Markets Respond as COVID Impact Lessens
The nation’s housing, residential remodeling and kitchen/bath markets each continued to respond to post-COVID realities as 2021 enters its final months and the impact of the global pandemic dissipates. Among the key statistics and forecasts released in recent weeks by government agencies, research firms and industry-related trade associations were the following:
HOUSING STARTS & NEW-HOME SALES
Continuing a trend from the beginning of 2020, low-density, low-cost markets continue to outperform other regional geographies with respect to home construction, according to the National Association of Home Builders. “With the shift to telework brought on by the COVID-19 pandemic, housing demand continues to show the strongest gains in lower-density markets as people have flexibility to live outside some metro areas,” said Chuck Fowke, chairman of the Washington, DC-based NAHB. “As workplaces increasingly adopt hybrid work models, renters and buyers will have increased (need) to minimize travel times and reduce both housing and transportation cost burdens,” noted NAHB Chief Economist Robert Dietz, adding that homebuilding is expanding most rapidly in locations with the shortest commuting times.
EXISTING-HOME SALES
Although housing supply continues to fall short of demand, additional inventory is expected to enter the market later this year as further COVID-19 vaccinations are administered and the number of homeowners in mortgage forbearance continues to decline, according to the National Association of Realtors. Although housing demand is still strong compared to one year ago, existing-home sales have lagged in recent months, the Washington, DC-based NAR reported, noting that total housing inventory was down more than 20% from a year ago. Despite the recent lag in sales, however, “the additional supply projected for the market should cool down the torrid pace of price appreciation later in the year,” NAR Chief Economist Lawrence Yun predicted. Total existing-home sales were pegged at a seasonally adjusted annual rate of 5.8 million units, up 44.6% from a year ago, according to the latest figures. “Home sales are now approaching pre-pandemic activity,” observed Yun. And although a lack of inventory continues to be the overwhelming factor holding back home sales, the outlook, Yun said, remains “encouraging.”
CABINET & VANITY SALES
Major domestic kitchen cabinet and vanity manufacturers continued to post strong sales gains through the first five months of 2021, as demand remains at record heights and the impact of COVID-19 continues to dissipate, according to the latest in a series of monthly surveys by the Kitchen Cabinet Manufacturers Association. The KCMA’s latest “Trend of Business Survey” reflected a year-to-date sales increase of 21.6% through May when compared to the same five-month period last year. Custom cabinet sales through the first five months of 2021 were up 23.5% over the same period last year, while semi-custom cabinet sales rose 21.3%, and stock cabinet sales gained 21.4%, the Reston, VA-based KCMA said, adding that overall May sales were up 32.9% compared to the same month last year. Survey participants include stock, semi-custom and custom companies whose combined sales represent approximately 75% of the U.S. kitchen cabinet and bath vanity market, according to the KCMA.
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Google’s Impact on Your Business
The successful digital marketing of your company is based on a seemingly endless list of criteria. I think of it as creating a flywheel, when all the spokes of the wheel are moving successfully in the right direction, and your business is firing on all cylinders. Your social media is getting great impressions, you have multiple funnels of leads coming in via phone calls and emails and your website is busy with visitors.
The marketing work behind the scenes that makes this happen is sometimes hard to articulate succinctly, as each component has its own complexities for success. Google is the champion of connecting businesses and customers, and has been for years. Customers search on items using keywords, and Google determines which websites show up in the results.
Google is now making the most comprehensive updates in its history, and business owners need to act to stay relevant, and improve their website placement.
Website Ranking Changes
You may have noticed your searches on Google are showing different results than in prior months. This is due to its June Core Update, which rolled out in June 2021 and rewards websites with quality content. Website content is graded for strong E-A-T – Expertise, Authoritativeness and Trustworthiness. Another overarching assessment is called Your Money Your Life (YMYL). Collectively, they rate the quality of the content and if the content can impact the life of the visitor positively. Core competencies websites should:
Contain quality content for your website visitors. Does your website contain written content that just scratches the surface of the subject matter on your website pages? Add content that educates and informs your visitors by delving deeper into the topic. This is good for brands that have products with unique and desirable features. For example, The Corian Endura website goes into details about the product Corian Endura. “It is highly UV resistant. Colors and patterns will not fade…It won’t burn or melt in temperatures up to 1000 degrees Fahrenheit, making it a smart choice for decorative fire surrounds.” This detailed explanation of a benefit is exactly what Google is encouraging.
