TUESDAY MAY 4, 2021

The Upfront

Will the Work From Home Trend Impact Residential Design?

Gensler’s latest workplace research shows that most people’s preferred place to work is the office, even though many felt they were most effective when they had the option to work from home or remotely for part of the week. Now that COVID-19 has forced many out of the office and into a work-from-home situation, people have had to adapt. The need for an effective home office is a trend that won’t go away anytime soon. 

As working from home gains acceptance and more roles are fulfilled in remote settings, the fundamental principles of workplace design will still apply — just in a residential context. In 2008, Gensler’s research established a framework for understanding work through the lens of four modes: focus, collaborate, learn, and socialize. We discovered that workplaces that integrated spaces to support all four of the work modes saw higher levels of employee engagement. How would these same four modes apply in a work from home model?

For starters, multifamily residential buildings will need to be rethought, both in terms of dwelling units and communal amenity areas. How do we do this while still addressing these four modes? How do you focus when the kids are home? How do you collaborate effectively on video calls when you’re trying to hide the pile of dirty dishes in the sink behind you? Do you really have an ergonomic workstation when you’re sitting in a dining room chair and your laptop is propped up on a milk crate on your dining table?

The recent residential trend has been to reduce unit sizes in the name of efficiency: just enough space for a living room seating arrangement, perhaps enough room for a dining table, a tight kitchen, and a sleeping area. While this trend will likely continue, we now need to consider how a home office could be part of the mix. It should go beyond simply designing a niche that can barely hold an IKEA desk. Perhaps landlords will be willing to offer predesigned workstation packages as a leasing incentive. Such a package could be designed to bring a focus space into the unit — one that includes a desk, ergonomic desk chair, lighting, and built-in storage. For tenants who don’t work from home, a design option for a crafting station or a recessed two-seat dining table could serve as alternatives.

Gensler concludes: As a result of our experience with COVID-19, the lines between live, work, and play will increasingly blur at an accelerated pace. Spaces inside and out of residential units will need to be designed for increased versatility while promoting productivity. Most importantly, designers and developers of residential projects will need to consider how the four work modes can be integrated in these new settings.

Okamura creates WORK MILL magazine in collaboration with Forbes Japan

WORK MILL is a lifestyle magazine that focuses on ‘Work,’ published in collaboration with Okamura and Forbes JAPAN. WORK MILL provides insights into new ‘work styles’ and ‘workplaces’ from around the globe to help create new values from a business strategy perspective. With its first publication in 2017 in Japan, the magazine’s US edition now celebrates its 4th issue, ‘Loved Company.’

‘Loved Company’ issue explores how companies maintain strong relations with their employees, customers, and communities through the fundamentals of human emotion. In the US and Canada, the magazine can be ordered upon request and is also available to read digitally through the online platform, Medium. Updated frequently with new articles directly from the magazine, visit okamuraglobal.medium.com.

Cold offices can make you gain weight

With millions of Americans vaccinated against COVID-19, many who have worked from home over the past year will be heading back into the office. Adjusting to new routines is challenging and can affect our health and fitness. We’ve been more sedentary or more active, gained weight or dropped pounds.

As part of my work as a biomedical engineer, I study how physical factors influence human metabolism. This includes height and weight, gravity – and air temperature. My research colleagues and I have found that living or working in a cool environment for extended periods can lower core body temperature. That decreases metabolic rate–how fast we burn calories–and commonly causes weight gain.

Maintaining core body temperature

Humans are homeotherms–that is, we maintain a relatively constant core body temperature. Specifically, we keep our body temperature in the range of 97 F to 101 F even in cool environments. Three different types of metabolic activity keep our body warm.

The first is basal metabolism. About two-thirds of the calories we burn each day fuel basic bodily functions, all of which generate heat: breathing, blood circulation, cell growth, brain function and food digestion. Any kind of physical movement also generates heat through chemical reactions that make muscles contract.

A third heat-generating process happens within specialized tissue called “brown fat.” It’s a leftover evolutionary adaptation that kept us from freezing during the ice ages. It kicks in when our core temperature drops to very low levels, but most people lose their brown fat as they age.

