Mark Mitchell on Upcoming Shifts in the Building Product Space for 2019 and Beyond

Find out how your company can embrace new trends with key insights from marketing “whiz” Mark Mitchell.
 

More About This Show

The Smarter Building Materials Marketing podcast helps industry professionals find better ways to grow leads, sales, and outperform the competition. It’s designed to give insights on how to create results-driven digital marketing strategy for companies of any size.
 

In this episode, Zach and Beth talk to Mark Mitchell, a leading consultant for both online and traditional marketing strategies in the industry.
 

Mark discusses two of the biggest shifts he’s seeing in the space, including online sales and off-site construction. Find out how you can stay ahead of the curve by either listening to the podcast or reading the article below.
 

Mark Mitchell is a 30-year veteran working in building materials sales and marketing so there’s no better person to talk to about changes in the industry. For the last eight years, Mark has served as a consultant working solely with building materials companies to help them grow sales with architects, builders, contractors, dealers, distributors, and big box retailers with his firm Whizard Strategy.
 

He’s also the author of the book, Building Materials Channel Marketing, which is considered the industry bible on the subject. Plus, Mark and his team offer a semiannual conference called the Whizard Summit in Boulder, Colorado where dozens of companies spend two days learning the best ways to improve both their traditional and online marketing.
 

Mark and our team at Venveo have stayed close since Zach met him at a remodeler’s show in Baltimore several years ago. Today, we’re lucky to tap into Mark’s expertise while talking about two of the biggest shifts happening in the building materials space and how your company can prepare for them.
 

[3:02]

You can already see Lowe’s and Home Depot becoming very focused on growing their online presence, whether it’s getting people to order online and have products shipped directly to their house or for an in-store pickup. These two industry giants serve as bellwethers for the rest of the industry and Mark is seeing online sales growth in micro-niches as well.
 

eFaucets.com, for example, sells completely online and is a huge resource to find everything in the world you could possibly want to know about faucets.
 

They’re an incredibly successful business. But what really surprises Mark is that you don’t have to have to be a company selling small, shippable building products to excel in this space. He recently saw a custom staircase company that sells completely online.
 

The size of the product is becoming less relevant for onlines sales. People want to go to a website like Amazon, push a button, and buy.
 

In addition to sales moving online, Mark also sees the distribution process shifting. Even if your company isn’t selling online, your distributor might be. Mark’s concern is that most companies are going to end up behind the curve in building an online presence. It’s important not to wait until it causes a problem; instead, be proactive about it.
 

So what are some things your company can do?

What to Change to Stay Ahead

Mark says that the number one thing is to be the online leader about information for your type of product. Think of any question someone could type into Google about your product category and your company should show up at the top of the page as an answer. The key is to start with information.
 

Next, have a person whose whole job is to explore and be on top of online sales for your entire type of product. Who is selling your product online today? What do you know about them? Is it being sold by the manufacturer, the dealer, or both?
 

Track and monitor this information, then develop your plan of what you’re going to do. Don’t wait until you're forced to react. Because realistically, Mark says you have two options when it comes to selling online.
 

You could sit back and do nothing for the next two years. But by year three, you’ll probably have no choice but to sell online. So be prepared. You may not need to sell online today. But you should at least be preparing some type of action plan to get ready because it’s coming.
 

And if you’re worried about disrupting your dealer relationships, check out this strategy Mark recently heard of from a manufacturer. The company has an online buy button but intentionally makes the prices higher than the dealer’s. They’re not trying to grow their online sales today, but when the consumer goes to price compare online, they’ll buy from the dealer at what seems like a discount.
 

At any point the manufacturer wants to shift their strategy, they just have to lower the price. Remember, if you can sell a staircase online, you can sell just about anything. You can either start now and figure out how to scale your sales online or wait three years and scramble to compete in a space that is overrun.
 

According to Mark, having a website is no longer an option. But that doesn’t mean that all websites are created equal. Too many building product companies think that any website checks off the box. But you also need to invest in smart strategies for your SEO, social media, and content.
 

Simply put, building materials manufacturers are ten years behind the rest of the world when it comes to marketing. It’s vital that you start leading the way in what a successful company looks like online.

Move to Off-site Modular Construction

[15:34]

One of the biggest problems with the building materials industry has been its tremendous amount of waste and inefficiency. Every other industry has figured out how to make products more efficiently with consistent quality and lower costs.
 

But because the building materials industry is so fragmented, with thousands of homebuilders and contractors doing things differently across the country, it’s been difficult for the industry to move forward.
 

This is starting to shift, however, and Mark says it’s because of two major changes that have occurred over the last several years.
 

The first was an influx in real estate investment in the wake of the great recession. Major firms bought up thousands of foreclosure homes across the country and kept them as rentals. This caused investors to look at how they cold better source materials for the construction industry.
 

The second thing that happened was a shortage in construction labor. These two factors made some key influencers realize that the numbers work better when you build a house in a factory. It’s frequently cheaper, faster, and better than what you’d find on a jobsite. This is especially true if you’re building a high rise apartment building that needs 100 bathrooms and kitchens, for example.
 

Mark has seen some larger construction companies create their own factories in order to move in this direction and he only sees it as a growing movement in the future. As a result, he foresees builders moving more into the design, marketing, and sales business.
 

A big player in the design build space is Katerra. Mark recently wrote a popular article that posits Katerra as the future of the building materials industry. They’re buying directly from manufacturers and have the opportunity to do what Uber did to the taxi industry.

One of Katerra’s goals is to be a more efficient source of supply in the construction industry compared to current methods. Their mindset requires a product with a certain performance. They don’t believe that brand names add value in a house.
 

Instead, they focus on design and performance. They deal directly with manufacturers in order to offer tremendous builder savings. They also now offer a wide scope of services that help make up for labor shortages, including architecture and engineering, construction management and general contracting, interior design, and of course, material supply.
 

Mark says that this means increased efficiency is going to be huge in the coming years. How can manufacturers stay ahead of this shift?
 

For starters, keep an eye on Katerra and similar companies. This movement is still small on the grand scale, but Mark predicts a shift will occur very quickly.
 

Manufacturers should start meeting with companies like Katerra right now. Understand how they work and what they’re all about so you can make a better, informed decision of how and where you sell a product. Learn what these companies need from a manufacturer, because it’s going to be different than what a builder or contractor needs.
 

If you can figure out how you can meet their needs, you could become the favored supplier early on.
 

Online sales and modular construction are two trends that will almost undoubtedly grow fast and furiously in the near future.
 

Want to talk to Mark about how your building materials company can stay ahead of the curve?
 

Visit his website at www.seethewhizard.com for more information.