2021 Predictions Impacting Our Industry

The new year brings new hope, new challenges and most importantly, new opportunities. The following are Interrupt’s 2021 predictions that will impact the building materials industry and potentially your business’ success.

• Elevate Your Values: A company’s values will be more important as considerations are made to help determine partnerships, purchase of a product or acceptance of a job offer. This personal side will help bond a customer (and employee) to a brand and create a personality that leads to loyalty. In the past, a list of values was stuck on the About Us page and probably not a big part of a company’s value proposition. Companies should look at elevating and integrating their values into day-to-day interactions, including training employees how to live those values every day.
• The “I Care” Movement: Charitable donations and volunteering will increase as we all have found more compassion through the pandemic (we can only hope!).
• Meals on Wheels: Many restaurants will fully adopt the “takeout” approach and turn more to food trucks, delivery, etc. to help them recover from the pandemic. This unfortunately will mean less wait staff needed if no/reduced dine in.
• Storms Then Sustainability: 2020 was the most active season ever for fires and extreme weather events, and climatologists forecast an increase in both frequency and intensity in 2021. With this trend and the new administration, expect a torrent of activity on the sustainable energy front in 2021. This enhanced focus should lead to positive developments in both innovation and the economy. The impact will include major investments and job creation in electric-vehicle infrastructure and alternative energy sources, companies of all sizes will re-evaluate sustainability commitments, and many companies have publicly set ambitious goals for moving to zero or near-zero emissions within the next decade. And Millennials will pay for products from companies demonstrating these sustainability commitments.
• Brick and Mortar What?: Five-10% of brick and mortar offices will sell off their locations and/or attempt to rent them out. Forty percent of physical retail locations will close in lieu of growing online approaches.
• Have We Got a Deal for You: The enormous spike in RV and boat sales in 2020 brought a huge number of newbies into these pastimes? For many, it was fun for a hot minute. We’re going to see the beginning of a flood of very lightly used RVs and boats for sale on the secondary market by the end of 2021.
• Turn the Phone and Cough: Virtual doc visits are here to stay. Telemedicine was slowly rising, and COVID accelerated its arrival. Hospitals overwhelmed with coronavirus patients had to reduce on-site procedures and offer virtual interactions. Retired doctors can now balance tee times around the flexibility of virtual appointments. It’s a win win-win scenario; less hassle for patients to take off work, less hassle for the doctors, less illnesses from being in emergency rooms, and overall cheaper healthcare. We will also see the emergence of completely at-home testing (COVID tests, Warby Parker prescription renewals, etc.) where the results are delivered via smartphone app in about 15 minutes.
• General Admission Only: Just prior to COVID, the Gensler Workplace Survey 2020 reported that workplace effectiveness was in decline, with those in “unassigned seating” struggling the most. Workers overwhelmingly favor a desk assigned only to them and are not willing to trade an assigned desk for increased flexibility to work remotely. Organizations will need to develop innovative space reservation programs to balance space utilization, employee and team schedules, and safety considerations. And partitions will go back to being taller.
• Changing the Game of Trading: The GameStop phenomenon will change the way Wallstreet/investing works, either with new rules against shorting/betting against companies, or, if nothing else, it demonstrates what large numbers of non-traditional investors (Joe Schmoe throwing in part of his stimulus check) can do to the broader market especially as things become gamified like they did on Reddit, and the ability to invest on smartphone apps.
• U.S. Population Regains Momentum: Population growth has seen a slow but steady decrease since 1990, with a current growth rate through 2019 at 0.5%. Immigration, usually a huge contributor to population growth in the U.S., peaked in 2016 immigration reform in 2021 will help change the downward trend. And children per household is starting to gain momentum. All of these are positive steps toward regaining the strong population growth that is important for the future of the country (and homebuilding).

