Tech and labor dominated the State of the Industry panel, which centered on adaptability and changing perceptions. By Dianne M. Pogoda
LAS VEGAS — NKBA’s annual State of the Industry panel discussion at KBIS, featuring executives from key segments of the kitchen, bath and design industries, focused on two of the most critical issues in the business: the shortage of skilled labor and the technology boom.
Both present challenges and opportunities, according to the panel, which was moderated by Fox News/Fox Business anchor Melissa Francis for the third year. Mikael Åkerberg, CEO of European kitchen furniture maker nobilia; Katty Pien, chief marketing officer of LIXIL Americas, home to iconic brands American Standard, D-X-V and Grohe; Randy Warner, president of Luxe appliance maker Dacor, and Adam Sandow, Chairman and CEO of SANDOW luxury media, shared their perspectives on these issues and potential solutions. Francis wove the two topics together, as the panelists described the connections. A consistent theme common to both issues was flexibility and adaptability.
Addressing the skilled labor crisis, which leaves hundreds of thousands of jobs unfilled in the U.S. every month and will be exacerbated by some 750,000 openings in construction by 2026, the panel emphasized that changing the thinking about the trades is key to attracting the next generation.
Pien said American Standard has been quite active in advocating for the plumbing trade for 60 years. “We know there’s a lot of myth and misperception around the plumbing industry,” she said. “So in the past year, we conducted proprietary research to understand why young adults aren’t going into the plumbing industry, and found that 78% of them think plumbing is grueling and dirty work. Most people think plumbers walk around with a plunger, but if you look around KBIS, you see all the innovation and excitement and technology, it goes way beyond that.”
Dispelling that notion, she added that, according to the survey, 90% of today’s working plumbers report very high job satisfaction, and 80% say they make “great money” and are very happy with their income. LIXIL has also hosted “Tools and Tiaras,” a program that welcomes high school girls into the company’s offices to understand what it’s like to work in the trades, and encourages them to go into these fields. “The key to understanding is education,” she said.
Warner noted that vocational schools have changed dramatically in the past decade.
“We used to supply vocational schools that had appliance service departments with free product, help educate them and help teach,” he pointed out. “But it’s hard to find a vocational school today, and most of them have gone to an online platform, so there’s much less hands-on learning now. The installation part of the business is very difficult, and takes a lot of training. We have an obligation not just to sell the product, but to be sure it’s installed properly — and there aren’t enough people to do that now.”
Åkerberg said Nobilia is approaching the problem from the manufacturer’s point of view. For instance, to help battle labor issues, his company is designing product that’s faster and easier to install.
“This makes the jobs go quicker,” he said. “We also run the Nobilia Academy to help young people train for these professions. We train in everything from sales to designers, technicians and installers — not only for young people, but also for people who want to change professions. And now, as we are newly established [in the U.S.], we will bring an academy here.”
While many people fear the technology that can potentially take jobs away from people, it also changes the skillsets needed to thrive in jobs for the future. An example of this is Sandow’s Material Bank, a technology platform and marketplace for materials sampling, which launched in Memphis in January 2019. The idea behind it is to send actual samples — from paint chips to tiles, wood or fabric swatches — to designers and their clients so they may see and feel the actual product before committing to a purchase. Sandow said there’s a very small window in which to do all that complex fulfillment and deliver samples anywhere in the U.S. by 10:30 the next morning, so they built the logistics facility from scratch.
“We saw that the labor in the fulfillment industry is typically temporary, on-demand, very low-paying jobs,” he explained. “So we started an experiment: We decided that if we wanted to be the highest-wage payer for warehouse workers in the Memphis area, we would invest heavily up front in robotic technology, which meant that even though we would employ fewer people, we would have the speed, service levels and low error rate to be able to pay these people very well — starting at $17.50 an hour, compared to about $12 in that market. Because of the robotics and automation, we gained great efficiency, we have great productivity and worker retention. It has been a big success and is a terrific example of automation working with people — and frankly, younger people love working with robotics.”
Sandow added that in today’s K&B industry, texture, materials and color are more important than ever, and clients need to see the product. And no matter what kind of virtual reality glasses they use, the glasses can’t simulate the actual product, so they have to sample it in person. Francis observed that while online technology or virtual reality can’t substitute for the real thing, Sandow’s sampling operation uses to state-of-the-art logistics technology to provide a solution.
