As we continue to work with many of the leaders in the home services industry, some consistent trends keep coming up. In many cases, these trends have been accelerated by the recent pandemic and the increase in demand that has arisen but in other cases, these have been building over the most recent years.
For organizations to remain successful, relevant, and responsive to the markets in which they operate, they need to find ways to work with, and in some cases, capitalize on these trends. The home and more importantly, the services and products needed to keep those homes running smoothly, continue to be of great importance to individuals and create a unique opportunity for organizations to address. Last year alone, the Home Services market grew over 17% and is estimated to be a $595B dollar market.
Homeowners, especially older ones, are committed to their homes and are spending money on keeping them in tip-top shape. As individuals live longer and prefer to stay in their homes, they are engaging in services and products that will support that desire.
With the recent increases in the value of real estate, individuals are also realizing increased equity in their homes that are being put back into renovations, products, and services. Add on top of this that the overall population is aging and when all these factors are considered, the home service industry trends below may not be that surprising.
Homeowners expect to be able to get information and access to services at any time, most importantly when they need it. This means they want to be able to find the information they need online, likely through multiple channels – websites, social media, business directories – but less commonly would they call an organization for the information they require. They expect organizations to be responsive to their query or they will move on to another option. Online reviews, social media groups and hangouts, and websites are key sources of information being trusted by future customers for the information they hold.
Once the initial contact has been made, the use of technology has increased significantly. Electronic, or even online instant quotes, online service scheduling, tracking of delivery, dispatch or service activities, and 24/7 access to status are basic expectations by customers. It is also important for organizations to offer quick steps to resolution as customers do not like to wait, be called back, or be delayed. This is partially due to the speed of life and partially their assumptions on what the process should be. The way networks connect and communicate with their customers is more important than ever.
As organizations seek to remain competitive and capitalize on the opportunities to service customers in multiple ways, larger more aggressive aggregators are coming into the space previously held by sole proprietors and family businesses.
These small business owners are aging and there remains a limited supply of new talent to take over for them as they retire or leave the industry.
In concert with this, the market is being commoditized, more options and services are being provided by a single organization and in some cases, the specialists are disappearing.
These new organizations offer bundled services – think purchase, install, and ongoing service or even multiple disciplines not previously offered together – and are usually offered at more cost-effective pricing. With a focus on technology, higher volume, and innovation, the aggregators often create an environment where smaller players can’t compete.
As noted above, the labor side of the home services industry is changing. Electronic and connected products are changing the skill set of servicers, there are fewer skilled tradespeople available and those who have been in the industry for years are retiring and not being replaced at the same rate as those exiting.
Skilled and qualified resources are scarce and while some organizations are trying to feed that pipeline, the demand has risen even faster, and as they say “good help is hard to find.” Organizations are striving to add value to their contractor networks to retain their individuals and create a stronger relationship with them, thereby improving retention.
As individuals spend more time in their homes, the demand for space, appliances, products and the structure of the home has been put under pressure. Consumers are looking at all these things and making sure they work, they will continue to meet the needs of the family and perhaps even invest in improving them. What may have been tolerated before – a broken ice maker, a loose dryer door hinge, or ugly threadbare carpets – may now get addressed when they are being used on a more regular basis and owners are faced with them daily.
Likewise, with restaurant limits and other restrictions, many homeowners have increased the cooking, baking, and general use of their appliances or are simply choosing to reconfigure and beautify their spaces to make them more functional for today’s realities.
With no shortage of television shows and youtube videos on “how to” do almost everything in the home, many individuals are choosing to do their tasks when they are easier, which leaves the more complex, part-dependent tasks for servicers. With extra time, or in some cases money, on hand, many are trying to sort the smaller jobs out themselves instead of just calling for service.
A direct result of the pandemic and economic shutdowns are the current supply chain issues and increased inflation that is hitting services, products, and other aspects of the home service industry. As labor is harder to attract, wages are going up, causing service costs to go up as well. As we’ve highlighted, the increased demand for parts and products against limited supply for the same has increased prices.
The home services industry is moving at an incredible pace, the fast pace of life and impact of changing technology is evident and the number of new entrants and approaches is baffling.
PlusOne Solutions has been working with customers in the home services industry for over 15 years to ensure they are reducing risk related to the service networks they engage by offering comprehensive risk management options like TIN Matching, COI Management, License and Certification Management, and Contractor Background Checks. Contact us today to learn more about the services that we have to offer.
Contents are provided for information purposes only and should not be construed as legal advice. Users are reminded to seek legal counsel with respect to their obligations and use of PlusOne Solutions services.
About PlusOne Solutions
PlusOne Solutions has been an industry leader in the risk management field by specializing in compliance programs that meet the complex challenges of geographically dispersed contractors, vendors, and employee networks. PlusOne Solutions protects companies from possible financial, legal, and reputational risks associated with contractor and vendor relationships while creating safer work environments. To learn more, visit https://www.PlusOneSolutions.net.sign up for the newsletter. Questions or comments? We want to hear from you.
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