Building a path to purchase
Inspiration takes on increased importance in an industry filled with new players and new trends.
The following is an article by Ken Clark from HBS Dealer on January 3, 2017.
Genius, believed Albert Einstein, is 99% perspiration and 1% inspiration.
Home improvement — judging from the quantity and variety of photo-rich, idea-sparking digital platforms that are competing for homeowner eyeballs and clicks — has a lot more inspiration to it. Just how much more is unclear.
You’ve heard of Houzz, Pinterest and Porch. But what about ServiceWhale, Thumbtack, Pro Referral, TaskRabbit and Paintzen. There is unprecedented competition for a new kind of entity to ignite a spark in the mind of a home improvement customer — plus, ignite it outside of the traditional retail space.
“What we’re continuing to see is the role of information inspiration in that process, we think of web sites like Houzz, Pinterest, etc., grasp and understand how to get in on that entry level for inspiration,” said Grant Farnsworth, of the Farnsworth Group. “At some time point, there is going to be some purchase made by that initial capture of inspiration.”
“What we’re continuing to see is the role of information inspiration in that process.”
Less clear than the need to inspire, he said, is the timing and quantifiable impact of the various steps on “the path to purchase” — the buzz phrase du jour for the retail industry. The science of where people begin the path, where they get distracted and where they finish is in its very early stages.
But companies are attempting to crack the code. Mooresville, N.C.-based Lowe’s reported during its recent analyst and investor conference that careful analysis of “terabytes of data” is leading to insights.
“We know that consideration period for buying a refrigerator is actually one-tenth the consideration period for a kitchen remodel,” said Mike McDermott, Lowe’s chief customer officer. “These valuable insights will now inform our customer and project acquisition strategy. We are refining our marketing messages to get compelling content in front of the right customer at the right time, driving improved engagement and increased sales.
This kind of data mining is beginning to open new ways of thinking about the path to purchase.
And the rise of non-traditional competition, according to executives at the Farnsworth Group, is loosening the grip traditional retailers had on their customers.
“First, it was just Amazon,” Farnsworth said. “Now what about Houzz and Pinterest, which sell stuff, and all the home service sites that attempt to inspire the customer, offer the product and get it installed. I’m seeing a lot of that happening right now.”
One thing to remember, according to the Farnsworth Group team: Digital building product sales are a small portion of the home improvement industry. But digital is a primary source for research and inspiration.
Consider this statistic from the company’s research: The No. 1 resource used by a homeowner seeking a pro for a home improvement project is “word of mouth,” cited by 60% of consumers — far and away the top resource.
“Word of mouth” includes verbal communication and online communication. Verbal communication leads the way (76%), followed by Facebook (43%). But in a respectable third place is the category of “home service sites/apps” at 29%. (Note: The percentages exceed 100% because consumers were allowed multiple responses.)
An Uber-like app isn’t likely to revolutionize the home improvement distribution channel as quickly as Uber transformed the taxi industry. But Farnsworth believes online home service can have a big influence on the future of the business.
“The audience is ready and able,” Farnsworth said. “The challenge is turning a complex need into a simple process.”
For additional information on Online Home Services, the Path to Purchase and how customers are being impacted, Contact Us Now.