• M&A Grows: Given continued strong cash flow, building material manufacturers continue to accelerate their merger and acquisition activity to gain share, technology, and distribution power. Branding challenges will also grow with this consolidation.
• SFBFR Outpaces Homeownership: In response to the continuing housing affordability challenges and people’s desire to have some space and privacy, single family built-for-rent homes will grow at a higher pace than any other new construction housing segment.
• Distribution Transformation: Select distributors will see the traditional approach to distribution has become outdated. They will change the game and successful ones will take control of their destiny by making shifts and investments to add technology and capabilities to connect more powerfully down channel to end consumers.
• Millennials Rule: Millennials (especially older) will continue to be the largest home buying generational cohort BUT the younger millennial group will postpone home buying in larger numbers as they work to save more money for down payments and identify where they want to live, who they want to work for and where can afford to buy.
• Second/Third Tier Markets See Surge: With remote working continuing and the high cost of big cities, smaller markets will see surges from families and millennials wanting less congestion and more space.
• Cash Me Outside: Outdoor living will continue to see double-digit growth in almost all markets and product segments. Many acquisitions (mostly small) will happen in this sector.
• Sustainability Finally Matters: Sustainability will be an increasingly important factor in new home types and home products thanks to the combination of millennials purchasing homes and accepting positions (builders, architects) in the building industry. Prior population groups were less likely to change buying behaviors to incorporate sustainable products or support sustainably-focused companies.
• Something’s in the Air Tonight: The general awareness and concern for the need for better indoor air quality will measurably increase (at least double), resulting in increased consumer and corporate spending on improving residential and commercial indoor air quality. Air quality in commercial markets is especially ripe…think schools and hospitals, offices and gathering spaces. Special federal and state funding will help push this even faster.
• Surface Focus Stays Strong: Paint, décor, flooring and outdoor projects will stay strong and may have their best year ever in 2021.
• Essential Doesn’t Mean Eventual: Even though the home building market was deemed essential during the pandemic, we, as an industry, will continue to have succession challenges with the small businesses serving the industry. While Entrepreneurship degrees and courses are increasing in popularity at universities across the country, we haven’t found the key to building millennials’ excitement for the building industry.
• Budget Reallocation: Building material industry travel budgets will be cut 35-50% and tradeshow investments reduced by more than 50%. While some spending may come back, this is definitely a long-term trend. The critical decision for companies is where to spend these saved dollars...successful ones will put it back into creating deeper customer experience (CX) understanding and engagement.
• Disruption Ahead (Finally?): Fortune magazine stated in 2017 that the U.S. building industry was the industry most ripe for disruption…(insert sound of crickets). We as an industry did almost nothing to lead any transformation. Amazon bought a precast company, Katerra faltered on their promises of innovation, manufacturers kept making traditional products, and no one solved the labor issue or automation. So, something big will happen in 2021/2022 that will kick start this disruption.
• Wanted: Data Engineers: In 2017, builders said the most important hire was a sales rep (42%) and only 4% said data engineer. Data, and more importantly the insights from it, are what will deliver a more relevant and powerful CX, and more profitability.

• Customer Experience Rules: CX is the new battleground for loyalty and growth. Companies that invest in understanding and leveraging a heightened level of CX will gain profit share. Those that don’t will merely grow and decline with the uncertain market – like a penny stock.
• Online Dramatically Outpaces Brick & Mortar: Ongoing momentum in online interactions between consumers and brands will drive less reliance on brick-and-mortar stores. Manufacturers are at a crossroads with how to deliver the last mile. Investing in your digital presence as your main storefront in 2021 will ensure your customer experience aligns with your branding and product offerings. Increased organic and paid search marketing efforts will help drive consumers into your digital storefront.
• Consumer Privacy Evolves: Data privacy will continue to play a major role in the online space. These efforts are focused on protecting the end consumer, so brands need to understand the potential impact of limited information availability to their analytic data and how it will change how they market to their end consumer.
• Great Pick-up Line: Every major chain business makes delivery and curbside pickup permanent offerings, with a catch -- it's not free.
• Color My World: For years, cool tones and subdued color palettes have dominated home design trends. Most were driven by the growth of the farmhouse style and the dominance of Joanna Gaines. However, trends will shift to warmer neutrals and will even throw in bold 70’s-style accent colors and over-the-top wallpaper (making a comeback). This shift could be led by people wanting a warmer feeling environment after the past year, or that the gray wave has gone too mainstream, and people are looking to add some uniqueness. We will see unique, jewel-toned cabinetry showing up in designs. Navy on the way out, emerald green grows in presence.
• ‘Merica Matters: “Made in America” will matter more in the purchase decision (especially by the trades), based less, unfortunately, on patriotism, and more on the confidence of obtaining product more quickly and consistently. But if you continue to manage production/inventory too tightly here in U.S. (i.e. continued allocations), this advantage goes away.
• No Cookies (or Milk): Targeting without cookies is coming. The procrastination of building first-party data to counteract the phasing out of third-party cookies will finally stop this year. Companies tracking these changes have already been working on building and segmenting their lead list. However, the majority of companies have milked their outdated process and haven’t addressed this monumental marketing change. So, take this as a nudge. Start creating targeted, value-added content that will get customers to interact with your brand. They need to see enough value in your interactions to give up their contact info, which is no easy task.

