Oak Brook, Ill. -- Researchers in the home improvement industry gathered for a day of trends and forecasts Wednesday at the 27th Annual Fall Conference of the Home Improvement Research Institute (HIRI).
Falling under the umbrella title of “Understanding the Future of Home Improvement,” the diverse slate of presentations took on various degrees of optimism, pessimism and -- in the case of an aging in place discussion -- opportunism.
J. Walker Smith, president of Yankelovich Partners, kicked off the proceedings with an optimistic look at market trends. After describing the current economic downturn as a “short-term period of difficulty,” Smith pointed to data that showed consumers are planning to follow through on roughly the same number of home improvement projects that were planned a year ago.
Consumers today are planning 2.8 projects, the median figure, with the median spending on all projects planned at about $1,320. That is down from 3.4 projects and spending of $1,535 a year ago. Those figures formed the basis for Smith’s optimism. “Despite the economy, consumers are still involved in this marketplace,” he said. “There is still an opportunity to do some business.”
Competition for that spending, however, will increase among suppliers and retailers, he said.
On the Yankelovich list of future projects, gardening or landscaping was mentioned by the most respondents -- 50 percent. And median spending on the lawn and garden projects was expected to be $250.
On the home renovation front, Smith said more people in 2008 said they plan to live in their current home through retirement -- up from 56 percent in 2006 to 64 percent in 2008. Among boomers, the change is even greater -- up from 56 percent in 2006 to 69 percent in 2008.
“They’re not looking for a new home, they’re looking for home improvements,” Smith said.
Louis Tenenbaum, an authority on the trend of aging in place, reported that 80 percent of people over 45 want to stay in the home of their choice, even when they need assistance. That points to the need for projects around the home -- particularly around the bathroom, kitchen and main entry areas. Tenenbaum described Universal Design, an inclusive way of designing homes, as the next “green.”
The current “green” home product trend also was on the agenda in a session called, “The Impact of the Green Movement in Home Improvement.” Smith explained what he thought was the key to understanding consumer behavior about green marketing: “It’s not about saving the world, it’s about saving me money,” he said.
He also pointed to the three-step process for selling green: Show consumers that green issues matter to them, tell them what they need to know about green, and -- after satisfying both those conditions -- offer them superior green products.
In an interactive presentation called “A Wall Street View of the Home Improvement Market,” Joshua Rosenbaum, executive director, global industrial group of UBS, took the audience through the roller coaster ride of the financial markets. Questions from the audience came fast and furious -- indicating the deep connection between home product research and market fundamentals.
Turning to housing starts, Rosenbaum saw some silver lining to the historical low number of new construction. “The good news is this level of housing activity is not sustainable,” he said. “But it’s not, I believe, readily correctible. Two issues are housing inventory and foreclosures.”
Rosenbaum’s forecast calls for a turnaround in 2010. “None of the people I work with are focused on 2009 for the housing market to come back,” he said. “They’re focused on 2010.”
The conference also explored the rise of shopper marketing -- the type of marketing that reaches consumers at the store level, as opposed to traditional advertising. Peter Hoyt of the In-Store Marketing Institute suggested that retailers and manufacturers will continue to look for new ways to connect with their customers in the store by studying how they shop.
In a presentation called “The Hispanic Market for Home Improvement Products,” James Gillula, managing director, advisory services for Global Insight, predicted that Hispanic spending at home centers and hardware stores will grow from $13.7 billion in 2008 to $23.3 billion in 2013.