Office furniture dealers are called that for good reason — they are experts when it comes to selling office furniture. Yet an increasing number of office furniture dealers are becoming more than that. They are adding things like audio-visual and other services and entering other vertical markets such as healthcare, education and government as a way to diversify and protect their companies from the business cycles that can crush contract furniture dealers during recessions and other slow times.
Not every dealer is jumping on board. Some want to stick to what they know — furniture. Others are unsure of how to enter new markets. And some dealers simply do not know what might be available to them and leave a potentially lucrative market segment untouched.
A good example of a dealer that has become much more than an office specialist is iSpace Environments in Minneapolis. The company, which was founded in 1993 as a refurbisher, has continually evolved and expanded its offerings.
While iSpace sells office furniture as an aligned Teknion dealer, it also provides AV integration services, architectural products, auto dealership design and a slew of services. Instead of simply farming out those added services, the company has built internal teams to support each area, said Joel Peterson, founder and chief executive officer.
“In today’s environment, in the corporate furniture hunt, it’s a race to zero,” he said. “It used to be that RFPs (requests for proposals) were, maybe $500,000 and above jobs. Now they send out RFPs for $75,000 jobs and they send them to like seven people. It’s a race to zero.”
Peterson was a pioneer when he added true AV integration in 2002. Next, the company added architectural products. iSpace has a 12-person, stand-alone team just to sell and support its architectural wall products — the fastest growing portion of its business.
It has another dedicated 10 person team to support its auto dealership group. The auto dealership group designs and supports the development of auto dealerships across the country, which includes furniture and specialty architectural millwork (things like service counters, key fob caddies and financing areas). iSpace also handles the back of the house for car dealerships, providing all the tech benches, parts racking and tire carousels.
“Really, besides the physical building itself, the only thing from the front door to the back door that we don’t provide within a dealership is the lifts and the fluid and air control that go to the individual tech stations throughout,” Peterson said. “But pretty much everything else in there we do. And we have worked with 25 different auto brands in 33 different states. We don’t really have many or any competitors that kind of do all that.”
Finally, iSpace provides services. It has nearly 30 people in the field that handle delivery, installation and maintenance for everything the company sells. Maintenance is a particularly important part of the AV business. Ads, moves and changes are common in AV and unlike furniture, which might have a 15 year life cycle, AV technology changes happen in a matter of a few years.
It is an integrated service model and one that is followed by Scott Rice Office Works, a Steelcase aligned dealer with offices in Kansas and Missouri, said Steve Jobe, vice president for vertical markets.
The dealership sells not only furniture, but also has a floor covering division and construction division. The construction division is not a true construction company, but more of a boutique construction company that does not compete with the big builders in the market. Still, it helps its customers by being able to move walls and build out rooms in a space, working adjacent to the major construction companies that really don’t want to do that work. Scott Rice Office Works also does artwork and signage. It has a full interior design staff. And it also has a facility management team that handles installation and move/change work.
Having all those services in house not only add to the dealership’s revenue stream, it also helps customers since they are working with a single entity instead of multiple businesses.
“You’re not working with a bunch of outside subs that you maybe can’t depend on. It’s all of your people. So you can go in a conference room with your floor covering people, your furniture people, your facility management people, your construction people, and have one meeting with your own people versus having to pull in a bunch of separate subs,” he said.
The business flows in both directions. Furniture opportunities open the door to things like AV integration. AV integration opens the doors to furniture sales. In fact, since AV integration is much more closely related to technology, it opens the doors to sales more often. The cycle of new products and innovation happens much more quickly, which gives the dealer the chance to visit customers more often.
“AV evolves and changes so quickly that even if you knew it last year, what was introduced last year is out of date and irrelevant to what you would buy or need this year. And so the buyers are really starved for the newest, latest, greatest, products and want to know what’s out there,” said Jobe. “The obsolescence cycle on AV is about three years. A lot of the components that we sell require continuous firmware updates to keep it in its most current user state.”
If you are a dealer that is interested in opening new markets but aren’t ready to jump into a segment like AV or flooring with both feet, there are specialized products that can be included in projects that add to sales. They are products like fire safety and security and artwork that might seem like an afterthought, but can add up to significant sales.
“We’ve helped dealers outfit entire hospitals with art that can add up to millions of dollars in sales,” said Paul Burton, vice president of national business development at Great American Art.
Great American Art has 30 million images and every piece is sold through dealers. The company sells commercial art printed on aluminum, acoustic tile, canvas, acrylic, PVC, framed prints, film, wallpaper and more.
FireKing International sells fireproof cabinets for important documents and items in an office. It is a specialized product that might not be top of mind when specifying furniture, but adding it to a project can mean additional sales with little effort. While computerized file storage is OK for some documents, important paperwork and sensitive information such as employee records need to be safely stored. FireKing products fit the bill. “Our products can add good profits to your dealership and can be included at the end of the project,” said Andrew Habeeb, vice president of sales for the company’s office furniture division.