On March 16th, just as my fiancee Gaetana and I were beginning what we thought would be our two-week confinement due to the coronavirus outbreak (ah, the good ole days), I could not resist the opportunity to share with you all just how much olive oil Guy felt we would need to survive two-weeks of home confinement.
I’ll admit, I caught some crap for it! “You’ll see” she said! Certain you can never have too much olive oil.
After Chris and Buck showed up, one of us should have never said, "We'll STILL have enough olive oil!" I may not be sorry for saying that, but that doesn't mean I don't regret it!
Right about now you may be thinking that the Lipton home is without olive oil and I’m telling you all of this because I’ve been put in my oily place by a woman and her “I told you so!” You may be thinking that Guy expects me apologize to you on her behalf for implying that she could not accurately forecast our family’s olive oil needs.
You’d be right!
My argument that our family had doubled in size held no water. Stating that the oil lasted over eight weeks versus the two weeks she was buying it for, fell on deaf ears. Also falling flat was my point that the bottle STILL had over a quart of oil in it!
Apparently if we come even CLOSE to running out of olive oil, Guy would feel vindicated and demand a public apology!
So, I’m sorry Guy! I'm sorry that you think that being down to the last quart of olive oil and being out are the same thing! And I’m sorry that I ever even mentioned this to begin with!
There, that’s TWO apologies, which should make everything better! As long as we keep this just between us, ok?
As Guy just learned, forecasting outcomes during a crisis can be a tricky business.
THE Farnsworth Group continues to update the data they are collecting on the effects of the coronavirus outbreak on the DIY and contractor segments. Their work continues to help dealers gain a better understanding of the current economic and behavioral changes we are all experiencing, due to the virus.
A few things that I want to mention before I get into some updated data.
It is possible or even likely, that you will see differences between this data and what you may be experiencing in your market. This is national data! Also of note is that while painting contractors are included in this data, not all the respondents to some survey questions were painters: GC’s and other contractors are included in some of this data. I’ll try to make that clear as I go.
One item of concern is the Business Confidence Index. On a scale of 1-10, the confidence indicator for painters stands at 5.7. That’s a significant 23% decrease from the 7.4 painters replied with before the outbreak. The only category of contractor which scored lower than painters was remodelers.
Also of note was the percentage of all contractors who reported job delays or stoppages since the outbreak. This number is a staggering 75% for small contractors and 85% for the larger ones. But there may be some good news mixed in with that: These numbers are lower than they were for the same questions just two weeks earlier! It may be a bit early to draw any conclusions from that data, but I like the trend and will keep an eye on it.
Over 65% of jobs cancelled were cancelled for health concerns stated by the customer: the homeowner not wanting the contractors in their houses. THAT number has been trending up and should cause some concern for any dealers heavily invested in the refi-repaint segment. As consumers start venturing out back to work and restaurants, it makes sense that they would want to keep their houses isolated: unless you want to sleep in your N95!
Regarding the work which contractors ARE bidding on, almost 60% of the small contractors (defined as under $750,000 in yearly revenue) responded that their prices were either “somewhat lower” or “much lower” than they would have been this time last year. Outcomes like that may lead contractors away from premium products so be on the lookout for that trend in your stores.
And make sure to keep in stock the products contractors want now! NOT what they wanted three months ago!
Saving the best for last: contractor behavior!
I’m happy to see that for two consecutive weeks, the percentage of contractors who purchased building materials IN a store was slightly up. It’s a short trend; two weeks! But still, it's a good sign for retailers.
Despite the increase in in-store traffic, over 30% of contractors responded last week that they purchased building materials online!
I hear that same thing nearly everyday from retailers: online and delivery, online and curbside, online and pick-up in store continue to drive their businesses.
Whether that is an opportunity to grow your market share or just hang on to what you've got, the e-commerce trend is not a new trend; it's a new reality!