Marketing Home Products

Best From KBIS
Returning to New Orleans to commemorate the National Kitchen & Bath Association’s 50th Anniversary, The Kitchen and Bath Industry Show 2013 celebrated “Laissez Les Bon Temps Roulez” as the good times indeed continued to roll amid a backdrop of positive economic momentum. This annual home and building products trade show is attended by many of the top companies industry-wide.

A limited supply of housing is helping to propel home prices even faster than wage growth… based on land, labor and materials cost constraints. In fact, home prices rose over 7 percent in the first 2 months of 2013, representing the biggest gain since 2006. Wallboard giant, USG, reported its first quarter net profit in more than 5 years, with Q1 operating income more than doubling year-over-year. Industry publishing leader Hanley Wood recently noted that home plan sales were outperforming budget “by far”, with a reminder that builders buy plans only when they’re ready to build.

Remarkable highlights from the KBIS 50^th Anniversary Show emphasized Outdoor Living, Modern Convenience and Fashion-Forward Style from around the world…

Outdoor Living
Cabinetry representing virtually every wood species was on display from notable brands including Wellborn and Wood-Mode; as well as new exhibitor, Elmwood.

However, most impressive was the Stainless Steel Cabinetry from Brown Jordan Outdoor Kitchens… with powder coated color finishes designed to perfectly match their iconic patio furniture line.

Countertop favorites included Silestone’s new Suede Texture, offering a striking matte, velvet surface; and Cambria’s Berkeley Waterstone collection with hints of copper and bronze highlights shimmering amid its bed of sandy quartz tones.

Nonetheless, Danver’s Italian Volcanic Lava Stone tops — glazed in a myriad of durable, hand applied ceramic colors — were clearly the show’s most luxurious surfaces.

Modern Convenience
SecuRemote technology was integrated with Belwith Products’ Keeler Architectural Door Hardware... now providing us the flexibility to operate their dramatic entry lock sets using remote Bluetooth smartphone access.

Rev-A-Shelf introduced a host of “necessories” including the only brushed aluminum door mount waste container system with patent pending Rev-A-Motion soft open / soft close slides. Their Tresco lighting options included L.E.D., Xenon and Fluorescent lighting innovations for the ultimate in cabinet and storage convenience. And, its co-branding relationship with ProMob 3D software imaging gave us the opportunity to view each functional opening from unlimited angles. I understand there’s even an interactive, ergo-dynamic video interface which ProMob is currently developing from its Brazilian headquarters.

Fashion-Forward Style
Speaking of Brazil, drama-seeking KBIS heads really turned for Metalsinos Hardware– featuring semiprecious jewel insets, mined exclusively from the Amazon region. They’re apparently all the rage in Abu Dhabi… recently spotted in the new Abu Dhabi Armani towers!

Challenger Brands White Paper
Yes, as you can see, challenger brands were certainly making their mark alongside industry leaders at KBIS 2013, the popular home and building products trade show. I invite you to download our new White Paper, “How to Win as a Challenger Brand” by Kleber and Associates to learn more about a host of proven competitive marketing success strategies, designed to help your team cross the finish line first.

New York City’s 12th annual Architectural Digest Home Design Show punctuated the beginning of the Spring Season in its typical energetic launch last week. With over 420 exhibitors and approximately 500 premium brands showcased… design enthusiasts, artists, showroom owners, designers and architects flocked to Pier 94 for rows upon rows of designer home brands of furniture and fashion. Everything from art, to carpets and rugs, fabric and trimmings, accessories, lighting, furnishings and kitchens and baths lined the show floors.

Design luminaries such as Dale Cohen, Barbara Horowitz, and Cynthia Barnes of art + interiors addressed one of New Yorker’s (and the country’s) most pressing issues—how to create dynamic style in smaller, existing spaces. The general atmosphere was upbeat and optimistic—a definitive change from the past few years.

