Expanding Your Opportunities: Vertical Markets
Written By Rob Kirkbride, Editor-in-chief, OI Publications • August 7, 2023
There’s a funny saying in the industry about how we all arrived here. It goes something like: “No one was ever born dreaming of working in the office furniture industry.” Unless your family has been in the business, we all came from someplace else and most of us never dreamed we would be here.
When you think about it, the same is probably true for many of the companies in the industry. Herman Miller was founded to make residential furniture. G.W. Haworth started in store fixtures. Steelcase got its start by making steel waste baskets.
My point is this: If all of us would have stayed in our chosen fields, we would have sold our careers and companies short. The reason all the above companies succeeded is that they shifted gears and went after other vertical markets, often when the outcome of such a move was uncomfortable, uncertain and unclear. Yet they (and we) did it anyway.
As the market for office furniture shifts, workstyles change and commercial real estate struggles with how the workplace will look going forward, it’s time to look at other vertical markets.
For the reasons outlined above, diversification is critical. We have some success stories about diversification in this industry already. KI is a good example. The company is an educational furniture expert, but it also has strong verticals in corporate, healthcare and hospitality. So when corporate is down, it can focus on education. When education dips, it can look to the healthcare market.
Herman Miller has done some of the same. The company has a strong residential program. In fact, if you read the transcript from its last quarterly financial report, CEO Andi Owen did not mention the office in her comments a single time. That diversity and its strength in the residential vertical market helped it ride out the pandemic much better than its peers that did not have residential to fall back on. Steelcase’s acquisition of Smith System was a very smart move and the company has had great success in the educational furniture market since.
Many office furniture makers dabble in other vertical markets, but not enough focus on these other opportunities all the time. For example, there are some companies that focus on educational furniture when the market for office softens (and just as quickly forget about it when the vertical tanks). It’s smart to diversify, but stupid to ramp up in another vertical just to abandon it when things get tough.
It is easy for me to tell you that you should explore other vertical markets. I’m not the guy who has to learn a new industry, figure out the sales process and cycle and develop products for a completely new vertical. It’s tough to expand into another vertical, even if it is adjacent to what you already know.
Still, it’s not impossible. I would recommend starting small. Figure out a single product in your portfolio that might work in another market. Perhaps it is a desk or simple office chair that would be perfect for a hotel room. Or maybe you have a stool or poof that would make a great dorm chair.
At the same time, you need to get sales involved early. One of the biggest hurdles to expanding into a new vertical is training sales and making sure they are on board with their new role. In fact, including sales should happen at the same time decisions are made about which products can adapt to other verticals since they have much more clarity on what will and won’t sell in these new markets.
With worries about an imminent recession easing, now is the time to think about what you can do to expand your opportunities. You don’t have to reinvent your company. Start small. Invest in some research (Write Office can help with that) to figure out the market and products that might work for you.
Whatever you do, don’t stop moving, growing and pushing forward.
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