In the early 2000s, the new workplace trend of coworking emerged and has since grown into a worldwide billion dollar industry. The coworking industry initially secured its place as a cost-effective option for entrepreneurs and startups looking for a way to get out of their homes, develop a dynamic community, and gain access to collaboration opportunities.
Now, with the upsurgence of a highly mobile workforce, the gig economy, and the world of startups, the coworking industry is forecasted to establish 30,432 spaces and 5.1 million members by 2022. But it’s not just startups and solopreneurs who are benefiting from what coworking has to offer – Corporate coworking has even become a thing and this too looks like it will continue to increase over the next five years.
With this industry success, some of the largest coworking firms, such as WeWork and NeueHouseappear to be eyeing other industries, specifically retail. This expansion and possible partnership seem logical – coworking, after all, values collaboration and cross-pollination within its diverse communities.
How Can Coworking Benefit Retail (and Vice Versa)
A partnership between coworking spaces and retail has benefits for both sides. The modern coworking space is not just a room full of desks. Most coworking companies are focused on creating a branded environment that goes beyond the “desk” – one that not only caters to the everyday needs of its workers but creates a better experience for them. For the owner of the coworking space, the provision of peripheral businesses, whether it be a fitness center or a retail shop, can help keep members happy, so they stay longer as tenants and attract new growth through word of mouth and fierce brand loyalty.
The retail side also stands to gain benefits from this trend. Retail has not been free from the onslaught of the Age of Amazon, the shifts in the economy, and the fact that consumers practically live online. Quite a number of brick-and-mortar stores and malls have closed, which seems to indicate a dying industry, one that some have called the “Retail Apocalypse.”
However, a report by Deloitte has hailed these changes as not a sign of the “Retail Apocalypse,” but rather the “Renaissance of Retail.” In their report, they find that physical retail isn’t dead, but boring retail is. Boring retail are those with one-size-fits-all-marketing, dull store environments, and mediocre service. It’s any retail brand that fails to innovate – namely, keeping up with the customer-centric shift.
In this retail renaissance, the physical retail that is thriving are the brands that have adapted. They know to focus on the customer through convenience, experiential shopping, value-priced merchandise that aligns with consumer needs. Co-working spaces have the potential to provide all of this for retail brands – convenience, experiential shopping, and products that align with customer needs.
Not only that, partnerships can provide some much-needed exposures for brands. Earlier this year WeWork and LinkedIn announced a partnership with J. Crew that would not only include a series of panels on professional success and personal fulfillment, they will also integrate J.Crew’s launch of its new wear-to-work collection. J. Crew’s campaign featured WeWork members wearing their newest designs, and WeWork will be hosting exclusive pop-ups and offering special discounts for its members.
Prior to this partnership, J. Crew had fallen into some dire straits – their revenue was slumping and they closed 50 stores in 2017 (and plan to close 20 more in 2018). This collaboration could increase J.Crew’s visibility not only among WeWork’s 200,000 members but beyond as well.
NeueHouse, another upscale brand of coworking spaces is also looking into retail. Neuehouse is an upscale brand with a price tag that matches. They not only offer workspaces, but also access to fresh and elegant food and beverage services, a state-of-the-art recording studio, green room, a lounge, and a diverse and dynamic schedule of cultural programming including film screenings, science discussions and lectures, musical performances, and artist talks. It seems they are well poised to add retail into the mix.
As mentioned by Jon Goss, the chief commercial officer at NeueHouse, “We think of ourselves as home of the new, and retail is very much a part of that.” The company’s most recent foray into retail featured a pop-up shop in its New York location for Aesop (an Australian skincare brand), which also happens to be a NeueHouse member.
While the biggest names in coworking are leading the charge, the number of smaller niche-oriented coworking spaces is also growing. These coworking spaces are intended to appeal to members with specialized interest or needs, which also offer prime positioning for retail partnerships. While this exploration into retail is new for the coworking industry, I expect we will be seeing much more of it in the future.