There were quite a few head-turners at the show, most notably in the kitchen and bath category – providing a nice tease in advance of next month’s KBIS event in New Orleans. Brown Jordan’s outdoor kitchen collection was recognized as one of the Architectural Digest editors’ top picks as “The very best from the Home Design Show” which included a designer line of custom outdoor cabinetry offered in eight wood grain finishes… all powder-coated over stainless steel. This made-in-Connecticut brand is answering the need of homeowners to expand value and space by creating truly spectacular outdoor living rooms. Brown Jordan offers a wide range of storage and organizational cabinetry, including grill and appliance base cabinets, designed to accommodate every major manufacturer’s grill, as well as various outdoor living lifestyle appliances and products.

Another eye-inspiring brand at the show was Ceramica Design Italia, featuring exclusive ceramic glazed lava stone work surfaces — truly works of art — for both indoor and outdoor use. The beauty is significantly more than skin-deep… based on the strength of the lava stone and the unique process in which this innovative material is manufactured.

Saturated color was one of the prevailing themes at the show, and few companies showcased it as well as NOA Living. A leading source for antique rugs, modern carpets as well as furniture and accessories, the company set the stage by combining ancient tribal design with modern minimalism. The lively, hand-knotted Bagua carpet here is made of virgin wool from New Zealand and “Goodweave” certified… helping to make this colorful brand that much more endearing.

Innovation was a key opportunity for brands to demonstrate at the show. Moonish awed passersby with magnetic, decorative wood tiles that are handmade in Brooklyn. Each tile is dyed and silkscreened on marine-grade plywood featuring a magnetic backing that allows for ease of installation while providing convenient flexibility for creating various geometric compositions.

China’s property market has been a hot topic in the news recently. Yes, property prices have been continuing to rise despite government intervention; but, are they close to overheating? Or instead does China’s housing represent a bubble that the government is actively and successfully deflating? I’m wondering what will come next — and most importantly, if there should be a pop, will it impact the global economy and the U.S. recovery?

Gillem Tulloch, a Hong Kong based financial analyst, was among the first to bring attention to this pending housing inflation in China. In his essay, “China’s Real Estate Bubble,” he points out a potential big problem: China may well be creating “ghost towns” with completely empty towers, neighborhoods and shopping malls. Although they’re adequately financed, hardly anyone lives there. Many in the middle class have been buying homes with fresh money to invest, as pure speculation. 15 years ago, the Chinese government revised its restrictive policy, allowing people to buy their own homes. And as the saying goes, be careful what you ask for. “[Real Estate] is the main driver of growth and has been for the last few years. Some estimates have it as high as 20 or 30 percent of the whole economy,” says Tulloch. He explains that citizens aren’t the only ones to blame. China’s government in fact, has spent some $2 trillion to get cities built as a stimulative means to grow the economy. And have we heard that scenario before? Those like Tulloch, who are close to the industry, agree that it’s devastating to ponder about what could happen if a China housing bubble were to explode.

Despite the negativity about housing’s elasticity and its potential fate, some official reports readily defend the evidence of rapid growth mode, recognizing that the momentum is well within sustainability standards. In “China’s Non-Bubble Housing Bubble,” Kenneth Rapooza, contributor for Forbes, argues that China’s housing escalation is a “non-bubble” and that the government there has done a admirable job of controlling prices. Those prices, he claims — while on the rise — are not out of control. Instead according to Rapooza,  Chinese restrictions have been set forth that require 20 to 30% down payments to buy a home, which provide far less debt for both builders and buyers (and less potential stress on banks).

Yet while the reported ghost cities continue to spread through China, builders are doing what they do best: continuing to build. Most remain confident rather than cautious and evoke instead, a national pride amid the robust economic backdrop. In fact, the larger homebuilders there seem to be immune to the reports of doom and gloom; rather, they are seizing the opportunity in the landscape to overtake smaller companies. Their deep pockets allow for them to better weather the vacancies than may their less-capitalized competitors.

The collective crystal ball here is of course, far from transparent. What will happen if we are witnessing a true bubble and it were to burst? Would the impending outcome be a disaster for the local economy, plunging home values and sparking social unrest? Would the result create serious implications for the international commodities markets from the world’s second largest economy, delivering a domino effect that could felt across the globe? China’s housing bubble isn’t likely to burst without an escalating warning; however, signs are clearly growing. Will the government be able to curb the housing enthusiasm? Some say absolutely, and others say no.

