OSAKA -- With the coronavirus pandemic set to transform Japanese offices, furniture and stationery maker Kokuyo is dealing with the blow to its traditional businesses by looking ahead to the contactless, digitally oriented offices of the future.
The company in July rolled out the Work Pod, a one-person booth that gives workers a closed space where they can focus on paperwork or online meetings, with a feature that automatically recirculates the air inside every 30 seconds.
Kokuyo has already received more than 100 inquiries from corporate customers about the new offering. While orders for new office furniture products normally start coming in only after the company begins marketing them, the Work Pod drew an enthusiastic response right after Kokuyo's initial press release.
The booth, designed with post-pandemic office life in mind, may represent a way forward for a company whose traditional businesses are unlikely to fare well under the new normal. Office furniture makes up more than 40% of Kokuyo's sales and has been a major earnings driver in recent years.
The company released an earnings forecast for 2020 last month that shows group net profit sinking 67% to 5 billion yen ($47.6 million). President Hidekuni Kuroda contends that its business model will need to evolve in light of the pandemic.
"The office furniture and stationery businesses have been put in a tough position by the rise in telework and at-home schooling," he said. "We urgently need to pivot to products and services that support these new ways of life."
Though the nature of the office seems poised to change, people will still continue to work, whether at home, in shared offices or on "workations" in resort areas. Kokuyo sees this as an opportunity.
Companies have begun to consider shifting away from conventional offices, such as Fujitsu, which has said it will reduce its office footprint in Japan by 50% by the end of fiscal 2022. Kokuyo sees the office becoming not just a place where people come together to work, but "a space where ideas are generated," Kuroda said.
Kokuyo's Shinagawa NX project, a complete remodeling of its office building in Tokyo, is emblematic of this change in mindset. The company plans to spend about 3 billion yen on renovations through 2021.
Kokuyo had originally considered making the building a coworking space similar to those popularized by WeWork, but the coronavirus pandemic forced a change of plans.
"We'll be a guinea pig for a bold experiment in working styles," said Kozo Sakagami, an executive vice president.
Though the details have yet to be disclosed, the new office is expected to feature single-person booths, a smartphone app that can track where employees are and how different areas are used, and digital spaces, such as video meetings and an internal social network, to help telecommuting employees stay connected. It will be designed to let people from outside the company come in to observe.
Shinagawa was filled with commuters even under Japan's coronavirus state of emergency earlier this year. Shinagawa NX is intended to showcase what offices of the future could look like.
Before the coronavirus, the big trend in office design was creating a relaxing environment filled with plants, wooden furniture, decorative pillows and cafe-esque coffee bars.
Sakagami believes businesses will continue seeking spaces that promote communication within and across different teams when the pandemic ends.
"In addition to the design, there'll be an increased focus on health," he said. "There will be demand for antimicrobial finishes and furniture designed to block droplets."
Kokuyo also sees new opportunities in companies that are downsizing or shutting down physical offices altogether -- a trend that has stymied many office supply businesses.
One way offices can save space is by scrapping desk assignments. Kokuyo has stepped up marketing for personal lockers and workstations with tall partitions designed for such spaces.
Kokuyo itself stopped assigning desks to workers in 1997. It provides pointers and layout recommendations to clients that are making the switch based on its own experience, as well as of others.
In terms of the shift to teleworking, Kokuyo was involved in designing a work lounge at a Yokohama condominium built by Haseko Corp. and its partners. The space features an open design with individual booths as well as large tables, allowing residents to work remotely without occupying precious space in their actual homes.
Kokuyo's expertise has attracted the attention of other developers as well. The company is providing recommendations for a similar work lounge at two condominiums being built by Tokyu Land in Tokyo.
Kokuyo took hints from its own workers' experience with teleworking due to the coronavirus. While the pandemic slammed the brakes on traditional sales visits, the company's internal messaging board was abuzz with conversation on how to improve the work-from-home experience, from reviews of different office chairs to instructions on hand-making a smartphone stand. Some of the posts led to new products to be released by the end of the year.
Office furniture is a crowded field with many rivals, like Okamura and Itoki. "All of us are only just getting started" on new pandemic-inspired businesses, Sakagami said. "How we approach them will determine who comes out on top."
"If office-related demand is going to decrease by 30%, we need to make up for that 30% through new business fields," said Kuroda. It remains to be seen whether Kokuyo can weave new opportunities out of the coronavirus pandemic.