Francis expanded on the topic of continuing to provide training for workers as they continue in their careers so they remain relevant in the workforce.
“I tell kids to pick careers that aren’t going to be eaten up by [artificial intelligence] two years after they’re out of school,” Sandow said. “Entire categories might disappear, but we will always need good, hands-on tradespeople to install kitchens and bathrooms.”
He identified two main problems: First, that schools don’t prepare students properly for jobs in the real world. Second, and perhaps more critical, are websites that play video after video showing how easy it is to “flip things on Amazon and make $300 a day,” he said. “There’s thousands of these videos telling them they can make this easy money. And it’s not a little thing, it’s prevalent. Everything on tiktok and Instagram is easy.”
Thus, he said the hands-on approach is critical, and the antidote to an attitude of “why would I go out and get a job when I can sit home and make a couple of hundred a day flipping things and play on my phone?”
He said young people must be made aware that if they don’t have stable careers, they won’t have a stable life in years to come.
“But tradespeople have this,” he said. “They’ve been able to build very good careers that are very solid. There are entire categories of work that will disappear, for example an Uber driver. It’s great, until driverless cars become prevalent and we don’t need Uber drivers anymore. Kids need to understand about career paths, and the difference between a two-year career and a long-term career.”
Francis countered that perhaps the key is to be flexible. When artificial intelligence takes over a particular career, people have to be able to go out and get training to do something else.
Pien added that young people getting started in their careers today must be resilient.
“We are projecting that young kids today will go through multiple careers in their lives,” she offered. “And we have to teach them that a four-year college degree isn’t the only way. A lot of kids graduate with heavy debt that they can’t repay. There are a lot of different ways to make it, and the skilled trades is one of the ways. So a college career isn’t the be-all and end-all for everyone.”
Åkerberg said that the jobs of today will change instead of disappear. For instance, imagine a kitchen installer working with Google glasses, running into some problem and getting information and advice instantly and visually on how to deal with it.
“This will be the support,” he said. “It will change the knowledge and skills needed to do the job and how we should educate them. Maybe we shouldn’t be so afraid of A.I. and robots.”
Sandow pointed to augmented reality, like the Google glasses, as real game-changer in perhaps 10 years. As augmented reality helps to guide the worker, the fear factor is removed, and the worker can do things he or she didn’t know. It will make the work more interesting, faster and more efficient, and appeal to younger people.
Francis asked about the balancing act between the rapid advancements in home technology that can be simultaneously terrific and terrifying.
Warner acknowledged this is a challenge. In the luxury appliance sector, especially, the customer is not particularly comfortable with high tech.
“We’re owned by Samsung, so we have all the latest technology we could want,” he said. “But you have to know your audience. So, we don’t lead with the tech. We lead with style, design and craftsmanship first, with technology on the back burner. All of our products are fully Wi-Fi capable, but I don’t believe today’s customer is utilizing that to its capacity. It’s coming… Samsung is driving that for the Millennial customer. We aren’t there yet, but we will be.”
Pien concurred that LIXIL strives to deliver the products and technology that consumers want and need, that it’s not technology for technology’s sake. Two out of three consumers now do a lot of their research online. They read up on these purchases, read ratings and reviews, see how it will look in their homes.
“That technology is very helpful to the consumer,” she said, “so we have to be sure we’re informing and supporting her with the technology that’s she finds helpful and makes her purchase journey easier.”
In fact, Pien noted that the industry is on the precipice of disruption by tech companies and start-ups, with e-commerce taking over.
“We see it in our business, with significant double-digit growth,” she said. “This is how Millennials shop. So businesses have to adapt and sell the way consumers want to shop, rather than the way we’ve always sold it.”
Warner, however, said pure e-commerce still presents a challenge.
“If we didn’t have [the designers and installers] to support us, it’d be a nightmare for consumers to buy online and install themselves,” he said. “The return rate would be astronomical. If you’re spending $100,000 to remodel a kitchen, you’re going to invest in a designer to make sure it’s all right. We sell a puzzle to put into a kitchen. In the first place, if we were to ship a range to a home, it’s 400 pounds, and a refrigerator is 300 pounds. Installation is very difficult. So I think we’re protected for a time from e-commerce.”
Åkerberg concluded that thinking ahead is the key to any endeavor.
“Flexibility is very important, and how you plan your business and invest,” he said. “You have to keep an eye on the short-term as well as the long-term.”