Which side are you on?

While some fear the stock market’s record breaking run this past week was based squarely on the Fed’s stimulative stance, it is clear to me that our economy is looking forward, with compelling evidence that is currently and aggressively fueling the home and building products industry.

Employment growth in housing-related sectors outperformed all other jobs. In fact, residential construction employment was reported up double the overall economy, helping to cut our unemployment rate to a four-year low on Friday… the best rate since December, 2008.

Wholesale inventories rose 1.2% in January – the fastest clip since 2011 – led by the value of lumber stocks, which grew by 3.4%. Keep in mind that an increase of finished goods in inventory would indicate products not moving. In this case however; considered as “raw material” for construction, lumber represents work-in-progress and as such, demonstrates robust channel growth.

Overlay this clear momentum against the number of homes listed for sale nationwide — down in late February by some 17% year-over-year — now at a 4.5 month supply, and we have the foundation for sustainable growth in the homebuilding channel.

So what should we do with this confidence, you might ask? Let’s start with innovation in ramping up product development. Consider emphasizing “lower” and “upper” pricing strategies (for trading-up and trading-down), as middle-tier audiences will continue to feel the squeeze. And yes, we must change from playing defense to offense… delivering on what we do, rather than straddling the oft-comfortable stance of blaming the political or economic environments.

Consumer confidence has been lagging since the beginning of the year, with the affluent in particular expressing skepticism in the overall state of the economy and their personal financial situation. In a recent study of affluent consumers by Unity Marketing, only 23 percent of respondents said they expected to spend more on luxury goods and services over the next twelve months.

With consumers cautious about spending on luxury items, what are marketers of luxury brands to do?

First and foremost, they must recognize consumers’ caution and work hard to help overcome their worries. Messaging should emphasize both high quality workmanship and long-lasting value. Pam Danzinger, president of Unity Marketing and author of Putting the Luxe Back in Luxury, says, “Luxury marketers must focus their marketing messages on quality and value this year as the affluent are reluctant to overindulge in extravagant spending. The high-end customers are signaling caution and marketers need to listen.”

Luxury products need to be positioned as a value proposition – keeping the image and essence of luxury while implying affordable prices. Tom Bodenberg, Unity Marketing’s chief consumer economist, says “People with means want to make smart buying decisions and playing up the quality and value of a brand while downplaying the pure ‘luxury’ of it is key for today.”

This week, the index of US leading economic indicators rose for a second month in January. Notwithstanding, let’s not allow the news about our economic and housing market rebound lull us into a false sense of complacency: it’s time for Congress to tackle housing finance reform. While you have heard my homebuilders’ “glass half full” prognostication for some time; in fact, there remains a significant amount of work yet to be accomplished on the structural side of the business. Amid a current backdrop of political gamesmanship, cabinet staff shuffling and sequestration blame on their collective plates, will housing finance reform be something the government finally tackles this year?

We all realize the housing market anchors the entire economy, and as such, we’re long overdue.

Lee R. Gibson, a community banker in Tyler, Texas, in his article, Memo to Washington: Time to Tackle Housing Finance Reform exclaims, “From my vantage point, I can tell you unequivocally that it is high time Congress take up housing finance reform.” Yes, Gibson sees the big picture. When the housing market is healthy, Americans feel good. When it’s bad, consumer confidence remains sluggish. Who can forget the debilitating malaise experienced during the financial crisis? While we’re now realizing steady improvement in the housing channel, the wounds remain and won’t fully go away until sustainable reform is accomplished. What does Gibson suggest? He encourages Congress to give “positive signals” that provide certainty about the future of housing finance. Admittedly, he and others remain concerned about how we resolve Fannie Mae and Freddie Mac as well as how we strengthen the Federal Housing Administration, among other issues and opportunities.

