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12 Kitchen and Bath Industry Predictions for the Next Five Years

Submitted by DovetailMarketing on Sun, 08/26/2018 - 15:28


Predictions by Thad Wittenburg, LinkedIn

1. 80%+ of kitchen and bath dealers with showrooms will become hybrids, selling not only out of the store but also online. This will be driven by changing consumer behaviors. Information gathering and shopping are trending more and more as online activities.

2. Currently there are 20,000-25,000 kitchen and bath dealers in the US. This number will be reduced by over 20% in the next five years due to an increase of online sales models, larger retail kitchen and bath chains, franchises, and other low-cost models.

3. There will be more freelance designers than ever before, due to the barrier to entry continuing to drop significantly. For under $10,000, they can set up a website, buy sample doors, invest in a CAD (2020) license and outsource delivery without ever investing in brick and mortar.

4. Outsourcing design services by kitchen and bath dealers, remodelers, design/build firms and builders will only increase considerably. This will allow companies to manage the ebbs and flows of their business without the consistent overhead of an on-staff designer.

5. Builders and remodelers will increasingly buy direct from manufacturers (this could be accomplished by partnering with design services or freelance designers to meet their customers’ needs).

6. 30% plus of cabinetry will be sold online. According to Statista, online sales are growing at a compounded rate of roughly 20% – 25% a year. If you don’t think cabinetry is going to be a part of that, think again.

7. An estimated reduction in the more than 225,000 designers in our industry today will most likely be reduced by 20% over the next five years. 

The reason for this will be increased productivity due to better kitchen and bath systems and advanced Artificial Intelligence (AI) design software. Statista says that in 2018 the current revenue of the overall AI industry is $1.62B and within five years will grow to $17.3B (10x increase). Customers will be able to plug information into this intelligent software and it will produce multiple design options for them. The good news is: designers will be able to manage a large increase in business, which, in turn, will mean substantial growth on the financial compensation front.

8. 90%+ of project presentations will involve virtual reality (VR) or augmented reality (AR). Statista forecasts that this year alone, the spend on AR and VR is $27B and in 2023, it’s estimated to be over $209B. The kitchen and bath industry is a perfect fit for these types of technologies.

9. Cabinet sales in the U.S. are estimated to be $21B for 2018 with an estimated increase to $28B by 2023.

10. Cabinet margins will drop at least 3-5 points due to transparency in pricing and more online sales.

11. Over 30% of all cabinetry is being delivered by third party companies now. ($25M out of $65M). That number will increase to over 80% in the next 5 years.

12. Onsite measuring of projects will be done with phone and/or tablet apps that use laser and/or infrared technology. This will give consumers the ability to take pictures and measurements of their kitchen and download information to send to their designers. (something like Canvas but more sophisticated).

These are only predictions based on current trends in our industry and the evolution of technology.