If you’re heading to IBS 2019 with a little more apprehension than last year, you’re not alone. Many businesses are feeling a little sluggish. Slowing sales, cost challenges, and lowered pricing are tempering past optimism. We can approach this time with fear, or we can see the relative slowdown as a time for introspection and planning.
Your first reaction may be to chip away at direct expenses, waste and shrinkage, or labor costs. Those efforts may be valuable and necessary, but we believe now is the time to position your business for success by thinking deeply about the future of our industry. From our vantage point as a marketplace interacting daily with homebuilders and building product manufacturers, we believe this positioning should encompass: (1) incorporating technology, (2) increasing thoughtful collaboration, and (3) tapping into the power of data.
2018 was transformative for our company as we completed the rollout of two award-winning applications—My HomeSphere and HomeSphere-IQ—that, together, create a shared, easy-to-use marketplace.
We believe 2019 and the years to follow can be transformative for your company, too, and for our industry. If we use the slowdown to apply the best in technology, we have the capacity to evolve the residential construction industry. We can replace a siloed, closed supply chain with a transparent system for communications and data-sharing between builders and manufacturers.
In the short term, better communications and data insights can increase margins. This effort is necessary, as materials and labor costs continue to remain high and demand is primarily in the lower price points. Over the long term, data-sharing will promote new understanding of each party’s goals and challenges that will lead to positive industry-wide change.
Just as Amazon restructured retail by putting buyers in direct contact with product manufacturers, the HomeSphere marketplace is evolving residential homebuilding by directly connecting building-product buyers and sellers. Shared information and data is a valuable currency in B2B buyer-seller relationships, as we work together to achieve our goals.
Which leads to our second recommendation for setting up a successful future for the industry—collaboration.
Imagine your business. As a builder, you rely on market condition data and direct homeowner feedback to plan for the future. What if building product manufacturers had the same information about your business and could offer you products that perfectly meet each homeowner’s needs?
Now imagine these insights and interactions happening throughout the industry. As our understanding grows, so will collaboration. Innovation—which MIT Technology Review writes “depends critically on the kind of cross-pollination of ideas that collaboration enables”—will follow.
But understanding relies on the careful collection and availability of data—our third recommendation.
As a natural extension of our rebate-processing platform, we are digitizing the whole U.S. home inventory, home by home, product by product, from foundation to finish, inside and out, and throughout the home’s lifecycle. Throughout our 20-year history, we have collected product data from more than 2 million home closings. We package this data monthly into easy-to-use applications that any level of user can access.
Ours is the first centralized source for detailed home product data, delivering a level of insight new to the industry. Currently, builders use the comprehensive data to drive product costs down through rebate management and make more cost-efficient decisions on new products.
Manufacturers use this data to better understand their builder customer and where their products are being used. Soon they will be able to ensure product availability and delivery at exactly the right time. They can avoid costly delays by analyzing data on sell-through of exact volumes and models of products at a CBSA (core-based statistical area) level.
Data insights can benefit every level of an enterprise, from land or demand planning to design, product choice, and marketing and sales—if we combine our historical high-touch, hands-on approach with strategies that incorporate the latest opportunities that technology and data analytics afford our businesses. Data will fuel the AI (artificial intelligence) that will power our industry in the future.
Glenn Renner is chief executive officer of HomeSphere, the country’s largest digital marketplace connecting major building product manufacturers and local builders. He can be reached at email@example.com.