Retail Observer

AUGUST 2023 RETAILOBSERVER.COM 31 to the NKBA Research Team, who expected that a greater challenge would be "competition from e-commerce." But the research told them that consumers who are remodeling their kitchens or baths consider it very important to see and touch products before making a final purchase. Most showroom dealers (67%) recognize the importance of developing relationships with homeowners and converting shoppers into buyers (63%). Showrooms also seem to understand that they need to continuously evolve in order to serve their customers and stand out from the competition. Already, many showrooms have been making big changes. In the past two years, seven in 10 (65%) have carried new or additional brands, while over half (53%) have significantly remodeled their showroom, and four in 10 (40%) have added product categories. Within the next two years, four in 10 showrooms will be remodeling their space or carrying new brands. TECHNOLOGY IN SHOWROOMS Showrooms are also turning to technology to improve the customers' shopping experience. About 50% of showrooms are incorporating technology into their experience. Enhanced displays and monitors are the most frequently mentioned customer-facing technology enhancement. As for operational technology, updated design software and hardware top the list. An impressive number of both showroom dealers and designers are expecting that virtual technology will increasingly be used in kitchen and bath design over the next few years. INSIGHTS FROM THE RESEARCH REVEAL PANEL NKBA released the report in conjunction with a Research Reveal panel that included independent showroom owners and a designer. The panel provided additional insights, including some relating to technology solutions. According to the panelists, lighting solutions are incredibly important, whether this meant natural lighting that would allow customers to envision themselves at home with the products, or lightboxes that made it possible to see products under a variety of lighting conditions. All of the panelists talked about 3D rendering and how effective it was for showing customers what their home might look like with new products installed. They also emphasized that using a website in tandem with in-person sales can be a smart move, because of how purchasing habits, and how designers work with their clients, have changed due to the pandemic. The panelists also said it was important to think about how to attract customers to their website and then connect them with designers and eventually get them to step physically into the showroom. They also touched on strategies to meet with clients online while also meeting them in person, for example by combining showroom visits with Zoom designer meetings, and showrooms that would offer both in-person and online or video conferencing. The panelists emphasized that showrooms should prioritize including new technology as part of their product selection, such as smart toilets and motion-sensor faucets, since learning about exciting new trends is part of the showroom experience. CURRENT AND EXPECTED FUTURE SALES The significant role of K&B showrooms is evident in the sales they generate. The independent showroom sector of the kitchen and bath industry has seen steady sales growth over the last two years, with most showrooms surveyed predicting continued growth for the immediate future. Of the independent K&B showrooms surveyed, 70% had 2022 annual sales of $1 million or more and 22% reported sales of $5 million or more. Also, despite the uncertain economic conditions that continue to impact both new construction and remodeling, showroom dealers expect their 2023 projected sales to be on par with their 2022 and 2021 actual sales. Most showroom dealers rate the current health of the kitchen and bath market positively. TOP K&B INDEPENDENT SHOWROOM MARKET RATINGS In addition to the release of the report and the accompanying Research Reveal panel, NKBA conducted a study to rank the top 100 geographic markets for K&B showroom locations over the next few years. Here are the top five risk-adjusted showroom markets (you can access the full Rankings Report by scanning below). #1: San Francisco. The factors driving this ranking are approximately 56,000 new construction units that are under-built and more than 156,000 pro K&B remodeling projects expected in the next few years. #2: Los Angeles. In this geographic market, there are around 5,600 new construction units that were started in 2022 and that will be completed in 2023. Additionally, it is expected that more than 305,000 K&B remodeling projects will be started in 2024, and that this trend will continue over the next few years. #3: Boston. In this market, the number of under-built new homes is 9,000, and over 153,000 K&B remodels are expected to be started in 2024. #4: Phoenix. Phoenix has 35,000 under-built new homes, as well as over 162,000 K&B remodeling projects expected for 2024 and following years. #5: Memphis. Memphis is under-built by approximately 13,000 new homes, and around 40,000 K&B remodels are expected to be started in existing homes in 2024. Additionally, this market ranks very high when it comes to the impact of K&B remodels on home values. To get NKBA's full Independent Kitchen & Bath Showrooms report, visit www.nkba.org/research or scan here. To watch the Independent Kitchen & Bath Showrooms NKBALive, scan here. RO

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