Marketing Home Products

 Existing home sales posted a February increase of 2.9 percent—the first increase since July, as reported by the National Association of Realtors (NAR). The surprising boost challenged analyst forecasts of yet another decrease and helped reduce the swollen inventory of unsold homes currently plaguing the market. NAR said the inventory fell to 4.03 million units at the end of February, marking the lowest inventory since August. What’s more, on a regional level, NAR reported increases of 11.3 percent in the Northeast, 2.5 percent in the Midwest and 2.1 percent in the South, not withstanding a 1.1 decrease in the West.

Despite encouraging news of declining inventory and regions showing sales increases, analysts maintain that these numbers may only demonstrate further momentum that the housing market has yet to hit rock bottom. While some companies are disheartened upon hearing the austere forecasts others actually revel in the news. How so, you might ask?

With risk follows big reward
A recent article in Advertising Age has many forward-thinking companies cheering “bring on the recession!” Citing some of our history’s most challenging economic declines, these periods were punctuated by several important brands that formed as a result. Examples include CNN and MTV, which were launched in the 1980-82 recessions. Wal-Mart, who charged confidently into the nationwide market during the early 1990s recession, experienced its fastest-growing sales trajectory. Wikipedia was conceived in January 2001, immediately following the bust of the dot-com bubble. And October 2001, only 42 days after September 11, marked the unveiling of the first iPod. These brands and products — recognized as some of the most successful in history — found their growth potential during some of our country’s most uncertain times. In the case of CNN and MTV, each has reshaped media consumption habits and television programming for an entire generation. Wikipedia and the iPod have both transcended society into an open-source, portable media and music network.

The takeaway
Recessionary environments can be ideal times to pave the way for innovation in marketing. In stressful economic times, consumers are forced to be more selective and make tougher buying decisions. This environment amplifies the role of marketing in capturing the fickle attention of a nervous marketplace and redefines the way dollars are being spent. Sadly, many companies instead pull back in these times—laying off employees, reducing research and development, decreasing marketing budgets, and discounting their prices as a defensive sales tactic. Yet those companies who forge ahead and put it all on the line are the ones who will historically experience the biggest paybacks.

For those of us in the housing market, periods of down time allow for increased change and enhanced opportunities . The housing slump may well better position the way for improved advancements among residential products and brands, pioneering floor plans, unique and affordable housing options, as well as technology innovations that push the envelope. Draw a lesson from our country’s past. “For marketers who kept their wits, economic valleys–the deeper the better, in fact–became foundations of empires.”

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Dual-Home Offices
Despite the current state of the housing market and uncertain condition of the U.S. economy, the remodeling industry continues to experience growth. In honor of National Remodeling Month, it’s only fitting to look around the corner to the future of the remodeling industry.

As modern-day remodelers seek to increase their bottom lines, and consumers look to realize meaningful returns on their remodeling investment via their homes’ resale values, the marketplace is turning increasingly to dual-home office spaces.

Trend factors:

Rise in home-based businesses
Home-based businesses have been climbing since the advent of the Internet. In fact, U.S. home-based sole proprietors generated $102 billion in annual revenue, according to a May 2006 study released by the SB’s Office of Advocacy.

There were 13.8 million income-generating home-based businesses operating in the year 2005, with 9.7 million accounting for the primary household income and 4.2 million for part-time income. (Entrepreneur.com) And these numbers will only increase with time…

Adverse economic factors
We’ve all heard the reports about the lack of job security (Bear Sterns traders, are you listening?), rising gas prices, escalating grocery bills, elevated need for single family two-parent income…the list goes on and on.

With the proliferation of advanced technology, increasing numbers of companies allowing their employees to telecommute a few days per week, flexible convenient work atmosphere, in addition to the heightened positive reputation and profitability of today’s home-based businesses-dual-home office spaces will soon become mainstream. And speaking of job security, the typical home-based business has been in operation for an average of 10.7 years. (Entrepreneur.com)

Couples working from home
Raising a family in today’s economic atmosphere a mid a time-starved society, while at the same time trying to achieve that coveted work-life balance, modern-day couples are working it out at home. According to the National Federation of Independent Business, there were approximately 1.2 million husband- and wife-owned small businesses nationwide in 2003 (The most recent reporting period.)

Multi-generational households
Today’s homes are comprised of not just one or two generations, moreover sometimes even three. As the generational gap increases, so does the need for office space — high school or college students requiring instant access to the Internet for homework, home-based entrepreneurs supporting their family, and even the 70-year-old mother-in-law who formed her own blogging site. The needs are endless, and will become only amplified over time.

What does this mean for the remodeling industry?
Although kitchens and baths remain the most prevalent source of remodeling dollars, dual-home offices will soon define conventional new construction housing design as well. Contrary to popular belief, not all individuals running their own home-based businesses work in their pajamas at the kitchen table. In fact, most don’t.

Just like “his and her” sinks for the bathroom, expect to see “work-in-place” areas designed for two as well. Say goodbye to spacious dining rooms, lavish living rooms, guest rooms and dens at these new rooms’ expense. Dual-home offices, laced with the latest in organizational tools, will take on a more prominent role in the household, defining the future of the remodeling industry. Position your products for this new opportunity and build your brand towards this aspiration or watch as your competition does.

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