The annual International Builders Show and Kitchen and Bath Show is one of the largest conferences in the country. Over 55,000 attendees crammed the Orlando Convention Center for the last time (back to Las Vegas for the next 10 years) to learn and connect with industry leaders. Ben Bruggemann and I spent our time connecting with clients, seeing new products and exploring the latest trends impacting the home, building product and consumer durables industries. Here’s some highlights from the show:
One trend that seems consistent is an effort to differentiate from the competition based on issues that might seem minor. A classic example is the battle of ice creation in refrigerator/freezers. While LG is excited to introduce craft ice that you might find in an expensive cocktail, Whirlpool decided that ice nuggets similar to a drink at Chick-fil-A was the way to differentiate. Rather than focus on ice, KitchenAid decided to make a water dispenser that is self-activating and able to sense how much to fill your dispenser. (A concept we researched in another platform for a brand focused on water. It was interesting to see the idea in practice.)
For those who struggle with determining when to take something out of an oven or what temperature is best, smart ovens with cameras are the latest. There’s an interesting debate about where to put the cameras as one supplier to the industry raised questions about a manufacturer’s approach with the camera in the roof of the unit. “What happens when food splatters? Do you have to clean the lens?” Watch the online comments over the next year to find out where camera placement works best.
Rather than focus on technology, Sharp decided to put a lip on its gas stove to eliminate that annoying crack between the cabinet and the unit.
Looking to distinguish on style, several manufacturers now allow consumers to choose the finish and color of the handle they have on their stove or other appliance. This approach has been popular in lav faucets for some time, but extending this to the kitchen with a higher-end look gives consumers more to think about in the purchase process – because style often trumps functionality.
Tiered branding is everywhere. From manufacturers to suppliers to builders, it seems there are entry points for the masses, higher-end and then extreme luxury. Recognized higher-end brands are now facing regional knock-offs that have all the look and feel of luxury, but brag that they cost less than their competition. One copycat manufacturer’s approach to innovation to the high-end buyer: look online at problems and delighters in comments about products in their category. Then build best-of-breed for cheaper.
Outdoor decks are changing as simple composite products look to compete for the big spenders. From price points of $1.69-$3 a linear foot for traditional composite, patterns that mirror Brazilian wood or other top-end natural products are available for about $9 a linear foot. Even Toto, with toilets costing up to $30,000, is facing competition for the extreme luxury buyer.
Why go high end? According to the builders we talked to that’s where spending is happening. People 60+ moving from their current home into their “final home” that is designed for them with room for visitors. It’s not unusual for them to pay cash for custom built, with all the upgraded features they want. For more on the issue of how seniors are driving the spending market in this increasingly K-shaped economy, you’ll want to read a recent Wall Street Journal story on the issue. (Sorry, no free link.)
While many of the new home buyers can afford it, not everyone is loading their home with the latest technology. Some want simplicity – so even homes costing $1-2M might not be tech intensive. The same trend could be found in products as diverse as outdoor grills. A full outdoor kitchen can be costly – think $7,000+ for just the grill – featuring the best grilling options. Many have built in technology. One major manufacturer simplified their on-screen technology because of the risk of problems with the gauge/screen from weather events. One storm and you run the risk of a $4,000 charge to replace the door/accompanying screen technology.
Like every industry conference, this one was filled with AI discussions. From production to highly custom builders, AI is being touted as the tool to help create efficiencies. Think change orders quickly flowing through the system connecting product ordering, delivery and labor allocation. While the biggest builders have the resources to engage tech-savvy professionals on staff to take the lead, it’s the custom and semi-custom builders who are looking for support. It’s not unusual for the ‘next generation’ of these family-run businesses to step up and help guide AI integration efforts. The parents and grandparents who have been in the business for years but recognize the sea of change look to take advantage of AI to smooth out the process management challenges inevitable in the industry.
From financial services to the products that build and fill our homes, where people live and how they spend their money in their home is an indicator of broader market dynamics. This huge show points to a continued bifurcation in spending driven by age and accompanying wealth. If you attended the show or have thoughts on this, we’d love to hear your perspectives. Please drop Ben (bbruggeman@marketvisionresearch.com) or me (ksteigerwald@marketvisionresearch.com) an email with any reactions or comments, or to learn more about how we’re working to help clients better understand this competitive industry.
