Rieke Office Interiors Evolves
This office furniture refurbisher has expanded into manufacturing its own product lines.
How does a company start from ground zero and proceed to become a $6.5-million player in the Chicago office furniture market in just eight years? In the case of Rieke Office Interiors, the answer lies in understanding changing market needs, responding quickly to moves by competitors and providing customers with more than just the standard fare.
From its humble start-up in 1992, Rieke Office Interiors has grown to a 50-person-plus manufacturer of office furniture. In this growth process, it has transformed itself no less than three times. First it was a new office furniture dealer, and next a company focused on refurbishing and reselling used office furniture. Later still, Rieke developed its own manufacturing capabilities and now provides its own lines of office furniture factory-direct to customers.
The story of Rieke Office Interiors is one that shows how a company can become a success in a highly competitive field by listening to customer needs and desires, noting shifts in business conditions and moving quickly to position itself to take advantage of better opportunities.
Rieke’s first mission was selling new office furniture. As a dealer, founder Todd Rieke soon learned of a dilemma faced by many customers, namely finding a way to dispose of used furniture, once they purchased new. Rieke also discovered that there was virtually no competition for used office furniture in the Chicago region. So he began buying up the used pieces to clean up and sell again. Rieke concentrated on refurbishing “brand” name equipment, most of it five to 10 years old, that he could easily clean, enhance and re-sell.
“We were cleaning up the desks and workstations we acquired and showing them in a 6,000-square-foot showroom in Elgin, Illinois,” recalls Chris Matus, Rieke’s current president. Matus, who began working at the company in its fledgling years, gained experience doing “everything,” from cleaning the furniture and doing installations, to dispatching duties and maintaining the warehouse. “Our original market wasn’t even the entire Chicagoland market, but just a 20-mile radius around our showroom,” he remembers.
As the refurbishing business progressed, customers began requesting modifications to the used pieces, such as changing the fabric on panels, or creating new countertops and worksurfaces. “When we found that customers would gladly pay more for these enhancements, we began offering those services,” says Matus. “We had so little experience, it was a big gamble. But it worked.”
In 1994, when the company began by refurbishing panels, it relied on an outside laminating shop to recondition worksurfaces, plus another shop for painting. It soon became apparent that in order to maintain quality control and on-time deliveries, Rieke would be better off bringing all tasks in-house.
“In addition to refurbishing panels, we started laminating our own tops and painting our own pedestals,” Matus says. “We were creating pieces of furniture that were practically brand new, yet cost our customers thousands of dollars less than new,” adds Matus.
A Changing Competitive Landscape
By the late 1990s, soon after building a tidy business in refurbished office equipment, Rieke began to encounter new competing threats from the brand-name furniture makers. Companies like HON, Herman Miller, Hayworth and Steelcase were beginning to introduce C-grade furniture. “We now found them coming in at mid-market or below and trying to take that business. Essentially, they began offering new at refurbished prices. Of course, these items were not of the same quality as their traditional lines, but customers were attracted to both the brand name and to the idea of buying ‘new’ instead of ‘used,’” Matus notes.
“Another problem we started to encounter with our positioning was that we were sort of ‘dead-ending’ our customer. A customer who might have bought some refurbished workstations would come back to us a year later and request more of the same models. Most of the time, we weren’t able to satisfy this type of request because we no longer had those items in stock. When that happened, it didn’t take long for customers to forget the thousands of dollars they’d saved in the beginning, and instead become disappointed because we couldn’t help them expand their office!”
Therefore, Rieke’s attempts to move customers into a different size or style of workstation were frequently unsuccessful.
By 1997 it had become clear to Rieke’s management team that the best strategic response would be to move into office furniture manufacturing. “We realized this would be the best way to protect ourselves from competing pressures from larger office furniture makers, plus it would enable us to leverage off of our strong customer relationships by being able to sell more to them over time,” explains Matus.
Today Rieke Office Interiors manufactures its own line of private offices and workstations, whereby it can supply standard models or custom items factory-direct to customers. Items include casegoods, bookcases, overhead units, wardrobe units and credenzas, in addition to desks and workstations.
“We manufacture our own peds, laterals, work surfaces and panels; our customers have lots of choices. Instead of making them settle for a 6-foot by 6-foot gray workstation, for instance, we can help them put a special design thumbprint on their office. We can match their interior design and colors. We can create our product to mesh with their office’s function, whether that’s a bank, a technology company or whatever,” Matus says.
|Rieke Office Furniture’s ThÃÆ?ÃâÃÂ¤go line is designed for creating versatile meeting room configurations. Furniture can do “double duty” as a conference room table or as classroom furniture.|
“We can custom shape their work surfaces, design custom storage, as well as any number of other things to make their space work better,” he adds.
