As online shopping continues to gain traction, the overall retail experience is becoming more critical to the success of big box retailers. Online product research now plays a huge role regardless of where the purchase ultimately occurs. Whether buying online or in-store, the consumer shopping journey often begins long before the final sale, challenging all retailers (especially big box) to more carefully craft the sales path from beginning to end.
business management predictions
The world is changing around us, impacting North America and ultimately your business. Mergers and acquisitions are increasing. Corporate organizations are realigning. Data is driving new insights. New administration policies are impacting the construction industry. That’s why organizational agility should be your top priority.
- Financial uncertainty. US GDP will slow over next 2-3 years from 2.3% to 1.8%. The Federal Debt will climb to a new high. Oil prices will increase moderately over the next 10 years. As China’s exports decline, it will buy fewer U.S. Treasuries. As foreign investors become more concerned about the U.S. debt, the value of the dollar will decline. All this potentially making interest rates rise.
- Assumed risk will make large corporations more handcuffed. As markets become more volatile and less predictable, risk exists in consumers becoming hyper sensitive on purchases and investing. This will weigh heavily on how corporate leaders set and deliver on goals and shareholder expectations. Businesses react to this uncertainty by hoarding cash, hiring temporary instead of full-time workers, and delaying major investments. Don’t chase the market down, control your own destiny.
- M&As will slow but continue to change the landscape of the industry. While the market will soften, there are still many cash-rich companies due to strong economics and the impact of the tax laws of 2018. As the market softens, risk-adverse companies will save their cash as a contingency to a down market, while the true leaders will invest in strong, relevant and innovative acquisitions and technology that will advance their company and category.
- More C-Suite hires will come from CPG companies. As companies strive for more data and insights, building product companies will hire more leaders from CPG companies who are farther ahead in understanding the value of and utilizing data to drive insights to better control their destiny.
- Organizational agility becomes more important than ever. The momentum of change is the fastest in history. Smart money will be on companies ability to shift gears quickly, have strong data to make good decisions and forecast effectively. Data driven insights will move from beyond just the analysts to programs driven by marketing. Brands that extrapolate data to drive meaningful insights around user/buyer needs for sales, marketing and business efforts will deliver higher ROI.
building and construction predictions
According to Fortune, the construction industry is the #1 industry to be disrupted over the next few years. These changes will come in many forms — regulations, building practices, labor resourcing, value chain make up and use of technology. Don’t let disruption happen to you. Instead, disrupt and cannibalize yourself before someone else does (ala Kodak).
- Starts will slow but remodeling will flourish. New construction will be volatile over the next 3+ years. Put your money and resources on the R&R segment, starting now (actually 18 months ago). No matter what happens to housing starts, what we know to be true is that an unprecedented 6+ million homes were built over 2003-2006. These are coming up on 15-20 years of age. We know these homes will need repairs, replacement and remodeling. Make your products and services relevant to an R&R solution.
- Modular (or “pre” everything) to make major gains. With costs of new construction and labor shortages escalating, there’s a continued need for more efficient and affordable, but still quality, housing. As a result, we’ll see greater growth for pre-fabricated, pre-forms, pre-cast and modular homes and structures. Traditional builders will acquire these technologies and companies (and vice versa) and use their scale to bring to the masses.
- Population shifts that will reshape local economies and the housing industry. Scientists and anthropologists will begin to forecast enormous population migration within the U.S. to the specific areas like the Great Lakes States Region. A major draw to this region is the low incidence of natural disasters, enormous access to natural resources (especially fresh water and abundant timber), open lands for future development, existing public infrastructure in major markets to handle more population and the low-cost of living. Know these key regions and make sure you have placement there.
- Contractors expect to use increasingly more tech to do their jobs. While manufacturers continue to assume contractors that use their products are behind the times, recent research confirms contractors plans on increasing their use of technology to make their jobs more productive and their value greater to clients. This technology will include the use of drones, wearable sensors and automation for material handling. Make sure you know where your product or service fits (or doesn’t).
