In addition to my role as executive vice president and general manager of Epicor’s Retail Distribution Group, I own a number of gourmet sandwich franchises in Oregon with my daughter and son-in-law. You would think these two jobs wouldn’t overlap in any way, but my recent experiences in the fast food industry have helped me identify a significant trend that I would like to share with LBM dealers.
The fast food business is dominated by young people. The average employee is 22 years old and our target customer is between the ages of 18 and 35. When I show up at my restaurants, I frequently work with employees who are 30 years younger than me, and I am struck by the sharp differences in our ways of thinking about work and life in general.
Ambitious youths have clashed with their established elders for thousands of years, and it is no great revelation that different generations don’t always see eye to eye with each other. However, I think that the rift between baby boomers and millennials is larger than any we have ever seen, and the generational transition we are currently experiencing is going to be one of the most difficult.
I believe the differences in ideologies between these two generations is large enough to cause a “structural break”--a time when past patterns and trends stop and new patterns and trends begin. As we transition away from the ideals of the traditionalist/baby boomer generations to those of the generation X/millennial generations, we are seeing many trends and patterns change … and they may be changing for good.
What does this mean to lumber and building materials dealers? If you are seeing a shift toward younger homebuyers and younger contractors in your market, you should take measures to offer the products and services that appeal to this younger customer. Millennials were raised in the Internet Age, and seek the instant gratification the Internet offers them. You may have seen the news stories of Amazon with its fleet of drones flying around making same-day deliveries. I don’t think we will be seeing anything like this in the LBM market anytime soon. However, I do think millennials are pushing the markets toward shorter delivery cycles.
It is also important to note that millennials are not driven solely by the almighty dollar. They are very interested in purchasing based on their social values and ideals, and we are already seeing values-based buying gaining momentum in the construction industry. According to a 2014 McGraw Hill Construction study, the green share of new single family residential construction has grown from 2% in 2005 to 23% in 2013, and 96% of American homebuyers said they are willing to pay more for a home with green features. Do you offer the right product mix to attract the growing number of green builders and contractors?
Every regional market is different, and I will leave it to
you to decide for yourself if this shift taking place in your market. However,
I recommend that you keep a close eye on this trend, embrace the inevitable
changes brought on by time and make the necessary adjustments to ensure the
success of your business.