The Office Redux: WeWork Concepts Get Another Look as Businesses Rethink Design

We often fall in love with imaginary workplaces on TV series from “The Office” to “Succession” without ever giving a thought to how things have changed in the past two years.

Offices as we knew them in February 2020 are, in many ways, no more. Many are now envisioning a new kind of post-pandemic workplace — in many cases, their own dwelling — and on a larger scale, a return to work that makes WeWork-type concepts more relevant than ever.

Supplying furniture for the work from home (WFH) crowd and slowly refilling office locations is Branch, whose business bloomed during the remote shift and is now capitalizing on outfitting the post-pandemic office, as co-founder and CEO Greg Hayes told PYMNTS’ Karen Webster.

Saying that 99.9% of pre-pandemic revenue was outfitting offices, “When the pandemic hit, we flipped almost a full 180. About 97% of our revenue went to work from home eCommerce,” he said.

That wasn’t a bad thing, seeing as how Branch’s business quadrupled during the pandemic as people bought ergonomic chairs, desks and other items for their new home offices.

As Q2 2022 begins, Hayes confirmed that offices are coming back, noting that “on a percentage basis, when you look at the growth rate of the enterprise business of people going back to the office, that is growing extraordinarily quickly. In Q1 2022, it was over 600% annualized growth.”

As good as WFH has been, Hayes and Branch are betting on the enterprise office comeback. That math isn’t hard to wrap one’s mind around. He explained, “A typical consumer probably spends about $400, and the typical office spends about $20,000 to $25,000 to start.”

What post-pandemic offices will look like — indeed, how leasing office space itself is changing in ways we don’t fully comprehend yet — make concepts like WeWork look ahead of its time. Branch’s Toronto office took a vote and employees gave a “resounding yes” to the idea of having an office — but just a few days a week.

“We looked at that and we said we’re not going to outfit everybody with their own desk and everybody’s not going to get their own office,” he said. “It’s going to be more collaborative; it’s going be fewer desks, but not everyone will be in every day. We’re seeing a lot of this.” he said.

In other words, a 10-year lease and a bunch of $4,000 workstations is so 2019.

See also: Hybrid Office Furniture Startup Branch Raises $10M in Series A

Bridging Home Office With HQ

With office occupancy hovering around 37% right now and millions of currently remote workers not at all comfortable going back to commuting and group work settings, the office as a concept is getting its biggest rethink since at least 2008.

Components of return to work will feature familiar fixtures — laptops, desks, chairs — with digital presence continuing in its role as the connector of all, and then some. Branch’s open-concept New York office is dealing with this now, as before videoconferencing became the norm, small team meetings quietly took place next to others without interference.

“Now there are moments where you’ll have five or six people all on a different call, all competing with each other,” Hayes said. “As we start to look for a new office in New York, that is maybe the biggest thing we’re thinking about.

“How do you make the physical office more appropriate for interacting with people who aren’t in the physical office?”

While open-concept offices were already taking heat before the pandemic as having missed the mark on things like privacy and noise, a design refresh with a digital twist is changing that — as long as a manufacturer like Branch can get its materials out of clogged shipping ports.

“Whenever people ask what keeps me up at night, my automatic, visceral answer is supply chain,” Hayes said. “It’s not so much an issue of getting your hands on materials, it’s getting those products onto a ship, getting them into U.S. ports, and by far the most difficult part of the process now is getting them out of U.S. ports and into our warehouses.”

The supply chain has “caused huge issues for us,” he added. “We’ve grown far faster than we anticipated, and so it’s very hard to get more inventory in quickly to meet the demand that we’re seeing.”

Higher than expected demand is a good thing. Not being able to meet it quickly, not so good. Branch hired supply chain experts, and they’re also paying through the nose for freight.

He said, “You can pay for premium containers and super premium containers, so you get the first truck that’s available. Paying the rate you see in the news for a container, if you pay that rate, you’re not seeing your container in your warehouse for like three more months.

“We don’t pay that rate. We pay the premium rate.”

Hayes said Branch’s pre-pandemic shipping costs on a container from Asia to a Branch warehouse was “about $2,500, and today, on average,” it’s now $30,000 — “over 10x higher.”

Alpine pricing on containers at least yields the added benefit of avoiding fines levied against companies whose containers sit too long at ports waiting (and waiting) for a truck.

As for upping consumer prices, he said, “We have passed some of it along. But we believe [the situation is] going to normalize, these rates are going to normalize. We’re more focused right now on growing the business and having what we see as a fair price point for the product.”

Read more: Work-from-Home Trend Not Working for Stores Whose Clientele Is Mainly Office Workers

Are ‘Clubhouses’ the New Office?

New styles will be part of the shift back to the office, as will an update of the shared workspace concept itself, finally bringing office life and the next normal together in one room.

In 1-2-3 fashion, Hayes described how Branch is meeting return to work challenges with decor that creates a welcoming vibe and restores a missing sense of community to many workplaces.

“One, it’s very easy to add cool, stylish products [from our range of accessories],” he said. “Part two is improvements, both quality improvements and aesthetic improvements to our existing lineup. We spend a lot of time on that. Part three is the addition of core new products to our line.”

New products include a desk made for smaller home offices at a lower price point.

“We see a gap between our price point on seating and the big players in the industry, like Steelcase and Herman Miller,” he added. “There’s an opportunity for us to release a chair, which we’re doing in about a month. It’s aesthetically like nothing else on the market, and that’ll be priced almost directly in between our current chair and a Herman Miller [chair price].”

Branch also offers Affirm buy now, pay later (BNPL) financing, now representing about 5% of sales. “Otherwise, they’re paying with a credit card directly through the website,” he said.

While Hayes’ original vision of Branch was an office furniture rental company, that was abandoned due to high working capital needs. However, he is curious about the mushrooming lease-to-own (LTO) financing segment.

Beyond that, two trends carrying Branch to its next mile marker is a move away from “large footprint offices with traditional kind of closed-door offices, into these more collaborative clubhouses. The other thing, and this is huge for us, is we are seeing landlords take their vacant spaces and pre-furnish them to make them turnkey.”

Calling this concept “lightweight WeWorks,” Hayes said after seeing their real estate sit fallow for over two years, landlords “want to make it easy for people to move in and give them more flexible terms. Instead of a five-, seven- or 10-year leases, they’re saying you can take it for 48 months or you can take it for 36 months, and sometimes even 24 months.

“They move their suites way more quickly that way.”

Related: New Data: Retailers Get Durable Sales Boost From Lease-To-Own Plans