With increasing body temperature, our metabolic rate rises and we burn more calories. This generates more heat and further raises our body temperature, creating a positive feedback process which usually keeps our body temperature in the healthy range.

But this process is remarkably sensitive to temperature. For every 1-degree drop in body temperature, our metabolic rate can decrease by more than 7%. This means that the resting metabolic rate for someone at a body temperature of 101 F (the high end of normal) is up to 30% higher than if their temperature were 97 F (the low end). Increasing body temperature by four degrees can burn more calories during the course of the day than the average person burns as a result of all of their daily physical activity.

Offices and the History of Noise-Canceling Technology

Offices, particularly the open plans touted for their creative collisions, were designed to foster interaction. Designers and promoters of the open plan compared it to “a busy restaurant or lively cocktail party,” writes Jennifer Kaufmann-Buhler in her recent book, Open Plan: A Design History of the American Office, “where the general ambient noise of the space masked the individual conversations such that one could reasonably have a fairly private conversation despite being surrounded by people.” But as Robert Propst, the Herman Miller designer known as “the father of the cubicle” soon found out, most workplaces required a little more masking, and so the plans intended to spark our creativity also spawned a new set of designs to fix the noise.

In 1976, the Acoustic Conditioner was born. Each spherical conditioner, set atop a slender stalk, could be clipped to the top of a padded Action Office partition and was intended to “condition” the atmosphere for workers within a 12-foot diameter while looking like a George Lucas reject.

Most companies focused on more unobtrusive office-wide technology, hiding machines behind acoustic ceiling tiles (yes, those ugly dropped ceilings have a purpose) and upgrading low-tech noise dampeners like carpets and curtains and cubicle walls. Weyerhaeuser, whose 1971 ecoheadquarters outside Seattle has been called “the original green building,” used plants as interior screens and sound baffles — just like the bars and restaurants of the era.

Since then, techniques to keep the noise down have continuously swung between personal tech and holistic hushing. By the 1990s, “hoteling,” the idea that workers would alight at the office only a few days a week, reigned supreme, and tent-inspired structures proliferated. Clive Wilkinson, whose firm designed offices for Google and TBWA\Chiat\Day, provided ad agency Mother with a London location that was all concrete surfaces below and sound-absorbing Marimekko light fixtures above. Ayse Birsel’s 1997 Resolve system for Herman Miller included accessories for personalization, as well as sound-dampening via sail-shaped rolling screens. “People modify their behavior,” HM’s Rick Duffy told Fast Company. “They lower their voices because they can see that other people are trying to work.”

Today’s primary noise-canceling technology shares a smooth white aesthetic with the original Acoustic Conditioner as well as nomadism with the 1990s: the earbud, piping white noise or podcasts or the Spotify playlist of your choice directly into your ears. New intra-office communication platforms like Slack cut down on outloud conversations, but a Google search reveals plenty of advice on how to “reduce noise in Slack.”

The Pandemic Pay-Off

Life is a balancing act. Achieving a harmonious relationship between work and life is a tightrope walk most of us struggle with. Since the beginning of the pandemic, that struggle is being fought on new ground, with work and home suddenly stuffed within the same four walls. We all left our workplaces – spaces that were carefully created to support working life – and set up on couches and at kitchen tables. Without a separate space to confine our 9-to-5 personas, it all began to run together.

There have been benefits. The trip from the coffee maker to the living room is far less fraught than the rush hour commute. But more than ever, work is bleeding into our personal lives and vice versa. The days of feeling frustrated by weekend work emails don’t seem so bad in a time when you never leave work – because you live there.

While the pandemic may have us looking to rebuild those walls between work and home, it has also opened a door: All this disruption presents an ideal opportunity to finally nail down that always elusive work/life balance.

Putting Employee Safety First in the The Post-Vaccine Office

There is no question that the effects of the COVID-19 pandemic will be felt in workplaces for years to come. Our lives are still changing on a daily basis, but as restrictions are gradually relaxed in some countries and vaccination numbers around the world rise, our attention is naturally shifting to what the future holds.

