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Companies Are Pivoting To Selling Furniture For Home Offices

SACHA PFEIFFER, HOST:

Many offices around the country are still closed while employees work from home, and that's created problems for people who sell furniture to these corporate offices. Planet Money's Greg Rosalsky says the market for desks and chairs offers a classic tale in economics.

GREG ROSALSKY, BYLINE: The company iMovR sells things like standing desks and treadmill desks. And when COVID hit and offices closed, it looked like doomsday.

RON WIENER: So literally in the span of two weeks, all of our pipeline of orders - of bulk orders disappeared - just vaporized.

ROSALSKY: This is iMovR CEO Ron Wiener.

WIENER: And we couldn't even reach people at their desks and find out what happened because they weren't there.

ROSALSKY: Wiener believed the office exodus meant a collapse in desk sales and that his company might even go under. But something completely different happened. All of a sudden, millions and millions of workers needed new desks for their home offices.

WIENER: And that's why all of a sudden, our sales tripled overnight. And they're still growing month to month.

ROSALSKY: iMovR was well-positioned for the massive shift to home offices. It's small and nimble. It sells on the Internet. And its furniture is designed for easy self-assembly. The same can't be said for its bigger competitors - companies like Steelcase and Herman Miller. Those are furniture companies that got big using an old business model - selling bulk furniture that requires professional assembly through brick-and-mortar retailers. It's not a great model for the COVID home office world. Ryan Anderson, the vice president of digital innovation at Herman Miller, admits they've had to make some changes.

RYAN ANDERSON: Well, like a lot of other industries, we face some immediate short-term challenges.

ROSALSKY: There's this concept in economics called the innovator's dilemma. The basic idea is that bigger, older companies often struggle to adapt to a changing market because all their money comes from the old way of doing things. Think the music labels and streaming music or Kodak and digital photography. Big furniture companies like Herman Miller may have been slow to adapt to the rise of online sales and the home office market for this reason. Now with COVID, they're being forced to catch up, adapting their old model and selling online for people's home offices.

ANDERSON: Ergonomic desk seating, as an example, would be one of those product categories that's just been absolutely crucial right now because there are people working from, you know, their guest bedrooms or their kitchen table, and they need a higher degree of comfort.

ROSALSKY: Anderson said he envisions a hub-and-spoke model for office work where employees are given the flexibility to work remotely, but there's still a central office that serves as an on-demand meeting ground. There you can collaborate and bond with your colleagues or work without screaming kids. He says they're making furniture that can thrive in both settings.

ANDERSON: I think if you're hedging all of your bets on the belief that offices will return to what they once were and that it's going to be a sea of desks where everybody needs to come and sit throughout the day to do their work, that would be very naive.

ROSALSKY: For months, Herman Miller's stock price has been in the toilet. But last week, it announced earnings that showed it was now beginning to replace a huge chunk of their lost commercial office sales with home office sales. That is, it may be overcoming the innovator's dilemma. It's a bad time to be selling furniture for high-rises in office parks, but it's a great time to be selling for the home office.

Greg Rosalsky, NPR News. Transcript provided by NPR, Copyright NPR.

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