dealers Archives - Westlake Royal Pros Blog

August 31, 2023August 31, 2023

Dealers Ramp Up Adoption of Ecommerce, Other Technologies

ecommerce activity at home improvement store

The construction and LBM industries are notorious for their slow adoption of technology. This includes ecommerce, which has lagged behind the pace of other industries. But the pace of adoption is increasing, driven by several factors, most notably the pandemic, wider acceptance, and demand from the next generation of customers and workers. And, perhaps surprising to some, AI is also playing a role.

According to LBM Journal’s 2023 LBM 100 survey, 40% of dealers offered online sales in 2022, a 9.5% increase over the previous year. Of those, 27.4% of orders were for curbside pickup.

“We’re hearing from almost every dealer we talk to that there is a real awareness that ecommerce is a needed element,” said Mike Berger, managing editor for LBM Journal. “The buying habits not just of consumers but also pros have changed so much since the pandemic started.”

Consumers have gotten used to logging onto not only Amazon but also home improvement retailers like The Home Depot and Lowe’s to compare prices and make purchases; LBM dealers are realizing that they need to ramp up their own ecommerce to keep up.

“Ecommerce is here, it’s only going to increase, and dealers are going to need to make every effort they can to accommodate it,” Berger said. “Younger folks coming into the LBM industry are bringing with them patterns of commerce they’ve already developed. To them, it’s second nature to be able to go to their phone, go to an app, place their order, and be done.”

While ecommerce has lagged, LBM dealers have made strides in other areas of technology. In its 2023 Construction Supply 150 report, Webb Analytics noted that while construction suppliers continue to devote a low percentage of revenue to technology, they’ve made remarkable gains. “Online bill presentation now is common, with online payment capabilities close behind,” the report explained. “The next big trends will involve notification of delivery status and online information about whether a product is in inventory. Both are likely to be features of customer-facing apps for smartphones—another growing trend.”

Dealers have responded to customer demand for easier access to accounts and pricing by making it easier to pay bills or check inventory online, a must-have for building pros who do office work after regular business hours because they’re on the jobsite all day. Online access may also be beneficial for customers for whom English is not their first language.

“Despite spending an average of less than 1% of revenue on technology—far below most other industries—leading dealers have gotten dramatically more techie over the years, especially this decade,” the Construction Supply 150 said. “We’re at the point where more than two-thirds of responding CS150 dealers make it possible for their customers to see purchasing history and bills online, and another quarter of the dealers plan to add that capability. Over half permit online bill payment, and another 30% plan to roll out the feature.”

One reason ecommerce might be slower to adopt is because pricing and supply in the building sector isn’t always black and white. Supply chain challenges, particularly over the past few years, have made it harder to predict what is available, and pricing can be impacted by a number of factors that vary customer by customer.

But, ironically, technology is helping to address those challenges, as well. “The stock issue is gradually improving as dealers get better warehouse systems,” Webb Analytics President Craig Webb said. “The pricing is getting better in part because dealers are getting more sophisticated at being able to categorize customers.”

Webb’s Construction Supply 150 found that 35% of dealers have a warehouse management system, but another 26% want to add it. Delivery notification systems are also on the rise, the study found, with 40% of dealers offering it now; 79% of dealers have dispatch/delivery software, which means notification offerings could rise soon.

For now, Berger said, many customers are using ecommerce for smaller items or one-off items, such as a few extra 2x4s or other missing materials needed to quickly complete a job. Consumers are using it as part of their pricing research, which positions dealers to potentially earn new business if they have an item at an equal or better price as a nearby big box store.

How Artificial Intelligence Can Help Dealers With Ecommerce

Webb and Berger both point to artificial intelligence (AI) as an important factor for dealers going forward.

“It looks like artificial intelligence’s ability to slice and price could be one of the very first ways AI makes an impact on dealers,” Webb said. “It’s possible to collect tons of information about customer history and purchasing patterns, to scrape the internet for what everyone else is selling for, and to look at commentaries on what’s happening with pricing trends, strikes, forest fires, etc., and make pricing recommendations in the moment for customers. [As a simple example,] it’s an automated way of seeing a winter storm coming and analyzing how many shovels you have.”

Berger said one of the biggest fears he hears from dealers is that adding ecommerce means increasing the amount of staff needed to handle it. But dealers who have found success are reporting the opposite, thanks in part to AI tools that can assist with filling out product descriptions, answering common questions, and more. “With the tools that are available, dealers aren’t having to radically ramp up their hiring.”

Solutions With Software

Existing and trusted software solutions also are playing a key role in getting dealers up to speed. The industry’s leading software providers offer systems that allow companies to run programs for what they want and need while adding or removing capabilities in the future.

Epicor’s enterprise resource planning (ERP) solution, for example, has an option for an integrated ecommerce platform.

ECI announced in July a new ecommerce solution for its Spruce ERP platform. The tools allow dealers to build a professional storefront website and customer portal without the need for coding or web development expertise. “For consumers and tradespeople, this means unlocking the ability to shop online for delivery or in-store pickup, browse products, create accounts, build self-service quotes, pay invoices, and more,” John Maiuri, division president LBMH at ECI, said in an announcement of the launch. “For LBM and hardlines businesses, this means help in avoiding over-stocking since inventory counts, transactions, pricing, invoices, and other information are directly connected between systems.”

It’s clear that more and more LBM dealers are embracing the efficiencies that technology can bring—while recognizing that customers will only continue to expect such conveniences in the future. As technology solutions become more advanced and more user-friendly, there perhaps may be no better time to take the leap.

