If you’re looking for a pick-me-up, feel good article, this isn’t it. But if you’re a manufacturer, distributor, or design firm looking for a strong dose of reality-and a map to help you begin to navigate the next couple of years? Read on. (Whiskey shot not included.)
1. Recognize that where your past growth came from may not be reflective of your near-term potential growth.
Let’s start by summarizing some key stats that affect the outlook for the interiors industry in 2024.
- CBRE survey revealed reduced office space needs among many employers. 68% of the largest companies (those with more than 10,000 employees) indicated they planned to downsize. 46% of other respondents planned downsizing as well.
- According to Interior Design Giants of Design data (analyzed by ThinkLab), design fees for the top 200 Interior Design Giants of Design in the largest sector (corporate) is down 19% since 2019 and will not recover in 2024.
- 9 out of 11 markets that outpace the rest of the US are in the sunbelt. While this is good news if you live in those regions, it may have you rethinking your geographic strategy. (CBRE).
- Small leases leading the way, average of 28k square footage, which is down 28% since 2019. (CBRE)
- When it comes to economic uncertainty, we all know that it is an election year in the US, but also 50% of the world’s population will be going to the polls.
For a more sobering perspective (with a sparkle of optimism woven in), check out this article quoting 40 CRE Execs Tell Us How 2024 Will Play Out — And What They're Doing To Prepare .
Uncertainty is at an all-time high. And the growth that is happening may be happening outside of your region. This
means more disruption, more shifts to focus on other vertical markets and geographies. And overall, more
“Put simply, in the largest industry sector – office - we are all going to be chasing more, smaller deals. Large deals
will be fewer and further between.” Geoff Euston, CBRE broker.
2. Recognize that now may be the time to dedicate resources to solve previously unsolvable problems.
But wait, there’s more. (You may want to grab a second shot of whiskey.) While CBRE’s 2017 Furniture Forum
shared ideas for improving the client experience with furniture (and other products), per Julie Deignan, head of
furniture advisory services at CBRE, “When it comes to product, master service agreements are expiring, while costs are soaring. This means they are going back out to bid more frequently, and this results in severe sticker shock. Clients are (loudly) saying, ‘I need someone to help me mitigate risk.’” Julie offers some timely and insightful clues for product manufacturers and dealers:
3. Look for clues upstream in the client journey.
While it’s easy to dwell on our industry’s challenges, perhaps the key to navigating the future lies in breaking out of our traditional echo chamber to understand the world from our client’s perspective. This is where we may find windows of opportunity.
We all know the pace of change is happening faster than ever before. ThinkLab has been tracking outside the industry research on B2B evolution, and we will be spending the next six months digging into how these broadly researched changes are specifically taking shape for the built environment. For more on where we are today, check out this episode of CBRE’s The Weekly Take featuring ThinkLab founder, Amanda Schneider.
According to Korn Ferry, 52% of B2B buyers say that the buying cycle has gotten longer. ThinkLab data suggests that percentage is even higher for our industry with many clients seemingly stuck in decision indecision. This is why ThinkLab set the topic of the 2024 Design Hackathon to explore the future of customer decision making. A recent ThinkLab survey revealed that 76% of end users see recent changes in how decisions are made that may be contributing to the extended decision-making cycle.
Together with our partners, 3Form, Allsteel, Daltile, Keilhauer, KI Furniture, Kimball International, and Tarkett, ThinkLab is digging into HOW their process is changing; uniquely nuanced by vertical market. Here are some early ThinkLab Hackathon 2024 stats revealed:
- 49% of corporate end users (highest of any category) say that decision making is taking longer in their
sector. We are researching WHY.
- 56% of hospitality end users (highest of any category) say that there are more decision-makers involved. We are researching WHO has project influence.
- 26% of healthcare end users say that now they want more data to make decisions. We are researching WHAT information they need.
- One in four education end users say they are doing more research on their own before the project starts. We are researching WHERE they are looking.
In the world of challenges and disruptions, you might not be everyone's cup of tea, but you might as well be someone's shot of whiskey, so choose wisely. As we navigate the complexities of the interiors industry in 2024, understanding the evolving landscape of our client’s world becomes our compass. While the path ahead may seem daunting, it's also rife with opportunities. By immersing ourselves in the client's perspective and solving their problems, we unveil windows of potential. ThinkLab's commitment to exploring the shifts in B2B decision-making, especially in the built environment, is a testament to our industry's resilience and adaptability. Join us on this journey of exploration and innovation—because, in the face of change, a well-timed shot of whiskey can be just what we need to toast to the future. Cheers!
Stay in the loop with ThinkLab's Design Hackathon research. Follow us on Instagram and Linkedin for early insights on decision-making challenges, both on social media and during our spring tour in Chicago, Atlanta, and New York City. For a chance to participate in our in-person events or to receive our full research findings once released, submit your information here.
Amanda Schneider is a member of the Research & Content Development team for ThinkLab, the research division of SANDOW DESIGN GROUP. At ThinkLab, we combine SANDOW Media’s incredible reach to the architecture and design community through brands like Interior Design Media, Metropolis, Luxe, and Material Bank with proven market research techniques to uncover relevant trends and opportunities for the design industry. Join in to explore what’s next at thinklab.design/join-in.