Here’s What You Missed at the 2023 HIRI Insights Summit

Home improve­ment research pro­fes­sion­als from across the indus­try con­verged this Sep­tem­ber at the Home Improve­ment Research Institute’s 2023 Home Improve­ment Insights Sum­mit, shar­ing valu­able per­spec­tives and the lat­est fore­casts on the indus­try. The event fea­tured speak­ers with extra­or­di­nary knowl­edge in a diverse range of sub­jects, each offer­ing unique insights into the ever-evolv­ing world of home improvement.

Let’s dive into the key take­aways from each speak­er at this year’s Sum­mit and explore how those take­aways can shape the 2024 go-to-mar­ket strate­gies of home improve­ment sup­pli­ers and manufacturers.

Top Economic Challenges in the Future Housing Market

Danush­ka Nanayakkara-Skilling­ton, Assis­tant Vice Pres­i­dent at the Nation­al Asso­ci­a­tion of Home Builders

Kick­ing off the 2023 Insights Sum­mit with gus­to, Nanayakkara-Skillington’s pre­sen­ta­tion paint­ed a vivid pic­ture of the future hous­ing mar­ket. She shared a fore­cast­ed gain in sin­gle-fam­i­ly starts for 2024, point­ing to low resale inven­to­ry and a dis­cour­aged sell­ing mar­ket as results of the mort­gage rate lock-in effect.

Addi­tion­al­ly, Danush­ka point­ed out poten­tial declines in apart­ment con­struc­tion in 2024 and grow­ing hous­ing afford­abil­i­ty con­cerns. These issues, which large­ly stem from ris­ing inter­est rates and esca­lat­ing mate­r­i­al costs, should be a top con­cern for home improve­ment mar­ket­ing pro­fes­sion­als. Under­stand­ing the market’s chang­ing dynam­ics is essen­tial for tai­lor­ing pric­ing and pro­mo­tions effectively.

Top takeaways

1. There is antic­i­pat­ed to be a bump in sin­gle-fam­i­ly home starts for 2024 due to low resale inventory.

2. Be cau­tious about mul­ti-fam­i­ly relat­ed efforts with expect­ed declines in apart­ment con­struc­tion in 2024 (and 1 mil­lion units cur­rent­ly under-con­struc­tion to hit the market).

3. Con­nect with the cru­cial entry-lev­el mar­ket for your offer­ings by under­stand­ing their afford­abil­i­ty concerns.

Home Improvement Market Forecast and Key Drivers

Todd Toma­lak, Prin­ci­pal of Zon­da, and Dave King, Exec­u­tive Direc­tor of HIRI

Accord­ing to Toma­lak and King, a vari­a­tion in eco­nom­ic indi­ca­tors crop­ping up toward the end of 2023 high­lights the impor­tance of seg­ment­ing mar­ket­ing strate­gies by category. 

Home improve­ment pro­fes­sion­als should tai­lor their approach based on whether they cater to pro­fes­sion­als or con­sumers, as well as the spe­cif­ic prod­ucts and labor involved. But despite eco­nom­ic fluc­tu­a­tions, the struc­tur­al dri­vers for home improve­ment — includ­ing demo­graph­ic shifts and pent-up demand for remod­el­ing — remain robust.

Toma­lak also said that as the indus­try con­tin­ues to adapt to the dig­i­tal era, the sig­nif­i­cance of an online pres­ence can­not be over­stat­ed. Home improve­ment busi­ness­es should invest in user-friend­ly web­sites and plat­forms to engage their cus­tomers effectively.

Top takeaways

1. Tai­lor mar­ket­ing strate­gies by cat­e­go­ry and cus­tomer type.

2. Struc­tur­al dri­vers for home improve­ment are strong — including 

   1. favor­able demo­graph­ic shifts

   2. the val­ue indi­vid­u­als place in their home as a place of refuge

   3. lack of hous­ing sup­ply that is also aging and enter­ing ​“prime” remod­el years

   4. pent-up demand for remodeling

Fundamentals of the Home Improvement Pro

Grant Farnsworth, Pres­i­dent of The Farnsworth Group

With the return of pre-pan­dem­ic growth on the hori­zon, the home improve­ment indus­try is more com­pet­i­tive than ever. Farnsworth advised man­u­fac­tur­ers and retail­ers to devel­op a com­pet­i­tive mind­set to main­tain and gain mar­ket share dur­ing this oppor­tune time. 

One approach to win­ning busi­ness could be adopt­ing a cus­tomer-cen­tric strat­e­gy. Farnsworth said it is impor­tant to rec­og­nize that cus­tomers are in con­trol and their pref­er­ences may span var­i­ous chan­nels. Meet­ing cus­tomers where they are can make all the dif­fer­ence in retain­ing their business.

Top takeaways

1. Cul­ti­vate a com­pet­i­tive mind­set for suc­cess in the home improve­ment indus­try. Busi­ness­es are healthy and expect to grow. Labor chal­lenges remain,
   Avail­abil­i­ty issues are eas­ing, but Pric­ing pres­sures are grow­ing. Know your customer’s busi­ness chal­lenges and respond. Are you help­ing them plan for growth?

