"We are seeing a clear trend of homeowner and contractor-directed research occurring online. This has implications for the branded building products segment that include making mobile and web-content enhancements a priority."
Chicago, IL (PRWEB) April 07, 2015
L.E.K. Consulting’s fifth annual Contractor Behavior Study indicates that momentum is building in the residential and commercial building and construction markets. The study showed year-over-year increases in revenue growth and number of construction jobs. For the first time in this annual study, L.E.K. included both residential and commercial contractors to highlight similarities and differences in contractor sentiment. Although commercial construction is expected to slightly lag residential growth over the near term, both segments reported the largest per-job revenue gain since the start of the recession.
“Our latest analysis reveals increasing optimism for both residential and commercial contractors as the number of jobs is growing and the revenue per job is expected to increase as well,” said Robert Rourke, managing director and head of L.E.K.’s Building Products and Materials practice. “We are also seeing a clear trend of homeowner and contractor-directed research occurring online. This has implications for the branded building products segment that include making mobile and web-content enhancements a priority, and providing valuable and new solutions such as marketing and client-facing tools in order to stay competitive.”
As in past years, residential contractors remain loyal to pro dealers (vs. home improvement centers) and still prefer trusted brands when faced with pricing pressure (vs. bargain hunting for lower pricing across channels and brands). In fact, one-step distributors and specialty dealers are benefiting the most in the current climate, as residential contractors are expecting to shift purchases back to the specialty channel. Loyalty to trusted partners held true in the commercial contracting segment as well.
Highlights of the L.E.K. Contractor Behavior Study findings include:
- The highest year-over-year increase in total jobs since L.E.K. launched the study in 2010
- The largest per-job revenue gain since the start of the recession
Loyalty to specialty dealers
- Substantial drop in residential contractors willing to shop at less expensive retailers for similar brands offered by specialty dealers – 17% in 2014 vs. 45% in 2013
- Big box retailers are losing ground as contractors are going to these stores primarily because of proximity to job site and to make “fill-in” purchases
Expanded digital competency
- Nine out of 10 contractors reported owning a mobile device and using it for basic business functions and price shopping
- Contractors are using visualization apps, which allow customers to view photos of siding, roofing, floor coverings or other materials superimposed over their existing structure. For example, manufacturers have begun offering building information modeling (BIM) to allow builders to virtually sample different types of materials
Additional insights and results can be found in the L.E.K. Contractor Behavior Survey: Building Momentum by Robert Rourke, Thilo Henkes and Darren Perry, managing directors in L.E.K.’s Industrials practice.
About L.E.K. Consulting
L.E.K. Consulting is a global management consulting firm that uses deep industry expertise and analytical rigor to help clients solve their most critical business problems. Founded more than 30 years ago, L.E.K. employs more than 1,000 professionals in 21 offices across the Americas, Asia-Pacific and Europe. L.E.K. advises and supports global companies that are leaders in their industries – including the largest private and public sector organizations, private equity firms and emerging entrepreneurial businesses. L.E.K. helps business leaders consistently make better decisions, deliver improved business performance and create greater shareholder returns. For more information, go to http://www.lek.com.