Building Product Purchasing Trends Among Specialty Trades and Installers in 2023

Building Product Purchasing Trends Among Specialty Trades and Installers in 2023

When preparing and adjusting your go-to-market strategies, it's important to view specialty trades and installers separately from general trades and builders. Here's the latest on specialty trades and installers purchase motivations and purchase mindsets.

The Farnsworth Group asked specialty trades contractors and installers from across the United States, such as HVAC Contractors, Plumbers, Electricians and Painters, what has shifted in how they research, find, select, and purchase building materials products.

Here’s a look at how key segments of trade professionals are behaving amidst changing market pressures.

The results from the full study of specialty contractors is included in the 2023 Building Products Customer Guide along with results from architects, engineers, builders, GCs, remodelers, and DIYers.

What Is a Specialty Trade Contractor?

According to the North American Industry Classification System, Specialty Trade Contractors fall under a sub-sector of building construction and remodeling. "The production work performed by establishments in this sub-sector is usually subcontracted from establishments of the general contractor type or operative builders, but especially in remodeling and repair construction, work also may be done directly for the owner of the property."

Specialty tradespeople are carpenters, painters, electricians, roofers, plumbers, landscapers, HVAC specialists, and other skilled laborers who implement foundational or finishing work on a building or home improvement project.

Purchase Behaviors Among Specialty Trades

So, are building product research and purchase behaviors among GCs, builders, remodelers, contractors, specialty tradespeople, and installers the same? To the contrary.

While all are considered Pros, their path to purchase behaviors, attitudes, and product uses varies. Specialty trades often have different needs than general contractors and builders, so their focus and behaviors when purchasing building products also varies.

When preparing and adjusting your go-to-market strategies, it's important to view specialty trades and installers separately from general trades and builders.

Installers and Specialty Trades Business Outlooks for 2023

Shorter project cycle for trades means they need a higher volume of leads to stay booked out; generally, specialty tradesmen will feel pressures from declining project demand and declining new housing starts.

Source: U.S. Census Bureau (2022), Monthly New Residential Sales, 2022 and National Association of Realtors (2022), Existing Home Sales

Yet, with the rebates and subsidies available to homeowners and businesses alike as a result of the Inflation Reduction Act, demand for remodeling projects related to renewable energy product installation is expected to remain strong.

In the most recent Building Products Customer Guide survey, respondents reported that 43% of their jobs were coming from new construction while 57% of jobs were coming from remodel and repair bids. We anticipate the focus of specialty trades and installers to increase among repair and remodel projects in 2023 and 2024. Over half of Pros in the residential trades are currently taking on new jobs.

In 2023, Tradespeople and Installers Care About Price First, and Availability Second

Our team at The Farnsworth Group foresees that these pressures will impact which retailers and dealers specialty trades and installers purchase from. These specialty Pros are investing more effort into product research to find cheaper brands, better deals, and a wider selection of products to fit varying project price points. In fact, 52% of residential tradespeople and 37% of commercial tradespeople are driven in-store to check prices and price shop according to the latest report.

Source: The Farnsworth Group (2022), The 2023 Building Products Customer Guide

If your product and marketing teams have not already been working to conduct pricing strategy research and adjust pricing schedules accordingly, you're already behind the curve as in 2023, catering to price sensitivity across the home improvement buyer segments is how your brand will retain market share and increase market penetration, especially among younger Pros. Further, ensure that your retail placements and merchandizing strategies highlight special offers, value-adds, discounts, and rebates, to move your product into consideration for a customer.

Will Construction Costs Go Down in 2023?

Based on findings from both the 2023 Building Products Customer survey and the latest data in our Monthly Home Improvement Monthly Tracker, which keeps a pulse on current Pro sentiments and behaviors, material prices are inflating overall project costs and the majority of Pros are passing those increased costs onto the homeowner, at least in part.

Source: The Farnsworth Group and HIRI, 2023, The Pro Home Improvement Monthly Tracker

Higher materials costs are a challenge that will continue to put pressure on specialty trades and installers, especially as demand in single family housing starts continues to decrease as it becomes more expensive to borrow money.

Pros and homeowners alike are wondering when building materials costs will go down so they can implement more of the remodeling projects and additions on their properties, rather than making trade-offs during projects and postponing projects outright.

Tradespeople Are Reluctantly Switching Brands, But They Aren't Disappointed

As a result of these market pressures, Pros of all kinds are focused on finding ways to reduce overall project costs to continue winning bids on repair and remodel projects.

Often known as a customer segment that is very brand loyal, the availability shake-up of the last couple of years simultaneously shook up that assumption.

In 2022, 32% of specialty trades and installers tried a new brand for the first time, especially among categories including

  1. smart home and home automation
  2. storage and organization
  3. lawn and garden

Smaller firms, those earning less than $500K annually, are more inclined to switch brands based on availability (48%) while larger firms, those earning more than $500K annually, reported they are more inclined to switch brands based on quality (50%).

Source: The Farnsworth Group (2022), The 2023 Building Products Customer Guide

In 2022, 86% of tradesmen who tried a new brand are overwhelmingly satisfied, which is both an opportunity and a risk facing your brand in 2023 and beyond.

In 2020 and 2021, the number of specialty trade purchases that were made at product specific suppliers and non-industry specific retailers, like Amazon, increased sharply due to availability issues. In the latest report, we see that purchases among specialty trades, especially smaller firms, shifted back in favor of big box retailers Lowe's and Home Depot. Between those two retailers is 52% of the share of channel, so if you are targeting trade professionals, be sure you are getting prime retail space in home centers.

Request access to the entire report covering customer attitudes and behaviors among DIYers as well as architects, engineers, builders, contractors, specialty trades, and designers.

Building Products Customer Guide, Request Access

Methodology: Who We Surveyed and How

To qualify as a respondent, they must have influence on products purchased and either sole or joint decision-making authority for their projects.

Survey respondents were primarily male (81%), managing less than 12 employees (58%), millennials (50%), working on residential projects (73%) and have been in business for over a decade (44%).

We surveyed the following categories of specialty trades and installers:

  1. Carpenters (20%)
  2. Painters (16%)
  3. Electricians (11%)
  4. Roofers (10%)
  5. Plumbers (9%)
  6. Landscapers (9%)
  7. HVAC (8%)
  8. Flooring (6%)
  9. Others (12%)

Our team at The Farnsworth Group will provide you with over 30 years of home improvement industry expertise and specialized market research knowledge to ensure you get the valuable insights you need to make data-driven decisions for your brand. 

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