Mark Mitchell’s excellent Whizard Strategy Blog recently reported on 10 Trends in Building Materials Sales and Marketing in 2015. Mitchell focuses on consulting manufacturers in marketing their materials — an intriguing niche, because of the different channels of distribution, including big box retailers (who sell both to contractors and do-it-yourself consumers), specialized wholesalers and in some cases direct-to-contractor services. As well, of course, there are issues with specification/design and contractor take-up and installation processes (or unwillingness to change). It’s a massive, complex and daunting market-space.
Mitchell says the biggest trend will be “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.
Instead, he says, the big box stores will drive the innovation — not such a good thing for manufacturers, because the stores’ interest in price and volume may not correlate with the manufacturers’.
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.
Other trends (you can read the entire explanation in his blog) include:
Trade show changes
Move online (driven by online leaders such as Amazon.com)
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.
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.
Global — US manufacturers will continue to fail to see the international opportunities even as manufacturers elsewhere continue to grow globally
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”: Mitchell doesn’t see widespread or quick take up of additional environmentally creative initiatives, “until Green can be simplified and less politicized”.
Income inequality: The green slowness exception will be the high-end, where an increasing number of relatively wealthy consumers want the best, and that will include green innovations.
While Mitchell’s ideas focus on the building materials sector, they have relevance for others within the AEC community. A relentless focus on cost reduction and fear of risking to innovate and change can result in the ultimate disaster — a disruptor totally destroying your market. It is hard to take risks and stand out as a leader, of course.