2. Embrace an omni-chan­nel approach to engage cus­tomers effec­tive­ly. Online is here to stay and the larg­er, more sophis­ti­cat­ed the Pro, the more you
   can sell online, but don’t ignore brick and mor­tar! Pros are still in-store. It’s a medi­um to reit­er­ate your brand posi­tion and prod­uct val­ue. Com­mu­ni­cate price, breadth of prod­uct offer­ings, and cus­tomer ser­vice along the journey.

Opportunities and Tools for Home Decarbonization Upgrades

Lucas Tof­foli, Prin­ci­pal at Rocky Moun­tain Insti­tute, and Cheryn Met­zger, Res­i­den­tial Pro­gram Man­ag­er at Pacif­ic North­west Nation­al Laboratory

In their joint pre­sen­ta­tion, Tof­foli and Met­zger empha­sized that today’s push for home decar­boniza­tion opens up a mas­sive mar­ket for home improve­ment busi­ness­es. By adding effi­cien­cy and elec­tri­fi­ca­tion capa­bil­i­ties to tra­di­tion­al remod­el­ing approach­es, busi­ness­es can expand their offer­ings and tap into this grow­ing market.

Addi­tion­al­ly, mar­ket­ing sus­tain­able tools and oth­er resources to remod­el­ers can help them nav­i­gate the com­plex­i­ties of pur­su­ing decar­boniza­tion projects.

Top takeaways

1. Seize oppor­tu­ni­ties in home decar­boniza­tion to expand remod­el­ers’ offer­ings. There are around 125 mil­lion res­i­den­tial hous­ing units in the US, and more than 90% will require upgrades to meet cli­mate goals; of these, about 75 mil­lion units will require work that includes improv­ing the build­ing envelope.

2. Pro­mote tools and resources to sup­port remod­el­ers in nav­i­gat­ing decar­boniza­tion projects.

Who Will Build the Homes of the Future?

Car­men Cruz, Nation­al Part­ner­ship Devel­op­ment Direc­tor of Build­ing Tal­ent Foundation

For the home improve­ment indus­try to thrive, address­ing the tal­ent short­age is para­mount. Cruz said this involves tack­ling three dis­tinct chal­lenges: the pipeline chal­lenge, the con­nec­tions chal­lenge and the engage­ment chal­lenge. Cur­rent indus­try pro­fes­sion­als can play a role in pro­mot­ing jobs with­in the cat­e­go­ry as an appeal­ing career choice.

Addi­tion­al­ly, Cruz made the case that col­lab­o­ra­tion and part­ner­ships are at the heart of over­com­ing the tal­ent short­age. Encour­ag­ing coop­er­a­tion and fos­ter­ing rela­tion­ships with­in the indus­try can help bridge the gap to new talent.

Top takeaways

1. Address the tal­ent short­age by pro­mot­ing the indus­try as a career choice.

2. Fos­ter part­ner­ships and col­lab­o­ra­tion to bridge the skills gap.

Consumer Behavior Trends Driving Home Improvement

Liza Haus­man, Vice Pres­i­dent of Mar­ket­ing at Houzz

Haus­man high­light­ed the impor­tance of stay­ing attuned to evolv­ing con­sumer behav­ior trends such as the cur­rent inter­est in at-home enter­tain­ment and relax­ation upgrades. She point­ed to chang­ing demo­graph­ics, includ­ing the rise in unpart­nered adults and multi­gen­er­a­tional liv­ing, that may require adapt­abil­i­ty in prod­uct offer­ings and mar­ket­ing strate­gies to stay top of mind.

Over­all, Haus­man empha­sized that in the pur­suit of expe­ri­ences, it’s essen­tial for mar­ket­ing pro­fes­sion­als to align their prod­ucts with what cus­tomers tru­ly val­ue in their homes.

Top takeaways

1. Stay attuned to evolv­ing con­sumer trends such as at-home enter­tain­ment and anx­i­ety antidotes.

2. Align prod­ucts with chang­ing demo­graph­ics and cus­tomer val­ues, which includes under­stand­ing pre­dis­po­si­tions to selec­tive splurging.

Tale of a Homeowner’s Remodeling Journey

Mark Harari, Vice Pres­i­dent at Remod­el­ers Advantage

Every remod­el­ing project is dif­fer­ent, and it is often up to the pro­fes­sion­al con­trac­tor to man­age client expec­ta­tions amid a myr­i­ad of factors. 

Accord­ing to Harari, pros often cat­e­go­rize home remod­el­ing projects into light, mod­er­ate and heavy remod­els based on cost and dura­tion. This, in turn, helps man­age client expec­ta­tions and project timelines. 

