They go by names like the Stand Up Desk Store and Stand Steady, and sell brands like AirRise, X-Elite, FlexPro and Vivo. To be sure, they are not names common to most office furniture projects, but they come out on the top of the list on Amazon, the uber online retailer that has become an office furniture behemoth nonetheless.
Whether that is reason for fear or celebration depends on who you ask. But like every other industry that sells something, the rise and increasing reach of Amazon is worth watching closely by office furniture makers, dealers and designers.
Amazon is a danger and a darling to the traditional office furniture industry. For some, it opens up the market to low price, cut-rate office furniture makers from Asia who previously had a hard time breaking into the North American market. For other domestic office furniture makers, Amazon has become a valuable retail partner that opens up a whole new channel and opens up their brands to customers who might never find them.
Traditional office furniture makers have carefully watched the rise of products on Amazon, but for the most part have been spared direct competition. Amazon is making a serious dent in transactional sales and accessories — sales to small start-up and mom-and-pop businesses and for accessories like monitor arms and products that turn static desks into sit-stand.
It is a trend Humanscale is closely watching, says Chris Gibson, vice president, marketing and product management of Humanscale. “From Amazon’s perspective … they want to be there to facilitate the sale. You get your stuff quick, and you get it cheap. It is really manageable and shows up at your doorstep,” he says. “Our industry struggles because (we sell) complex ergonomic tools. It is more built to order. Custom furniture is not suited for (websites like Amazon).”
And the average consumer shopping on Amazon, including the small business owner looking to outfit an office, doesn’t understand that important difference. A Humanscale Quickstand, which turns a static desk into a height-adjustable one, retails online anywhere from $550 to $850, depending on the model. The scissor-type products designed to do the same thing as the Quickstand sell on Amazon starting at $150. Industry insiders understand these products are not in the same league. But to the small business owner looking for something to help his employees stay healthy after he read an article about sitting being unhealthy, there is no difference — at least initially. Yes, a Yugo and a Mercedes-Benz are both cars, but there is a difference.
“These companies just create a product that goes up and down and sits on the desk,” Gibson says. “For $299, a consumer can buy it, pull it out of the box and now they get to stand. The Amazon phenomenon has driven a lot of this. Consumers perceive this is what ergonomics is.”
Most people don’t look “deeply” on Amazon either. If they are browsing chairs, they might not understand the difference between a proper ergonomic product and the super cheap product on Amazon. And a mesh chair with a funky headrest might look good online, especially for $199, but it probably won’t help their back pain — and might contribute to it.
Office furniture dealers probably don’t have to worry much about those searching Amazon for office furniture. If people are shopping on Amazon for office furniture, they are probably not the target client, says John Schwartz, president and chief executive officer at Sam Clar Office Furniture, a Bay Area office furniture dealer.
That does not mean there is no effect on dealers.
“It is not our target market, but what we have found are unrealistic project timelines due to what I term ‘the Amazon Effect,’ ” says Sam Joyner, vice president of sales at Creative Business Interiors, an office furniture dealer in Raleigh-Durham, North Carolina. “(They say to me) ‘I can get what I need tomorrow (from Amazon).’ Clients are waiting until the last minute to make decisions that require evaluation and planning to properly outfit their office space.”
Transaction-based office furniture sales are alive and doing very well on the Web, says Lee Vanderham, a channel strategy consultant for eBusiness at Steelcase. Creating a positive online customer experience for large and complex space needs is a hurdle that has not been resolved, at least not yet, he says.
The complexity of the office furniture industry, which many from outside the industry complain about, might just be protecting it from being destroyed by Amazon. The furniture specifying process is multifaceted, iterative, relational and content heavy, Vanderham says, though simplifying it should be an industry goal. “The manufacturer who resolves this first will have a significant advantage and one that should be a priority in every office manufacturer’s digital strategy,” he says.
Simply put, if the office furniture industry does not untangle its complicated sales web, the tech industry will do it for them.
Some in the office furniture industry sell directly on Amazon, while others do not. “Directly” is the key word, since a search on Amazon pulls up results for all the majors. Anyone can buy a Steelcase Gesture, Herman Miller Aeron or Knoll Generation chair, regardless of whether any of those companies want them on Amazon or not. Humanscale, for example, does not sell directly on Amazon, but for $999, anyone can buy a Humanscale Freedom Chair.
Controlling distribution can be extremely difficult, especially when dealing with a freewheeling online retailer like Amazon. “Whether you make that decision to sell on Amazon or not, all (of the major office furniture makers) are selling through them. You can try, but it is very difficult to control the secondary market,” Gibson says. “Once a month, at least, we find our products popping up on Amazon, and we don’t know how they are getting the product.”
The most common way products end up on Amazon is through a dealer or retailer that uses a second DBA to sell online. Though it is irritating for the majors, it usually isn’t a huge problem since the price they are being sold at on Amazon is often more than the price a dealer (and large customer) gets off list when buying through project pricing. Still, the unsuspecting consumer that buys a Freedom chair on Amazon believing it is directly from Humanscale may find the chair isn’t protected by the same backing and warranty they would receive from the manufacturer.
Selling directly on Amazon can be a good choice for a small office furniture maker or a manufacturer making a simple office product since it directly reaches the consumer.
Kimberly Hulsey, territory manager at Haworth, says she sees customers buying more accessories on Amazon, but for larger furniture purchases, they are using online sources like Amazon to research before heading to the dealer to buy. “I think places like IKEA and Target are more of a threat in my industry, especially with start-ups on a limited budget,” she says.
Despite its size and all the markets it serves, Amazon is definitely interested in the contract market, says Jeff Carlson, principal at MyResourceLibrary.com, an online design resource. “They approached us at Neocon East and asked if we would be interested in putting together a program for them,” he says. “We passed. MyResourceLibrary agrees order taking and selling are two different animals, and our commitment is to support the contract dealer community.”
Still, the threat to industry is says, Lori McConnell, territory manager at The Global Group. “Don’t kid yourself. Some projects will still require design and consultation but the seating, filing and ergo accessories business could be eaten alive by this kind of distributor. SOHO will be the market that will turn to the Amazons of the world first,” she says.
Amazon will be a challenge to the office furniture industry with a scale and breadth of offering that is impossible for the industry to match. Educating the customer about the differences online will be important.
When facing a potential challenge, it’s best to prepare for the worst rather than hope for the best,” says Mike Hagerty, president of Cuna Supply, a Texas-based distributor. “If Amazon decides to go after office furniture, look out. Amazon has the capability and resources to team with large office design firms and create a new end-to-end distribution channel without breaking a sweat,” he says.
Amazon has more than $113 billion in sales — 10 times that of the entire office furniture industry. Its stock trades for more than $813 a share. There is no way the office furniture industry can buck this beast.
“Never turn your back on a lion, or ignore his presence at your peril,” says Tony Salter, owner of Salamander Enterprises, a New Zealand furniture trading company. “One needs to find ways to either cage him, or use him to advantage.”