Key Takeaways:
- Smart-home products are the most likely feature to be at a premium level;
- Comparing households with earnings above and below $120,000, appliances had the smallest gap of all features in the desire for higher-end upgrades;
- Mature singles/couples without kids at home were far more likely to opt for premium upgrades than any other life stage group.
By Robert Isler
Premium upgrades have been surging this year, leading mid-level renovations and far surpassing low-end in growth compared to 2020. NKBA took a closer look at what was driving that trend in its October update of the Kitchen & Bath Market Outlook, and the results yielded a few surprises.
For four of the kitchen features examined, more than half the upgrades were high-end. These were led by smart-home products, where 57% were premium. Water-filtration systems was next at 54%, while some of the more standard features, including appliances and countertops, were high-end 51% of the time. Even more basic kitchen features that aren’t as top-of-mind during a remodel did very well, with 44% of households going the premium route for flooring, and 43% for lighting. Somewhat surprising were cabinets, which came in last and far behind all others. Only 33% of remodels including cabinets were premium in nature.
Nearly 80% of mature homeowners are choosing premium upgrades for their remodels.
It gets more interesting, though, when premium upgrades are examined by level of household income. The study compared households with earnings above $120,000 and those below that threshold. Obviously, the higher the income, the more likely households are to opt for premium upgrades, no matter the feature. But it’s revealing when differentials are examined.
For instance, 65% of those in the higher bracket purchased premium smart-home products, vs. 50% of lower earners — a 15 percentage point differential. Countertops, range hoods and faucets/plumbing products have similar spreads. But when it came to water-filtration systems, viewed as a health feature, the gap narrowed to just 7 percentage points: 58% vs. 51%. The narrowest differential of all, though, is for appliances, with 54% of those in the higher income bracket opting for higher-end, and 50% of the lower bracket, a gap of just 4 percentage points and an indication of how important premium appliances are for homeowners, regardless of income level.
On the other end of the spectrum, the differential is largest for lighting features, with 55% of those in the higher bracket going the premium route, vs. just 37% of those earning less. Cabinets also show a large gap, with 43% of the higher earners opting for premium, compared with 29% of lower earners. These comparisons offer a sense of which features are deemed important enough to splurge on, and which take a back seat.
Another way the study sliced the likelihood of going the premium route was by life stage. Mature singles/couples without children in the household blew away all other groups examined. Nearly four in five (78%) of upgrades for this group were considered premium. Apparently, at this stage of life the mantra is, “I’ve saved all my life, I know what I want, and I’m willing to pay up to get it.” This is a huge increase over previous premium level percentages for the group, as pandemic restrictions have led to greater savings and the opportunity to repurpose discretionary funds meant for vacations and other activities.
Conversely, just 40% of younger singles/couples without kids opted for premium upgrades. In the middle were families with kids under age 12 in the household, at 54%, and families with kids 12 or older, at 46%.