• Lose the Kitchen Table: How we engage with each other in business has forever been changed and companies/people will continue to embrace the newfound technologies (Teams, Zoom, SharePoint). There are a host of software and technologies that enable a new more virtual selling and estimation process. This trend will accelerate and will help drive more relevant and dynamic selling processes and companies using pressure selling methods will die off. Successful companies will optimize people resources and at same time sell a higher value mix/project.
• Mainstreaming VR: The increased popularity and affordability of Oculus Quest2 will see innovative companies using VR technology for a broader array of mainstream applications including skills training, telemedicine, travel and even sports and entertainment experiences.
• QR Comeback Kid: On the heels of their epic introductory failure, the “QR codes will make a comeback.” The concept was great; connect a customer to branded content with a single click. However, inaccurate usage and required app download contributed to the quick death of the busy square. Surprisingly, quarantine consumers found themselves using them to avoid touching menus or products. With this functional re-introduction and no longer needing a separate app, QR codes are set for a comeback. That said, we plead with companies; think before you place. Putting a QR code on a billboard is not a good solution.
• TikTok’s Evolution: TikTok will begin to challenge YouTube as the go-to location for how-to tutorials and other informational video content, particularly among young adults.
• Expanding Your Basket: Companies will diversify their influencer group, not putting their marketing dollars all in one basket. The concept of spending a significant amount of money on a TV personality or even a well-known social influencer is no longer needed. Utilizing micro-influencers who connect with smaller, more focused segments of your audience will help create a more personalized connection. Stop trying to find one influencer who represents your entire brand.

• Meet George Jetson (and Astro): Pulte announces George Jetson Village, the first fully wired, telecommuting / WFH planned community in the USA (IoT, 1Gb fiber internet connections, et al.). Sitting around the house with no cares; a dog’s life.
• All She Want to Do is Dance: The Boston Dynamics Robots will compete on Dancing With The Stars.
• Turning the Page: Jimmy Page will release the legendary Swan Song that he finally completed while in quarantine.
• Mo Money, Mo Egos: Move over Mark Cuban, there’s another egomaniac billionaire in the game. Jeff Bezos will finally buy an NFL team in 2021, either the nearby Seahawks or the Washington Football Team, and he’ll pay a record amount for it just because he can.
• Summer of Love: Just like the roaring twenties following WWI -- assuming vaccinations go as planned -- summer 2021 is going to mean packed bars and clubs (maybe good time to invest in some Trojan stock).
• Zoomphobia Emerges: A new phobia along the lines of agoraphobia will be discovered due to so many people working from home virtually, attending virtual webinars and not getting out to see other humans (other than their immediate family). This phobia involves fear of having only virtual interactions and not being able to go out for an actual coffee and small talk in person.
• Business Growth or Bust: If you read this far, you either are very bored or care a lot about leveraging these predictions to help with business growth. Either way, your reward is to be entered into a drawing for a free consulting session for your building product business, or at least some good industry bantering over a couple cold virtual drinks. Send a quick note to info@interruptdelivers.com to enter by February 15th.

If one or more of these predictions impact your business, it’s important to be aware and take action. We’d love to chat with you about these predictions. Reach out to us through our social media or email and give us your thoughts!