Thanks for a Miracle Market

by WOHe

American homeowners, midway through a difficult and
uncertain year, continue to make a bold and powerful statement
about who they are, who they want to be, and how they want to live
their life.

It’s a statement that’s literally rewriting the conventional
rules of consumer behavior, fueling the nation’s housing market,
and reverberating positively throughout the kitchen/bath
industry.

Maybe you haven’t noticed lately, but the kitchen and bath
industry has become perhaps the closest thing there is in the U.S.
economy to a Miracle Market.

It’s a market that, almost miraculously, remains alive and well
in the face of a three-year economic decline that has seen
corporate profits plunge, manufacturing slow, capital spending dry
up, the technology sector collapse, layoffs mount, and the equities
market overrun by bears.

It’s a market that somehow continues to thrive in the face of a
sluggish economy, the war with Iraq, the fallout from 9/11,
unending worldwide uncertainties, and the continued threat of
domestic terror.

It’s a market that remains buttressed by a once-in-a-lifetime
array of demographic factors, low interest rates and favorable
lifestyle trends.

And, it’s a market that continues its promise of tremendous new
opportunities for everyone in the kitchen and bath distribution
chain.

Much of this can be laid at the feet of the American consumer,
who has come in recent years to view the home as not simply a
shelter but as a refuge, a haven, a place to spend time in and
money ona sanctuary in which to seek comfort, sanity, intimacy,
peace.

It’s become increasingly clear in recent months, though, that
there’s far more than even that in play these days.

Today’s consumers are making a clear cut statement. What they’re
saying is that they’re looking for a higher standard of living than
ever: Higher-quality products. Larger and more well-appointed
homes. A new level of luxury.

You see it all over. In automobiles, clothing, food, personal
care products, sports equipment, home furnishings. And you see it
in new and remodeled homes that feature next-generation amenities
and high-tech options.

It’s not just happening at the upper strata of society,
either.

Even America’s middle-market consumers are trading up. They’re
shopping more selectively, paying premiums for leading brands,
seeking features that were once the exclusive hallmark of
top-flight luxury goods, surrounding themselves with products that
provide clear functional and emotional benefits.

This “trading-up” phenomenon is being fueled by a wide range of
demographic factors, cultural shifts and lifestyle changes. It’s a
reflection, for sure, of growing incomes, rising home equity,
higher levels of education and the availability of premium brands
at lower prices. It’s also a reflection, however, of a powerful
emotional need on the part of American consumers to make a positive
statement about their life, their home, their status.

The impact of all of this on the kitchen and bath market is
clear. Housing starts and home sales remain strong. Homeownership
remains at near-record levels. Home equity continues to grow.
Refinancing activity marches on. Shipments of most key products
remain strong.

And, the high end of the Miracle Market purrs along.

Sales of custom and semi-custom cabinets are leading gains in
the overall cabinet market; average kitchen prices are being
reported higher among surveyed dealers; last month’s K/BIS in
Orlando attracted a record 785 exhibitors and 50,000 attendees.

And, there’s more. A striking new study by the National
Association of Home Builders reveals that fully one-fourth of home
buyers aged 50+ are actually paying more for the home of their
golden years than for their previous home in sharp contrast to the
past.

You can’t help but be left feeling lucky and grateful that
you’re part of the kitchen and bath market at this point in time.
Lucky the market is as vibrant and stable as it is. Lucky that
consumers’ love affair with functional, beautiful kitchens and
baths continues, and that this industry can enable people to feel
good about their homes and help shape living spaces that nurture
and comfort and bond.

We can only hope that the Miracle Market we’re in right now
somehow manages to last.

In the meantime, it’s up to all of us to be truly grateful, to
recognize the immense opportunities out there, and to seize the
moment.

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