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4 Slides, 4 Key Conclusions from the ProDealer Summit

Updated: Oct 23, 2019

You could fill a notebook with the quality content delivered at last week's ProDealer Summit, put on by the National Lumber and Builder Material Dealers Association and HBS Dealer. These three slides and one image, referenced in a quartet of presentations, contain some of the most valuable messages from the event.

John Burns Real Estate Consulting's ranking of the 50 biggest markets by housing cycle risk

John Burns' Good News/Bad News Report on Housing

The head of John Burns Real Estate Consulting says that, from a national perspective and barring problems with mortgage rates and monetary policy, the new-home market is on solid ground. But that ground also looks pretty flat, as he believes single-family permits will be unchanged this year and drop 5% next year while multifamily permits will inch up 3% in 2019 and slide 10% in 2020.


And keep in mind that your local conditions may vary, John Burns adds. His housing cycle risk rating puts San Jose, Calif., in the very high risk category. Meanwhile, troubling conditions are low in the Midwestern triumvirate of Chicago, Indianapolis, and Cleveland.


Burns urges dealers to keep an eye on several trends, most notably the rise of build-for-rent single-family housing, more offsite construction, modular construction, and accessory dwelling units. He notes that new homes currently account for about 11% of all home sales. If builders can construct homes with great design, the right price, and an optimal location, they could widen their share to the historical average of 15%, Burns says. That would push permits to about 1.4 million per year--roughly a 12% increase from current rates.



Want Workers? The Effort Needs to Start Earlier Than You Might Expect

Lots of dealers have spent years shaping the value proposition they present to customers, but many LBM operations hungry to build their staff never have thought to create an Employee Value Proposition to guide them when luring potential hires. That's the argument that Scott Ericson and Jennifer Swick of Wheelhouse 2020 made in their keynote speech.


Such a proposition matters because, as the slide above suggests, there are several steps in the process from first awareness of a potential employer to actually submitting a job application. Swick and Ericsson said 75% of all candidates research you before applying, and seven out of 10 won't bother to go further--even if they are unemployed--unless they see something they like. To the Wheelhouse executives, this means dealers have to make sure all their social media presents the company in attractive ways.


Presentation by The Farnsworth Group and Venveo

Millennial DIYers Are Different

It's more likely than not that a millennial will shop online for home improvement and building products before ever going to your store, new research by The Farnsworth Group and Venveo shows. And because 77% of the online shoppers visit a home improvement store's site vs. just 38% who said they open up a local hardware store's site, odds are that dealers are losing millennial DIYers' business before those people ever think of visiting the dealer's store.


What to do? Go where your customers are, Farnsworth's Grant Farnsworth and Venveo's Beth PopNikolov suggest. And as you bolster your digital presence, supplement the usual demands for prices, reviews, special offers, and availability by also including Millennial-friendly how-to videos and related instructions.


Visitors to a Home Depot in Louisiana see this Stine Lumber billboard

Promote 'The Better Bucket'

Dealers have been tormented for decades by disruptors, three panelists said at one ProDealer Summit session. What to do today, given the challenges from companies like Amazon, Katerra, and Entekra. For these three, the advice was much the same as their predecessors faced when challenges like big-box stores arrived: Decide what makes you special and then push that service offering extra hard.


Here's an example. Jeremy Stine, marketing director at Sulphur, LA-based Stine Lumber, noted that Stine sells several brands--particularly Stihl, Big Green Egg, and Yeti--that aren't available at The Home Depot. So Stine has a commercial promoting exclusive brands as well as survey results indicating it scores higher than the big boxes on customer service. Even more direct, Stine created an ad for a billboard (shown above) that's located directly across from a Home Depot store. David didn't show the billboard during the session, but did share it with me afterward.

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