For many businesses it is a time to focus on adapting and understanding how to operate safely and efficiently in the so-called ‘new normal’. Despite the promising roll out of the vaccination program, a hybrid of home and office-based working is likely to remain the norm for many companies. That said, people are steadily regaining confidence and are spending more time in offices as part of a more flexible approach. This means there needs to be a concerted focus on how to integrate better standards of hygiene, social distancing and a sense of collective responsibility into the workplace.

So, what does the post-pandemic and indeed post-vaccine office look like, and what can people expect to see when they do return?

The function of the new office

The pandemic has made many of us realize that the office is a home of collaboration, it is key to maintaining and fostering workplace culture and allows a greater focus on employee wellbeing. Recent research has shown that 84 percent of business leaders still say a physical workplace contributes to instilling vision and purpose to their employees, suggesting that the majority of businesses will continue to keep a physical workplace going forward and that this wasn’t the ‘work from home revolution’ first heralded in early 2020.

However, despite its many benefits, as an industry we must not simply adopt a one-size-fits-all approach and need to work hard to flex and respond to the needs of both individual companies and individuals. This is where workplace strategy teams have an important role to play in helping clients analyze the potential benefits of a particular office and then they can work together to help create the best space. When it comes to the function of the office, we’re seeing that it’s no longer a location to sit at a computer and work through a backlog of emails, but rather a destination for team building and a place for people to come together. That means that the office interior will need to shift away from being desk-based and towards shared space. The key thing here will be doing this safely, so that employees feel reassured that they are safe to be at work, while also working in an environment that feels friendly, natural and conducive to productivity and collaboration. Workforces have felt the brunt of being kept in isolation for over a year, so it’s also vital offices are a place they want to return to, and considering elements like biophilic design is a key part of achieving this.

Healthy Buildings Are Not What You Think, But Matter Now More Than Ever

Whether the public realizes it or not, the buildings they work in are probably unhealthy — an unsettling reality that is as true today as it was before the coronavirus pandemic.

That’s because defining what makes a building “healthy” or less than that ideal is complicated, especially now as building owners desperately search for ways to convince tenants and their employees that it is safe to come back to the office.

With millions of dollars in rent — and the health of millions of workers — at stake, clearing this uncertain air has become the priority of two entities, WELL and Fitwel, which have been issuing healthy building certifications and seals with the stated goal of enhancing the health and well-being of occupants.

However, those assurances come with a price tag and lingering misconceptions about what these healthy building labels mean. 

“Who isn't interested in healthy buildings today?” Skanska USA Commercial Development Sustainability Director Sarah King said. “As we come back and see the world reopen after the pandemic, it's really underscored how personal it is — you feel it very personally when you're entering into a building and wondering how it can impact your health.”

Americans spend about 90% of their time indoors, where certain types of pollution can be up to five times higher than outdoor concentrations, according to the U.S. Environmental Protection Agency. In the pandemic era, this indoor health risk is compounded by a greater threat of contagion.

“It definitely spreads more indoors than outdoors,” Harvard Medical School associate professor of immunology and infectious diseases Roger Shapiro said at a press conference last year. “The virus droplets disperse so rapidly and in the wind that they become a non-factor if you’re not really very close to someone outdoors, you know, let’s say within 6 feet.”

Overall, WELL targets ten concept categories of buildings: air, water, light, nourishment, thermal comfort, sound, movement, material, mind and community. Fitwel has seven health impact categories: community health, reducing morbidity and absenteeism, social equity, feelings of wellbeing, healthy food, occupant safety and physical activity.

The Post-Pandemic Office Might Feel Like a Library

Kate Weidner, CEO of creative agency SRW, starts her day in what for many months has been her personal office and happy place — a 14-person table in a newly designed boardroom.

On the ground floor of a retrofit meatpacking plant in Chicago’s West Loop neighborhood, she manages the agency’s client portfolio, which includes natural food mainstays like Simple Mills and Calbee North America and the product lines of popular chef Stephanie Izard.

