Phil Biggs is the industry/technology analyst for NewsTalk 1340 WJRW
June 12, 2013 – 10:30 am
CHICAGO, IL. – Opening day Monday at NeoCon in Chicago’s legendary Merchandise Mart was a stirring sight. Having lived in Chicago for nearly nine years I’ve known about this annual pilgrimage the furniture industry makes to downtown Chicago every year in June. For those unfamiliar, NeoCon is North America#039;s largest design exposition and conference for commercial interiors, providing thousands of innovative products and resources for corporate, hospitality, healthcare, retail, government, institutional and residential interiors from more than 700 showrooms and exhibitors. And the Merchandise Mart is the world’s largest commercial building, with 25 stories and spanning two city blocks along the famous Chicago River. Here are some of my observations from the floor of the show:
This gathering always produces a buzz, but this year even more so. Two factors make this year’s NeoCon even more exciting than the last several – first, there is a clear commitment by the industry to truly re-invent office furniture. No longer called “systems” as they were known the past few decades, now it’s all about accommodating an individual “lifestyle” versus making an institutional product. In short, closed-space cubicles are out and open-space collaboration is in. As Brian Walker, CEO of Herman Miller told me, they are in business to examine “modes of work and create unique settings that offer a mix or blend of connection and comfort to bring life to today’s work environment.” Second, the industry forecast calls for an increase in consumption this year of nearly 4.5%, and that number is slated to move to an almost heart-pounding 8% in 2014. The industry has mostly suffered flat or marginal sales growth since 2009, so these solid projections are welcomed and embraced.
Everybody here seems to think they can design cool products. If it were so easy then everybody would be as successful as industry leader Steelcase and design leader Herman Miller. But it’s not that easy…and they’re all not that successful. The proof is in the impressive number of first-day awards netted by these two titans and the other major manufacturer, Haworth, who comprise the furniture industry’s Big Three. More than ever before, the furniture makers seek to incorporate thoughtful design and integrated technology into new work environments. Fundamental changes in work, while accommodating different generations, styles, and unique business requirements, make this a daunting task. Meanwhile, the need still remains to look at the hybrid or crossover effects between home and office work, which means striking a balance between greater flexibility and portability while managing the embedded costs of all these added features. Like other global industries, there is a fundamental need to stay on the leading-edge of design and marketing while finding new ways to control the costs of manufacturing and distribution to foster innovation. As you look at this new setting by Steelcase’s Coalesse brand, is there any doubt you’re seeing a bolder and different look to today’s office?
Working remotely has become a standard, but companies are making efforts to attract workers to come in the office. Companies need workers to collaborate – which means some if not many of those at-home workers must return to the office and give up some of the conveniences they love. The interaction among work groups translates into more on-the-job creativity and innovation. As Steelcase President #038; COO Jim Keane told me, Reverse migration…where workers are coming back into the office after years of working remotely “…is helping build better collaboration, more trust, and greater efficiency in the workspace. That’s good news for our industry, and our job is to help by providing them the right products that connect people, enable technology and optimize space.”
Providing healthy food and specialty beverages, fun activities during employee breaks, and other on-site perks is how workers are being attracted to come back into the office. The industry is now designing workspace to reflect those trends, with more and more offices looking like an Apple Store or Google headquarters. Thus the office itself becomes the means to attract new employees, stimulate and retain existing employees, and entice stay-at-home employees to return to their places of work like prodigal sons and daughters.
Pressure from offshore manufacturers and growing demand for more technology-enabled products is affecting cost and design decisions. It was apparent this week that the rising number of manufacturers and designers from China, India, Malaysia and elsewhere pose a threat at the growing juncture where the consumer decides between high-end design and quality versus lower-end look-alikes. Cost is always a big consideration in the furniture business, especially now as fit, function and utility are transformed. But the even bigger issue is how the industry moves from merely technology-hosting to true technology-enablement and integration.
That’s an expensive proposition and one not easily achieved, as evidenced by the fact that none of the major furniture companies have built flatwire®, wireless, or other power sourcing applications into their current products. Eliminating wire bundles will create sleeker design options and provide new capabilities that Millennials and other everyday technology-users demand. However, neutralizing the extreme costs of implementation will likely require unique and unprecedented partnerships, not unlike the Ford-Toyota powertrain alliance in the auto space, in order to push such initiatives forward. The world has changed, and at times fierce competitors have become kindred spirits in order to respond to dynamic global markets.
The Big Three and all of the furniture industry have weathered many tough challenges over the past decade. These current issues will be met with experienced, resourceful responses. For now, the beat goes on…as times are finally looking brighter, with innovation and collaboration the themes of the day.
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