Tuesday, August 23, 2016
During the period of “conspicuous austerity” resulting from the Great Recession, consumers were reluctant to make new purchases or undertake larger remodeling projects. Designers had to adjust to the “new normal,” which meant relying more heavily on design and consulting fees in a more competitive market.
Now, the pendulum has swung back in the other direction — but with one major difference.
Renovation and remodeling activity is at its highest level in more than a decade, and consumers have ramped up their spending to acquire higher quality furnishings and materials. However, many of today’s clients are turning to design professionals for advice rather than for design assistance.
A common lament I hear as I travel around the country speaking with designers is that clients are buying fewer products. At the same time, my firm has seen a notable uptick in recruiting and hiring of salespeople.
Clearly, demand for product must be up. And in fact, it is up —quite substantially according to several recent industry reports.
Why the disconnect? The fact is consumers are going elsewhere to buy products. Some are going directly to the manufacturers or suppliers via the Internet. Many are using other sources, such as contractors, in-house designers at retail stores, even their real estate agents.
This is not a new trend. It has been building over the past decade. The difference I am seeing now is in how clients are viewing designers.
Designers should be busier than they are. The economy, employment and the housing market have improved. Demand for remodeling and renovation projects has been strong for the past two years and is projected to remain so going into next year. Yet design activity actually weakened during the second quarter of this year.
To me, this signals a fundamental shift in client behavior. You can see it reflected in this year’s Houzz & Home Report, in which more than half of those homeowners who used professional design services for a recent remodeling or renovation project did so because they wanted help with finding the right products. Less than a third hired a professional because they wanted design help.
I think several factors are driving this trend. One is the popularity of DIY, even among more affluent clients. Consumers would rather spend their money on products and materials than on services. In regard to purchasing, they view designers as unnecessary middlemen.
Linked to this is the growth of e-commerce. Consumers are much more comfortable purchasing items unseen through the Internet, and many vendors are encouraging them to do so by offering no-penalty returns, including the cost of return shipping.
In addition, the role of professionals is changing. With so much information and advice available online or via apps, and with people relying more and more on consumer reviews and social networks for recommendations and referrals, professionals are regarded less as experts and more as advisors or counselors.
This is not to say that clients no longer value interior designers. Design activity has slowed but is still up from several years ago. There are plenty of full-service design projects happening around the country —especially among high-end clients who have the resources to buy the products they want and pay for professional services.
Among clients who are affluent but not wealthy, and thus more cost conscious, we are witnessing a definite sea change — a new “new normal,” if you will. Design is becoming more of a commodity, as is evident from the proliferation of web-based design services and DIY apps.
This means designers need to think about reframing their value proposition to meet the demands of a changing market, or risk seeing more of that market captured by nonprofessionals.
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