The agency moved into its newly renovated office in March of 2020 after relocating from the top floor of a nearby WeWork co-working space in an area that has become the hub of Chicago’s growing tech community. The studio has 40 employees, but, on any given day, only about five to 10 report to the office, where, for now, on-site attendance is optional.

“We definitely view this space as a library-slash-clubhouse for those able to come in.”

During our phone interview in January, Weidner told me she was the only one there, save one of her colleagues “squatting in the creative conference room.”

Here’s the thing, though. She’s comfortable there, and not planning on making any drastic real estate decisions soon.

“We definitely view this space as a library-slash-clubhouse for those able to come in,” Weidner said. “And we are very lucky that it’s on the first floor; we have our own entrance.”

Like many tech companies, SRW is embracing the office as a flexible “touchdown” space. Employees can come in — or not — as they see fit. Office life is evolving rapidly as employees get vaccinated and return in greater numbers, Weidner told me, but the hybrid model for work is unlikely to change any time soon, and that means a new design vision for the workplace: the library.

“If you think about the language of a library, what does that get you?” Elizabeth von Goeler, a principal interior designer at the architecture and design firm Sasaki, said. “It gets you protocols that everybody understands for quiet and focused work. And so it’s a very direct response to the open office spaces created in the last 10 years that weren’t done right.”

“Often those spaces didn’t have the support spaces to hold meetings,” she continued, “and they became so large and open you, literally, couldn’t think. That’s part of the reason for the library format. It gives you another language outside of the office, outside of the design world, to say, ‘OK, I’m going to have a spot to think.’”

What's a landlord to do when the office is a destination, not a routine?

Every week a new survey is published or a statement from a CEO hits the press related to corporate occupier’s desire to adopt a form of hybrid working for the long-term post Covid 19. And as a result, the desire to occupy less space in their central office hub. Landlords are asking- What do we do now to attract and keep great occupiers, and fill our buildings? I have an idea that is of its time. A time when the world has started to cooperate, collaborate, and work towards a common purpose. When work, life, values, and priorities are shifting. Employers are seeking to look after their people in a holistic way in and out of the office.

What if landlords came together with their occupier clients to support lifestyles not just workstyles?

The starting point of this idea is for landlords to ask yourself, who is your customer? No, it’s not the CEO or the CRE Director, but the entire workforce that occupy each and every building in your portfolio. Yes, all the portfolio not just those within a single building.

My suggestion is treating your occupiers as Members not Tenants. Members of your exclusive club. Provide those members with perks and benefits.

For example, access to all the shared landlord provided facilities and events in all the portfolio…the co working spaces, the reception breakout spaces, gym, cycle parking, showers, TED talks and events, the concierge services, etc. Across the whole portfolio not just within their own building. Landlords can provide a variety of benefits and facilities, but not have to do it in every building.

On top of that landlords support your club members lifestyle not just workstyle. Tap into the buying power of that community of members by negotiating discounts or benefits with lifestyle products such as Netflix, Just Eat, Spotify, Uber, cinemas, theatre, health clubs, etc. all accessed via a free app for the members.

VTS CEO Nick Romito On Office Demand Surge, Why An All-Remote Strategy 'Is A Terrible Decision'

On this episode, we talk to Nick Romito, the CEO of VTS, a cloud-based leasing and portfolio management system. The company tracks office tours each month, and it releases a monthly VTS Office Demand Index.

Last month, the company reported a surge in demand — nationally, the index jumped 86 points, a monthly growth rate of 28%. However, in New York City the demand is still 20% down from February 2020. Romito said if tours are up, deals are imminent, meaning companies are planning their comeback — just how that comeback looks in practicality is the big question.

“We do feel like a big part of that surge is pent-up demand, the question is, does that growth continue or does it start to temper a little bit?” Romito said. "The thing that we have been waiting for is the tech tenants have really been on the sidelines for quite a while … Tech is now starting to wake up, and that’s a big part of what we’re going to need to see this recovery happen."