Use related keywords that satisfy the intent of the visitor. It is not just about the search keyword, but why that keyword was chosen. A good example is the keyword “DIY.” A person searching on “DIY Cabinetry” wants to save money on cabinetry by “doing it yourself.” That person would also benefit from a video showing a step-by-step installation, how long the project may take to complete and an estimate of the money they can save by doing it themselves.
Be trustworthy. In addition to being a quality resource for expert information, your website needs to be safe. Make sure your website’s domain is secure by correctly implementing HTTPS (Security Certificate). It is very important to you and Google, and helps to ensure any data your users input won’t be compromised by an undesirable third party. Check your website URL to ensure it begins with “https.” If you have “http,” install a security certificate.
Eliminating Cookie Tracking
Third Party Cookies enable the advertisements that tend to follow you as you browse the internet. Cookies let websites remember you, your website logins, shopping carts and more. Google uses that tracking information to show visual advertisements. This is one type of Google advertising.
There are privacy laws being written that question the legality of this practice. In response, Google has developed “Privacy Sandbox,” an advertising method that still maintains your search history to use for advertising targeting. Google simply will no longer follow you around the internet in tandem. The Sandbox concept is that their advertising will become interest-based versus a focus on a particular product or subject. In 2022, Google will no longer be tracking your activity as you bounce from one website to the next, and then using that information to follow you around with advertisements.
If your marketing includes Third Party Cookie advertising, Google is testing a replacement via Federated Learning of Cohorts technology (FLoC). FLoC is a replacement for third-party cookies that gathers data based on the behavior of groups of internet users to generate relevant online ads, rather than tracking an individual’s browsing history.
Marketing TRENDS & New Guidelines
As technology advances, so do the expectations of your visitors on websites and social media. Here are some forward-thinking trends for 2022 that will not only satisfy your audience, but will also appease Google.
Interactive Social Media Posts and Web Pages. Think about information that adds value to your audience, and entices them to partake. Questionnaires and polls are great if the participant sees the resulting information as valuable to them. An appliance company can provide checklists for appliance maintenance, and informational videos on how to clean cooktops and keep vegetables fresh in your refrigerator, all with embedded clickable links to even more information. Create a list of the most common questions your customers have about caring for the item to start your video checklist.
Micro Influencer Marketing. A micro-influencer is someone who has between 1,000 to 100,000 followers on social media. Micro-influencers focus on a specific niche or area and are generally regarded as an industry expert or topic specialist. They are gaining attention because they tend to have stronger relationships with their followers than a Macro (500,000 to 1 million followers) or Mega influencer (1 million to 5 million followers). Micro influencers come with a smaller price tag and often convert (via more likes, increased followers or sales) a larger percentage of their followers over Macro Influencers.
Nostalgia Marketing. Nostalgia marketing recaptures your audience’s attention by sharing stories and images from your past. By taking a walk down memory lane, your growth and the humanity of your brand are shared. When we revamped Giorgi Kitchens website, they provided us with a photo album of their entire design history. We created a vintage page full of photographs that date back to the 1960s. It is one of their most talked about website pages.
If your website traffic had a noticeable reduction in visitors during May and June, the above items will improve your visibility. The recent changes made by Google are the most impactful changes made in their history. It may take time for the updates to be universally seen. If you have any questions, contact me at [email protected]. I am more than happy to help fellow Kitchen and Bath Design News readers navigate the new digital landscape. 
Denise Grothouse has an extensive background in international business, branding and marketing. She specializes in digital and social platforms and integrating them with traditional marketing and branding strategies. No stranger to the kitchen and bath industry, she is best known for her work as chief brand officer of Grothouse, Inc., and president of the marketing company Perfect Six.
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PRO Act Seen Impacting Independent Firms
WASHINGTON, DC — Union-friendly legislation aimed at expanding workers’ rights to organize and collectively bargain could have a potentially deleterious impact on independent designers, installers and other self-employed contractors who serve the kitchen and bath industry, critics of the proposed law say.
The Protecting the Right to Organize Act, widely known as the PRO Act, recently passed the U.S. House of Representatives and is currently awaiting Senate action, while drawing sharply mixed reviews. If enacted, the proposed legislation would advance the labor movement’s major legislative priority: providing protections for workers attempting to organize and bargain collectively. President Biden supports the measure, but it is unlikely to advance in the Senate as an entity unto itself without either Republican support or through reconciliation, but has recently been included in the Biden administration’s proposed infrastructure bill.
The PRO Act, among other objectives, would revise the definition of “employee,” “supervisor” and “employer” to broaden the scope of individuals covered by fair labor standards. It would also significantly increase the power of labor unions, including their ability to collect dues, pursue class-action litigation and injunctive relief, protect workers’ rights and wage strikes, among other things.
