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Fifty shades of green

BY HBSDEALER Staff

By Kent Panther, VP, Director of Strategic Planning at Wray Ward

According to the latest nationwide research by The Farnsworth Group, given consumers’ varying views of green advantages as well as the skepticism many have regarding green claims, the opportunity for manufacturers to capitalize on an ability to better define green — and to promote its specific benefits — seems clear.

Brad Farnsworth, whose company conducted the study, “How ‘Green’ Are Home Improvement Customers?” summarized it like this: “Clearly, a majority of consumers are receptive to green products, but they need a greater depth of information to encourage purchase — especially information that points out how they will personally benefit from the product. Manufacturers and retailers alike need to spell out what green means. The category is ripe for growth.”

The results of the 500-person study may help guide product manufacturers, especially in refining their communications vehicles and marketing messages.

Not surprisingly, the survey found that respondents fall along a wide continuum, from Ideologues to Anti-Ecos (see chart).

Attitudes toward green, however, may not match consumers’ purchasing behavior. A higher percentage of Anti-Ecos purchased HVAC systems or light bulbs they defined as green as opposed even to Ideologues.

This discrepancy between attitude and actions may be accounted for by different definitions of green. When asked what the term “green” meant to them, nearly half of the survey’s respondents correlated green with “environmentally friendly,” while nearly 20% defined green as “energy saving,” and about the same number thought of green as “recyclable/renewable.”

Moreover, the research showed that consumers are most likely to purchase green products that benefit themselves. In order of priority, factors most likely to influence purchase are energy efficiency, longevity of the product and low maintenance. Perhaps consumers, such as Anti-Ecos, are inclined to buy green products they believe are in their economic self-interest. The way green is defined and its perceived benefits are both essential.

As to the importance of purchasing green products for home remodeling and maintenance projects, about 13% of all respondents feel it is “not at all important,” 56% feel it is “somewhat important,” and 31% are either very near or in the range of saying it is “extremely important.”

While a large majority of consumers show an interest in green products, few feel knowledgeable about the category. Among consumers, 25% fall within the “do not know much” range, 63% consider themselves “somewhat knowledgeable,” and 12% rate themselves as near-experts or experts.

Finally, all consumers should be considered as potential targets for green products regardless of their professed attitudes. 

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HIRI takes the industry’s pulse

BY Brae Canlen

Since the beginning of the economic downturn, forecasts on housing starts, real estate sales and remodeling have gathered like a convention of fortune tellers. But only one crystal ball is focused solely on the home improvement industry and how consumers are spending — or not spending — money on their homes.

The Home Improvement Research Institute (HIRI), headquartered in Tampa, Fla., is an independent, not-for-profit organization comprised of about 80 manufacturers, retailers, wholesalers and allied organizations in the home improvement industry. Once a month, HIRI holds its “Pulse of the Industry” webinar to provide the latest data and what implications it might have on its members. Listed below is a summary of August’s report, which bases its conclusions on statistics from various government agencies, trade groups, marketing research firms and academic think tanks. For more, visit HIRI.org.

Green lights

• Low mortgage rates and strong housing affordability could boost home sales.

• Backlog of remodeling jobs, low financing costs, stronger consumer confidence and stabilizing home prices point to an uptick in remodeling. Harvard Joint Center for Housing predicts double-digit growth by the first quarter of 2013.

• Retail sales are showing good growth for 14 straight months — with the exception of June.

 

Yellow lights

• Overall economic growth still at a modest pace

• Moderate rate of inflation

• Are housing prices truly stabilizing?

 

Red lights

• Consumer confidence up one month, down the next. “Consumers are very prone to the latest headlines,” said Fred Miller, HIRI’s managing director.

• There is no end in sight for foreclosures.

• Global instability — particularity events in Europe and the Middle East — could push the U.S. economy into another recession.

• Employment is growing, but not fast enough. “It continues to have an impact on the consumer psyche,” Miller said. 

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Readers Respond

BY HBSDEALER Staff

Crime and punishment, redux
The following is a letter in response to “Illinois contractor gets 10-year sentence for asbestos violation.”

