll in its portfolio, announced two new hubs in London and New York. The multi-floor hubs will include a mix of stores, showrooms and studios. In New York, the 11-floor hub will have a key presence from brands Geiger and DatesWeiser that specialize in executive private office and conference designs.

Julian Buckner, founder and CEO at interior design and furniture rental firm Vesta, said about 20% of its clients are commercial, an increase from last year a stark change for a business with origins in high-end homes. “People are focused on the design side,” he said. “They could go to a standard office furniture provider. Getting the calls to have the conversation is, right off the bat, something new.”

Once signed on, Buckner said clients are looking for residential and home-like touches. Zoom-friendly wallpaper, ample plant life and warmer color pallets can all play a role in elevating an office space. “Even law offices are moving away from the dark wood panels.”

Some workplaces are leaning more toward hotel lobbies or lounges than traditional offices. Functional gathering spaces are a key focus, whether a cozy seating area with lap desks or a cluster of standing desks. Some businesses that have hybrid employees are re-imagining the conference room, swapping out a long rectangular table for a tapered design that shows up better on a video call. 

While such aesthetics were once the signifier of a tech company, Buckner said all companies asking people to come into the office are charged with creating impressive spaces.

“We’re starting to see a broader realization that interior design and the aesthetic of an office can be a competitive edge,” he said.

Allison Ballard, vp of strategy at furniture rental company Cort, works with clients to create and redesign workplaces. As they bring people back to the office, she said businesses are looking to create spaces that have flexibility and promote collaboration. That might include private small rooms for video or phone calls, as well as places that invite people to interact and congregate.

“The office space needs to be outfitted to accommodate the multiple different ways people are working on any given day, which is drastically different from before,” she said.

From a business perspective, Ballard said, Cort’s clients are looking at rental in order to have maximum flexibility for their space to see what works. Some may not want to commit to buying assets, given how quickly working environments and staffing needs can change.

“We have a lot of companies tell us they’re going to keep a portion of their assets flexible and not invest in underperforming space or furniture assets long-term,’ she said.

Ballard said the latest trends in office design choices reflect a newfound focus on nicer items that comes from blending more residential trends in the office. 

“Our corporate office occupiers are iterating on their existing office space, looking to right-size their portfolios and move into what the industry calls a ‘flight to quality’ space,'” she said. “Long gone are the cubicle farms, replaced by touchdown stations, collaborative areas and lounge-like spaces.”