Oct 27 2020

New Work, new customers – new offerings

New Work is no longer a buzzword. What began as a revolutionary concept in the 1970s has now established itself in many fields. This in turn offers furniture manufacturers and retailers opportunities to reach a new target group. In our interview, we spoke with André Hempel, founder and Managing Director of Lab of Rent, about New Work, co-working and the post-corona era.

Mr Hempel, there are many issues behind the concept of New Work. What consequences of the new world of work does the furniture industry absolutely need to pay attention to and why?

New Work stands for a multi-layered process that entails fundamental changes in the world of work. This dynamic development is influenced by digitalisation and demographic change. Digitalisation is driving radical change in how we work. Processes, activities and workflows are being reconfigured and are opening up scope for creativity. Added to this is the arrival of the new generations, who have different ideas about personal and professional development. 

With a view to the furniture industry, this means accepting digitalisation quickly and wholeheartedly, especially in retail, so that the industry can gear itself towards new customer needs and requirements. Let’s take one major theme from the “New Work universe” – co-working – and examine its impact on the furniture industry. What originally started out as simple offerings for freelancers and start-ups has quickly established itself as an accepted alternative to traditional office culture. Modern work environments and co-working spaces with an urban ambience are booming across the world. 

A good example of the diversity of co-working is the three-month pilot by the Berlin department for finance. It launched the initiative Work Different – A Work Culture Fit for the Future in the Senate’s Department for Finance in January 2020. For office furniture manufacturers, this means gearing their offerings towards new target groups and reviewing or adapting their product portfolios. What was in high demand yesterday may no longer meet today’s needs. 

Is the current situation changing this, and if so, what will remain the same in the post-corona era? 

The pandemic and its repercussions have further intensified this development and forced many companies to adapt their processes rapidly. Working from home was also an option before, but we’re now seeing the home office being used to a much greater extent. As a result of the required safety measures, the focus has shifted to the home. Being physically present in the office or working in co-working spaces has become less important for the time being. 

And I am convinced that, in our day-to-day lives, we will see a combination of these different forms of working, but with an even greater focus on the home office. But remote working also means working digitally from anywhere. Co-working doesn’t have to reinvent itself. Rather, it needs to master the balancing act between individual work and communicative interaction better than it did before. The same applies to the classic office workplace. Companies need to position themselves in such a way that these possibilities interest users again. 

For instance, hotels are offering their free capacities as co-working spaces, either in partnership with other companies or independently. These offers include full-service packages based on their existing infrastructure.  One example of this is the Scandic Hotels Group, which has offerings in 270 locations in six countries, including in Berlin, Hamburg and Frankfurt.

Work environments have become more dynamic and are incorporating new elements faster than before. We are learning that we all have to adapt to these changes and that we all can do so, too.  There are opportunities for new growth here for the furniture industry, and not just in the office furniture segment. There are even opportunities to pick up on trends in other industries and leverage them for the interior design industry.

What does that mean in concrete terms, and which additional new possibilities could play a role?

All the scenarios for the post-corona era are still very much theoretical at the moment, and at best they have the characteristics of trends. We are all still unable to assess exactly how things are evolving. That means that the demand for flexibility will increase. In concrete terms, what I mean is that the different types of work environments also call for a wider range of offerings in the provision of furniture and furnishings in order to make the economic risks easier to calculate.

According to a study on new work in Germany conducted in October 2020 by Schöner Wohnen and the news magazine Stern, half of employees would be willing to invest up to Euro 500 of their own money in their personal home office. And 77 per cent of the companies surveyed would spend more on furniture and spatial design if the financial means were available. 

We are living in a situation in which these adjustments are necessary on the one hand, but on the other, budgets are getting tighter, and the temporal dimensions of the use remain uncertain. The question is, why does an investment always have to take the form of a purchase if there are already alternatives available to rent? Renting products is something we already practise in many areas of our daily lives. We know and use providers such as SHARE NOW and TIER Mobility in the mobility sector and streaming services based on the Netflix and Spotify model.

The Otto Group as Germany’s leading online retailer with its in-house start-up OTTOnow and Grover, which has Saturn and MediaMarkt behind it, are focusing on leased offerings for multimedia, household appliances, the smart home and sports in the lifestyle segments. Even in the fashion industry, renting is no longer something unheard of with the arrival of providers such as myonbelle, FAIRNICA and WeDress Collective.

Providing offerings on a rental basis that are oriented towards New Work is therefore only the logical consequence and an economic requirement that is in keeping with our times for the furniture industry and its distribution structures. And today’s and tomorrow’s customers from the world of work need these additional concepts, too, for their own survival. All this makes it a step towards securing the industry’s existence in the long run.

Is there real demand, and do corresponding offerings exist? How can such services be presented, and how can they be utilised?

Actually, this issue is not a new one in the furniture business In the events industry segment, which is very close to New Work, it is already a familiar model and has been practised for many years. And it has also already been implemented in home and work environments for a number of years by providers such as Lyght Living furniture leasing. 

One example of it in practice in the context of New Work is the collaboration between Roomhero as a supplier of furnishings for residential and commercial properties and its co-working customer SleevesUp! Spaces. The offices in the new SleevesUp! location in Darmstadt have recently been furnished on a rental basis.

The challenge lies not so much in the products, because the furniture industry largely meets the requirements for multiple use with the materials used and its production processes. Rather, it lies in the overall concept of renting, which calls for even greater collaboration between several partners. For instance, the content of the rental terms and conditions concerning liability and insurance needs to be adapted to simplify the process.

Ultimately, use in the form of rentals opens up the opportunity to move towards a “renting as a service” model. Comparable services have already existed for a long time in the furniture industry in the US and the UK with “furniture as a service”, which involves property providers, insurers, logistics companies, furniture manufacturers and renting platforms collaborating in the customer’s interest.

How do you personally view the possibilities for new models of consumption in the field of New Work and on a fundamental level?

I am convinced that rentals meet the needs of our times. In addition to the issue of practising sustainability more actively, they meet these needs first and foremost from an economic perspective by fulfilling customer needs for flexibility and individuality. Fundamentally, rental services in the furniture industry are about complementing the opportunities for use for customers and not about cannibalising buying. Renting is only logical when you consider the products’ material suitability and the length of time for which they are used. And it is precisely these models that offer manufacturers and retailers the opportunity to establish additional pillars in their distribution structures and in the services segment, such as reconditioning. 

And parts of our daily personal and professional lives will be dominated by rented products in the future. Perhaps New Work will become one of them in some areas of life. For me, that is absolutely conceivable.

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Andre Hempel Senior Management
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