And Gibson isn’t alone. A number of bankers in the industry are wondering aloud why homeowners are turning down perfectly good opportunities to make positive changes to their own mortgages. While of course, some are taking advantage of these historic low interest rates and appraisal-free refinancing, many homeowners remain hesitant, unsure and skeptical to trust government programs like HARP. In fact, Lisa Price, a mortgage banker for Quicken Loans, laments about one client who recently turned down a refinance that would have saved him $630 a month. Price remains perplexed, as are many others who are trying to persuade homeowners to take advantage of smart and legitimate deals. Surprisingly, only about 25% of homeowners who qualify for the HARP program actually end up refinancing. So what gives?

Pain from both the housing bubble burst and the financial crisis is still fresh. On the encouraging side, home inventories were reported this week to have fallen 25% year-over-year to a current level of just 1.74 million units: the lowest since December 1999. Yet, there are only so many hedge fund assets willing to scoop up depressed housing inventory for their rental investment. Will single family homeowners fully regain their trust again? Not until Washington takes some action, instilling optimism and confidence in our nation. Only then will people act – to provide the sustainable boost that our economy truly needs.

On Wall Street this week, Lumber Liquidators beat expectations while exceeding its revenue guidance, rising over 20% from the earlier year quarter. Similarly, American Woodmark announced nine-month net sales rose 21%, compared with its prior fiscal year. While increases were experienced in all of its sales channel, I was particularly impressed that the cabinet manufacturer’s “new construction” division led by more than 50%. And those new rooms certainly must need new furniture, as even La-Z-Boy beat both expectations on revenues and earnings per share with its margins growing 130 basis points to 32.5%.

Hot Products as seen at IBS 2013

Displayed beneath a dramatic waterfall, the Lemieux Torrefied Collection of Premium Exterior Wood Doors by Masonite was the first of its kind in the wood door industry to undergo protective torrefaction: an all-natural green process where the wood is heated over time to eliminate its tendency to rot.  What’s more, the solid hardwood door, available in four species, glowed with a toasty color as the cell sugars in the wood were literally baked — that also left insects with nothing fun to eat.Helping to further define its leadership role in the category, Masonite also debuted its MAX Configurator, a virtual design tool which simplified the door-ordering process. This unique on-line portal’s breakthrough technology allows dealers and their customers to visualize customized entry, interior or patio doors, while keeping an eye on the overall retail selling price – provided confidently and automatically by local dealers.

While decking choices were numerous, it was railing innovation that really created new found importance. DesignRail® by Feeney aluminum railing kits offered an easy-to-install, attractive, durable and affordable alternative to wood or composite railing.  Its environmentally-friendly aluminum railing offered the benefit of weather resistance, durability and easy maintenance while alleviating concerns for rusting, peeling, splintering or repainting.  And KLEERRail™ PVC Railing System by Kleer Lumber promoted its first architecturally correct engineered PVC railing system, with a unique and sturdy blind fastening construction.

Classic architectural detail surrounded hand-assembled pergolas, arbors, posts and pre-assembled railing from Walpole Outdoors which helped to define the outdoor living room trend. The 80-year old company known for authentic New England craftsmanship introduced its easy-to-install, PVC pergola kits.  The trade channel can choose from over one hundred PVC-safe colors that are factory applied with a twenty-five year warranty, designed to save the contractor time while helping to ensure low maintenance living for the homeowner.

Danver Stainless Outdoor Kitchens Architects, designers, builders and homeowners can now choose from a vast selection of custom colors and realistic wood grain powder coat finishes on stainless steel cabinetry to create a one-of-a-kind outdoor living area. Modular Danver stainless cabinetry provides infinite flexibility in design configurations, and its easy-alignment design system allows for quick, precise installation with less labor than typical outdoor cabinetry. A free Online Design Tool also has been launched for better planning of outdoor living spaces via an easy-to-use, Microsoft® Word format that allows for simple copy-n-paste outdoor kitchen design.

Brown Jordan Outdoor Kitchens from the maker of Danver Stainless Outdoor Kitchens offers an exclusive collection of finishes and doors styles that complement the well known brand’s patio furniture. This new line of outdoor kitchens combines advanced European frame-less cabinet design with refined features, such as “soft close, self-close” drawers to bring outdoor experiences similar to those previously enjoyed only in interior environments.

Colorful Formica® countertops offer a modern, upbeat look that appeals to a new generation of homeowners.

