As the flexible workspace industry grows, there’s a burgeoning trend for operators to move away from the middle ground and towards highly specialised, niche target markets.
Why? Because the size of our industry is now sufficient enough to provide ample choice for clients, and those who don’t find their specific needs being met can simply take their business elsewhere. CBRE’s report into flexible workspace (November 2017) found that the number of flexible workspace centres globally has been growing at an average of 13% per annum over the past decade, which represents a tripling in size since 2006.
Some operators are now meeting this challenge head-on by catering to niche and often sector-specific requirements.
At the GCUC UK workspace conference in London last month, the subject of ‘nichification’ was discussed repeatedly throughout the three-day event. James Rankin, head of research at the Instant Group, cited a study by Instant that found small independent spaces in particular are “driving the trend of ‘nichification’, providing spaces that cater to specific audiences and interest.”
That these spaces are mostly independent suggests that the ‘middle ground’ is well covered in certain markets, and operators are now creating very specific spaces for niche audiences having identified a gap in their local markets.
According to Rankin, this trend is expected to continue as occupiers seek more choice in their workspace.
So what type of niche workspaces are out there?
The GCUC UK panel discussing this very topic included:
Another example of a niche workspace is Blooming Founders, a female-centric workspace in London launched by Lu Li. Although the first of its kind in the UK, the rapid growth of female-orientated workspaces in the U.S., amplified by The Wing, suggests that the UK could be set for more gender-specific spaces in the near future.
Interestingly however, whilst the proliferation of highly specified flexible workspace providers may reflect a large and growing industry, we have reached a point where so-called niche operators are actually hitting back at the concept of being niche, and instead claim that they are simply providing a set of services that closely match their clients’ requirements.
Ursula Errington from SiGNAL Bordon describes niche workspaces simply as “good business” and believes there is a propensity to move towards this model, even for those who operate vanilla workspaces.
“It’s the first rule of business: know your customer and serve your customer,” she said, speaking at GCUC UK.
“Maybe we need to redefine niche. We’re all here because we’re passionate about facilitating people and connections. In my mind, it’s bonkers that providing childcare in your workspace is considered niche. We are not ‘the other’”.
Understand your market and cater to them
How do you know what your clients want? How do you identify a niche?
Sometimes, new opportunities come knocking. Asked how she found her ‘niche’, Shazia Mustafa of Third Door said: “It found me! In 2008, I wanted to start a business, but I was a new mum at the time and I didn’t want to leave my daughter alone to go to work. I stumbled across coworking, but when I looked up nursery options I found zero flexibility.
“So I decided to do it myself and build it all in.”
10 years later, Shazia runs a successful business offering flexible workspace with in-house childcare. “We understand our market and cater to them, that’s how we’re successful,” she said. Such is the ‘stickiness’ of clients who have their requirements so closely met, that they remain loyal.
“We have one customer who’s been with us for 6 years. Even after customers leave, they continue to come back to us to hire our meeting rooms.”
How to identify specialist opportunities
Existing workspace operators have an invaluable opportunity to identify potential new service offerings simply by asking their clients or members, and by listening to prospective clients during tours or over the phone. Monitor your customer service channels -- it will tell you everything you need to know.
Where possible, ask your visitors too, such as meeting room and hot desk users, in order to offer services that would turn infrequent visitors into more permanent clients.
And remember that not all clients need office space. If you have a high volume of creatives or producers of artisan goods based nearby, consider offering a ‘makerspace’ or shared workshop facilities for those who spend more time designing and building rather than working from a laptop.
Local government research and statistics on your local economy and demographics will help point you in the right direction. Reach out to nearby business groups, such as your Chamber of Commerce and local networking groups, to connect with local businesses and find out what they’re looking for.
And use your industry contacts. Speak to agents, brokers, operators of search platforms, industry suppliers or partners, and other workspace operators.
This so-called ‘nichification’ has been marked as an accelerating trend in our sector, which is a strong sign of a healthy, growing industry. And while it may not be necessary or sustainable to focus entirely on specific requirements, there are certainly opportunities to enrich your flexible workspace offering for those who are open and willing to receive them.
Guest post written in collaboration with Allwork.Space