- Urbanization will gain traction. With the population growth and migration forecasts, we’ll see more housing in urban areas. And not just the usual large cities (like Chicago, NYC, LA). Millennial and Boomers will find new, more affordable locations and make them cool to live in. This migration will influence building types, furnishings, transportation and retail.
channels to market predictions
There is one thing for sure, your place in the value chain has changed and consumers (that includes the trades) have totally different expectations that will continue to change how they value (if at all) your contribution to their overall experience in the selection and purchasing processes.
- The existing value chain is outdated. You need to decipher where you are in the chain and what value you provide today and will need to in the future. Chances are, you’re not providing the same value as ten, five or even two years ago. And because of that, you’re not worth what you once were. So, define how you’ll change your value and place in the chain, or customers will define your worth with their dollars.
- Channels will dramatically change — evolving to a direct model. As brands strive to take control of their value chain from beginning to end, and ensure even better customer experiences, more and more will cut out the middleman distributors and dealers, and go direct. While CliqStudios, UberDoors and others were a one-off exception phenomenon a couple years ago, turn-key platforms like these will soon be the norm. Amazon is coming, what are you going to do?
- Transition from “ship on demand” to a “build on demand” world. Expect more products to be made-to-order, just-in-time or even 3-D printed locally. This will be a game changer for all kinds of materials (especially plastic/resins) that currently cost much more to warehouse, inventory and ship than to make. This could be particularly helpful for remote locations where you can just make as you need (think continuous gutters).
- Retail stores get smaller while distribution centers get bigger. Consumers are getting used to having everything from gifts to groceries delivered right to their doors. Time is a consumer’s most precious commodity. Find your path to rethink the model from manufacturing to the consumer.
customer engagement predictions
An overwhelming 89% of people will leave a brand after one bad experience. Unfortunately, most brands don’t even know when their brand has been abandoned. That’s why customer experience will have the largest momentum of change on your business in 2019. The expectations of consumers evolve daily, and their interactions in other markets (such as apparel, groceries and Amazon) is changing their expectations in all categories in which they purchase.
- Brands will be guided more deeply by users than ever before. As people rely more heavily on product and brand reviews, User Generated Content will become more important to purchase decisions and brand perception and will contribute to a brand’s authenticity.
- Pop-up brand experiences will sky-rocket. More brands will experiment with different spaces and experiences on a small scale. These will be experiential events and retail experiences that excite all the senses bringing in taste, smell and feel to complement visuals.
- Normalization of the artificial and virtual worlds. VR will never replace the real thing but it will continue to grow. AR will find more useful applications to help consumers with purchasing decisions such as trying on glasses and clothes, painting walls and styling your room. Wayfair does this really well now. All of this available just from the existing camera on your smartphone. Businesses adopting AI in 2019 will be able to save costs and accelerate growth, getting an edge over their competitors. AI offers what humans can’t. Real time, 24/7 personalized engagement resulting in data driven customer experiences and real-time tailored marketing strategies.
- Video will dominate. Getting content out fast is key and videos are an impactful medium. Live video, 360/interactive, vlogs (video blogs), searchable videos, YouTube videos showing up in paid search results (in beta testing now) will continue to rise. According to Cisco, 82% of all web traffic will be through video by 2021.
- Personal and professional will continue to mix. And Human-to-Human (H2H) will grow. Personalization of content will become critical to be in the consideration set of potential customers.
- Accelerated adoption of Internet of Things. Technologies like voice search will create opportunities for marketers to offer more targeted and relevant content even though it raises questions around privacy and permissions. Marketers will need to find ways to walk the line between being relevant and convenient versus creepy and annoying. In addition, visual search will rise. Like Google Lens, which recognizes objects and landmarks through the camera app, Pinterest and Snapchat are testing features that allow users to take a photo of an item to find out where to buy it online or search for similar products.
