Marketing Home Products

With 7.6 million kitchen remodels in 2007, up 200,000 from 2006, today’s homeowners continue to deem kitchen remodels a valuable investment. But do extensive makeovers remain a priority? With the current housing slump, are today’s kitchens really going on a diet?

Not exactly; in fact, today’s kitchens are feasting on professional grade options including high-performance, energy efficient appliances, flooring, and lighting, with an increased appetite for universally designed spaces that will endure with age. Although homeowners are more hesitant to pour money into their kitchens than they were during the high of the housing market, the focus on energy efficiency and universal design has many in the mood for an update, even if it’s not a total overhaul.

They may be slimmer, but today’s kitchens are certainly not disappearing from plain view.

What do homeowners want in a kitchen remodel?
Incorporating energy efficient dishwashers, cooktops, and refrigerators, ambient and overhead lighting, and bamboo flooring, continue to provide a newly-remodeled kitchen with an aesthetically pleasing look and feel, while upping the resale potential of the home. 

When attending the recent Remodeling Show in Las Vegas, it was clear that open floor plans were an essential priority for today’s homeowners. Also prevalent was the availability of universally designed options for the entire home. Creating a space that will last with age and increase resale value when the home goes on the market remains very important. A multitude of storage options including drawers placed in lower cabinets and those that hold pots, pans, silverware and cooking supplies in an organized fashion is increasingly appealing to today’s home gourmands.

Creating a space where the stove, refrigerator and sink are within easy reach is another must-have for a universally designed kitchen space. Countertops and specific areas to prep, wash, cut and clean will make even the most “ordinary” kitchen the favorite room of the house. Specialty accessories and plumbing fixtures that mount on the walls or the backsplash of stoves provide easy access while ensuring the kitchen remains neat and organized.

Reflect the growing trends
For manufacturers of home related products, remember to create products that mirror the desires of today’s consumers – energy is key! Improved energy efficiency throughout the entire home is a major concern that begins with the kitchen. We all feel the effects of soaring gas prices and area attuned to the requests for environmentally-friendly product innovation. Promotion of ecological best practices will capture the interest of today’s homeowners and generate success within the remodeling market.

Providing incentives
Although the market for kitchen remodels continues to remain healthy and robust , homeowners want unique enticements. We’ve heard about prominent builders offering to pay for closing costs, so it comes as no surprise that today’s remodelers and designers are offering their own financing options and creating their own loyalty programs. And that’s not a bad idea…incentives are a great way to make homeowners more comfortable during the remodeling process and feel that they are getting added value. These incentives may even turn them into brand evangelists and repeat customers.

Healthy not just hefty kitchens
What we all want in the end is a healthy kitchen jam-packed with high-performance, functional attributes. Smart manufacturers and marketers are making themselves very familiar with consumer spending habits and adapting products, services, and marketing campaigns to reflect homeowner needs, while providing incentives to keep customers comfortable and content.

Want more information about housing trends? Click here. 

By Jill Levenson

Our latest K&A e-blast regarding diminishing average home size provided some statistics on the changing real estate market and its connection to the building and remodeling industries. The real thesis was that we, at K&A, expect many American homes to be full of more creature comforts than their earlier counterparts. While the article was chock full of interesting demographic data, I think some additional psychographic research is a vital piece of the puzzle as we seek to understand this trend.

As an Art Director at K&A, my market research doesn’t just happen in the office. I recently purchased my first home, which I suppose makes me a young-ish example of the female “chief purchasing officers” we’ve been talking about. So, in the spirit of research, let’s consider what follows to be an experiment in self-ethnography – a quick review of the thoughts that crossed my mind when it came to making the final decision to purchase.

To me, the definition of a “McMansion,” which I hope we agree has decidedly negative connotations, is more about a home’s size in comparison to the land lot it occupies than it is about the size of the home alone. The trend here in Atlanta, specifically regarding infill housing, has been to put the largest home possible on a tiny little piece of land. I think people who buy these homes want maximum living space with the minimum cost in terms of landscaping and maintenance.

In the grander sense, I think the McMansion phenomenon also shows how the people who buy and live in these homes value their quality time with the outdoors. (I mean, honestly, how do you host a barbecue on a 5’ x 5’ patch of grass?) Driving around town, I am truly disgusted when I see the tracts of land that have been clear-cut to make way for these kinds of infill developments. I would be ecstatic to see this trend reverse itself, with homes being more in proportion to the land they occupy and with yards dotted with mature trees. I’m certainly not the first person to criticize a lot of the infill housing I’ve seen around town.

The trend towards greener housing is one factor affecting the decline in average home size that we haven’t yet taken into account. Besides only wanting to pay for square footage they will actually use day to day, (seen in the trend towards more open floor plans, fewer separate formal dining and sitting rooms, and more en suite bathrooms, etc.), people are realizing that their decision to protect their own pocketbook can also be beneficial for their whole community.

