The Next Big Buying Force

DENVER - An important new generation of Americans is beginning to change the ways homes are designed, built and remodeled and it will be critical for kitchen and bath marketers to understand their lifestyles, attitudes and buying preferences in order to tap into the business potential these budding new customers represent.

That was the message delivered to kitchen and bath dealers and product suppliers by Steven Kleber, president of Kleber & Associates Marketing and Communications, an Atlanta-based communications agency specializing in the building products market. Among the company's clients are KWC Faucets, DreamMaker Bath & Kitchen and Diva de Provence.

During an address at the recent Fall Conference of the SEN Design Group here, Kleber noted that, for years, most marketers have focused for good reason on targeting baby boomers, a massive demographic group with enormous purchasing power.

However, younger homeowners aged 25-34 and known widely as "Generation X" are emerging as a powerful buying force in their own right, and they "differ from previous generations of home improvers, and are more willing to make tradeoffs to achieve a higher quality of life and a customized personalized living space," Kleber told SEN members.

Kleber's conclusions are based largely on insights culled from a pair of focus groups conducted this year by Kleber & Associates in Dallas and Atlanta.

Participants in the sessions were homeowners 21-35 years in age, with a household income of $50,000 or more. All had purchased either a new or existing home within the past six months.

Among the conclusions drawn from the focus groups were the following:

• Young Homeowners place considerable value on personal time. Their days are consumed with varying work hours, increased accessibility (cell phones, PDAs, e-mail), longer commutes, and tremendous options for spending discretionary time and money. In contrast, earlier generations had very predictable workdays, and eating out with friends and going to the movies, for instance, were rare treats.
• Young Homeowners want projects done promptly. "They want projects completed quickly and, if needed, they will hire a professional to get it done," Kleber explained. "Compared with previous generations at this age, Generation X is more apt to weigh the cost of hiring a professional versus the time involved in learning how to do the project and complete it."
• Access to money is not a barrier. Payment options including home equity loans, refinancing, credit cards, or savings were seen as plentiful. But, while access to money was no object, "they want to take a financially manageable approach to home improvement," Kleber said. "They don't consume just for the sake of consumption or as a status symbol."
• Homes are investments. "As a group, Young Homeowners see homes more as a mechanism to build personal wealth than as an expense or a place to 'plant some roots,' Kleber said. And, when they are ready to invest, "they want projects done right away. Remember, this is the generation accustomed to seeing complete home renovations on TV done in 30 minutes or less."
• "Just acceptable" is not good enough. Young Homeowners want items that reflect their personal style. They disavow things that are too "cookie cutter." They demand options, and they want fixtures and furnishings to be "hip" and "contemporary."

DIFFERENT THAN BOOMERS

Kleber noted that Young Homeowners comprise roughly 40 million U.S. residents, and are approaching the prime years for buying a first home and nesting. Projected homeownership rates have not peaked for this group, he observed, noting that people under the age of 25 are the fastest growing home-buying age group in the country.

Furthermore, this group of people often eschew the traditional 20% down payment and 30-year fixed-rate mortgage and are taking advantage of low interest rates, 100% loans, adjustable-rate mortgages and a wealth of first-time buyer programs being offered by lenders.