“Ten years is absolutely ludicrous. A violation of this sort warrants a fine, not a jail term. Child abuse, rape, murder, multi-billion dollar mortgage/bank frauds warrant jail time. How could a justice system give a contractor jail time, while bank executives who basically trashed the entire American financial system are not even taken to court? That’s right — they got bailouts instead of jail time.”
— Chuck Crocker
Winnipeg, Canada

Remembering Joe Gardiner
The following refers to “84 Lumber executive perishes in boating accident.”

“Joe Gardiner was one of the best field people to ever come out of the old Payless Cashways organization. He will be missed by 84 Lumber, by the industry and by me personally.”
— Frank Chambers

Lowe’s second-quarter results
The following is a response to Lowe’s and Home Depot’s financial results.

“There is a difference between Home Depot and Lowe’s. Retail is tough and somehow, Home Depot has the mojo to come back from chaos under [Robert] Nardelli, and to get the focus back where it belongs. The market can certainly handle two strong competitors. Where there are three, it might not be possible. Now, the challenge is for Lowe’s to figure out what it needs to do to get the customers back in the stores.”
— Posted online by “Dick W” 

“I think the reason why the home improvement industry does so well is because it is designed to weather all kinds of markets. When the economy is good, more people buy houses, and thus contribute to the demand for home improvement. When the economy is down, instead of buying new houses, homeowners decide to improve on their existing houses, hiring services like cavity wall closers or renovators. Thus, the industry can weather all kinds of economies quite well.”
— Posted online by “AlexCavity”

Flying on the company’s dime
The following refer to an article about Tractor Supply Co. CEO Jim Wright’s recent declaration that he always flies coach.

“We have never flown first class unless we were bumped up. Never paid for it in 41 years.”
— George A. Pattee
Chairman and CEO
Parksite

“At Bostwick-Braun, we ALWAYS fly coach.”
— William R. Bollin
Chairman and CEO
The Bostwick-Braun Co.

“My strategies regarding air travel is not to fly whenever possible. It’s a royal pain.”
— Bruce Currie

The danger of antidumping laws

“Disputes over dumping — selling products in the U.S. market at prices below the cost of production or for less than what the products are sold in the home market — are a major thorn in the side of companies wanting to do business internationally. The United States enacted the antidumping law to protect U.S. manufacturers from ‘unfair’ imports, but the real impact is to bankrupt legitimate U.S. companies and destroy U.S. jobs.

“Antidumping actions have spread to cover imported home-building material products, especially from China, ranging from wood flooring, steel nails, steel sinks and solar cells to ironing tables, just to name a few.

“People may argue that the antidumping law is protecting U.S. industries from unfairly dumped imports. To win an antidumping case, a U.S. industry — which can be a single company — needs to convince the U.S. Commerce Department that foreign exporters are dumping, and the U.S. International Trade Commission (ITC) that the practice has injured the U.S. industry.

“But the Commerce Department finds dumping in 95% of cases. With 30 years of work in this area since 1980, first in the government and later in private practice, I can count on one hand the number of times the Commerce Department has made a no-dumping determination and stopped the case. Since antidumping cases against China represent more than 90% of U.S. cases, it is important to understand that pursuant to the Commerce Department’s methodology, almost all Chinese companies are considered to be dumping with no evidence they are doing so.

“The real damage of an antidumping action, however, is not to foreign/Chinese companies, but to U.S. companies — importers, distributors and downstream producers. Chinese companies do not pay antidumping duties. U.S. import companies by law are liable for antidumping duties, and the importers can be retroactively liable if those antidumping duties go up in subsequent review investigations, which they often do.

“More importantly, antidumping cases do not help U.S. companies injured by imports. Importers simply go to another country, such as Vietnam.”
— William E. Perry is an international trade law partner at Dorsey & Whitney. From 1980 to 1987, Perry was an attorney in the antidumping area at the ITC and the Commerce Department.
Click here for his full commentary. 

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