Two-thousand square feet is plenty of living space for the average nuclear American family—whatever that means anymore—and most information I can find on green living suggests that anything above that limit for a single family is automatically considered “un-green,” no matter how green the building materials and home fixtures. In fact, I think anything over 3,000 square feet automatically fails LEED certification – a major issue many people had with the EcoManor recently built in Buckhead.

Another trend, especially here in Atlanta, that would certainly affect average home size, is reverse gentrification (which seems to be happening to many American cities at an increasingly rapid pace). In general, in-town housing comes at a premium due to higher density and demand, but, in many cases, it is also necessarily smaller. (Inman Park not included, far as I can tell.) With gas prices still near record highs across the country, many potential homebuyers are looking to move closer to work to save time and money on their commute. So, once again, we see American families making decisions that reduce the strain not only on their own resources, but on the world’s natural resources as well.

For me, I knew that a 2,000 square foot home close to work was:
 
a) all of the floor space I could possibly need

b) the most I could afford not only in terms of a mortgage payment, but in terms of the time and money I have to spend on upkeep and maintenance
 
Besides what I’m saving on gas, I have almost two extra hours of free time every day since I moved closer to work. You can’t beat that. But on the issue of yard size, I’ll be the first to say that I wanted to have my cake and eat it, too. I required at least some semblance of a nice backyard for my dog (and, of course, for barbeques), but I also knew that I didn’t want to spend much time or money on landscaping. Hence, I’ve been looking into xeriscaping, bringing me to my next point:

I’m all for these trends and the economy-minded decisions that drive them, however purposeful or inadvertent their effects may be on the gradual movement towards a newer, greener, and more efficient American Dream. And if that means I can afford to install a Mr.Steam® steamshower in my smallish master bath, even better.

Jill Levenson is the Art Director at K&A. She can be reached at jlevenson@kleberadvertising.com or 770.518.1000.

Want more information on housing trends? Click here.

As a follow-on to my last blog,  it’s important to highlight some additional reasons to further support the theory that those companies that ride out the wave of the housing slide will be the ones on top during the upturn. By creating and engaging in powerful and innovative sales and marketing strategies, those companies will emerge as stronger brands as the housing market rebounds. The Patriots just don’t stop playing football because they’re being called “cheaters” by the opposing fans. Today’s lesson – and you’ve heard this before – “What doesn’t kill you will make you stronger.” 

Consumer spending defies industry analysts

You can’t always rely on the analysts…more often than not, they are critics rather than realists. Is the glass half empty? Or half full? According to a recent article in the New York Times, consumer spending rose a better-than-forecasted 0.6 percent last month, the largest increase since April. Construction spending also increased 0.2 percent in August after a 0.5 percent decline in July. In addition, income increased 0.3 percent. Although the financial and consumer discretionary sectors are still a bit behind, the numbers are nevertheless showing a 0.6 percent growth, challenging earlier predictions. There is still plenty of demand in today’s economy.  

A rebound in sight?

Another Times’ article quotes Thornburg Mortgage claiming the market for “jumbo” home loans — those with a face value of more than $417,000 — appears to be improving. In recent weeks, investors have been more willing to buy bonds backed by pools of the mortgages, but are now demanding higher returns and increased safeguards against default. Although the market “has a ways to go before it’s back to functioning in a completely normal way,” said Larry Goldstone, president and chief operating officer at Thornburg, “home buyers searching for jumbo loans will notice a slight drop in interest rates.” He also comments that “the market has improved modestly and it is certainly not deteriorating.”  

Stocks – reaching record heights

The market averages are hitting new heights. Prior to writing my last blog at month’s end September, I couldn’t accurately predict what the new month would bring, yet this year’s October rebound mirrors that of October 1987…a spooky coincidence to the summer decline and retrenchment 20 years prior.  

How do you remain a heavy player? Maintain your stance in the industry. Even today’s largest and most profitable builders (KB Home, Lennar, Centex, D.R. Horton and Pulte Homes, among others) – that are all, by the way, reporting losses for the past two quarters – aren’t just halting new-construction because the housing marketing is showing a remission. Instead, they are capitalizing on opportunities to maintain and increase consumer demand such as paying for closing costs or offering additional features as incentives on newly-built homes.  

Moreover, due to tighter financing and lending options, these same builders are showcasing innovative ways to design and market homes that will shape new building and design trends and consumer buying habits for years to come. Instead of pouting over the recent lack of affordability of today’s McMansions, today’s most savvy builders are creating open and versatile home plans and building smaller homes on smaller lots that reflect the way today’s home buyers want to buy. Take a look at the new KB Home/Disney co-branding initiative for some blue sky inspiration.

Maintain an upbeat attitude

We’re coming off a high in the industry, a high that was, by all accounts, unsustainable. So, take the negatives and turn them into opportunities. Inspire your creative juices by implementing new sales and marketing strategies that will redefine the marketplace and your brand. Challenge yourself. Those companies that continue to specifically target today’s consumers with innovative and engaging sales and marketing strategies will be the ones that will remain on top in the long run. It may take a bit of refocusing, but if you keep your eyes on the prize you will emerge strong.