Design Firms, Suppliers Scrambling to Adapt in Face of Coronavirus Pandemic

WASHINGTON, DC — Kitchen and bath dealers, remodelers and design firms, like businesses across America, are being significantly impacted by the COVID-19 outbreak and are implementing a wide range of mitigation strategies in response to a highly fluid public health crisis that’s already having a major impact on corporate bottom lines.

According to an online poll conducted last month by Kitchen & Bath Design News, a whopping 87.6% of surveyed dealers, designers and remodelers report that the novel coronavirus is having a palpable operational impact on their business – with 36.4% reporting that the impact is “significant,” 29.5% saying it is “moderate” and 21.7% saying it is “marginal.” In contrast, only 12.4% of surveyed design pros report that the virus is having no noticeable impact on their operations at the current time.

Similar percentages of dealers and designers report that the virus is also having a significant impact on current and anticipated 2020 revenue and profit, as they witness uncertain, frightened kitchen/bath consumers cancelling projects and postponing remodeling decisions in the face of stock market volatility, job layoffs, pay cuts, social-distancing requirements and declines in personal wealth.

Specifically, 42.6% told KBDN that the virus will have a “major” negative impact on 2020 revenue and profits. By comparison, 38.0% say the negative impact is expected to be “moderate,” and 15.5% say it’s expected to be only “marginal.” By comparison, only 3.88% of those surveyed say they expect no impact on 2020 revenue and profits at all.

The spreading public health crisis is also forcing companies across the entire spectrum of the kitchen/bath, new construction and residential remodeling markets to implement strategies aimed at mitigating the impact the virus is having on businesses, employees, customers and personal lives.

Businesses of all types – including kitchen/bath dealerships, design firms, remodelers, architects, cabinet shops, fabricators and contractors – are reported to be in a virtual state of paralysis: voluntarily, or being forced to, shutter factories, showrooms and shops, cancel or postpone client meetings, radically revise operations, and require employees to work remotely. Manufacturers, distributors and importers, similarly shaken by the spreading outbreak, are also facing significant travel restrictions, sales slowdowns and supply chain disruptions.

In terms of business operations, 56.7% of those surveyed by KBDN say that they’re managing to conduct business as usual thus far, although 4.7% have suspended company operations entirely for the foreseeable future, 24.8% remain open for business but have closed their showroom(s) to visitors, 17.8% remain open for business but have reduced business hours, and 17.1% have reduced operational overhead.

In other survey results, 59.7% of those polled report that they’ve experienced uncertainty/delays in client decisions, 36.4% have experienced kitchen/bath project cancellations, 42.6% have stopped visiting client homes or job sites and are limiting in-person contact and 55% have canceled, or are considering canceling, attendance at trade shows, conferences, industry meetings and other live events in 2020.

Among other findings regarding business operations:

  • 28.7% of those surveyed have faced production slowdowns or delivery dates from suppliers.
  • 2.4% have started reassessing overseas (e.g. China, Korea, Italy) supply sources.
  • 7.8% have cut back on marketing efforts.
  • 17.1% have expanded or are revising their marketing efforts.
  • 51.9% have spent time reassuring worried consumers.
  • 45.7% have made concerted efforts to sanitize their showroom.
  • 41.1% have cancelled or postponed appointments.
  • 27.9% have revised revenue and profit forecasts.
  • 17.8% have mandated associates to work remotely, if possible.
  • 45.7% have communicated with clients about delays, etc.
  • 20.2% have delayed anticipated hiring.
  • 15.5% have delayed anticipated showroom expansions, product line additions and other investments.
  • 38.8% have readjusted project timelines.
  • 27.9% have experienced a slowdown in sales leads.
  • 24% have contemplated layoffs, salary reductions, eschewing personal paychecks and/or other major cost-cutting moves

Design firm owners and employees are also finding constructive ways to utilize the time if they’ve temporarily closed their showroom or have projects on hold. For example, 41% of those surveyed say they’re working on better organizing their business, while some 35% say they’re working on strategic planning for the future and a similar number say they’re working on developing marketing strategies for when business conditions improve. About 32% say they’re spending time researching new products and/or business practices. A similar number report that they’re ramping up social media efforts, email blasts or other communications, while 24% say they’re investing time in online training and/or improving their skills or the skills of their staff.

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