Hello everyone, I’m Melanie Jones, and I am thrilled to bring you an insightful interview with Darrell Gardner, Director Of Product Development at CORT. Join us as we delve into the exciting world of CORT Furniture-as-a-service™ and how CORT is revolutionizing the industry with its unique approach. We’ll explore the company’s commitment to quality, sustainability, and innovation, as well as the passion behind CORT’s product development. So, let’s dive in and discover how CORT is changing the way we view and utilize furniture in today’s rapidly evolving world!
Attracted to CORT: A Berkshire Hathaway Company
Melanie Jones: Let’s start with what attracted you to CORT about 18 months ago.
Darrell Gardner: There were a lot of things. First, we’re a Berkshire Hathaway company. That’s just cool. We are contributing to one of business’s biggest and most recognized names. I liked that.
Once I started meeting some people during the interview, I got excited about the culture and the company. Everyone was enthused about the mission. I did have a moment where I thought, how exciting could a furniture rental business be? I followed my gut, and I made the right choice. As you know, Melanie, we’re quickly moving down the path and emerging as a contemporary company changing several industries. It is invigorating!
Changing Perceptions: From Old Furniture to Contemporary Style
Melanie: When I joined CORT about eight years ago, I discovered that everywhere I turned, people had a different perception of CORT than what we were offering. We have an abundance of stylish and relevant furniture and offer it as an on-demand subscription-type model. I couldn’t understand why others thought we had old used furniture suitable only for an emergency.
Darrell: I agree there needs to be more clarity about furniture rental, even as numerous players enter the field. Indeed, we have led the way in creating the cool factor, and the difference comes down to the fact that we offer an actual rent-to-rent model. A lot of other companies are genuinely rent-to-own companies.
Furniture-as-a-Service: Driving Positive Changes
Melanie: Agreed! Globally, I see start-ups trying to align themselves with the CORT Furniture-as-a-Service offering we created at CORT. They hope customers use their financing vehicle and eventually purchase the furniture.
We truly have a model that is disrupting furniture utilization in so many positive ways. When meeting with industry leaders in commercial real estate, I challenge them to think about the global mindset shifts that had to occur for Uber to disrupt transportation and Airbnb to innovate travel and hospitality. And then I can demonstrate how our Furniture-as-a-Service model is driving a similar change in furniture utilization. The most popular benefits seem to be helping customers reduce risk, conserve capital, the on-demand speed, flexibility, and so forth, but the furniture itself is essential. Share your perspective on this.
Investing in Quality: Solving Problems for the Future
Darrell: We purchase high-quality capital assets that are depreciated to provide a high-quality furniture experience. Some of the newer companies are purchasing retail products not built to withstand the rigors of the rental environment or commercial use. We invest heavily in high-quality construction and high-quality materials.
For example, you can sit on one of our sofas for 15 years, and the foam will never collapse. We stand behind what we manufacture, what we purchase, and what we do.
Our offering is unique. We are solving problems years in the future. We know we’re 18 to 24 months out from a launch when we start developing new products. We strive to have furniture that will last five years or more. Because of that, we study and predict what people will be doing in the future.
We ask questions such as:
- How will people be functioning?
- How can we provide a service that allows them to work better, different, smarter five years from now?
- What are projected trends?
That’s something that drew me to the company. I love questions like, what is the root of a problem, and what do we need to solve for? It’s easy to think of CORT as a product company, but we focus on how to solve problems and champion our customer’s experience.
Product Development and Selection: Innovation Across Business Lines
Melanie: I was in a meeting with you not too long ago, and you were talking about our sourcing strategies. I loved learning about the research invested in product development and selection that supports customers across our business lines: workplace, residential, and tradeshows. I know you’re very enthused about this mission.
Darrell: My team oversees corporate product development, which is for residential, workplace, and trade shows and events. There’s so much overlap and the ways that product functions in different parts of our lives. Think of a table. It can sit next to a sofa in a living room. You can put a cup of coffee on it in the morning and a beverage in the evening. That same table works in the bedroom as a side table or storage. This same table works well in the workplace, especially as residential trends evolve. And the table could absolutely appear in a tradeshow booth.
A simple example to demonstrate how we look at product overlap, modularity, and interchangeability. The multi-functional aspect of what we are building at CORT is revolutionary and will continue to support the needs of our customers.
Building Strong Partnerships: Affordability and Quality
Melanie: There are financial benefits to our customers because of our ability to buy at a significant scale and then utilize the product assortment in our primary business lines.
Darrell: We’ve worked on building a fabulous network of partners who help us provide customers with solid furniture options sourced globally. We leverage these economies of scale and offer top-quality, affordable products. Our model is what allows us to do that. We want our product back to use again and again.
Passion for Products: The Beauty of Functional Furniture
Melanie: Recently, you invited me to a learning session about a chair. Many at CORT have a greater interest in the actual products than me. But your enthusiasm for that chair sparked my interest, and I quickly saw why you were so passionate about “a chair.” You are just as enthusiastic about many CORT products, aren’t you?
Darrell: Yes, indeed. Our partners help us problem-solve large-scale issues, so it’s more than just our internal teams. We seek out the best of the best. In this case, the chair you mentioned is a true winner. It just won a significant award at NeoCon. It’s a beautiful chair with a fantastic ergonomic design featuring all the bells and whistles. It ensures the user is sitting with proper spine alignment. We’re designing it to work from a sit-to-stand function, so it works with various work surfaces.
