Four Key Takeaways from the Home Improvement Conference

Grant Farnsworth
September 25, 2018
THE TALK... | Markets & Trends

Each year, the Home Improvement Research Institute puts on its Insights Conference that brings together professionals in research and sales, as well as manufacturers and retailers of building products and other building professionals. This year’s event, held last week in Oakbrook, Ill., also featured talks by building and home improvement experts including Lawrence Yun, chief economist from the National Association of Realtors, Jonathan Spader, Sr., a researcher from Harvard’s Joint Center for Housing Studies, and Zach Williams, CEO of Venveo. Over the two-day event, attendees were left with four key takeaways:

  1. A softening market is likely near

  2. Remodeling will remain strong

  3. Conversations are critical

  4. Technology will drive opportunity 

Market may Soften

Call it a re-set, call it a recession, but the message was clear that, due to some economic and industry headwinds, the building market is due for a softening in the next two to three years. Contributing factors include:

  • Increased material costs due to commodity prices and tariffs,

  • Increased labor costs due to a shortage of labor,

  • Increased home prices due to lack of inventory, and

  • A lack of affordable, entry-level homes.

Remodeling will Remain Strong

Mobility rates are lowering. Data shows that homeowners are now in their homes an average of 10 years compared to prior rates of seven to eight years. The housing stock continues to age. This results in homeowners wanting and needing to update or repair their homes. Home prices are going up, mortgage rates are increasing and affordability is decreasing. All these factors mean homeowners are staying put more and more. Therefore, the remodeling market is expected have solid growth for the next few years.

Action Opportunity: Think about your customer mix and product position. What are you doing to meet the needs of remodelers, replacement contractors and DIYers? 

Conversations are Critical

Younger generations are using technology to shop and capture information in ways not available 10 or even five years ago. With Gen Y and Gen Z quickly becoming the dominant share of the U.S. population, manufacturers and retailers must understand their needs and develop mediums that support those needs. As Williams from Venveo stated, “the customer doesn’t need you.” However, they still want you to be a part of the conversation.

Today, it means using technology to allow customers access on their terms whenever they want. Conversations may be through bots, social media or several other sources. 

Action Opportunity: What is your brand doing to participate? Are you communicating a feature or solving a problem?

Technology, Technology, Technology

HIRI provided a panel of executives from Kohler, Lowe’s, HomeAdvisor, and Hanley Wood. Each commented that the opportunities of the home improvement and building industry will revolve around technology advancements and our uses of it. This includes using technology to better communicate with customers on their needs. It also involves applying data analysis to predict and respond to buying behaviors. Technology seems to also be a catalyst in changing how we build and maintain homes.

It’s clear technology can provide some solutions that better enable the customer and help our industry manage the current challenges of labor and costs. Perhaps the combination of industry headwinds and advances in technology will propel our industry to evolve, bringing with it amazing opportunity.

 

Grant Farnsworth is the business development director for The Farnsworth Group, a research firm that combines building industry knowledge with research expertise. The Farnsworth Group works with clients to answer needs of these audiences and how their products, brands and channels align, and helps firms understand their own brand perceptions and why customers do/do not purchase products. Reach him at gfarnsworth@thefarnsworthgroup.com.