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.
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.
There is anticipated to be a bump in single-family home starts for 2024 due to low resale inventory.
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).
Connect with the crucial entry-level market for your offerings by understanding their affordability concerns.
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.
Tailor marketing strategies by category and customer type.
Structural drivers for home improvement are strong — including
favorable demographic shifts
the value individuals place in their home as a place of refuge
lack of housing supply that is also aging and entering “prime” remodel years
pent-up demand for remodeling
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.
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?
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.
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.
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.
Promote tools and resources to support remodelers in navigating decarbonization projects.
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.
Address the talent shortage by promoting the industry as a career choice.
Foster partnerships and collaboration to bridge the skills gap.
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.
Stay attuned to evolving consumer trends such as at-home entertainment and anxiety antidotes.
Align products with changing demographics and customer values, which includes understanding predispositions to selective splurging.
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.
Understand that for pros, the top priority is managing the entire end customer experience and their own reputation.
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.
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.
Although supply chain tensions have eased due to lower demand, be prepared for logistical constraints that will resurface as demand rebounds.
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.
Becoming the preferred customer continues to be the best antidote for supply chain constraints.
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.
Adapt to the ever-changing preferences of your audiences, and engage with them on their terms.
Plan for omnichannel activations with a view of the customer, not the channel itself.
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.
Take advantage of influencer marketing to expand audience reach and brand awareness and drive customer consideration and brand loyalty.
Prioritize an influencer’s audience quality and relevance over its size. Also be sure to partner with an influencer who shares your brand values.
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?
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