We know copper is inherently anti-microbial, and the mesh on this chair is infused with copper at a molecular level, meaning that bacteria cannot live on it. Viruses cannot live on the mesh of this chair. So, unlike other chair mesh, where you must take a Clorox wipe or other chemicals to clean them, this chair never needs to be cleaned.
Tackling Change in the Workplace: Permanently Flexible Solutions
Melanie: You just went down the path of being very excited about that chair again. You are enthusiastic about many of our products. People don’t realize how much goes into our product development.
Darrell: We have built a product development team at CORT that has fun together as we work hard to innovate. Digging into these larger-scale problems and finding real-world solutions is what we do. Our visibility into how people live, work, and celebrate, as our tagline goes, is accurate and essential for our product development work.
Melanie: I’m often asked, where does your furniture come from? Who are your partners?
Darrell: A big lesson everyone learned recently is how important the supply chain is. We’ve worked to diversify our supply chain for years, which helped us tremendously during the pandemic. CORT just passed the fifty-year mark in business, and we’ve developed proprietary minimum construction standards; everything we do is built specifically to support our business model. It supersedes most furniture standards regarding durability; it must for us to be successful.
Looking Ahead: Furniture in Five Years
Melanie: You’ve shared that CORT is working to be more environmentally conscious. Many of our customers are interested in that perspective, so we’ll continue to work with other Berkshire Hathaway (CORT + Sustainability) companies to make progress there.
Along those lines, I’ve come to you several times as the National Director of Commercial Real Estate Partnerships to support companies looking to support environmental trends. Thank you!
One industry segment is the flexible workplace. Partnering with companies like Convene, WeWork, and Workbar (Recent CORT Workbar Interview), we know often they want to help members access specific furniture instead of purchase. If a company moves into a space for one year, purchasing often doesn’t make sense.
These environments are fantastic, and working with their design teams, we’ve had to be creative in finding resimerical furnishings from our offerings that will be available on demand anywhere across the country. Thoughts on our forward direction in that area?
Darrell: The great thing about our residential furniture is that it is built to go into the office environment. Even though stylistically, it might not fit in every instance; the product is built to sit in a commercial environment. And our selection is broad enough to meet most any application.
From the perspective of how we are evolving our workplace division it’s an exhilarating moment for us. Every company is different. We all do different types of work. Every space is different. How we create the environment around us to support work will be critical in the coming months and years.
Lifespan and ROI: Making Data-Driven Decisions
Melanie: This is a moment of change for many organizations. We’re seeing a shift in the workplace where lease lengths are shorter, either in a spec suite, membership I a coworking / flex office environment and even traditional leases for 18-24 months. How furniture is utilized is changing because so many of us work in different locations with space commitments of varying degrees. Buying furniture is no longer the only go-to.
Darrell: Absolutely. We use the term permanently flexible. Furniture-as-a-Service allows companies to be permanently flexible as they solve problems and let go of furniture inventory management.
Melanie: We both have exciting roles and responsibilities at CORT. Our culture provides us with freedom and encouragement to innovate and collaborate.
Darrell: I love that we’re encouraged to spend time together. You’ve always encouraged me to participate in what you are working on. And having that cross-functionality allows us to learn from each other, which allows us to provide a better service to CORT customers.
Melanie: As I meet with commercial real estate leaders, I spend time demonstrating use cases, financial models, reduced risk, conserving capital, accelerating leasing, greater customization, speed of delivery, flexibility of a subscription, and so forth. But at the end of the day, it does come down to the furniture. How will our furniture selections look in five years? What do you see us doing differently?
Darrell: We will be laser-focused on the idea of being permanently flexible. Our world will continue with constant change, and as an organization, we want to make sure that we’re making investments that allow us to be agile and adaptable as possible. We should incorporate additional modularity and build in the ability to share components. Look for increased modularity, multi-functionality, and the ability to be stylish yet timeless.
Melanie: How do you know when it’s time to retire products from our ecosystem?
Darrell: We make sure that we study the product and market to determine the lifespan of a product before it’s even introduced. When we add a sofa in 2024, we know it will be rolled out of the current inventory beginning in 2028. We have visibility into how the product will live in the rental cycle.
Melanie: It is fascinating to know we look at the profitability of each piece and develop and understanding KPIs around a chair, for example.
Darrell: Every month, I sit down with the leaders in various departments, and we discuss the metrics that matter as we develop a continuous improvement roadmap. I’m held accountable for precise metrics, including the return on the assets. If we are going out and spending a dollar on an asset, I know what the ROI expectations are ahead of time.
Melanie: Few companies operate at such a sophisticated level, and things like this set us apart. What else excites you about your mission at CORT.
Darrell: What excites both of us is that we are making significant industry changes in many different ways. I could speak for days on this topic!
Industry Changes and 4SITE Technology
Melanie: That’s a perfect segway into a mention of our 4SITE occupancy sensor technology. In the workplace and commercial real estate, we are finding real-time occupancy data critical to help leaders know how to adjust real estate portfolios. When our customers learn they can use 4SITE with a flexible furniture model, it provides a window of learning and adjustment without significant risk.
Darrell: When you think about furniture rental in the workplace today, it’s about education and learning what the workforce is doing. CORT facilitates that education. Our team has the industry knowledge to help set up an office for various tasks and environments and then provides the ability to capture data on who is using what areas and when.
I love conversations like this because so many people need help understanding what we do, what it looks like, and the range of services we provide. We’re at the forefront of being able to help people adapt to whatever changes are ahead.