Long-term, while overall office demand is still in question, Romito said his conversations with fellow CEOs give him optimism for the future value of the workplace.

"I’ve spoken to something like 25 CEOs who have anywhere from 5K SF of office space to 1M SF and I would say 95% of folks are going to say, 'It is mandatory you’re in the office in September.' Is it three full days or four? No one’s doing less than three, that I can see," he said.

"Clearly Salesforce and these folks are saying, 'Well, [remote work is] going to be permanent.' Good luck. I’m going to give them probably a year before they say, 'This is a terrible decision, our teams have to collaborate and work together.'"

Coworking Is The New Normal, And These Stats Prove It

Coworking is here to stay. It was here to stay before the coronavirus pandemic; but the onset of the COVID-19 pandemic has solidified coworking’s standing as a preferable workspace solution.

In the early days of coworking, many argued it was nothing more than a movement and trend that would eventually fade away.

Twelve years later, what started as a movement has become a full-blown industry that has entirely disrupted the way people lease and use office space. As demand for coworking spaces has risen and the industry evolved, so has the terminology. Today, many people use coworking, flexible workspace, and workspace-as-a-service to refer to the same thing.

One thing is clear, regardless of the term you decide to use, flexible work environments are here to stay.

Numbers that back up the growth and potential of coworking:

Statistics gathered from reports published in 2020-2021

• Despite the pandemic, many markets globally have shown increased demand for flexible workspace, and on shorter terms. The Instant Group forecasts flexible workspace supply growth of over 21% in 2021.

• Aas of Q2 2020, the coworking footprint nearly doubled since 2017 to 86.0 million square feet (msf).

• Coworking space as a percentage of total office space nearly doubled from 1.1% in 2017 to 2.1% as of Q2 2020

• 67% of CRE decisionmakers are increasing workplace mobility programs and incorporating flexible space as a central element of their agile work strategies.

• 86% of CBRE respondents see flexible office space as a key component of their future real estate strategies.

• More than 90% of respondents projected lease flexibility will increase in the future. Of these respondents, 25% believed this will take the form of more flexible workspace agreements.

• The Commercial Observer estimates that coworking spaces are likely to double or triple in the U.S. in five years.

• Landlords will increasingly allocate 10 – 25% of their assets for flexible leases.

• 71.5% of workers that used coworking prior to the pandemic plan to return to it, while 54.9% of remote workers that didn’t use coworking before stated that they will consider joining a coworking space as a remote work solution in the future.

• 40% would like to be able to work from a third-party place such as a coffee shop or a coworking space (+11%).

• Coworking spaces will become popular among a growing percentage of employees (from 30% pre-crisis to 40% post-crisis).

• 20% of corporate workers used coworking space at least one day a week, an increase from 14% in 2019.

• 30% of flexible workspace providers reported that occupancy rates have remained relatively stable through the global lockdown, only falling by 10%.

• Supply in the UK has grown by 4% despite COVID-19.

• The share of the flexible office market held by London continues to grow year on year, up to 31% in 2020.

• The UK flexible workspace market is on track to hit 12.5% penetration within two years – a doubling of current supply.

• 90% of LATAM operators are planning to expand over the next 12 months.

• Despite the COVID-19 pandemic, JLL still predicts 30% of all office space will be consumed flexibly by 2030.

• The U.S. total flex office inventory was reduced by only about 1% in H1 2020.

• Inner cities have become the most popular location type to date in 2020 with a 52% share of demand.

• 43% of workers would consider working from a company-provided location nearer to their home at least a few times a week.

Office Tours Spike 28% As CRE Gears Up For Labor Day Return To The Office

In major office markets across the country, potential tenants have been eyeing space more than at any time since the outbreak of the coronavirus pandemic over a year ago.

Office demand in major U.S. markets jumped by 28% from February to March, according to a monthly report by VTS, a software provider for commercial real estate landlords. VTS’ Office Demand Index increased by 160% in the first quarter and now sits at 86, 9% less than where the index was in February 2020, leading the report to conclude that “return to work appears imminent.”