Fresh on the heels of the Pergo purchase, Mohawk demonstrated its single source solutions, furthering its reputation as one of the most recognized brands in flooring for builders and property management firms. Its Daltile EcoPremier Terrazzo featured a blend of recycled porcelain and marble chips designed to satisfy the commercial segment’s continuing demand for green products, delivered at a value price point.

Ainsworth showcased its new PointSIX DuraStrand Flooring, featuring a revolutionary OSB panel with patented, tapered-edge technology… designed to resist weather-related swelling. The innovative flooring provides for a one-year, “no-sand” warranty as well as the industry’s only lifetime warranty against de-lamination.

Moxie Showerhead with wireless speaker from Kohler takes singing in the shower to new heights. With Moxie speaker which connects to BlueTooth, you can listen to music, audio books or the radio while showering.

Touchless Kitchen Faucets from Kohler bring an ease to cooking and cleaning in the kitchen that has been available in commercial establishments for years.

You can check out more hot products and booths from IBS 2013 on Pinterest, courtesy of the #KBTribeChat crew.

What better place to celebrate December’s 54-month high of construction starts than the spot that gambling made famous. No it certainly didn’t feel like a crap-shoot anymore, despite the Las Vegas venue. According to construction market indexes, builders have not felt this confident in light construction since April, 2006.  And, it certainly showed at last week’s International Builders’ Show.  Attendance for the three-day event was initially estimated flat at 50,000…yet the crowds swelled well beyond that mark with an upbeat vibe.

And the event promises to be even bigger next year when it will be co-located with the Kitchen and Bath Industry Show, in what is being billed as “Design and Construction Week.” In fact, organizers believe the presence of both shows next February will attract 50% more builders, remodelers, developers, architects, designers and other industry professionals. What’s more, the annual Surfaces show is slated to be joining forces further in the following year.

The backdrop at the show was housing inventory at a ten-year low while employment applications were hitting fresh, five-year bottoms. It only makes sense — as a leading indicator — more people are employed as housing picks up. And chatter was rife with realities of material costs determining price increases. Could this even begin to sound like rumblings of not-so-distant inflation?

In conversations with builders and remodelers on the floor, there appeared renewed desire for the latest and most advanced products and services, designed to attract buyers while helping them differentiate their “shovel ready” homes and projects.  More often than not, the mission in 2013 will continue to be centered around capitalizing on trends… such as outdoor living rooms and easy-to-install, low maintenance products, designed to expand builders’ businesses.

Sure, ample concern remains for a housing market that’s been through a six year decline. We all saw head bobs at a similar juncture in 2009.

Yet this time it feels very different — as home values have continued to rise with some ten consecutive monthly increases… November actually marking the biggest gain since May 2006. The pendulum is swinging back, but of course, it is difficult to say whether it will find a predictable path.

Key Trends at IBS 2013

1. Outdoor living and exterior design – expanding outside of the home
2. Expanded color pallets – exterior as well as interior
3. Durable building materials
4. Easy lifestyle/low maintenance living
5. Building science for high performance homes
6. Pre-assembly
7. Online business tools and project visualizers
8. Social media impact and importance

See our picks for Hot Products at IBS 2013 here.

How nostalgic is the time. Five years ago this week, I was at Countrywide Financial presenting our integrated marketing campaign. What a surprise that Bank of America would announce in mere days that they would acquire the infamous brand for $4.1 billion. Following a FBI investigation for fraud three months later… I suppose there’s no need to bring us all through the housing crisis again. Let’s instead fast forward to a Happy New Year.

Based on the best opening day in history, the famed “January Indicator” predicted a continuing upward trajectory for our markets in 2013. Shares of PulteGroup have nearly tripled since last year – making it the best performing stock on the S&P500, which itself now stands at a 5-year high.