Rieke is involved in office projects of all sizes. Many are large, involving 30-plus workstations and a like number of private offices. Typical projects involve 10 to 15 workstations and offices.
Revving Up the Buying Experience
Most of Rieke’s customers initially ask for fairly standard office furnishings. “We love that, because we know we’re up against some ‘plain Jane’ corner workstation design. We’re able to show them a lot of designs and styles, and we’re usually able to deliver all this for an even better price,” says Matus. When visiting Rieke’s showroom, customers are treated to many new ideas they might never have considered on their own.
Rieke’s 28,000-square-foot manufacturing area is also on display. Matus reports that customers respond favorably to seeing Rieke’s manufacturing plant because it lessens concerns about on-time delivery. Plus, the lifetime structural warranty on furniture that Rieke offers its customers carries more weight when they can see the manufacturing process, he claims.
As for delivery, Rieke delivers its products in three to four weeks, which is significantly faster than the industry standard practice.
Putting the "Custom" in "Customer"
Matus believes that Rieke Office Interiors’ focus on custom solutions is a strong selling point to its customer base. “To us, customization is not something to be avoided, but is welcomed and encouraged. It’s standard operating procedure to us. We want our clients to think in terms of custom solutions because that eclipses our competition. Our competitors might require eight or 10 weeks for delivery of custom products, and we can beat that by half.” Matus believes customization also recognizes the fact that individuals work differently at their workstations. One person might be perfectly comfortable with a traditionally configured station, but another might prefer extra storage or a different set-up for computer equipment, he notes.
Rieke has established close working relationships with several suppliers of materials that are “preferred” quality. For fabrics, the company does a significant amount of business with Guilford of Maine. For high-pressure laminates, it’s Nevamar.
Matus says he has high regard for HPL as a functional yet stylish surface. “Laminate is so practical, and it’s beautiful. Laminate patterns have really come such a long way, and there’s no end to the choices you have from traditional, to contemporary, to whimsical. One of our offices features a high-gloss cherry woodgrain laminate, and it absolutely fools the eye. Laminates are practical, durable, affordable and give such a smart look,” he notes.
“It just makes so much sense to pay half as much as real veneer and still give everyone a wonderful look in an office,” Matus continues. “It’s tough keeping good employees these days and providing a gorgeous office environment is one way of saying, ‘The boss really cares about us.’” Taking advantage of improved HPL wearability features such as Nevamar’s Armored Protection Surface means that the practical initial investment also pays off longer-term.
Rieke’s designers often assist customers in selecting other design components, such as floor coverings and lighting fixtures. The company has established relationships with other manufacturers, whose materials and samples are available to help guide customers toward their own decisions. (Rieke does not actually supply these items.)
Rieke Office Interiors continues to serve the Chicagoland market primarily. However, it now covers the entire region, into Wisconsin and Indiana. Only about 7 percent of the company’s $6.5 million in yearly sales are outside this territory. The company believes that it still has huge opportunities in its home territory, and it has organized its marketing effort to exploit that potential.
Rather than spend dollars on traditional print advertising or direct-mail brochures, Rieke has established a New Business Development department. Its members are devoted to building close relationships with business communities within the Chicago region, through which they are able to identify office projects that are new or expanding. They are heavily involved with Chambers of Commerce, Rotary Clubs, regional architectural and interior design industry functions and other activities that pay rich dividends. Telemarketing is another tactic used to identify potential opportunities.
Rieke account managers then follow up on leads. They have some novel sales tools to support them. One is a “business card CD-ROM” — a small CD given out with a business card that showcases Rieke’s facilities and operation. It’s one way for prospects to learn about the company without having to travel to the facility. The company also sends out a series of oversized postcards, each one featuring an office facility outfitted by Rieke. The furniture designs displayed are unique and memorable and are completed for “name” clients such as R. R. Donnelly or Jiffy Lube. These postcards are sent out when Rieke has discovered that a company is planning a move in six months to a year. “Five or six ‘visits’ via these display postcards over a series of weeks is usually enough to get us an appointment,” Matus observes.
The company also maintains a Web site, www.rieke.com, that has recently added e-commerce capabilities. Standard modular products in Rieke’s Trophy and Velocette lines are available for purchase, as is another line called ThÃÆ?ÃâÃÂ¤go, which is designed for creating versatile meeting room configurations.
So where does Chris Matus see Rieke Office Interiors in the future? He responds, “Our market right here in the Chicagoland area is huge — $500 million annually in office furniture purchases. So we don’t have to go too far afield to find more growth opportunities. Right now, we’re a little over 1 percent of the market. In three or four years, we could be at 10 percent.” Aggressive and optimistic words … but judging from the track record of this company up to now, it’s a goal that’s definitely within reach.
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