Kitchen & Bath Business - September 2020 - 19

People who aren't moving as much are remodeling. On the other hand, with
all the threat of infection more prominent in crowded areas, we can anticipate
people moving from urban areas to suburban or rural areas - and as we know,
home buying is good for NKBA members."
CONSUMER BEHAVIOR IN DISRUPTIONS

In noting that there have been three major disruptions since 2000 - the 9/11
attacks, the financial crisis of 2007-2009 and now the pandemic - Smith
talked about some similarities and differences among the three.
Similarities are that innovation succeeds, big brands enjoy more advantages
than smaller brands,and there aren't real changes in price perceptions.There are
some changes in the ability of people to afford things, he said, but not lasting
changes in people's price-to-value perception,and that will happen now as well.
"[Sept. 11] was more about fear, so the job was to restore confidence," he
said, "while 2007-2009 was a liquidity crisis, so there was pressure on the
credit markets and loans to enable people to afford things again. Now, we have
a demand problem that started as a supply shock. We're trying to get people
out into the marketplace again to pick up the slack in demand. We've got to
reassure people about their health and hygiene to do that. The first thing is
to signal hygiene as people engage with you in the marketplace. That's the
only way to get the high-end consumer - who's already been avoiding the
market - back."
Smith turned to the concept of long-term scarring effects on consumers who
are just now coming into the marketplace and forming their expectations of the
marketplace - the future luxury customer.
"There's a tendency to overestimate the likelihood of a recurrence of a
'black-swan' event, so as a result, people become more cautious and pull
back,"he said."We tell our clients to focus their attention on communicating
confidence to consumers, that they don't have to fear the marketplace going
forward.The forecasts about the scarring effects of this current pandemic are
pretty scary, as much as a 10 percent [decline] over a five-plus-year period,
so as companies, we need to step in and take some responsibility for restoring confidence before they really begin to impact our future opportunities."
REACTIVATING THE MARKET

Asked for some advice to brands, designers and
retailers, each panelist offered a few key points.
"Innovate around hygiene, communicate that
you're more flexible, that you can adapt to new
needs, and indicate that you're a brand with a conscience and in tune with the big changes that are
happening in the marketplace in the context of
society in general," advised Smith.
Danziger expressed optimism about the future
of the home sector coming out of this crisis, while
acknowledging the challenges ahead.
"You are the most important resource for your
business, so conserve your optimism and your
spirit," she said. "Maintain a positive attitude,
believe in yourself, your talent and in the lifeenhancing products and services you provide
your clients. That's what made you what you are
today and what will take you into the future. Your
products and services will be more important
than ever before to clients, especially since they're
anticipating spending a lot more time in their
homes - so you have to make that home a wonderful place to be."
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Kitchen & Bath Business - September 2020

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