Kitchen & Bath Design News

OCT 2013

Kitchen & Bath Design News is the industry's leading business, design and product resource for the kitchen and bath trade.

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Survey However, here, too, storage remains a priority, with more than half (52.8%) of those surveyed saying clients want more and/or better storage. More than half (51.2%) also would like to replace their tub with a larger shower, survey respondents reported, while 48% are concerned with accessibility and 44.1% are prioritizing money savings. Again, water savings and green issues seem to have fallen of the map, with only 4.7% of dealers and designers polled saying these are a client priority. AVERAGE EXPENDITURES Just a few years ago, getting consumers to spend any more than the bare minimum on kitchen and bath remodeling was a major challenge. While consumers are still buying cautiously, they seem to be loosening the purse strings at least a little bit, if the survey results are any indication. In fact, more than 42% said their clients are spending more than $40K on a kitchen remodel (see Graph 7), compared to a survey two years ago that showed fewer than 30% spending more than 40K. Breaking it down, 7.9% of dealers' clients are spending less than $15K,13.4% are spending $15,000-$20,000, 19.7% sp end $20,0 01$30,0 0 0, 16.5% sp end $30,001-$40,000 and 14.2% spend $40,001-$50,000 on their kitchen remodel. At the higher end, 16.5% of their clients are spending between $50,000 and $75,000, 7.9% are spending $75,000-$100,000 and 3.9% are spending $100,000+ on their kitchen remodel. In the bath, more than 45% of consumers are investing $15K+ on their bath remodel, with 19.1% spending $15,001-$20,000, 6.4% spending $20,001-$25,000, 13.4% spending $25,001$40,000 and 6.3% spending in excess of $40,000 on their new bath (see Graph 8). ➑ Average Expenditure on a Complete Bath Remodel 7.9% 6.3% Under $5,000 $40,000+ 13.4% 16.7% $25,001$40,000 $5,000$7,500 19.1% $15,001$20,000 18.3% $10,001$15,000 6.4% $20,001$25,000 11% $7,501$10,000 KEY DRIVERS As far as what drives the buying decision, it may not be what you think: In these days of high-tech everything, dealers and designers polled still find their clients are most swayed by personal referrals from friends and family, the reputation of the designer and/or design firm and the rapport that develops through the sales process (see Graph 9). I n fact , dea ler s a nd designers polled cited referrals as the number one factor driving the buying decision (cited by 73.6%), followed by the reputation of the designer and/or design firm (69.8%) and the rapport with the designer/ salesperson (69%). What does that prove? Quite simply, for most consumers, when bringing a stranger into their home to remodel their most intimate spaces, it's still about trust. The ability to meet budgetary needs was also cited by 42.6% of those polled, a key decision driver for their clients, along with the quality of the design plan for the space (37.2%). Interestingly, online ads, social media and even the frm's Web site scored very low on the list of key drivers 40 | Kitchen & Bath Design News October 2013 in the buying decision. That's not to say that these aren't important, as there's plenty of research showing the importance of a frm's online presence in attracting clients in the first place. As one survey respondent pointed out, "Clients used to 'pre screen' companies by visiting their showrooms; now they screen them online and only go to the showrooms they feel will be a good ft for what they're looking for." However, to actua lly close the sale, it's clear that it takes more than a good online presence, but rather the ability to establish trust with the client. When asked to identify other key drivers for buying a kitchen or bath right now, a nd how t his has changed over the past few years, responses varied from economic-based ones to functional concerns to demographics-related drivers. Below are a sampling of their responses: • "Our mature clients and baby boomer buyers are looking for their 'forever' kitchen and want all the bells and whistles and extremely personalized touches for their dream kitchen. They are designing for themselves. Our Gen Xers still may have resale in mind and will be more cautious about some of the 'trendier' selections. However, both types of clientele are looking for the 'wow' factor." • "In the past few years, it was necessity that drove clients; currently it is some extra equity or retirement money that is purchasing the project." • "When the economy was at its worst, no one would do anything that wasn't essential, but now clients are looking to update their current property so they can enjoy it for a few years before they sell it somewhere down the line." • "People are no longer changing homes every fve years so they are interested in upgrading their living space rather than moving to another home." • "Deferred maintenance and functional obsolescence cannot be ignored any longer. Many have postponed remodeling because of the economy and diminished equity in their homes, but they can't ignore the plumbing leaks and broken appliances, so they are biting the bullet and paying for the improvements rather than making minor repairs." • "Budget is still king. Most of our clients feel they need the change, not that they want it. • "Kitchen layout is opening up to the rest of the house, so the walls are coming down." • "Price still seems to be the biggest factor. Quality and warranty are the next two biggest factors." • "Clients are feeling more optimistic about the economy. House sales have improved, so updating and adding value to their properties is back as a motivating factor." • "Finding quality cabinets for the lowest price possible is the number one priority right now, where that was number two or three in importance in the past. Consumers today are very afraid of 'over improving' their property." • "Two drivers we're seeing are people renovating homes after a parent moves to assisted living or passes away, and baby boomers wanting to fnally get their dream kitchen or bath in their existing house." • "A key bathroom driver is often water leaks. Key kitchen drivers can include functionality/storage, the need to update a 'tired' kitchen or the failure of existing appliances. These drivers haven't changed too much since the beginning of the Great Recession, but people are becoming more confident lately about investing in a new kitchen or bath." • "Many consumers have waited, but now have settled on going forward with a remodel. Many appreciate new technologies and products and want to incorporate these into a design." Factors That Drive the Buying Decision Referral from friend/relative Reputation of frm/designer Rapport with designer/salesperson Ability to meet budget needs Design plan for space Product selection Showroom displays Firm's Web site Print ads Radio or TV ads Online ads Firm's social media 73.6% 69.8% 69% 42.6% 37.2% 23.3% 17.8% 10.1% 3.9% 3.1% 2.3% 0.8%

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