The Office Redux: Companies are rethinking design

We often fall in love with imaginary jobs on TV shows from The Office to Succession without ever thinking about how things have changed in the past two years.

Offices as we knew them in February 2020 no longer exist in many respects. Many are now envisioning a new type of post-pandemic workplace — in many cases their own homes — and, to a greater extent, a return to work that makes WeWork-like concepts more relevant than ever.

Branch, whose business thrived during the remote shift and is now benefiting from the office’s post-pandemic outfitting, is supplying furniture to the work-from-home (WFH) crowd and slowly filling up office locations, as co-founder and CEO Greg Hayes told Karen of PYMNTS said Webster.

He said that office outfitting accounted for 99.9% of pre-pandemic revenue: “When the pandemic hit, we turned around almost 180%. About 97% of our revenue came from work-from-home, e-commerce,” he said.

That wasn’t a bad thing considering how Branch’s business quadrupled during the pandemic as people bought ergonomic chairs, desks, and other items for their new home offices.

Earlier in the second quarter of 2022, Hayes confirmed that offices are coming back, noting that “when you look at the corporate business growth rate of people coming back to the office, it’s growing extraordinarily fast as a percentage. In the first quarter of 2022, annualized growth was over 600%.”

As good as WFH has been, Hayes and Branch are banking on the corporate office’s comeback. This math is not difficult to understand. He explained, “A typical consumer probably spends around $400, and a typical office spends around $20,000 to $25,000 to start out.”

What post-pandemic offices will look like — how office space leasing itself is changing in ways we don’t fully understand yet — make concepts like WeWork ahead of their time. Branch’s Toronto office voted, and employees voted “a resounding yes” to the idea of ​​having an office — albeit only a few days a week.

“We looked at that and said we’re not going to give everyone their own desk and not everyone will have their own office,” he said. “There will be more collaboration; There will be fewer desks, but not everyone will be there every day. We see a lot of that.” he said.

In other words, a 10-year lease and a bunch of $4,000 workstations is so 2019.

See also: Hybrid office furniture startup arm raises $10 million in Series A

Bridge home office with HQ

With office occupancy currently at around 37% and millions of teleworkers not at all comfortable returning to commuting and group work environments, the office concept is undergoing its biggest overhaul since at least 2008.

Components for the return to the workplace will feature familiar furnishings – laptops, desks, chairs – with the digital presence playing its role as the link between everything and more. Branch’s open-plan New York office is now addressing this, because before video conferencing became the norm, small team meetings took place quietly and privately alongside others.

“Now there are moments where you have five or six people who all have a different call and they’re all competing with each other,” Hayes said. “When we start looking for a new office in New York, that might be the biggest thing on our mind.

“How do you make the physical office more conducive to interacting with people who aren’t in the physical office?”

While open plan offices were already under pressure before the pandemic for having missed the mark on privacy and noise, a design refresh with a digital twist is changing that — as long as a manufacturer like Branch can get its materials out of congested shipping ports.

“Whenever people ask what keeps me up at night, my automatic, instinctive answer is supply chain,” Hayes said. “It’s not so much about getting your hands on materials as it is about getting those products onto a ship, getting them into US ports, and by far the most difficult part of the process now is getting them out of US ports.” to bring out and into our camps.”

The supply chain has “given us a lot of problems,” he added. “We’ve been growing much faster than we anticipated, so it’s very difficult to get more inventory quickly to meet the demand that we’re seeing.”

Higher than expected demand is a good thing. Not being able to hit it fast, not so good. The branch has hired supply chain experts, and they also pay for the freight through their noses.

He said: “You can pay for premium containers and super premium containers to get the first available truck. If you pay the rate you see in the news for a container, if you pay that rate you won’t see your container in your warehouse for about three more months.

“We don’t pay that rate. We pay the premium rate.”

Hayes said Branch’s pre-pandemic shipping cost for a container from Asia to a Branch warehouse was “about $2,500, and today it’s now averaging $30,000 — “over 10 times that.”

Alpine prices for containers offer at least the additional advantage of avoiding fines against companies whose containers stand too long in ports waiting (and waiting) for a truck.

Referring to consumer price hikes, he said: “We passed some of that on. But we believe [the situation is] will normalize, these rates will normalize. We are currently more focused on growing the business and getting what we believe is a fair price for the product.”

Continue reading: Work-from-home trend doesn’t work for stores whose clientele are mostly office workers

Are “clubhouses” the new office?

New styles will be part of the shift back to the office, as will an update of the shared workspace concept itself, finally bringing office life and the next normal into one space.

In 1-2-3 fashion, Hayes described how Branch addresses the challenges of returning to the workplace with decor that creates a welcoming atmosphere and restores a lack of community in many workplaces.

“First, it’s very easy to add cool, stylish products [from our range of accessories],” he said. “Part two is improvements, both quality improvements and aesthetic improvements, to our existing lineup. We spend a lot of time on it. Part three is adding new core products to our lineup.”

New products include a desk for smaller home offices at a lower price.

“We see a gap between our seating price point and the big players in the industry like Steelcase and Herman Miller,” he added. “We have an opportunity to release a chair, which we will do in about a month. It’s aesthetically like nothing else on the market, and price-wise that will be almost squarely between our current chair and a Herman Miller [chair price].”

Branch also offers Affirm Buy Now, Pay Later (BNPL) financing, which now accounts for about 5% of sales. “Otherwise they pay with a credit card directly through the website,” he said.

While Hayes’ original vision for Branch was an office furniture rental company, it was abandoned due to the high working capital requirements. However, he is curious about the thriving lease-to-own (LTO) financing segment.

Additionally, two trends that are taking Branch to its next milestone are the shift from “large-scale offices with traditional closed-door offices to these more collaborative clubhouses. The other thing, and this is very important to us, is that landlords take their vacant spaces and pre-furnish them to make them turnkey.”

Hayes called this concept “lightweight WeWorks,” Hayes said after watching their properties sit idle for over two years. Landlords “want to make it easier for people to move in and offer them more flexible terms. Instead of a five, seven, or 10-year contract, they say you can take it for 48 months, or for 36 months, and sometimes even for 24 months.

“They move their suites around a lot quicker that way.”

Related: New Data: Retailers get permanent sales increase through hire-purchase plans

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