What the Industry Learned in 2022
Written By Rob Kirkbride, Write Office • December 19, 2022
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2022 has been a year to remember for the office furniture industry. It was mostly good, a little bad and a whole lotta weird. Here are five things we’ve learned as an industry that we need to remember as we head into the new year, in no particular order:
The office furniture industry is a lot more resilient than many believed. Think about what you were doing a year ago. Many of us were sick with COVID or dealing with outbreaks from a huge spike caused by the omicron variant. Business leaders were concerned that COVID would continue to spike. We didn’t know it then, but it would mark the last major spike in the virus that disrupted the world, at least to this point. While the virus remains, it has become much more manageable. Life for most has returned to some normalcy.
And the office furniture industry – arguably one of the industries most affected by the pandemic as workers around the world move from the office to work-from-home – made it through, changed, but ultimately stronger.
I would argue that the pandemic did the industry some overall good. It forced us to seriously look at work from home trends (that had already begun prior to the outbreak). It forced us to lean down after a few fat years. And it forced us to rethink office design, which was long overdue.
Dealer consolidation occurred at warp speed. Dealers are the lifeblood of the office furniture industry and we all watched with interest as they gobbled each other up. Many big dealers got bigger and quite a few small dealers went away.
Consolidation in the dealer world was happening prior to this year, but 2022 was a huge year for mergers and acquisitions, which shouldn’t come as a surprise. Consolidation makes sense, especially against the backdrop of shrinking margins and efficiencies of scale.
It will be interesting to see how the majors handle these mega dealers and how their say in matters will affect their smaller dealer colleagues. Regardless of how the dealer shuffle turns out, dealers are being forced to run their businesses smarter and more nimbly than they have in the past.
NeoCon still matters, even as more manufacturers look outside theMART. The 2022 Shuffle was a dance not limited to the dealer community. Manufacturers did some shuffling of their own this past year.
A few brave (some would say foolhardy) manufacturers joined MillerKnoll and Teknion by opening new showrooms in Fulton Market. Many others are weighing their options. Humanscale, Inscape and others have made the move out of theMART and will be followed by a few more for NeoCon 2023.
Despite the losses, NeoCon was as important as ever. The show remained strong in 2022, even without the brands that left. And attendees found Fulton Market isn’t nearly as fun to navigate as theMART, especially in 90+ degree weather. It’s hard to get around the neighborhood, restaurants and other amenities were packed and the neighbors weren’t very happy about sharing the space with thousands of office furniture looky-loos. It will be interesting to see if 2022 was the tipping point or just a reminder of how important theMART is as an industry hub.
Supply chains and manufacturing needs to move closer to home. The biggest issue facing the office furniture industry in 2022 was not the pandemic. Instead, it was supply chain issues caused by Chinese suppliers and manufacturers who remained closed while the rest of the world opened.
It created the largest-ever industry backlog that many companies are still working through today. The office furniture industry was strong in 2022, but this wasn’t a backlog caused only by strong demand. It was a manufacturing backlog caused by a lack of parts (and entire furniture products). The ripples caused by the backlog created rifts between manufacturers and their dealers and dealers and their customers.
Many manufacturers learned the hard way that the supply chain in the office furniture industry stretched too far around the world to keep it under control. A lot of manufacturers are smartly looking for suppliers and OEMs that are much closer to home or bringing some processes back in house.
The longer employees were allowed to work from home, the more companies saw the folly in trying to manage the out-of-office experiment. As more and more data comes in about the work from home debacle, the more we are going to understand the importance of being together in the office. Unfortunately, we will never know exactly what was lost in the process. What cutting edge technology was never realized because the two people who might have invented it were stuck working from their kitchen tables? What new products will never be launched because the team that might have come up with them never huddled together in an office to design them?
In this week’s Insider, we are looking back at what we learned in 2022. Next issue, coming out January 3rd, we are going to look ahead at what we can expect in 2023. I think we can all agree that a little stability next year would go a long way to calm the jangled nerves of the industry.
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