How­ev­er, the pros face a dual chal­lenge, because they are also required to man­age the customer’s emo­tion­al aspects of a remod­el. In light of the skilled work­er short­age and extend­ed project time­lines, these fac­tors can cause addi­tion­al stress for the pro­fes­sion­al remod­el­er, espe­cial­ly as the front-man for any­thing gone wrong on the project, even when it’s a sup­pli­er lev­el issue. 

It is impor­tant to solve for the pro and make sure they look good to the home­own­er; help them build their rep­u­ta­tion to retain their business.

Top takeaways

1. Under­stand that for pros, the top pri­or­i­ty is man­ag­ing the entire end cus­tomer expe­ri­ence and their own reputation.

2. Be aware of how the chal­lenges pros face are com­pound­ed by the emo­tion­al aspects of the customer’s remod­el­ing jour­ney on top of skilled labor short­ages and inflation’s impact on sales cycles.

A Supply Chain Teetering on the Edge of Gridlock

Ken Pin­to, Own­er of Ken­zai USA

Pin­to not­ed that sup­ply chain chal­lenges have some­what eased due to less­en­ing demand. He attrib­uted much of this tem­po­rary relief to a reduced demand for cer­tain prod­ucts and ser­vices. How­ev­er, despite some eas­ing of sup­ply chain issues at the nation­al lev­el, glob­al unrest remains a sig­nif­i­cant threat.

His advice? Becom­ing the pre­ferred cus­tomer is key to mit­i­gat­ing sup­ply chain con­straints for home improve­ment retail­ers and man­u­fac­tur­ers. This doesn’t always require pay­ing more; rather, it often means estab­lish­ing bet­ter com­mu­ni­ca­tion and col­lab­o­ra­tion with suppliers.

Top takeaways

1. Although sup­ply chain ten­sions have eased due to low­er demand, be pre­pared for logis­ti­cal con­straints that will resur­face as demand rebounds.

2. Keep a close eye on geopo­lit­i­cal devel­op­ments that may impact the sup­ply chain, as glob­al unrest threat­ens the sup­ply of raw mate­ri­als and free trade routes.

3. Becom­ing the pre­ferred cus­tomer con­tin­ues to be the best anti­dote for sup­ply chain constraints. 

Omnichannel Evolved

Bill Rossiter, CEO and Prin­ci­pal of Inter­rupt

In Rossiter’s ses­sion, he made the case that the focus of omnichan­nel mar­ket­ing isn’t on the chan­nels them­selves but on deliv­er­ing a seam­less cus­tomer expe­ri­ence. He said that invest­ing in a cus­tomer-cen­tric approach can sig­nif­i­cant­ly impact a brand’s val­ue in the mar­ket and finan­cial performance. 

How can mar­keters exe­cute this approach? Rossiter sug­gest­ed using data ana­lyt­ics to cre­ate per­son­al­ized cus­tomer expe­ri­ences and tai­lor­ing mar­ket­ing mes­sages and offer­ings to indi­vid­ual pref­er­ences. He also rec­om­mend­ed using real-time data to adapt con­tent to meet the chang­ing needs of diverse cus­tomer segments. 

Top takeaways

1. Adapt to the ever-chang­ing pref­er­ences of your audi­ences, and engage with them on their terms.

2. Plan for omnichan­nel acti­va­tions with a view of the cus­tomer, not the chan­nel itself.

Influencers in Home Improvement

Lau­ra King Edwards, Con­tent Mar­ket­ing Direc­tor, and Aman­da Williams, Pub­lic Rela­tions Direc­tor, of Wray Ward

Influ­encer mar­ket­ing can be espe­cial­ly effec­tive in reach­ing DIY­ers and home improve­ment enthu­si­asts and can dri­ve demand dur­ing the con­sid­er­a­tion stage of the buyer’s jour­ney. Edwards and Williams shared a thor­ough overview of why influ­encer mar­ket­ing works in the home improve­ment cat­e­go­ry and strate­gic ways to invest in influ­encer mar­ket­ing to reap the most ROI.

Top takeaways

1. Take advan­tage of influ­encer mar­ket­ing to expand audi­ence reach and brand aware­ness and dri­ve cus­tomer con­sid­er­a­tion and brand loyalty.

2. Pri­or­i­tize an influencer’s audi­ence qual­i­ty and rel­e­vance over its size. Also be sure to part­ner with an influ­encer who shares your brand values.

3. Repur­pose, reuse, recy­cle: Don’t stop at ask­ing influ­encers to post con­tent on their chan­nels — acti­vate these part­ner­ships on your own chan­nels to max­i­mize the value.

The Home Improve­ment Research Insti­tute was thrilled with the wealth of knowl­edge shared at the 2023 Insights Sum­mit. We hope you found this sum­ma­ry — and, if you joined us in Chica­go, the event — valu­able as well. How will you lever­age this knowl­edge to craft tai­lored strate­gies that res­onate with chang­ing con­sumer pref­er­ences, mar­ket dynam­ics and the evolv­ing home improve­ment landscape?

To get access to ongo­ing home improve­ment research and receive a dis­count­ed rate for next year’s Insights Sum­mit, become a HIRI mem­ber today.