Dallas – like many other markets across the U.S. – is a hotbed of coworking space providers vying to fill their shared working spaces with employees and entrepreneurs alike. As changes in technology and employee expectations continue to disrupt how and where employees work, some forward-thinking retailers are taking advantage by remodeling their stores to add coworking spaces next to their traditional product offerings. One such retailer entering this new market of retail-meets-coworking is Office Depot, which believes the new service is a natural extension of its brand. The office supply retailer kicked off this fusion concept last year in a revamped Silicon Valley store and based on its success have expanded the concept. Office Depot joins a crowded field of coworking space providers, including WeWork, Common Desk, Breather and Industrious.
There are a few questions for the broader retail industry that arise with a traditional brick-and-mortar giant like Office Depot moving into the workspace-for-rent industry, especially in light of the so-called “retail apocalypse” and what looks to be an unending wave of digital disruption. Are fusing retail and coworking spaces, and housing them under one brick and mortar roof, a new retail apocalypse survival strategy? Which other retailers might be able to take advantage of these trends? What concepts are complementary in nature to co-workings services? Can a non-industry latecomer get its foot in the door and compete with established firms like WeWork?
Office Depot may be onto something: working remotely, co-working, collaborative workspaces and hoteling are all contributing to a new perspective on how organizations – and now retailers – utilize space. Below, we analyze two of the most essential insights from Office Depot’s bold move into the coworking space.
- Make the most out of your space – Office Depot CEO Gerry Smith summarized one of the driving factors behind the retailer’s coworking strategy in his announcement of the concept: “The vision from the beginning is, how do we utilize the assets we have?” As new technologies and evolving consumer shopping behavior continues to disrupt the retail industry, big-box retailers struggle with surplus space. This is reflective of a global trend as many organizations reassess their physical footprint to enhance the workspace for employee productivity and optimize leased office space. Office Depot’s answer to the extra space feels disarmingly practical: transform extra retail square-footage into rentable office space, thereby diversifying product and services.
- Synchronized products and services – Office Depot’s entrance into the coworking space feel like a surprisingly practical retail strategy in many ways. By renting office space to corporate, freelance and remote working customers, and adding a drop-in option that could appeal to entrepreneurs or students looking for temporary office space, Office Depot is doubling down on its customers’ dual need for space and supplies. Who is this office supply retailer’s target customer base? Corporate and freelance workers in need of office supplies, business services and IT support. Add to this convenience membership plans that combine the office space lease with product discounts and you have formidable mixed-use space offering.
If Office Depot is able to tap into the current evolution of the workspace and employees’ desire for flexible work schedules, they stand to benefit greatly from an industry which is projected to grow by 42% over the next three years. If you’re interested in balancing employee requirements while also protecting your bottom line by ensuring optimal space utilization, download Tango’s Space Management datasheet below.
