Starting mid-March, The Farnsworth Group and Home Improvement Research Institute began tracking DIY and Contractor behaviors being impacted by COVID-19 on a weekly basis.
Two months later, we have learned several important results.
Health Remains Top Concern, But Budget Concerns Are Growing
It comes as no surprise that nearly all contractors have experienced delayed or canceled projects with COVID-19.
The leading cause? Health concerns.
And not just homeowners concerned with contractors in their home, but also contractors being concerned about their staff. Homeowner’s health concerns have remained consistently high.
However, over time, we have seen homeowner concerns over budget/finances increase from a low of 44% to 55% today. This will be important to watch as it may impact project scope and types of products used.
Channel Behavior Has Changed
Residential contractors had dramatic changes in their channel behavior. At one point, in-store purchases were only done among 53% of Pros compared to a high of 79% in mid-March.
Health concerns were again the leading force of this change. While in-store purchases have returned, they are still down. Compare this to online purchases that remain strong.
On average, ~40% of contractors are purchasing online and having materials delivered, while ~30% are purchasing online and picking up at the store. Smaller firms (those with
Availability Becoming More Important
One additional cause for channel shift is availability. 38% of contractors most recently cited lack of product in stock as a reason they purchased online. As contractors begin doing more work, availability may become more of a challenge.
Lack of inventory may lead to new products, new brands and new suppliers being used that can meet the needs of contractors. Understanding where Pros are going, why they are going there and how they prefer to purchase materials is an opportunity for suppliers and manufacturers alike to capture share.
The Worst Is Behind Us
Data shows the lowest volume of bids and most negative sentiment came in mid-April. Since, contractors have expressed seeing higher bid volumes and higher closure rates, though still lower than pre-COVID. The Farnsworth Group Contractor Index also provides data that lead and bid quality is better than normal, which is contributing to improving closure rates.
Those that are “extremely concerned” about COVID-19 negatively impacting their business have been declining since mid-April. While many are concerned, those concerns have shifted from Extremely Concerned to Somewhat Concerned, which is another sign that the worst may be behind us — barring any new major global or economic events.
The Role of Manufacturers and Suppliers Must Change
In recent years, contractors were struggling to find labor and were trying to keep up with all the projects in their queue. Those days are gone for most Pros. Today, only 21% of pros are concerned about Labor, which is the lowest out of seven issues. At the top: Health, Finances, Getting Leads and Getting Materials.
Gone are the days of helping contractors manage their workload. Instead, Pros may be looking for sales, marketing, lead support or for suppliers to have products in stock or online for delivery. These new priorities will differ by trade, size of firm, product category, etc.
It’s critical to understand how these needs have changed so your sales, marketing, product and channel teams can respond accordingly.
In Summary
The home improvement contractor market has shown a great shift in behaviors, a change in their needs and likely a change in what they expect from Manufacturers and Suppliers. With many expecting to do less work this year than prior to COVID, these shifts represent opportunities for manufacturers and suppliers to gain share: product share, brand share, channel share.
Those that can determine what contractors need most AND can respond to those needs will win.
What does your sales process look like in this market? What messages resonate with pros today? What types of products and pricing options do pros expect? Where are they purchasing your products and why?
Today’s contractor market is different. Gone are the days of turning down work because they are too busy. New challenges may impact their decisions for years to come.
If you want to learn more about your business and COVID, contact us today to start your custom research project.