From September 21 – 23, the Home Improvement Research Institute hosted its annual Insights Summit, a three-day congregation of industry insiders and thought leaders as well as some of the largest stakeholders in home improvement and remodeling. Typically held in Chicago, the Insights Summit has been a virtual conference for the past two years, allowing registrants to attend from wherever they are at no additional cost.
A major theme of the Summit centered on the pandemic’s effect on the home improvement industry, and discussions touched on the current U.S. economy, its impact on housing trends, and actionable steps for professionals shifting into a post-pandemic market. Participants received access to valuable home improvement market research and data.
In case you missed it, we’re providing a look at some of the topics and key takeaways from each day of the event.
Each day of the HIRI Insights Summit was categorized by presentation topic, with the first day focusing on the state of the U.S. home improvement and housing market. Major takeaways included the following.
1. There is still uncertainty about the economy’s recovery.
Despite continued gradual improvement in the labor market (in lockstep with rising employment rates), James Bohnaker from IHS Markit said that COVID-19 strains will remain in the economy for the foreseeable future. This is due partly to the Delta variant driving rising hospitalizations and deaths, which causes increased caution in spending from consumers. Likely coming with the tailwinds of this strain, however, will be excess savings and pent-up consumer demand for social spending.
2. Housing affordability is likely to decline as we enter 2022.
It’s no shock that housing is red-hot right now. However, this could soon lead to many potential buyers being priced out of the market. Rob Dietz of the National Association of Home Builders explains the double-edged sword coming our way: Supply-side challenges are increasing residential construction costs, but even once building material prices begin to normalize, skilled labor shortages will persist. These factors, in turn, will increase prices and make entering the market for first-time buyers and minority buyers increasingly difficult.
3. Existing home inventory supply has already hit bottom.
Vacant developed lots are disappearing quickly as builders snatch them up at a record pace. In fact, the new home lot supply is currently at the lowest level ever tracked, with nearly every market undersupplied. However, Ali Wolf from Zonda expects inventory in the new home market to open in the coming months as more lots planned for excavation become available to builders.
Day two of the Insights Summit provided diverse discussions around the pandemic’s legacy on consumer behavior. These topics focused on trends in consumer projects, emerging technologies, and evolving purchasing behavior. Here’s what we learned.
1. 2022 will be a transitional period.
With a shift into a post-pandemic world, consumers will also shift their spending priorities as life events and activities previously put on the back burner become feasible again. For example, those who spent more on remodeling or décor in 2020 – 21 may want to spend money on travel in the coming years. Therese Caruso of Zeno Group also points out that the transitory hybrid back-to-work/school models may play a role in dictating design choices in the home.
2. Consumers are prioritizing wellness at home.
Mental health was given a much-deserved platform as our society grappled with social isolation and stay-at-home orders during COVID-19. In his presentation, Delos Labs Vice President Jie Zhao proposed that the pandemic made people more aware of their family’s wellness inside the home as well: From fitness to indoor air quality, consumers are thinking more about home improvements that can positively impact the spaces where they spend time throughout the day.
3. Demand for home improvement professionals will continue to grow.
Because COVID-19 fueled the need for homes to do double, triple, and quadruple duty (serving as an office, gym, daycare, and more), DIY projects skyrocketed in 2020 – 21. In fact, Liza Hausman, Vice President of Industry Marketing at Houzz, said more than half of homeowners took on projects themselves in 2020. However, as most of these improvements wind toward completion and people become more comfortable with the idea of having others in their home, expect a 60% increase in demand for professional contractors.
The last day of HIRI’s Insights Summit focused on retailing. Keynote speakers dove into the specific channels through which consumers learn about and purchase home improvement products, as well as shared advice regarding how to improve approaches in the wake of COVID-19. Our key takeaways include the following.
1. An omnichannel approach remains critical despite a return to in-store activity.
Many stores were forced to transition to an online ordering system in the midst of stay-at-home orders in 2020 – 21. Can we expect consumers to forgo the “new normal” once COVID-19 restrictions are lifted? According to Grant Farnsworth of The Farnsworth Group, online shopping remains strong with younger homeowners and larger contractor firms, despite the return to in-store activity. In order to reach the largest market share, he recommends keeping multiple channels open at a time.
2. Contractors and homeowners continue to have COVID-19-driven concerns.
Farnsworth also said that availability and pricing are leading challenges preventing project completions, impacting timing and budgets, and causing most homeowners to spend more than expected. While research from The Farnsworth Group indicates it is a good time to hire a contractor to complete a home improvement project, it is important to keep in mind that the lasting impacts of the pandemic are still present and real.
3. Not every company can be a “technology company,” but they can be an “experience company.”
According to Doug Stephens, aka the Retail Prophet, the classic brick-and-mortar store no longer sits at the top of the marketing funnel. Nowadays, the in-store experience is just part of a well-rounded, deliberate content plan that helps customers build a relationship with your brand. Whether using a digital, physical, emotional or cognitive approach, Stephens says that brands should focus on creating experiences that will connect them with customers through the channels they operate best in.
Each day of this year’s HIRI Insights Summit brought timely conversations and helpful, actionable advice from experts navigating a fast-changing industry.
Next year’s conference is sure to bring even more insights, but you don’t have to wait to get in the loop. By becoming a HIRI member, you can get access to all past, current, and future research. Join today!
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