Surprising Consumer Design Insights | John Burns Real Estate Consulting

Surprising Consumer Design Insights


Three of the biggest surprises at our Housing Design Summit last year were:

  1. Significant building products research. How surprised many of our builder, developer, and architect clients were by the level of consumer research and insight conducted by building product (BP) companies. Their prior exposure to BP execs was mostly with BP salespeople and not their research teams.
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  2. Dearth of builder, architect, and developer research. How surprised our BP clients were that builders, developers, and architects conducted so little consumer research. One even quipped on-stage: “I just realized that architects and builders consider us to simply be holes to fill in the kitchen.”
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  3. Depth of professional trend watcher research. Professional housing design trend watchers work closely with many companies but not production builders for some reason.

Industry Silos

I followed up to learn why everyone was so surprised and uncovered a number of industry silos, including:

  • Capital partner silos. Home builder and developer lenders and shareholders invest primarily in short-term risk-adjusted returns, and are generally unwilling to fund innovative ideas or even follow up with home buyers after they have moved in to see how they like the designs. Ask capital partners what they think about funding new design, however, and you should expect a tepid response.
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  • Construction silos. Building the same home over and over reduces cycle time and construction defects, while new ideas take extra time and may result in construction problems. Many industry construction execs appreciate new ideas occasionally, but they find repetition is much easier to manage.
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  • Architect silos. The architects tell us they aren’t funded to do research, although one of our architect clients recently funded a research lab. Some architects even believe that research would stymie their creativity or provide misleading results. I asked one veteran architect how many consumers he had met who lived in one of his homes, and he sheepishly estimated 20. I have to believe that he could learn a lot by talking to homeowners who live in homes he designed. He also mentioned that his builder clients might not want him speaking with residents, for fear he might bring construction defect issues to the surface.
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  • Building product research silos. Building product companies are very competitive with each other and don’t share their ideas until they become public for everyone to see. While that makes sense, we also learned that they rarely take the opportunity to meet with the architects and builders who determine what products get purchased, and instead they speak with home buyers directly. One reason they don’t meet with industry execs appears to be that the highly fractured remodeling market is larger than the new home market, and their products are often used more broadly overseas and in commercial buildings.
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Preference to Copy Rather Than Innovate

Since good design ideas are easy to duplicate, many executives want others to take the risk and will copy the ideas that work. Oddly enough, that is one major reason we have a DesignLens™ membership. Each month we highlight and store in our searchable database successful new design ideas from all over the country. While most DesignLens™ members tend to be innovators, we are tapping into a growing number of those who prefer to learn from other’s efforts before taking the risks on their own.
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Two Suggestions

I have two suggestions.

  1. Learn from each other. Devote a little bit of time and money to meet with and learn from the research and design departments at building product companies and the builders who purchase and sell the products. I believe our Housing Design Summit is the best place to do that.
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  2. Interview your home buyers post purchase. Don’t let the bean counters (I can say this because I was formerly a CPA) prevent you from getting better. Many people love sharing what they love about their home and will be impressed with a builder’s or architect’s desire to continually get better. Talk to 20 homeowners in every neighborhood one year after close out and ask the questions needed to make your next homes even better.

For more information on our DesignLens™ membership, where we help the industry have the confidence needed to profitably build and finance the best places to live, see DesignLens™ or contact Jenni Lantz.

 


John Burns If you have any questions, please contact John Burns at (949) 870-1210 or by email.