Lessons Learned from the Incoming Residential Players

August 15, 2018 by

There are new players in the contract interiors game: enter distributors with high-end finishes that feature a comfortable, welcoming, respitality aesthetic. Brands are taking many of the leading trends we’ve been talking about since NeoCon, and collectively offering them through an established channel with an amazing customer buying experience … and it’s not who you’d expect.  We’re referencing established  residential brands, previously exalted for their work in their own market, powerfully taking a stance in the contract interiors sector.

Experts agree that the contract interiors industry has witnessed more change in the past five years than it has in the past 30. One of the most intriguing changes we’re starting to witness is the growth of consumer brands into the contract interiors industry. What was once a niche market is now being infiltrated by many (dare we say “household”) brands. Perhaps this growth is a response to the increasing demand for respitality℠ design that focuses on incorporating pieces and principles from home and hospitality spaces, or maybe it’s a response to the changing market as brands across the industry, holistically, look for ways to better capture a larger piece of the market share. Regardless of the drive, these brands are paving the way for tectonic shift in the contract interiors industry, and illustrating the need to adapt to the real changes we face today. Here’s how… and why.

 

Transitioning downturn into an opportunity for growth

When Crate and Barrel recognized a rapid increase in furniture sales for corporate clients, the company turned it into an opportunity for growth. Crate and Barrel started 55 years ago as a lifestyle brand offering high-quality products with exclusive designs for the residential sector. Through the years, the company, along with its sister brand, CB2, has been well-known as a go-to for corporate gifting. Corporations would select from the company’s unique assortment of gifts and housewares as incentives, or year-end or goal reaching gifts for their employees. After growing organically for more than 20 years, the company’s corporate gifting department saw a shift in purchasing activity.

The company began to see an increase in corporate purchasing of furniture. As Michael Chaney, Director of Business Sales for Crate and Barrel and CB2 shared, “Over the past five years, we saw more furniture sales for hospitality, corporate offices, and other unique spaces that demanded a different type of product. Customers would ask if a residential product of ours was commercially tested, and when it wasn’t, they still wanted  to purchase it because our furniture offered the aesthetic they couldn’t find in a typical commercial piece. This realization helped us accelerate our strategy of creating products and processes better suited for the business customer.”

 

Viewing customers in a new light

Chaney shared that a significant shift for the company was its perspective on raising corporate awareness through traditional residential customers.  “Every one of our customers has a connection to the business community, whether they work for a business or own one, so each customer has the potential to be a Business Sales customer.” He added, “Business sales typically require an amplified level of service. So we’ve created a special experience unique to the needs of that type of sale, including a single point of contact from quotation through delivery, 3D design technology, order consolidation and a variety of delivery options. We are also rolling out a Business Sales program that will allow a corporate customer to go into any Crate and Barrel or CB2 location and get service for their business needs. And like a customer coming to us for their home, a customer purchasing from us for their business has the potential to become a repeat customer.”

Wayfair, one of the world’s largest online destinations for the home, and another brand commonly known for consumer sales, agrees. Margaret Lawrence, VP of Wayfair Professional, a one-stop solution that helps business customers make good spaces great, shares that the goal of the program is to provide a seamless user experience, regardless of the industry for which they are buying. She adds, “One of the things that our team does well is help customers navigate through the many products on our website. We want to create an experience where business customers find it easy to navigate the different commercial-grade products and find the specs and product features that will work well with their space. We’ve created a dedicated account management team that helps build strong relationships with business customers so they feel like they have a consultative experience with a consumer brand.”

 

Adapting to new demands

Both brands agree that one of the biggest challenges facing this transition is the ability to provide commercial-grade furniture within distribution lines originally designed for residential uses. “We’re working with our suppliers to get a more robust rating on our commercial pieces,” shares Lawrence. “This is specifically relevant to the hospitality industry, but is relevant to many of our business customers as well.” In addition, Wayfair recently launched a partnership with Wyndham, where it offers a tech platform portal to allow franchises to purchase their hotel brand standard furniture through the Wayfair site. Lawrence believes this partnership points to the company’s flexibility and tech-centric approach to making customer experience more seamless.

Chaney agrees that this shift has resulted in a need to look at business differently. “Expanding our business sales is a growth driver for the company. Our goal is to position Crate and barrel and CB2 for the commercial industry, using our roots with our residential look and comfortable feel that makes people feel like they are at home. The shift that’s occurring in the space indicates that the comforts of home are taking over, and we have an opportunity to create a niche in the marketplace.”

While these examples shed light into the way residential companies are transitioning into the commercial sector, their overarching principles provide some pretty concrete reminders for us all: Adapt to your environment. Always see an opportunity for growth. Change with the market trends, not after them. Know your audience and help them have an amazing buying experience. People like to purchase from brands they know and trust. Lawrence concludes with this, “The better we can identify who our customers are and how we can address their unique needs, the better the experience gets. We see much of our future growth around providing a user-friendly experience. Much of that experience we’ve created already, just in our consumer space. The challenge now will be how do we transition that consumer experience to the commercial arena.”

 

 

This article was originally published in The Business of Furniture, a division of Bellow Press, on August 8, 2018. It is reprinted here with permission.

About the author: Amanda Schneider, LEED AP is a researcher, blogger for the Huffington Post, and the founder of ThinkLab www.thinklab.design, a research led strategy firm serving the contract interiors market.