We’ve all invested a year on an election and its fiscal cliff, that both achieved very little if anything. Yet we stand on the edge of what promises to be a much welcome sea of change. After all, we’re tired of the European meltdown, leadership change in China and civil war in Syria. We’re no longer worried about the fragility of the dollar or even our need for imported oil. Heck we’re awash in shale gas, oil sands and deep water drilling to the point of reaching the lowest levels of imported fuel since 1987. Treasury Secretary Geithner can now securely resign with our appreciation… those banks that were too big to fail, are even bigger now. Our mortgages which remain at historic low rates carry new rules that require lenders to actually consider whether a borrower can repay their loan. Nevermind that this may potentially hurt the rising tide of first-time homebuyers as rental rates continue to rise. There are mergers and acquisitions to consider – from Kleer Lumber by Tapco, to Viking Range by Middleby and Pergo by Mohawk. Home and building products are ready to get serious. After all, we’ve got the International Builder Show for which to look forward.

At the show this year, amid the myriad of brands vying for your attention, please consider those which have adopted a new paradigm for the new year. They have invested in research & development, advanced technology and innovation… when their competitors have played defense.

Consider the brands that have embraced the concept of “selective consumption”.  Brands that are structured to deliver the types of services that allow customers to find and drive buying decisions 24/7. Those that understand that customers now control when and where they will choose to interact. Yes, these brands may have lost control — yet they have gained a greater opportunity to maintain loyalty.

And seek out those brands that are executing within new success factors. In the past, marketing got by on meaningless metrics that didn’t necessarily affect the bottom line. Now home and building product brands have the ability — through the advances in technology — to better monitor the results of marketing efforts and connect to the end goal of driving sales: value and success which is measured in outcomes, not outputs. After all, “doing” is now the key to differentiation. And no doubt the victory lane will be reserved for those who refused to hesitate and faced in a direction that others feared.

Our industry is being redefined by brands that are more nimble, tech savvy, open and collaborative. Its leading brands will be strong and sustainable, based on their willingness to be in a perpetual state of change and their ability to execute and adapt faster than their competitors.

We hope to see all of our friends and partners in Las Vegas later this month. In preparation, I’ve listed a few recommended brands that are delivering better on this new paradigm for you all to place on your “must see” lists. Read our IBS 2013 Preview here.

As we gear up for the 2013 NAHB International Builders’ Show in Las Vegas, here are a few of the exciting things that must not be missed.

Masonite

Interested in learning more about a first-of-its-kind exterior door collection designed to protect against damage? The Lemieux Torrefied Collection is the first wood door to undergo a protective torrefaction process, an all-natural green process that makes wood more structurally stable and highly resistant to heat, cold and moisture.

When it’s time to expand their outdoor living area, homeowners often turn to pergolas and other products from Walpole Outdoors. Celebrating 80 years of business this year, the company will showcase a variety of architectural landscape products, including Walpole Outdoors custom PVC pergola design options and distinctive PVC pergola kits with canopies that contractors will find easy to install.

Kleer Lumber

For contractors tired of wrestling with time-consuming post wrap installation, Kleer Lumber, Inc. offers KLEERWrap Post Wrap, a next generation product that is faster and easier to install than previous generations of post wraps. With KLEERWrap Post Wrap, the contractor no longer has to wait during the installation process for glue to dry to remove tape and straps that hold the wrap together. The PVC post wrap from Kleer is a cost-effective way to improve the appearance and durability of exterior posts.

Residential Architect magazine named CableRail by Feeney as one of the fifteen products architects can’t live without as the go-to option for creating safety railing that maintain sight lines, views, and light. Perfect for projects with a view, CableRail stainless steel and DesignRail aluminum railing assemblies are durable, versatile, easy to use, economical, and beautiful.

If you are looking for a complete outdoor living experience with one-stop-shopping for all your outdoor kitchen needs, look no further than Danver Stainless Outdoor Kitchens. Its premium collection of stainless steel cabinetry in a variety of exterior finishes as well as amenities for outdoor kitchens and living areas will be on display.

More and more homeowners are investing in creating their very own dream outdoor living space. Brown Jordan Outdoor Kitchens now offers its first-ever designer line of custom outdoor cabinetry featuring stainless steel construction to ensure durability and lifetime of enjoyment. Architects and designers can choose from an array of designer colors and realistic wood grains powder coatings in addition to standard stainless steel finish.