Strategic Considerations For Retailers and Coworking Spaces
Is it your dream to work from home? Imagine being free to set your own schedule and avoid office distractions while wearing what you want and travelling where you please. Or is this your nightmare? Would it be an isolating experience where you miss social interaction, struggle to be disciplined, and spend too much time at home?
A need for different types of workspaces is growing, so it is important for retailers to consider if they want to make their space more freelancer-friendly, partner with co-working brands, or recognize remote workers as potential customers.
A Need for Workspace
As digitization continues to transform nearly every industry, many people are able to work from home more often – but have decided that they don’t like it after all. While some are able to enjoy its benefits (such as digital nomads and those with a separate home office), others have learned that they need more distance between home and work.
This need for workspace is likely to continue to grow as jobs become less dependent on location. Perhaps in the future, virtual reality technology will allow workers to feel like they are in a different location while working at home, but at the moment, there is a large demand for physical workspaces outside the home.
Coworking spaces such as WeWork have exploded in growth in recent years, but membership fees can be a barrier. For those looking for more affordable options, cafés and libraries can be a solution, although coworking spaces offer more social and networking opportunities and are better suited for teams. A good café or library can also be hard to find as workers compete with each other for seating and power outlets and look for spaces with solid WiFi, food options, and acceptable noise and music levels.
For many retailers, it is difficult to decide whether or not to welcome remote workers in their shops. Remote workers may buy very little and take up space for long periods of time, so some managers enforce rules that customers must make a purchase every few hours to get a WiFi code. Other strategies include blocking access to power outlets and only offering WiFi during the daytime on weekdays.
On the other hand, providing a good place to work (or study) will attract customers inside and develop brand loyalty. Coffee shops frequently use this strategy, such as Starbucks creating a comfortable and welcoming “third place” between work and home where one can spend time and socialize. It is also becoming more common to see freelancer-friendly space in other retail categories.
Partnering with Coworking
For restaurants or bars, space is sometimes unused during certain dayparts (morning/lunch or evening), which presents an opportunity for a new use. For example, Spacious finds unused spaces during certain times (often in restaurants) for remote workers. Because the location is multi-purpose, membership fees are cheaper than dedicated coworking offices, but the property owner still gains another source of income. Other coworking companies, such as Industrious, are partnering with malls to take over vacated retail real estate.
Banks have offered services such as conference room rental for quite some time, but they are now experimenting with integrating more social coworking space into their branches. For example, Citizens Bank offers workspace for its small business customers called Vault 405 – complete with podcast and conference rooms, 24/7 cash exchange, and wireless charging stations. Barclays also offers customers a place to work (Rise and Barclays Accelerator), however they cater to fintech start-ups specifically.
Linking coworking to your existing products or services will add value for customers and create stronger brand connections.
Some retail categories, such as office supply stores or technology companies, are naturally positioned to offer workspaces. Apparel and grocery stores will also have a brand fit with coworking if they cater to remote workers in their respective categories (i.e providing fashion studios or shared access to well-equipped kitchens). It is possible that this strategy will evolve into a blending of head offices with their store networks.
To determine if adding coworking space is a good strategy for your brand, ask these key questions:
- Will the coworking space attract customers and build loyalty?
- Does it enhance your customer experience?
- Does it relate to your products or services, or build relationships with workers in your industry or category?
Another opportunity to consider is concentration of large numbers of coworkers. Coworkers are potential customers for food, drinks, or hand soaps, and become a target audience for retail brands. Product trials (that are included in the coworking memberships) offer brand exposure, and retail pop-ups can be integrated into lobbies and common areas. Another interesting development in coworking is to group the collective output of members. For example, WeWork is introducing WeMrkt that features members’ products and offers them additional marketing opportunities.
Welcoming or resisting coworking and freelancers ultimately depends on your retail category and if it is a good fit with your brand. It is a worthwhile strategy to consider since it is one solution to counter the decline in store traffic as customers increasingly shop online. Opposite trends are occurring in retail and coworking, where one has vacant space and the other needs it, so there is an opportunity for a strong partnership. Nevertheless, it is a trend to follow closely as it continues to reshape our built environment and the distinction blurs between office, retail, and home spaces.