A Market of Perils and Possibilities According to HomeAdvisor’s 2018 - PowerPoint Presentation

A Market of Perils and Possibilities According to HomeAdvisor’s 2018 TrueCost Report, the shortage of homes for sale and increasing home prices and mortgage rates have prompted many homeowners to keep their current homes and upgrade, a positive trend for the kitchen & bath market. The report also revealed 67% of current homeowners would buy a new home to match their lifestyle and requirements better, which is why 84% said they wouldn’t put their home on the market for the next 12 months (through March 2019). Even though many homeowners plan to renovate instead of buying a new home, many will be hiring general contractors and remodelers who continue to have difficulty hiring qualified professionals and who expect product and materials costs to increase.

Baby Boomers and Millennials Are Top Target Audiences Millennials and Baby Boomers are both spending considerable dollars on home-improvement projects, which is very good news for the kitchen & bath industry and remodelers, according to the HomeAdvisor 2018 TrueCost Report. While Millennials completed the most home projects during the 12 months ending March 2018, or 42% more than Baby Boomers and 18% more Generation X, Baby Boomers spent the most money, or 32% more than Millennials and 14% more than Generation X. With fewer “starter homes,” or those priced less than $200,000, available for first-time Millennial buyers, 83% of them anticipated spending more on improvements to their existing homes through March 2019, and more than half will spend more.

Homeowners Know Why They Want a New Kitchen The 2019 US Houzz Kitchen Trends Study finds the top two reasons homeowners want a new kitchen continued to be “can no longer stand the old kitchen,” 34%, and “finally have the means,” 33%, although both reasons have been declining since 2017. A smaller percentage (35%) of homeowners said they were opting to enlarge their kitchens, compared to 41% in the 2018 study. Baby Boomers were more likely to enlarge their kitchens and equip them with aging-in-place upgrades and conveniences. 83% of homeowners planning a kitchen renovation hired a professional, with a general contractor first, at 50%; followed by kitchen designer, 20%; interior designer, 14%; architect, 12%; kitchen remodeler, 11%; and lighting designer, 2%.

Kitchen-Upgrade Preferences Although transitional, at 21%, and contemporary, at 15%, were still the top 2 kitchen styles homeowners would choose, according to the Houzz study, the farmhouse style increased 2 percentage points from 2018, to 14%, while the other two decreased. Cabinetry is a primary feature of a new kitchen and the Houzz study found that custom cabinets, 41%, and semi-custom cabinets, 33%, were the most popular makes while the favorite primary door style remained shaker, at 57%, with flat-panel, at 19%. Color is also a critical design element and, although white remained the top cabinetry color, at 42%, wood increased by 3 percentage points, to 28%. Multi-colored was #1 for countertops, white for backsplashes and gray for kitchen walls.

Personalization of Existing Home Drives Bathroom Renovations According to the 2018 US Houzz Bathroom Trends Study, “want to personalize a recently purchased home” had the largest increase as a motivation for a bathroom renovation, or 2 percentage points from 2017, to 26%, indicating a pent-up demand has waned. The study also found 46% of homeowners planning a master bathroom renovation included the remodeling of the master bedroom, with 81% choosing a complementary design for both rooms. Upgrading the master bathroom’s systems was the #1 major change for homeowners, at 62%; followed by modified walls, 47%; changed layout, 44%; modified floor/ceiling, 15%; and changed room location, 7%.

Homeowners’ Master Bathroom Styles and Features Preferences Although the contemporary style continued to be #1 during 2018, at 20%, it has been declining, from 26% during 2016 and 23% during 2017. As with kitchen renovations, farmhouse, although still small, has gained appreciably, from 3%, 2017, to 7%, 2018. Although white was still the top color choice for bathroom cabinets, or 34%, gray was the favorite color for walls, at 32%, and flooring, at 29%. Tile is a major product used in master bathroom renovations, and brick was the dominate choice among homeowners, at 66%; followed by grid, 11%; herringbone, 7%; random, 6%; hexagon, checkerboard and diamond, at 4% each; and lacework, 1%.

Advertising Strategies With Baby Boomers a prime target audience for kitchen-and-bath renovations, TV and direct mail are a perfect combination to offer products and/or services that help them stay in their homes longer and add safety and convenience features. Use the Major Kitchen Built-In Upgrades table on page 2 of the Profiler to feature and promote with a discount one of consumers’ favorite upgrades for consecutive weekends throughout the spring. A kitchen-and-bath store could promote itself as a “Young Homeowner” specialist, emphasizing products, styles and features that are specifically appealing to Millennial homeowners.

New Media Strategies Use the data on page 1 of the Profiler and HomeAdvisor to create social media posts that help consumers understand the actual costs of various home projects. Include tips about how consumers can plan their projects to be more affordable, but still of high quality. Host a “My Ugly Kitchen” or “My Ugly Bathroom” contest, asking people to post photos and/or videos on retailers’ social media pages. Ask everyone to vote for the ugliest, and then award the winner with a heavily discounted package of products to renovate. Use social media posts, preferably “explainer” videos, to highlight consumers’ premium master bathroom renovation preferences in the table at the bottom of page 3 of the Profiler, and offer a discount when customers buy two or more with one purchase.