VTS’ index is largely based on the number of office tours conducted by potential tenants in a given market, and its reported increase in demand has not translated into a boost in leasing activity quite yet, according to research from Colliers.

“[Q1 was] just a continuation of what we had experienced the past few quarters,” Colliers National Director of Research Steig Seaward told Bisnow. “Tenants are slow to return to the office. Nothing has really changed.”

The same is true of in-person work — employee occupancy rates have only inched up over the first four months of the year, according to card swipe data from Kastle Systems. Office usage across the 10 largest markets in the U.S. averaged 26% in the week ending April 21, only a couple of percentage points higher than the rate in mid-January.

Norwegian Design Expands to the US With the Arrival of 4 New Brands

The design industry has always looked to Norway as a constant source of inspiration for contemporary design, sustainability practices and its holistic approach to manufacturing. With Norwegian design gaining more popularity, it is exciting news that the Norwegian Design Industry, a division of The Federation of Norwegian Industries, will be expanding its presence to the United States this year by introducing four innovative interior design brands to the U.S. market. At ICFF 2021 in November, Dyfosit, Fram Also, Heymat, and Northern will showcase the very best of Norwegian design.

What makes Norway stand out from other design countries? Norwegian design takes its cues from Norway’s natural environment, including the northern skies and landscapes, the native materials and the colors found in nature. Norwegian designers also consider the environmental impact of manufacturing and strive to create long-lasting products that don’t end up in the landfill using modern and traditional engineering technology. With these four Norwegian brands soon arriving to the U.S., it won’t be long before we see more Norwegian design in the home, public space and office.

A new addition to Flos’ Bellhop collection - Bellhop Floor by Barber & Osgerby

Flos’ popular Bellhop Collection by design duo Edward Barber and Jay Osgerby is welcoming an eccentric but enriched addition to the family - Bellhop Floor. An elegant and discreet presence, but with a strong personality, the designers flipped the top of the existing collection and added a combination of new materials for the floor version: concrete, aluminum, and glass.

The original inspiration for Bellhop was the desire to create an object that would feature a kind light full of personality, resulting in contemporary, battery-powered, candle-like light to take from one room to the other. Barber and Osgerby developed a whole collection for Flos that was later enriched with wall models and outdoor bollards. Where table lamps are often discreet, the Bellhop Floor completes the family with a more sculptural character.

Bellhop Floor features a stable concrete base and an aluminum body available in four colors: brown, green, red and white. The diffusers are white for all of the color options, except for white, where the diffuser is grey.

X50. The definitive stacking chair redefined.

The innovation of the X50 stacking chair is hidden comfort in simple linework. This, appearing at first glance to be just a simple plastic seat, is actually an elastic seat that adapts to the body contours automatically and responds to body movements instantly, providing extraordinary comfort over a conventional upholstered seat. It is also easy to clean. Even more amazing is its weight of only 9.5lbs and easy stacking up to 50 chairs at around 6’6” high. The X50 chair designed by axona AICHI provides functional beauty that co-exists with a simple clean design.

LightArt’s New Pendants Study Scale, Color, Lighting Technology and Sustainability

LightArt announced a new addition to their Coil Collection – a breakthrough line of fixtures made from upcycled waste. Inspired by the look of ceramic pottery and nature’s color scape, LightArt introduces Coil Collection Naturals with calming new colors, bold new shapes, and sizes, and efficient performance lighting technology. The Coil Collection Naturals push the boundaries of upcycled waste by incorporating color, new shapes, and sizes unfamiliar to recycled materials repurposed into lighting.

The collection is the byproduct of years of meticulous internal research & development, bringing together material science and design to produce 3D-printed pendants out of the company’s recycled waste. Coil Collection Naturals shares the same hand-spun, ceramic look of LightArt’s original Coil Collection and builds on its guiding principles, working with the engineering division of parent company 3form and pushing the boundaries in collaboration with other polymer companies across the US to tap into collective expertise and drive for innovation. The pendants are made from internal waste material and highlight LightArt’s innovative development process. The waste material is pelletized and sorted by color through new technology before pigment and a matting agent are introduced for its final form. LightArt continually strives to manufacture lighting that is net positive in climate, waste, and energy.

