Building materials manufacturers will face a lot of changes in the coming months. The challenge is that most of these changes, while important, will appear to be small. Because of this, they will be easy to ignore.
Building material manufacturers are frequently guilty of ignoring small opportunities and changes in the market until they are smacked in the face. It’s only when they are threatened that they wake up and react.
When they react they are trying to catch up rather than lead.
Here are the trends for building materials sales and marketing
- More of the Same.
Probably the biggest trend I see from manufacturers is no change at all. I believe that most of them will keep doing what they have been doing while trying to reduce costs. Most of them will not take the time to step back and question their approach.
- Big Boxes Lead Innovation.
Lowe’s and Home Depot will continue to develop and test innovative ways to grow their sales. Manufacturers will simply follow along and still be afraid to try to get ahead of the big boxes in the area of innovation.
- Trade Show Changes.
Trade shows are a big expense for many building materials manufacturers. Hanley Wood, who controls many of the leading building materials shows, has sold that business to Informa PLC, a UK-based publishing and events company. I feel that Hanley Wood has improved the shows they managed.
I have no reason to believe that Informa won’t also do a very good job managing the shows. There will be changes and building material manufacturers need to look for these changes to see how they will affect their business.
They won’t be just trying to sell you booth space, as they will want a bigger share of your marketing budget. You will be offered packages of services that include booth space. This raises the level of dealing with the show above your trade show manager.
- Move Online.
As Amazon threatens the big boxes they will continue to work on growing online sales. Building materials companies need to support this and to explore, on their own, selling online. This will likely create some channel conflict but it is too important to not explore.
- Builders Still Hold Back.
Homebuilders will continue to use the same products and construction practices. Builder staffs are too lean for them to seriously look at any big changes. Labor shortages also continue to hold back builder’s growth potential. Big innovation may be the solution to labor issues but this won’t be the time that builders make any big changes.
- Design Build Growth.
In the commercial market, Design Build will continue to grow faster than the traditional architectural specification approach. If Design Build hasn’t already surpassed Architectural Specification, I think it will in 2015.
General contractors recognized this shift a few years ago as they all changed their logos to add the words “Design Build Experts”. We are now seeing architectural firms waking up to this and also adding Design Build to their capabilities.
Manufacturers will begin to wake up to Design Build. A simple measure of this is how most Commercial Building Materials Manufacturers will have a tab on their website that says Architects. I have yet to find one that has a tab that says Design Build. In 2015 you will start to see manufacturers finally begin to recognize this opportunity.
Unfortunately most American building materials companies are very provincial as they see the US and maybe Canada as the only real markets in the world.
Manufacturers from other countries see the world as their market. They will continue to acquire US companies or grow the sales of their products in North America and the rest of the world. US manufacturers will continue to play in their comfortable little sand box of North America while global companies surpass them.
Just like NEST has disrupted the thermostat market, I think we will see some other disruptors in building materials. They may be a new product that makes the existing products irrelevant. Or they may be a construction technique that changes how products are sold and installed.
These disruptors will probably come from outside the industry. They will be hard to spot at the beginning, as most manufacturers won’t take them seriously until it’s too late.
- Slow Growth of Green
Green will continue to grow at a slow pace. The main reason for this is the Green movement has managed to politicize and overly complicate what it takes to be Green.
It used to be much simpler. You could do something like add more insulation and caulk your house. You would see a result and feel that you did something good.
Now you don’t know where to start and whatever you do is either wrong or not enough in someone’s opinion.
For as intelligent as the Global Warming crowd is, I see no sign of them changing their practice of preaching to the choir rather than making real change.
Years ago we stopped forest fires and littering with Smokey the Bear and a Crying Indian. Until Green can be simplified and less politicized, it will continue to grow slower than it should.
10. Income Inequality
Whatever you think of income inequality, the reality is that the rich are getting richer and there are more of them. Many of the wealthy are looking for ways to spend their money, and housing is a very popular choice. They are building new homes as a primary residence and additional homes so they don’t get bored. These homes tend to be large and to be full of the most premium, cost is no object, products. They use architects and designers for these one of a kind abodes.
If you sell premium building products, the market should be good for you if the architects and designers know that you exist. The more exclusive and expensive your product is, the better.
Wealthy people also like to be over the top Green so there is opportunity for products that offer performance as well the ones that are just pretty to look at.
Trends Mean Opportunities
As you can see the trends are for a lot of small change that will not be enough to cause most building material companies to change. Those few companies who see these trends as opportunities will be taking steps to be the disruptor who tilts the playing field in their favor.