Will there be a recession in 2020? Who will win the presidential election? Those are worthy short-term concerns, but my horizons—and I’m sure, yours as well—stretch way beyond the next 12 months. Here are five industry trends that I believe you can count on developing in this new decade.
Individualized Online Purchasing:
E-commerce in LBM has been stymied by the fact that every price quoted has depended on a slew of factors that were previously too complicated to put into a computer. But I believe we’re nearing the day when your customers will be able to buy goods online based on customized price quotes and their credit line. The computer power will be there. The challenge will be whether you can create formulas to tell the computer how to set prices. You might have to give up a few sales reps and hire a few programmers.
Dealer Builders:
There’s a rush by big LBM operations to buy or invest in truss and other component plants, and you’re seeing execs contemplating whether to get into or expand installed sales. Both trends reflect builders’ continued desire to subcontract any part of the job that actually involves going to the jobsite. Increasingly, you’ll be the builder—often out of necessity. Big builders will become less likely to hire you if your value proposition is based solely on selling and delivering goods.
Fewer Takeoffs, More Consulting:
Building Information Modeling (BIM) systems not only make it possible to design a home in 3D, they also produce a list of every stick used to build the structure. When that happens, you won’t be needed to create the takeoff. But I don’t think you’ll be out of work, because your clients will suddenly discover the value of the quality control work and error-spotting that you’ve been doing on their plans. You’ll become consultants, and may even get involved in a project as the plans are being created.
Big vs. Small Towns:
There was a time when construction supply companies were identified based primarily on which products they sold most: Lumber vs. roofing vs. drywall, etc. That distinction is fading as specialty dealers expand into just about every category except commodity lumber. In the future, we’re more likely to categorize dealers based on how big a community they serve. The smaller the setting, the more likely that a dealer will be a something-for-everyone establishment with a heavy emphasis on remodeling and retail rather than new construction. The bigger the setting, the more emphasis you’ll see on new-home construction, big builders, and components.
Demography Is Destiny:
The most common age for a white person in America today is 58. For a Hispanic person, it’s 11; for a black person, it’s 29, and for an Asian person, it’s 27. We’re becoming a minority majority nation, in which the style preferences of ethnic groups will play a role in home designs (e.g., wok kitchens and extra-big spice cabinets). We’re also getting older, and that means more attention must be paid to aging-in-place renovations. Finally, these demographic changes could signal that the era of “pale, male, and stale” LBM executives is nearing an end.
I have long contended that nobody knows more, cares more, and does more to affect the built environment in your community than you do. I think that will be even more the case in the 2020s.
