25 Oct 2021 • Work
Office furniture is going circular. What will the subscription economy change next?
Renting your workplace setup could be more profitable and sustainable for both manufacturer and user, but it still might not be a net benefit for interior design.
Back in April we noted the B2C furniture brands trialling subscription models to keep up with their customers’ lifestyles. In the space of just six months, the rental revolution is already on the brink of becoming mainstream, with Muji and John Lewis making it possible for customers to lease rather than own their products. Now commercial furniture manufacturers are switching on to furniture-as-a-service (FaaS): either through third-party companies, or by taking the leap to invest in new models themselves. We examine the moves and motivations in this emerging market and where it might lead.
Rent vs own
In 2015, US-based startup Swivelfly was the first to provide FaaS to match the fast-moving business environment of Silicon Valley. Its monthly charge gave companies sizing up and down a risk-free way to fit out new spaces without major investment. Swivelfly has since disappeared. But fast forward five years – through the co-working boom, the push for circular manufacturing, and hybrid work fuelling demand for flexibility – suddenly it seems there is greater confidence around the idea.
‘Flexible workplace furniture services make sense for all kinds of reasons. Most companies aren’t that interested in the maintenance and upkeep of their office environments’, says Tien Tzuo, author of Subscribed, in a 2019 interview. ‘Most companies want to create appealing workspaces that encourage innovation and productivity. Most companies want access to the latest and best ergonomic options out there. And most companies want to save money and increase efficiency.’
Copenhagen-based subscription service Nornorm was launched in 2020. Addressing the huge amount of office furniture that goes to waste every year (8.5m tonnes annually in the US), it presents itself as a sustainable and affordable alternative to ownership. Kathryn O’Callaghan-Mills, design director at UK-based workplace consultant, Area, thinks FaaS would be popular with her clients. ‘Nornorm repairs, refurnishes and re-circulates office furniture: a fantastic offering in a sustainable approach to specifying a product for longevity,’ she says. ‘Furniture subscription provides a great opportunity to adapt furniture to suit evolving office environments, giving the user choice in their ways of working and provide employees with empowerment.’
Services like Nornorm are catching on, but O’Callaghan-Mills thinks that, in the commercial furniture market, they aren’t necessarily more sustainable than doing things the traditional way – specifying high-quality furniture a company feels responsibility to take care of through several office moves. She explains: ‘There is argument in the positive longevity of purchasing commercial furniture outright. If you buy well, it’s an investment. And products are made to last, giving clients opportunity to utilize them for a long period of time.’ Subscriptions make sense for consumers who want to update clothes, entertainment and their homes regularly, but do we care as much about the office environment? Along with the influence of hospitality and high-end residential design on commercial interiors, monthly subscriptions could encourage a fast-fashion culture in office design that didn’t previously exist.
Brands pivoting to subscription
Office furniture brands are considering developing their own subscription services, too. The wastefulness of the commercial furniture industry – and concern over procuring future material supplies – led 125-year-old Dutch manufacturer Ahrend to make the move to a circular business model. Documented as a case study by the Ellen MacArthur Foundation, Ahrend’s FaaS offer is enabled by introducing QR-codes to each product that allow it to be tracked through its lifetime, and a separate financing model that makes the manufacturer the lifetime owner of each product. The case study mentions the following benefits: ‘FaaS means Ahrend can have a closer relationship with customers and there is potential for greater profits. If the desk or chair can be maintained in use for more than about 5-6 years, from that point on, the revenue per item is increased compared to a straight sale.’
In 2019, ING surveyed 300 US executives about moving from a product to a service model and found the main challenges were: managing ongoing product maintenance, adapting sales and distribution models, and rethinking product pricing. But Ahrend also found a hurdle in overcoming internal resistance. It’s not easy to convince an organization with a growth mindset to make less product, not more. Tzuo notes: ‘The change companies need to make is to prioritize usage and consumption over strict unit sales. They need to think in terms of miles driven, not cars sold. Organizational inertia needs to be overcome to succeed with the shift to a subscription-based business model.’
Workplace as a service?
These organizational shifts are feeding into the idea of entire workspace environments being up for rent, including design. That’s the deal with co-working and flexible spaces that already operate in the space-as-a-service game, but companies across the board will soon have similar demands to stay agile. Finnish furniture brand Martela offers a more total service in the Nordics, including management of remote employees’ workstations at home. And Nornorm is partnered with Edge Next, a smart technology platform, bringing the digital and physical layers of workplace design closer together. In the near future, everything we need in the office – furniture, equipment, software, energy, plants, consumables, and art – could be bundled up into pay-monthly plans that are delivered and maintained by a third party.
So where does this increasingly networked offer leave spatial designers and specifiers? O’Callaghan-Mills points out that providing all the parts of an office is not the same as providing a whole. ‘If you want to create an environment that provides flexibility and flows seamlessly with integrated tech and good acoustics, you need to create rooms that cater for those elements,’ she says. ‘Furniture solutions provide great flexibility and work positively alongside a blended environment, however they shouldn’t be a substitute to the materiality of a purpose-built environment.’