Daily Takeaways from the 2021 Home Improvement Insights Summit

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.

Day 1 Focus: Market

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 2 Focus: Customer, Project, and Product

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. 

Day 3 Focus: Channel

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!