23 September 2022
Industry events, Industry news
Hardware Retail was in the crowd on Yesterday’s summit in Chicago on the 20th-21st September. Over the course of two days, attendees heard from over 12 speakers on various topics relevant to the home improvement industry. Review the 10 key areas that several speakers touched on here and learn more about how you can access the latest home improvement data from the Home Improvement Research Institute (HIRI) at hiri.org.
- Generation Z. While Gen Z isn’t at the peak of home improvement shopping yet, they will be before we know it. That The NPD Group says this generation is currently spending money on storage products, and they support brands with strong personalities that use messaging that aligns with their core values. Alicia Rain water from Center for Generation Kinetics says teen employment is low due to lack of enthusiasm to get driver’s license. She also says the social issues they care about the most are climate change and social justice. “The more we can learn about Gen Z now, the faster we’ll be able to adapt and be able to connect, understand and market to them when the time comes,” says Rainwater.
- Trades. There are large openings in construction and other trade jobs. The Great Recession saw skilled workers leave these jobs and not return. Add in the push for college education over trade education that has been prevalent for many years, and we now face an undersupply of skilled workers, says Danushka Nanayakkara-Skillington, who does forecasting and analysis for The National Association of Home Builders. Nanayakkara-Skillington says about 60,000 new hires need to join the trades each month to keep up with the growing industry and aging workforce.
- Recession. There are some differing opinions on the economy going into 2023. Nanayakkara-Skillington of the NAHB predicts a mild or soft recession in 2023. Todd Tomalak of Zonda highlighted similarities between the current economic climate and the 1920s. The general outlook is that 2023 will see a struggling economy, but it will not be a replica of any of the recessions the US has seen in the past.
- Housing. Housing affordability will decline in 2022 and 2023, says Nanayakkara-Skillington. She says home ownership peaked in 2004 at 69.2% and is currently at 65.8% and will continue to decline as interest rate and low inventory issues continue. The NAHB’s Housing Opportunity Index (HOI) has hit its lowest level since the Great Recession of 43, meaning that only 43% of new and existing housing is affordable for a typical family making a median household income of $90,000. Every quarter-point increase in mortgage rates costs 1.3 million households, Nanayakkara-Skillington says. Susan Yashinsky, vice president of innovation trends at sphere trend, mentioned solutions would be found in cohabitation and common spaces.
- Millennials. Millennials are the largest living generation in the country right now, making up the largest percentage of home buyers at about 46%, says Nanayakkara-Skillington. Rainwater says millennials and Gen Z are visual learners and buyers, which means YouTube reviews of products and other video experiences are influential. She also recommends providing ongoing quick-hit feedback to retain millennial and Gen Z employees.
- Reconstruction. Carlos Martín, project director of the Remodeling Futures Program at Harvard Joint Center for Housing Studies, predicts overall growth in the remodeling industry. Marine Sargsyan, staff economist at Houzz, says kitchen and bathroom remodeling are the top projects that homeowners tackle. Planning and completing projects takes an average of nine months, and over three-quarters of homeowners finance these projects with cash, with credit card financing the second most popular option. With more people working from home and less need for cars, garage conversions are becoming popular, especially in walkable communities, Yashinsky says. Aging homes, a shortage of new homes, aging on-site trends and recent home buyers who may have settled for an imperfect house to succeed in a competitive real estate market will support growth in the remodeling industry, Tomalak says.
- Products. Sargsyan says homeowners value quality over price in the building materials category; price above all for hand and power tools; and brands for white goods. Mischa Fisher, Chief Economist from Enter Inc., says that as labor shortages continue, labor-saving products will become important. Many baby boomers want to age in place, so design and products that help will be important going forward, says Yashinsky.
- Trends. The development of outdoor life skills, such as foraging and gardening, is trending, Yashinsky says. Flexibility in the spaces of the home is also trending, with spaces that have to serve multiple purposes, pocket doors have become in high demand, she says. The front garden lounge is becoming more popular as people have fallen in love with interacting with their community, are still spending more time at home and need more living space, and many have already extended their living space into the backyard.
- Nature and sustainability. Climate change has brought interest in drought-tolerant landscaping, Yashinsky says. Resettlement communities, or communities built for those who will be displaced by climate change, are being created, Yashinsky says. Eco-retrofitting and sustainable products will continue to become more important as governments begin to adopt plans to combat climate change and consumers like Gen Z gain more purchasing power and start thinking more about the Earth’s future, she says.
- Technology. Solar energy is the cheapest source of electricity for most major countries for the first time in history, so innovation in building materials, like colored glass solar panels, is happening and will continue to happen, Yashinsky says. Invisible tech, which shapes technology with design and masks interfaces so that ambient computing looks like home design and blends into materials like wood and cloth, will continue to evolve and become more common, Yashinsky says.
Learn more about HIRI here. Find out how to invest in younger generations here.
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