Top Takeaways:
- Although backlogs remain strong, challenges are increasing.
- Homeowners are shifting to virtual shopping for better sourcing and pricing.
- Product inflation and the need to increase worker wages are compromising margins.
By Robert isler
Sourcing challenges, long lead times, a shortage of skilled labor, relentless price inflation, and growing customer frustration are among the myriad of obstacles faced by designers in today’s environment and covered in the Q1 NKBA/John Burns Kitchen & Bath Market Index (KBMI) report.
Let’s dig in. On sourcing, just under half the designers surveyed indicated they have shifted their strategies in the first quarter of 2022, with the vast majority of them switching from foreign to domestic suppliers based on availability. Over half report using new brands this year vs. last, with the goal of keeping timelines intact. Simply put, more designers are less committed to brand loyalty than they’ve been in the past, particularly regarding hard-to-source products such as cabinets and appliances.
“Designer margins are being squeezed by higher product costs along with a need to make significant wage concessions to retain skilled labor.”
Decisions to switch brands are also a function of supply chain nightmares that are rampant across most industries. The survey reflects these issues, as nearly two in three who opt into new sourcing base it solely on availability and lead time, vs. just 20 percent who are doing so to receive better pricing. While almost half plan on returning to historical brands because of quality concerns about the new offerings, about the same number aren’t sure if they’ll go back.
As if margins aren’t being compromised enough by higher costs from suppliers across virtually all product lines, 3 in 4 designers have had to raise worker wages due to intense competition for skilled labor, with the average increase a significant 21 percent. At the same time, customer frustration has led many to explore virtual design services. When questioned for this survey, more than 1 in 4 designers noted that change, as customers are shopping for better prices.
Designers have shared ways they are coping with some of these challenges. One is to increase offerings so customers don’t look elsewhere. As one designer stated, “Clients are willing to compromise to find things in stock, so I’ve expanded the number of brands I offer.” Along those same lines, another designer noted that since the focus seems to be on quality as prices are already high across-the-board, they are adjusting accordingly. A third has been tracking customer shifts and following their leads, saying “With price increases on all our products, consumers are shopping around more. We’ve had to educate ourselves on product reviews and what’s available.” Despite all of these challenges, in many cases designers are busier than ever with growing backlogs. One offered a solution to this as well, “We offered virtual meetings to our process to qualify clients.”