Does DIY harm interior designers?
Wednesday, March 06, 2019
There’s plenty of good news in the 2019 Houzz State of the Industry report. Among all the statistics provided in the report, though, one data point in particular caught my eye. When asked about their business challenges in 2018, 21 percent of interior designers — far more than any other group of professionals — cited "Increased popularity of DIY."
In fact, it tied for No. 4 among a list of 14 possible business challenges. That made me wonder, are interior designers disproportionately disadvantaged by DIY consumers?
Although demand for interior design services declined in the fourth quarter of 2018, according to the American Society of Interior Designers, with residential designers reporting billings well below positive territory, designers in the Houzz study estimated annual revenue growth of between 8 and 13 percent.
Nearly 8 in 10 interior designers said they expect 2019 to be a "Good" or "Very Good" year for business. As in previous years, designers were the most optimistic about their projected revenue growth (9.4 percent on average), with 74 percent anticipating increased revenues and 70 percent expecting increased profit over 2018. Given the overall positive outlook, where does the threat of DIY figure into this picture?
At it happens, around the same time the Houzz report came out, the National Association of Realtors released its 2019 Remodeling Impact Report: DIY. The study found 53 percent of all home projects involved hiring a professional (the same as in 2017 and up from 48 percent in 2015). Even more to the point for interior designers, 41 percent of respondents said they preferred to hire a professional when the result they desired was better functionality or livability.
These figures correlate with the U.S. Census Bureau’s data from the biennial American Housing Survey. In 2013, 2015 and 2017 more than half of all major remodeling projects undertaken by homeowners involved hiring a professional. In addition, the value of those projects was twice or more than the value reported by those who chose to do the project themselves.
More in-depth studies on the remodeling market conducted by the Joint Center for Housing Studies at Harvard University (JCHS) found that DIY spending on discretionary home improvement projects did indeed increase following the recession that began in 2008. However, these studies also found that younger and less-affluent homeowners were more likely to undertake DIY projects; that older homeowners and owners with older homes tend to spend more and hire professionals more often; and that the top five percent of spenders accounted for between one-third and one-half of all annual spending on discretionary remodeling projects.
Another interesting finding of the JCHS studies is that, despite fluctuations in the economy and home prices, annual homeowner spending on home improvement as a share of home value has remained more or less stable over the years, averaging just over 1 percent.
Results from Houzz’s various kitchen, bath and home renovation studies from 2016 to 2019 display a similar pattern. For kitchen and bath renovations, use of interior designers has consistently remained in the 11 to 14 percent range and in the home studies, which involve a greater number of project types both interior and exterior, at 7 to 8 percent.
Whether for financial reasons or because they prefer it, some homeowners do choose to undertake larger remodeling projects themselves. In the main, though, surveys of DIY projects, such as that recently conducted by home improvement referral service Porch.com, find that they tend to be simpler tasks, such as painting, wallpapering, replacing lighting or fixtures, or doing basic home repairs.
A recent survey by pro referral service ImproveNet found that 63 percent of participants who undertook at least one DIY project in November 2018 regretted not involving a professional. More than half (55 percent) said the finished result did not look good, and one fourth (24 percent) said it did not function well.
These findings suggest that DIY is not taking business away from most interior designers. Without question, more and more clients or prospective clients are choosing to do all or some of their own purchasing and may have their own ideas about how they think the design should look.
Designers who have not adapted their business model to accommodate these changes will likely experience a decrease in business and revenues. But there appear to be plenty of potential clients who need a designer’s help for other reasons.
It’s interesting that the same percentage of designers who said the popularity of DIY was a business concern also cited "Difficulty finding prospective customers." Perhaps more to the point are the two top business concerns designers indicated: "Managing consumer concerns about costs" (38 percent) and "Managing consumer expectations" (39 percent). Having and communicating the right value proposition to today’s consumers would appear to be the key to gaining their business.
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