A product of the economic downturn is a massive shift in consumer behavior. Identifying these shifts will give remodelers an advantage when it comes to adjusting their tactics to reach consumers and their offerings to respond to those consumers’ future needs.
Walker Smith, executive chairman of The Futures Company, a marketing strategy consultancy based in Chapel Hill, N.C., had an interesting take on the consumer mindset and how that drives purchasing trends, noted in his presentation, “Home Improvement Future-Forward: Shifts in the HIRI Future Trends and Opportunities for Home Improvement Retail.”
Today’s consumer, according to Smith, is one who is actively engaged in their world and critical of purchasing and decision-making because of the uncertain environment experienced in the last few years.
The top sources of information on home improvement products came from friends/relatives (62%), Internet (44%), sales personnel in a store (42%) and finally, professionals (31%) as a source.
Consumers are cautious of their actions involving their homes, and according to Walker, of those respondents citing they are expecting to do a major remodeling or home improvement project within the next two years, 78% reported they are not willing to take risks in order to make up for the money lost in the recent economic turmoil.
In order to reduce these risks, homeowners are researching products and projects more than ever before, using online reviews, social networks and manufacturer sites to determine what they will buy.
This trend is also spurring a new subtrend, which Walker refers to as Reconstructed Consumption. Homeowners are more interested in non-conventional models of purchases, which is translating into a stronger rental market. In the past, many believed the consumer’s indicator of success was owning a home or car, but now consumers no longer feel that drive to own something in the traditional sense..
Renting cars or homes is just as acceptable and, in some instances, believed to be a smarter way to live because of lost value in owned items, particularly homes, since 2008.
Interestingly, this trend is likely to move forward into other items in one’s life, like goods and services. According to Walker, 57% of respondents from all generations reported to agree with the statement, “I like to try new products and services more than sticking with the products and services I have always used.”
Although a remodeler can’t rent out a kitchen remodel, they can work with their vendor partners to devise ways for consumers to”test” items, such as a paint color or an appliance , in order to make consumers more confident in their decisions. For example, car companies have picked up on the free trial concept, in allowing consumers to drive a new car for a week before making a purchase.
Walker also hit on a consumer’s need to ensure authenticity in the company from which they are purchasing. In particular, companies must represent themselves honestly and place importance on social responsibility. The Internet is a big player in this trend, as it can make or break the consumer’s perception of a company.
Bad reviews and comments are all easily found online, as is information put out there by representatives of your company. If that information conflicts with other company information, that can also negatively sway a consumer. Eighty-five percent of respondents said they were more likely to buy home improvement products and services from companies that make clear what they stand for and stay true to their values.
Being a member of NARI and making that membership visible will increase in importance in future buyers, as a third-party verification of ethics is powerful.
But this also goes a step further.
Remodelers should be more transparent online with what their goals and values are, and they must invest time addressing negative issues and providing their opinions appropriately. At the same time, remodelers should be mindful of the products or manufacturers they promote so that their clients will associate their remodeler with companies who are also authentic and truthful.
Find out which population segment will dominate in the next decade in Getting to know Gen Y.