But the proposed legislation has spurred sharp debate among proponents and critics. Advocates claim the law would begin to level a playing field that they say is unfairly tilted toward big business and management, currently making union organizing drives and elections unreasonably difficult. However, business groups, including the U.S. Chamber of Commerce, have opposed the act, claiming it would undermine workers’ rights, lead to widespread uncertainty and litigation, ensnare employers in unrelated labor disputes, have major tax ramifications, and force workers to pay union dues regardless of their wishes.
The National Kitchen & Bath Association, which has a significant number of independent designers and allied professionals as members, declined comment on the proposed legislation, characterizing it, at the current time, as “nascent.”
A major point of contention, critics charge, is the fact that the PRO Act is closely tied to what is known as the “ABC Test,” a multi-phased determination of whether an individual holds the status of an employee or operates as an independent contractor.
Independent contractors in numerous and varied career fields with established businesses in California, including sole-proprietor LLCs with multiple clients, have been dramatically impacted by the ABC Test since the state’s AB5 went into effect in January 2020, according to PRO Act critic Jamie Gold, CKD, CAPS, MCCWC, a Bonita, CA-based kitchen design, wellness design consultant and Kitchen & Bath Design News contributing editor.
“While aimed at forcing companies to reclassify gig workers as employees, the ABC test forced many other independent contractors out of work (and) it has the potential to do the same on a national basis if the PRO Act becomes part of federal law,” Gold says, noting that the law, if enacted, would force many businesspeople currently classified as independent contractors to be reclassified as employees.
“The PRO Act, as it currently exists, can have tremendous impacts on the kitchen and bath industry,” says Gold, citing, as one example, a requirement that kitchen and bath showrooms would have to hire all of its designers as employees, rather than contract with professionals on an as-needed basis, significantly raising their labor costs.
“Independent installers and measurers who contract with kitchen and bath firms or installation companies would be impacted, as would independent kitchen designers – particularly those without showrooms or employees – who work on a project basis with large kitchen and bath firms or design-build firms,” Gold contends. “Product designers who contract with cabinet or appliance manufacturers, as well as rendering artists who contract with kitchen designers or design firms (would also be affected).”
“You can surely see the massive disruption to our industry if this legislation passes as is,” Gold observes. “Any law that can’t distinguish between someone who drives food to customers and a designer who creates food storage spaces or food preserving appliances is a bad law,” she adds.
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Survey Spotlights Priorities of Homebuyers
SANTA CLARA, CA — With life returning to normal as the COVID-19 pandemic recedes, prospective homebuyers have developed a specific set of priorities when it comes to the products and design features they want in their next house.
That is the key conclusion of a new national survey conducted by Realtor.com. The recent online poll involved more than 1,200 adults over the age of 18 who plan to purchase a home within the next 12 months, according to Realtor.com, which is operated by publicly traded News Corp under a license from the National Association of Realtors.
“The COVID pandemic ushered in a new way of thinking about what ‘home’ means, and that is influencing much of what today’s home shoppers are looking for,” said George Ratiu, senior economist for Realtor.com, which reported that the desire for additional space was the top reason driving home shoppers’ decisions to purchase a new home in the coming year. Survey responses also indicate buyers are looking for more flexibility in their home space and affordability in exchange for a shorter commute, the new realities of a post-COVID world, Ratiu said.
“Garages, large backyards and space for pets always rank high on buyers’ wish lists, but those features have grown in importance,” he said. “The pandemic has elevated our relationship with family, as well as the need for our home to serve multiple purposes, especially the ability to work remotely. As a result, we’re placing a premium on the need to accommodate extended family, and features like a home office and broadband internet.”
When asked which home features have become a priority as a result of the pandemic, a quiet location (28%), an updated kitchen (25%) and garage and large backyard (24% each) topped the list. Outdoor living area (20%), space for pets (18%), updated bathrooms (19%), home office and broadband internet capabilities (17% each) and open floor plan (16%) rounded out the top 10 pandemic-induced most desired home features (see graph, left).
Sixty-five percent of respondents indicated that they are considering extended family when they shop for a home, with nearly a quarter stating that they are planning to buy near family members, Realtor.com reported. One-fifth of those surveyed said they will have extended family living with them full time, while 30% said their new home would need to accommodate extended family staying with them part time or visiting.
Decreasing in importance from prior surveys was the need for a short commute time and a home with smaller square footage. For example, only 9% of those polled indicated a short commute time was a priority, and only 4% said they are looking for smaller square footage. This was down from 11% and 8%, respectively, prior to the pandemic. 
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