As 2017 winds its way toward the halfway mark, it seems like a good time to assess the overall kitchen and bath market, as well as how business is looking for the rest of the year and what challenges lie ahead. And, for kitchen and bath dealers and designers, the news is largely positive right now: Revenue projections are up, profit margin expectations are up, consumer confidence appears strong and the overall market is seeing steady growth.
In fact, according to a major new cost-of-business survey conducted on behalf of Kitchen & Bath Design News by its exclusive research partner, the Research Institute for Cooking & Kitchen Intelligence (RICKI), a whopping 81% of kitchen and bath firms surveyed are projecting increased revenue for the current fiscal year over the previous year, with average revenue increases of 15% being projected for 2017 as compared to 2016 (see related story, “On the Rise“).
Nor is that growth just a matter of dealers and designers spinning their wheels but not seeing the benefits of working harder: Indeed, 59% of those polled projected increased profit margins as well as increased revenue – meaning today’s kitchen professionals aren’t only selling more, they’re also selling smarter.
Staffing is also on the rise, with roughly half of those polled having increased the number of installers they employ, and a third saying they’re hiring additional design and sales personnel. All of which continues to fuel the largely positive outlook espoused by kitchen and bath dealers and designers who, according to the survey, are largely feeling good about current and future business prospects, and the economy as a whole.
But that doesn’t mean there aren’t still challenges ahead. An improved economy has led to labor shortages and higher employee and subcontractor costs, and product costs have also seen increases.
Additionally, unrealistic budget expectations among clients continue to beleaguer many design professionals. So instead of battling the economy, they are battling misconceptions from consumers educated by TV shows that showcase 60-minute kitchen renovations (minus commercial breaks), along with a growing generation of millennials who were essentially raised online, and who struggle to understand that buying a new kitchen or bath isn’t the same as price shopping the newest iPhone.
In fact, confident, tech-savvy, visually-driven and budget-conscious millennials offer their own set of challenges, as they have strong preferences, both in design and in how they want the sales and design process to evolve (see related story, “Millennial Matters“).
Online competition, struggles to determine the most effective marketing tactics in a quickly changing landscape and the need to keep up with new and sometimes time-consuming technology also present challenges.
Yet despite these, kitchen and bath dealers and designers who are able to adapt their businesses continue to flourish. And this seems to be true with firms of all sizes.
In fact, in this month’s Portfolio of Showrooms story, dealers with showrooms ranging from 1,600 sq. ft. to 12,000 sq. ft. prove that winning showroom strategies can inspire sales in any size space – as long as it truly speaks to the clients’ needs and desires (see related story, “Visualizing Dreams“).
While the showrooms spotlighted in this issue come in many different configurations, with dramatically different displays and design philosophies, what all of them share is the ability to adapt to the ever-evolving needs of their clients, and to bring homeowners’ dreams to life.
Of course a strong market is a wonderful thing. But the ability to solve people’s problems and help them realize their dreams will always be the ultimate fuel that drives success. ▪