Why The Consumer Buying Experience in Residential Construction is Ready for Disruption
Remember the days when you had to get up off your butt, grab your car keys, drive to Blockbuster, browse DVD’s, wait in a line, pay, drive home, insert the disc… all just to watch a movie?
Seems crazy now considering you can browse movies without getting off your couch, watch trailers, read reviews and purchase with a click of a button.
At the time, Blockbuster didn’t seem too terribly inconvenient but now that we’ve experienced the “Netflix” sensation we will never go back. And the lesson learned is simple… the consumer has all the power and they will always choose convenience.
I’ve talked a lot about this before but every industry seems to be transformed by creating more convenience for the consumer. Think of convenience as simply creating a better experience. It sounds so simple but to really disrupt an industry you must transform the experience and not just make it slightly better.
The movie rental industry didn’t get transformed by a better Blockbuster, it was transformed by an entirely new way to purchase and rent movies that is way more convenient.
So how does this relate to the consumer buying experience in residential construction?
The buying experience for the consumer looking to do a remodel or build a new home sucks! There’s no other way to put this. In fact, I’m not aware of too many industries where the buying experience is as inconvenient and unclear as residential construction.
Let’s focus on remodelling since that is very hot right now and a lot of home builders differ in their process. When a consumer wants to renovate their home they usually get multiple estimates from various contractors in their area. The estimates are really the “point of sale” since everything begins with the estimate.
Here’s the problem… the estimates are all static and vague. It doesn’t matter what tool the contractor is using, the consumer doesn’t get to see what matters to them most. And what matters most to a consumer is their finishes, the selections they make such as countertops, floor, backsplash, lights, faucets, etc.
Most contractors will include an allowance pricing which means they assign an arbitrary value to all the selections (i.e. $5/sq ft for tile, $10/sq ft for backsplash, etc). Little do consumers realize that the estimate pretty much is useless at this point because every contractor can play with the allowance pricing as it is totally arbitrary and they are actually incentivized to make it as low as possible so they can win the bid.
The result is that the consumer gets a bunch of estimates that have line items with a price and they can’t really compare the estimates to each other. They are forced to agree upfront to an estimate and then drive all across their city for the next week or two making selections at the tile store, countertop store, cabinet store, and so on. As they make their selections they have no idea the impact it will have on their overall price. Only after they let their contractor know and they spend hours/days recalculating the estimate do they find out that they are already over budget!
Name an industry with a more inconvenient buying experience. I honestly can’t think of one.
It is crazy we are in 2021 and this is what happens all around the world in one of the largest industries. So the question is why? Why hasn’t anything been done to solve this problem? Why hasn’t anyone brought the contractor, subcontractor, and retailer together to present one seamless buying experience for the consumer?
Because it is a very hard problem to solve.
Construction projects are very complex and custom. Each project is different for the most part so trying to create accurate prices with selections within the estimate is very challenging. Plus, the focus most construction software companies have had is on providing tools for the contractor instead of figuring out how to transform the buying experience for the consumer.
But let’s just pretend this glaring problem could be solved, what would the world look like?
Imagine a world where the consumer could get an estimate to their iPad or mobile device or laptop and it is interactive. The estimate is almost like an online e-commerce store but everything is tailored to their project dimensions with accurate prices. Imagine the consumer being able to play with the estimate by upgrading, making selections, adding optional items all while seeing the price change in real-time. Imagine if the retail experience was brought seamlessly right into the estimate so that the consumer didn’t need to drive all around the city making selections without knowing the impact on price!
Isn’t this what consumers really want?
I’ve been through several large renovation projects. And let me tell you… there’s nothing worse than driving around the city making selections without knowing the impact it will have on the price. I clearly remember being in HomeDepot with my kids and wife after visiting many other stores prior. We were just needing to find a faucet for our kitchen but I was so exhausted and “hangry” that I threw the first one I saw into our cart and said “We’re going home”. Funny enough, we hated that faucet and ended up having to replace it.
It just makes no sense that with one of the largest expenditures a person will ever have they are forced to agree to something static and vague upfront with no real clue as to what they are getting or what the final price will be.
There is no question the residential construction industry will be disrupted and it is my opinion it will begin with the “point of sale”, the estimate. Something so boring and traditional will be transformed into a living, dynamic, interactive, e-commerce experience. The contractor, subcontractor, retailer, and consumer will be operating within one seamless experience.
It seems so clear to me that this is the future of construction.
The best part is that https://CostCertified.com, a company I co-founded is already tackling this problem. We have already transformed the buying experience and empowered contractors to build & send interactive estimates. In doing so, consumers who receive a CostCertified quote are way happier, and contractors using our platform are booking more jobs and making more profit from upgrades.
As a startup we are far from being what we envision the end product to be but at least we are already providing a level of convenience & clarity not previously seen in the residential construction industry.