Three Big Ideas for the 2019 HIRI Summit

What’s Next for Home Improvement: Three Big Ideas

Each Fall, home improve­ment thought lead­ers and stake­hold­ers come togeth­er in Chica­go to dig into chal­lenges fac­ing the indus­try and pull out action­able insights. We walked away from the 2019 edi­tion of the annu­al Home Improve­ment Insights Sum­mit with three big ideas:

1. Con­sumer pro­files and expec­ta­tions are chang­ing as they become bet­ter informed through technology.

Today’s con­sumers have rich, in-depth infor­ma­tion at their fin­ger­tips and can make more informed deci­sions than ever before. With tech­nol­o­gy, touch­points, paths to pur­chase and inspi­ra­tion sources all chang­ing, shop­pers get hit with more mes­sag­ing and more decisions.

In response, brands can stay nim­ble by focus­ing on cre­at­ing val­ue for tech-savvy con­sumers beyond table stakes needs such as speed and accessibility.

“For home improve­ment, con­sumers are knowl­edge-hun­gry. Sev­en­ty-four per­cent do research to get as much infor­ma­tion as pos­si­ble before mak­ing a pur­chase. Knowl­edge is absolute­ly essen­tial for brick and mor­tar, but a seam­less, effort­less expe­ri­ence is also impor­tant.”
Amy Antho­ny, Senior Direc­tor of Cus­tomer Insights, Loyalty/​CRM and Mar­ket­ing Oper­a­tions at Lowe’s Companies

“Adap­ta­tion is key right now. We are in a space where media is con­stant­ly chang­ing because tech­nol­o­gy is con­stant­ly chang­ing. ​‘Ask your neigh­bor’ has now become ​‘Ask Google.’
When you can’t try before you buy, brands have to offer oth­er modes like videos and reviews that make you feel like you are expe­ri­enc­ing the process. Video has now become a trust­ed source for infor­ma­tion, prod­uct trans­paren­cy and added val­ue.”
Car­isha Swan­son, Mar­ket Direc­tor at Hearst Media Group and House Beau­ti­ful, in her pre­sen­ta­tion ​“Home and the Ama­zon Effect”

2. A decrease in mobil­i­ty indi­cates chang­ing mar­ket demands.

Gen­er­a­tional dif­fer­ences mat­ter more than ever, as mil­len­ni­als mature into the home­buy­ing mar­ket and boomers age in place with more pur­chas­ing pow­er than pri­or gen­er­a­tions. For brands, it’s impor­tant not to assume ris­ing gen­er­a­tions’ pref­er­ences will mir­ror those of the gen­er­a­tions before them. As mobil­i­ty pat­terns change, so will con­sumer needs and demands. Busi­ness­es that rec­og­nize these chang­ing pat­terns ear­ly can stay ahead of the game.

“The top five strongest prod­uct cat­e­gories right now are low- to mid-priced bath­room items, win­dows and doors, insu­la­tion, syn­thet­ic deck­ing and yard improve­ment. What do these have in com­mon? They are pur­chas­es catered to home­own­ers plan­ning to stay in their homes, spe­cif­ic to those with ris­ing incomes, and fall in the low-to-mid price point. It turns out that peo­ple who stay in their homes make very dif­fer­ent kinds of pur­chas­es. Main­te­nance is more of a con­sid­er­a­tion.”
Todd Toma­lak, SVP of Research at John Burns Real Estate Con­sult­ing, in his pre­sen­ta­tion ​“Home Improve­ment Fore­cast: Prod­uct Cat­e­gories with the Best and Worst Outlook”

“From the 1940s to the 1980s, about one in five Amer­i­cans moved every year. Today, only about one in 10 Amer­i­cans move each year, and decline is steep­est among young adults. Why is mobil­i­ty declin­ing? The rea­son is not known for sure, but an aging pop­u­la­tion, multi­gen­er­a­tional liv­ing, dif­fer­ent hous­ing struc­tures, hous­ing costs, stu­dent debt, the rise of dual-earn­ing house­holds and telecom­mut­ing could all have vary­ing impact.”
Rior­dan Frost, Research Assis­tant at the Har­vard Uni­ver­si­ty Joint Cen­ter for Hous­ing Stud­ies, in his pre­sen­ta­tion ​“House­hold Mobil­i­ty and Impli­ca­tions for Home Improvement”

3. Weath­er isn’t just for small talk any­more, but a seri­ous force to be reck­oned with.

Chang­ing and inten­si­fy­ing weath­er pat­terns will require the atten­tion of busi­ness lead­ers in the home indus­try. Smart brands will real­ize their respon­si­bil­i­ty and oppor­tu­ni­ty as the impact of inclement weath­er grows. Doors are open­ing for the home to be even more con­nect­ed to peace of mind, secu­ri­ty, well­ness and expres­sion — qual­i­ties con­sumers increas­ing­ly crave in the face of uncertainty.

“In the 1980s, there was an aver­age of three nat­ur­al dis­as­ters per year with dam­ages cost­ing $1B+. In 2018, there were 14, with the total cost of dam­age being $92B. One in 8 home­own­ers is mak­ing repairs for weath­er-relat­ed dam­age. Because we exist at the cen­ter of the home, we are the first respon­ders — we address these dis­as­ters in real-time. It is our respon­si­bil­i­ty to address these impacts as well.”
Nino Sitchi­na­va, Ph.D., Prin­ci­pal Econ­o­mist at Houzz, in her pre­sen­ta­tion ​“Home Improve­ment Mar­ket Update”

“Eighty-two per­cent of mil­len­ni­als are anx­ious about how cli­mate change will affect their children’s qual­i­ty of life. Forty-one per­cent want to be seen as some­one who buys green prod­ucts — and 25% of Amer­i­cans can name a spe­cif­ic brand they’ve pur­chased or not pur­chased because of the envi­ron­men­tal record of the man­u­fac­tur­er (up from 6% in the 2000s). But scream­ing ​‘You can save mon­ey’ is not the way to con­nect con­sumers to envi­ron­men­tal prod­ucts. Health and com­fort are the more com­pelling dri­vers.”
Susan Shel­ton, Pres­i­dent and CEO at Shel­ton Group, in her pre­sen­ta­tion ​“In Me, On Me, Around Me: Under­stand­ing the Health Con­cerns of Today’s Home Improve­ment Prod­ucts Buyer”

“Weath­er data is not the same as weath­er ana­lyt­ics. I wish it were that sim­ple! Every­one talks about the weath­er, but no one does any­thing about it. More than 90% of annu­al weath­er-dri­ven sales volatil­i­ty orig­i­nates from typ­i­cal, every­day weath­er. We must iso­late and quan­ti­fy the weather’s impact mov­ing for­ward. Don’t chase the weath­er. Send sup­port in advance where it’s going to be need­ed.”
Scott Bern­hardt, Pres­i­dent at Plan­a­lyt­ics, in his pre­sen­ta­tion ​“Weath­er­ing Home Improvement”

Ulti­mate­ly, we left the con­fer­ence with a pos­i­tive out­look. Across the indus­try, research shows today’s con­sumers are more knowl­edge­able and inspired. Emerg­ing gen­er­a­tions are fus­ing new ener­gy and aspi­ra­tions into the home­own­er­ship world. And, home improve­ment experts are gen­er­al­ly opti­mistic about brands’ abil­i­ty to bet­ter define their place in the cat­e­go­ry through research-based, con­sumer-cen­tered strategies.

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