Axpo Holding AG Offices – New York City

The new American Headquarters of Axpo Holding AG in New York City present a fresh perspective on contemporary workplace design, use of sustainable materials in interiors, and fascination with Swiss precision.

BoND created a uniquely Swiss environment for energy company, Axpo Holding AG‘s new offices in New York City, New York.

Taking hints from Swiss airport lounges and Mad Men era office decor, this 28th floor Midtown office is characterized by dark and refined interiors contrasted with red, gray and chrome fixtures and fabrics. The office includes a bullpen (trading area), conference room, a board room, private offices and public areas for gathering and dining. Sweeping views of Fifth Avenue and the nearby St. Patrick’s Cathedral Spire anchor the different spaces.

Axpo’s corporate brand identity and “Swissness” were key drivers of the design. Fittingly, we decided to source the majority of the furniture from Swiss companies like Vitra and USM, known worldwide for their cutting-edge design and quality. Artworks by Swiss artists were carefully curated throughout the office.

Wayfair's $112 billion plan to take over your entire home

It started with speaker stands. Steve Conine and Niraj Shah launched RacksandStands.com in 2002, when they were 28 and 29, respectively, and when the concept of buying things on the internet was just getting started.

The speaker stands sold well—well enough for Conine and Shah to launch another site, and another, and another, using the same formula of product-specific sites. They soon launched 250 separate websites, for niche topics like EveryCuckooClock.com, TheWokStore.com, and AllBakersRacks.com. Within a decade, the system they had built amassed $500 million in revenue per year (or about $2 million per year per site).

“We started thinking long term,” Conine says. While their strategy was successful, they saw a clear advantage in launching a destination site—a place like Amazon. Consumers would know to visit the site to begin their shopping journey, rather than land there through search engines and ads. So Conine and Shah hired a branding agency and rolled their dozens of websites into one.

They called it Wayfair, a name designed to mean nothing.

In 2020, Wayfair did $14.1 billion in business in furniture and home goods. That gives it 2% of the $840 billion home category in North America and the U.K. (according to Wayfair’s Euromonitor data and its own analysis), making it only one-tenth the size of Home Depot. But anyone who has shopped for furniture and furnishings online knows that Wayfair has an expansive digital presence that no other home store can match.

During COVID-19, Wayfair reported its first quarter of profitability since it went public in 2014. Sucharita Kodali, a VP and principal analyst at Forrester, attributes some of that to a broader boost in online shopping and home goods during the pandemic. But Wayfair has experienced 50% year-over-year compound growth since it was formed in 2014. And 2020’s year-over-year growth was in line with this, at 55%. So with or without the pandemic, Wayfair argues it still would have been profitable.

Wayfair is deceptively difficult to analyze, even for business analysts. It appears to be a massive furniture and home goods website, but it’s also a large infrastructural network that delivers products from manufacturers to people’s homes, and a technology company powered by 3,000 engineers and zero furniture designers. Wayfair doesn’t just want to sell you your next love seat; it wants to be your destination for every future home project, from remodeling a bathroom to redecorating your whole house, with just a few taps.

By current projections in the growth of the home industry, Shah explains that even without gaining more market share, Wayfair will be selling $112 billion a year in home goods by 2030. “We obviously intend for our share capture to build over time,” he says. But Wayfair’s competition is robust across the fragmented home industry. It includes home improvement chains like Lowe’s, big-box retailers like Walmart, furniture giants like Ikea, decorating services like Houzz, and countless direct-to-consumer startups dipping their toes into the furniture and housewares market. Wayfair’s quest to rule the home sounds impossible, but so does turning a website that sells speaker stands into a $14 billion business.

Best of Instagram

The latest job ads from Contract.Careers

©2021 CFN.News

CFN.News - PO BOX 2551, Sarasota, FL 34230