Market Trends April 2019
Home Design Trends
Here are some of the current trends in home design, according to Builder Magazine:
Affordability. There is an acute shortage of affordable homes in many markets, offering builders an opportunity to “address the middle” and come up with more affordable single-family homes. Much of the demand comes from educators at all levels, municipal workers, healthcare employees and tradespeople who are being priced out of “gentrifying” urban neighborhoods.
Smart as Standard. As Amazon, Google, and Apple compete for consumers to purchase smart devices that do everything from turning on the oven to reminding you to close the garage door, they are increasingly partnering with larger home builders to lock in customers. Widespread adoption of home technology has made connectivity an affordable, expected standard in new-home construction and savvy builders are responding to meet this need.
Making Room for Mom and Dad. One of the biggest trends will be in-law suites on the main floor, ranging from simple bedroom suites to all-out mini-apartments with a separate living zone and kitchenette. Not all in-law suites are for parents; in some cases, they are for adult children or extended family or even friends who are pitching in to bring down the cost of owning a home.
Style Trends. The modern farmhouse look will continue to be the hot style of the moment. As a companion, exteriors that showcase siding in different ways are popular, such as using vertical siding on top and traditional horizontal siding on the rest of the home.
Kitchens Keep Growing. But the extra square footage will be devoted to features that incorporate the kitchen into living space, such as expansive banquettes, oversized islands and bar seating, rather than to work space, as in previous years. There is also a resurgence of “unfitted” kitchens where pieces are more furniture-like, materials are more complex, and open shelving replaces expanses of cabinetry.
Statement Ceilings. This trend encompasses a broad range of design elements for what designers call the “fifth wall,” including delicate trim details, intricate designs using beams and bolder looks where materials such as plaster finishes, wallpaper or even brick are the focal point. It’s being viewed as an affordable way to add impact to the home.
Wellness. Bringing touches from the outdoors inside is not only an aesthetic choice, but on trend with people’s desire to live healthier lives. Real plants actually filter harmful chemicals out of the air. People are also opting for natural materials over manmade, hardwood instead of carpet and flat finishes with fewer chemicals instead of high-gloss paint finishes.
Color it Creative. Bold, colored cabinets will take hold along with a more eclectic, transitional style in interior design. Metallics, such as gold, bronze and chrome, are making a comeback as home products designers mirror the jewelry fashion trend of mixing metals. In hardwood flooring lighter, more natural colors will edge out espresso and darker shades. Engineered vinyl plank flooring and tile that mimics wood are also gaining market acceptance from entry-level to luxury home buyers with its durability and realistic hardwood look and feel.
Working from Home. As telecommuting becomes more widespread, people are looking for office space within their home and community. Builders are responding by including offices or flexible spaces and equipping the entire residence with smart-home technology. Outside the home, builders are offering community centers with amenities such as co-working space, internet cafés, package delivery, and outdoor WiFi parks with tables for laptops.
Aging in Place
Freddie Mac estimates that 1.6 million more senior households are staying in place than would have been the case if this generation of seniors behaved like previous generations of homeowners. Instead of moving, more people born after 1931 are choosing to age in place in their homes, adapting them to changing needs if necessary. For perspective, 1.6 million units is roughly the same as the number of new single-family and multifamily housing units built each year and represents more than half of the current shortfall of 2.5 million housing units that Freddie Mac estimates the country is currently dealing with. The report also cites the fact that many seniors are in better health than previous generations. The fact that seniors are aging in place has made it tough for millennials and other first-time buyers who are finding themselves priced out of the market by a shortage in supply.
Amazon is introducing a program that offers Prime customers the option to pick one day a week that’s “Amazon Day.” Amazon will then be able to group their purchases and deliver them all at once, reducing the amount of packaging and boxes needed. Prime members can select a different option at checkout any time they want to. Amazon says they have tested the program with a group of Prime members and Amazon Day has already reduced packaging by tens of thousands of boxes. Amazon says that Amazon Day helps customers manage their deliveries and have fewer boxes to recycle and analysts note that the move will of course reduce Amazon’s shipping costs and help them move toward their Shipment Zero carbon reduction initiative’s goal. Customers have thus far not been offered any incentives to switch to Amazon Day.
FedEx is testing an autonomous delivery device with retailers that include Walmart and Target. It’s called the FedEx SameDay Bot. The bot, which is actually a large white cube on wheels, will allow retailers to accept orders from nearby customers and deliver them directly to homes or businesses the same day. FedEx is also collaborating with Lowe’s and other retailers to help assess the retail industry’s autonomous delivery needs. FedEx is developing the zero-emission, battery-powered bot with DEKA Development & Research Corp, whose founder also invented the iBot robotic wheelchair and Segway motorized scooter. The bot is designed to travel on sidewalks and along roadsides and has a host of safety features, as well as the ability to navigate unpaved surfaces, curbs and steps. FedEx plans to test the bot this summer is select markets, including Memphis, Tennessee. FedEx currently offers a SameDay City service that operates in 32 markets and 1,900 cities.
Walmart is also reportedly working with Estonian robotics startup Starship Technologies on delivering food orders to college kids in Virginia and with vehicle startup company Udelv in Phoenix.
