COVID-19 Brings New Mix of Customers, Product Sales to Pro Yards (Part I)

Building products manufacturers, mills, and wood treatment facilities are keenly aware of the COVID-19 traffic boost in home improvement warehouse (HIW) stores, such as Home Depot, Menards, and Lowes. If they have a strong presence in those locations, these manufacturers are happy about that boost. But many who aren’t well established in HIW stores and are more dependent on lumber and building materials dealers are feeling like they’re missing an opportunity.

In order to track how COVID-19 is impacting the traditional pro dealers and lumber yards, Home Innovation teamed with Webb Analytics in August 2020 to conduct a survey designed to gauge how their business is changing. A goal of the survey was to uncover opportunities for manufacturers and suppliers to serve this channel better. Below is a summary of our findings.

A new and important customer category has emerged among pro dealers — the do-it-yourself homeowners looking to avoid the crowds at HIWs. This group is particularly looking for lumber for outdoor living products, and sometimes tools and hardscape products as well. These DIYers provide a welcome infusion of cash sales into this channel, which normally operates on credit with their pro client. But not everything about this change is seamless. DIY purchasers generally require a higher level of service and like to visit the store in-person. Also, with dealers experiencing a supply shortage for certain building products, they are seeing contrasting changes in buyers’ attitudes – some are more anxious about getting materials and more insistent about order specs; others are more willing to try alternatives to products they’ve traditionally purchased.

One question on the survey was, ”Overall, what is most striking change about your customers and the products they buy since COVID-19?”

Among the first 32 write-in responses, 8 mentioned they were most struck by DIYers coming into stores; 7 mentioned the boost in outdoor projects and treated lumber purchases; 4 mentioned the supply shortage for treated and other lumber products.

Some of the specific comments included:

More cash sales, and buyers are less price sensitive
A lot of new faces in the store, and many more incoming calls from shoppers
Major supply issues, particularly with treated lumber, commodity lumber, and plywood
Supply issues overall have buyers looking for alternative solutions
Customers are ordering with more lead time
Higher level of stress among buyers to get the materials they need
There is a boom in outdoor projects
Some project types, such as hotel and multifamily, “stopped dead”
Walk-in customer base is more steady — particularly from DIYers avoiding HIWs
Some product categories are selling more (e.g., exterior materials), but some are selling less (e.g., cabinets)

One respondent’s summary of the change in their customer base was, “More homeowners for sure, where we are usually 90% contractor. Lots of folks wanting treated and cedar products and lots of door orders. More people (homeowners mostly) needing more hand holding on how to install or how something works, whereas usually our contractors don't need as much help ... not complaining as we do a good job with helping people. It's just been a different group of people shopping with us that we don't normally see, which has been great. Just hope those people come back again!”

Opportunities for Manufacturers and Suppliers

With such as vast transformation underway, it’s time for manufacturers and suppliers to explore how they can better serve the lumber yard and building materials dealer segment. There seems to be a window of opportunity to serve pro dealers as they service DIYers and pro remodelers who are opting away from crowded HIWs. This may involve a second look at consumer-friendly products; merchandising displays or on-site support; and/or more remodeling-focused products, particularly with outdoor lumber and hardscape materials.

With many materials in short supply and some buyers being more open to alternatives, there may be additional opportunities for providers of innovative products and materials, particularly with outdoor living materials such as decking and railing. The climate may be right to make inroads into this sales channel.

Also, due to some supply issues and buyers’ decrease in price sensitivity, there may be opportunities for suppliers of value-added or up-scale materials. Often, these suppliers avoid the pro dealer/lumber yard channel due lower potential margins and price competitiveness, but they may need to re-think it as an opportunity to expand. COVID-19 has trained the industry to expect longer lead times, so if long lead-times have hampered a manufacturer’s use of this channel in the past, now may be good time to revisit it as an option.

More Research Findings to Come

In the coming weeks, we will be reporting further on several other questions we asked in this dealer survey, including:

Categories of pro dealer customers that are increasing, decreasing, or staying the same: home builders; remodeler; installing contractors; non-residential builders; property managers; and DIYers
How specific product categories are selling (more, less, or the same as prior to COVID-19): siding; insulation; roofing; lumber; panel products; cabinetry; hardscape; masonry; and others
Whether COVID-19 has resulted in an increase, decrease, or no change in pro dealers’ mix of low-end, mid-range, or high-end products sold, by specific product categories

If you are considering conducting research among building materials retailers that service building pros, contact us – we can discuss our recommended approach and how we can get feedback from this channel on your behalf. With our access to lumber and building materials dealers, we can conduct research among this important customer base to gain insights into how you can serve them better.

Filed Under:

Sales and Marketing

Tagged:

Building Products, Marketing, Building Practices, Homebuyer Preferences, Data and Trends