- Social listening will be the largest contributor to research and marketing. Brands will start to pay attention to what their target customers are talking about and use that to shape their product innovation, CAPEX spend and marketing efforts. Content is not just king, it’s now critical. Large B2C companies have a centralized content hub of 20-30 people constantly creating and monitoring what is being said about them and their competitors. This philosophy will trickle into the B2B world this year. We don’t see a 20 person team formalizing in building products, but companies should dedicate at least two to three people to capture and analyze this valuable data.
customer influences predictions
Probably the biggest momentum of change is occurring in the ever-changing expectations from customers. Ways and depth of engagement is changing everything we once knew to be true.
- B2B is acting like B2C. Contractors are consumers first. They use the same smartphone (nearly 90% of them have smartphones) for business as they do personally. Smart brands are starting to treat B2B customers like a B2C customer because they have the exact same expectations around service and information.
- Millennial engagement expectations will continue to shape the way everyone interacts with brands. With time being the most important attribute of dealing with a brand, companies will integrate hyper convenience into their products, services and path to market. Instant gratification will drive a new distribution channel approach. And Americans will continue to consume information on their schedules, 24 hours a day.
- Sustainability will start to matter more in brand choices. Millennials will continue to care about how the companies they purchase from treat the planet and treat their employees.
- Evolution of transportation will change where and how we live. With the growth of ride shares, driver-less cars and public transportation, Architects are now reducing square footage of parking garages. They are actually constructing new buildings differently (with electric and plumbing channels), knowing these parking lots will ultimately not be needed and therefore transition into community or living spaces.
But wait… there’s more. Because we are not all business all the time, we wanted to share some fun and interesting predictions for 2019.
- Finding a better balance between traditional and innovative. With all the chaos and divisiveness in the world, people will start focusing on staying close to home, helping neighbors and prioritizing family. More consumers will shop local and bring more acts of kindness in small ways to counteract the negativity. With all the hacking and stealing of information through the internet and social media people will start minimizing their exposure and go back to more traditional means of communicating off the grid.
- The Cleveland Browns will win the 2020 Super Bowl. We predict their 2019 regular season will bring a strong resurgence. You have to believe in the possibility.
- The 2:00 marathon mark will be broken. Eliud Kipchoge will break the 2:00 mark for the marathon (an almost inhuman feat), leading the way for more unique training regimens for all those passionate about running. For the rest of us, let’s get our butts back in shape for real this year. Run or walk a 5K (3.1 miles) each week and see what happens. If you do, you can burn nearly 8,000 calories in a year.
- Landline phones and cable are the minority. Households with landlines will have dwindled to well under 50% mark. And cable/dish TV service companies need to watch out. This trend is also coming for you as the vast majority of the Millennial population feel it’s absurd to pay for cable when they merely get any show they want on any device. Are you a Slinger?
- Elon Musk will meltdown and Tesla’s future will be uncertain. Changing regulations and tax credits will hurt Tesla’s future, and Elon Musk’s lack of/erratic focus will drive uncertainty in his brands. This will have impact on pushing innovation to a new level. However, a bevy of new innovators will appear, which will increase the momentum in new sectors.
- Beets are the new Brussels sprouts. Beets will replace Brussels sprouts as the go-to appetizer. And food trends will stretch this year to some funky places. Desserts will include hummus, cheese flavored teas, nitrogen gas infused everything (coffee and ice cream), doughnuts are the new dessert (duh!), and lemonade everything is the new black. Pack your Tums.
- 2020 Color of the Year is fresh (or not). Pantone predicts “Living Coral” will be the 2019 color of the year, influencing everything from fashion to automotive, home furnishings, paints, walls coverings and flooring. But with potential dark clouds on the economic horizon, could we see “Not-Quite-Black”? Deeper shades of the color wheel — dark blues, greens, grays and even browns that almost read as black.
- Pets make homes smart. Most American houses have become "smart homes" with 61% of pet owners having at least one form of smart technology. This will extend to pets in 2019. More than half (56%) of pet parents will have special pet tech set up in their homes, from pet cams to app-controlled feeders.
- 2019 will be the year of “bite-sized travel.” More organized travel itineraries mean shorter time frames. Thanks to improvements in online booking experiences and on-demand car rentals/accommodations, micro trips (weekend trips) will become the more sought-after travel experience.