Amazon Scout is an internally developed autonomous vehicle that Amazon is reportedly testing that was designed to beat Starship Technologies to the market. Six Scouts are delivering packages in a neighborhood in Washington state. Amazon also partnered with Chamberlain on the Amazon Key program, which allows select Prime members to receive deliveries in their garage.
The Humanization of Digital Assistants
Sometime in the future a conversation with a digital assistant will be virtually indistinguishable from a conversation with a person, according to Rohit Prasad, the head scientist for Amazon’s Alexa. Prasad has worked for two decades in machine learning and other areas of voice technology and currently oversees hundreds of engineers working to ensure that Alexa responds appropriately to voice commands. They are also working on teaching Alexa to tackle more complex issues, such as having a fluent conversation, whisper responses or remind you to close the garage door. Prasad says that they know they can’t be the expert in everything; that the WebMD skill (Alexa’s version of an app) may be the best place to access health information and Airbnb knows a lot more about vacation rentals than Alexa does. Digital assistants will keep getting smarter in at least four dimensions. The first is competency; accuracy and the rang of things AI can do will keep growing. The second is context awareness, where Alexa will learn to answer questions based on context, so if you ask her what the temperature is, she’ll be able to figure out whether you want the temperature in the house or outside or in the oven. The third is a version of responsiveness; if you whisper to Alexa, she whispers back. The last is almost what could be described as reasoning; you would tell Alexa you want to take a vacation in Aruba for a week, and she would search for Airbnb, airfare, rental cars, etc. Prasad says the toughest skill of all is at least ten years away. It’s the ability of AI to make a joke.
Canada’s Tech Future
Canada is undergoing a digital transformation that will continue to alter what the future of jobs and everyday work will look like, according to a recent report in the Hamilton Spectator. Toronto was recently recognized by global real estate leader CBRE’s annual Scoring Tech Talent report as one of the best locations for tech teams to settle because of the deep pool of available talent. The conditions that supported Canada’s tech growth also have implications for the future of the workforce overall. Canada is attractive to global talent and is welcoming an influx of skilled international workers to fill technology jobs, reportedly due to Canada’s merit-based immigration policy. However, Canada is also losing talent to Silicon Valley, home to many top tech companies, venture capital funding and higher salaries. Canada also has many companies that are transforming business through AI, which is just at its beginning stages when it comes to tech jobs. Canada’s ecosystem for startups was ranked third in the world by Swiss-based startup Blink, partially due to the support systems and the presence of many accelerators and incubators across the country. In addition, Canada has a strong university research community.
China Top Retail Market
China is expected to surpass the US and become the world’s largest retail market this year. Retail sales in China are forecast to grow 7.5% to $5.6 trillion this year, according to eMarketer’s worldwide retail and ecommerce forecast. US retail sales are expected to increase 3.3% to $5.5 trillion. While growth is slowing in both countries, China is expected to outpace the US through 2022. In recent years, consumers’ incomes in China have risen, catapulting millions of people into the new middle class, according to eMarketer.
Best Buy’s Journey from Retail-Led to Customer-Driven
Best Buy CEO Hubert Joly shared what he called the chain’s seven-year transformation from retail-led to customer-driven with attendees at this year’s Adobe Summit.
Seven years ago pundits thought Best Buy was on the way out, and Joly admits they were not in good shape. But Best Buy was determined to recover from the impact of Amazon and put customers at the center of their new business.
The key to change was the combination of data, employee enablement, purpose and customer experience. The first phase of the turnaround, dubbed “Renew Blue,” began in 2012 and was all about building a comprehensive strategy.
The strategy had several components. First, Best Buy made sure prices were competitive with Amazon. They then focused on the experience. They redid their website and invested in search functions and information. They made shipping a key tool, and now offer free shipping that they promise is as fast as Amazon. They then invested in the in-store experience and employees. That helped turnover to drop to less than 30%. They also partnered with their key technology companies.
All that resulted in taking nearly $2 billion in cost out of the business. They are now focused on reinventing the company through a strategy they call “Best Buy 2020: Building the New Blue.” They decided they are not in the business of selling products or doing transactions; their purpose is to enrich lives with the help of technology through addressing key needs, from entertainment to health and security. They don’t see themselves as a brick-and-mortar retailer, but rather a company obsessed by the customer and serving them in ways that truly solves their unique problems.
Best Buy also decided they needed to earn a reputation as a good corporate citizen. Initiatives include reducing their carbon footprint and launching Teen Tech Centers, interactive spaces dedicated to helping teens better understand technology and its role in modern lives.
Another new program is called “Total Tech Support.” For $200 per year, Best Buy supports all the technology in a home and shows up to fix whatever goes wrong. Best Buy also bought Jitterbug, a company focused on utilizing technology to support the elderly living at home, with the objecting of helping aging seniors stay home and live independently.
A variety of programs, including virtual reality, are designed to help people choose the best technology for them. They’ve also enabled a version of buy online, pick up in store that makes picking up an order quick and easy.
Seven years ago, 80% of Best Buy’s media spend was in mass marketing; today it’s 90% digital. Their customer database has more than 12,000 attributes. As an example of digital personalization, Best Buy sent out 40 million versions of one promotional email. The metrics they use to measure success are also changing.
In February Best Buy reported fiscal 2019 results that handily beat analysts’ expectations, delivering double the earnings from last fiscal and comp store sales growth of 4.8%, the eighth consecutive quarter of increases in comp store sales.
© Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.