Gain more insights and stay connected with Westlake Royal Building Products® on LinkedIn.

How to Use Inspiration Boards for Siding Selection

Westlake Royal Building Products inspiration boards

With the sheer number of siding options on the market, siding selection can sometimes be difficult for homebuyers as they navigate which materials, styles, profiles, and colors are right for them. Being able to see—and feel—the choices and understand how they work together can be powerful. Physical inspiration boards at the dealer or in a builder’s showroom or model home can help customers begin to envision how products look in real-world applications, visualize how they come together in popular multi-textured facades, and determine what they like and don’t like.

An inspiration board is a three-dimensional element that serves as a miniature wall section, combining several types of cladding, trim, and accessories into a diorama of sorts. Unlike a display board showing a small sample or even a larger product section, an inspiration board gives buyers an idea of how the finished exterior will look when fully outfitted with other claddings and accessories.

Here’s are examples of some of the inspiration boards Westlake Royal Building Products™ curated for this year’s International Builders’ Show:

Vignettes can combine several types of cladding to show common ways of achieving the multi-textured look, such as Versetta Stone with Cedar Renditions in the center vignette above or Exterior Portfolio Market Square siding with Foundry 7” Split Shake in the right-hand vignette. Each includes coordinating accessories to complete the look, including Atlantic Premium Shutters, Royal Trim & Mouldings column wraps, and a color-matched Mid-America mounting block.

“It brings it all together, catches people’s eye, and helps them visualize how they can outfit their exterior with Westlake Royal Building Products,” said Kriss Swint, Director of Marketing Communications. “Those applications help create more of a feeling and a mood. It helps us tell our story.”

If space is a concern, inspiration boards can take the form of smaller shadow boxes, such as these boards displayed at the 2020 Builders’ Show:

Though slightly smaller, these displays still make it easy for customers to see how various products come together to make a cohesive, eye-catching look.

Here are some tips for creating inspiration boards to ease siding selection:

• Seek out ideas: To put together Westlake’s inspiration boards, the team consults with product managers about the latest trends and draws on what customers are doing with the products. They also study magazines and Pinterest to keep up on new combinations and find fresh ideas.

• Include signage: Be sure to identify the products in the display so that buyers know what they are looking at, that everything is available from you, and how they can replicate the exact look if they so choose.

• Include images: Accompanying images showing a rendering of the look on a full home or of the home that inspired the vignette can help further increase and ease visualization.

• Add decorative touches: Don’t forget the other elements one would find on the exterior, such as plants, a light fixture (with mounting block), window box, or address block.

• Add QR codes: Including a QR code with a link to the products’ web pages or online brochures can make it easy for visitors to get more information on the products they’re seeing as they make their decisions, freeing up your staff in the process.

• Leverage your manufacturer: Don’t be afraid to reach out to your manufacturer rep for help curating your inspirational displays. They can offer advice on what products work best together and assist with finding the right information to link to, along with providing take-home samples, fan decks, and literature.

To make inspiration boards more powerful, you can pair them with Westlake’s online design tools, including the Virtual Remodeler, the Dream Designer, and HomePlay Prime, which allow buyers to mix and match products on an image of their own home or a similar home.

May 31, 2022June 25, 2022

Top LBM Dealers See Dramatic Growth Alongside Supply and Labor Challenges

The 2022 LBM 100 from LBM Journal and the Construction Supply 150 from Webb Analytics are not just lists of the leading LBM dealers in the country—they’re a reflection of the state of the greater construction industry and its challenges and opportunities. As such, it’s not surprising that dealers reported dramatic sales increases all while navigating a series of unprecedented obstacles.

“Though the nation’s dealers continued to navigate the pandemic in 2021, the challenges that accompany it were slightly different,” LBM Journal said. “Pandemic-amplified labor shortages and continued supply chain constraints and price hikes have only worsened and have recently been joined by rising inflation and fuel costs, due in part to the war in Ukraine. At the same time, booming residential construction activity continued throughout 2021, forcing dealers to channel their problem-solving even more as they tried to keep materials in customers’ hands, deliveries on time, and expenses down.”

Growth indeed. The magazine reported that all but one dealer on the list experienced sales gains in 2021, with 29 growing 50% and 10 companies experiencing gains of 75% or more. Some of the growth was driven by acquisition, but much of it can be attributed to booming construction activity.

Skyrocketing lumber prices also played a role, Webb Analytics noted. “Largely because of softwood lumber’s 116% price increase between January 2020 and January 2022, according to the Producer Price Index, lumberyards with manufacturing operations saw their revenues shoot up 58.6% in 2021 from the year before,” the analysis said. “This group—one of five subcategories tracked in the CS150—gets a lion’s share of its revenue from sales of framing lumber as well as from manufacturing wood-based components. Thus, a huge amount of what these dealers stock sold for drastically more than it did just a few years ago.”

Here are other notable trends from this year’s LBM Journal 100 and Construction Supply 150:

• Ongoing labor woes: Not surprisingly, LBM dealers are feeling the labor strain like elsewhere in the construction industry and the rest of the country overall. “This year, 84% of companies indicated that recruiting, hiring, and retaining employees is a challenge, up 7 percentage points from last year,” LBM Journal reported. “The most difficult positions to fill, by a significant percentage, were drivers and yard workers.”

In response, dealers said they are implementing a number of efforts, from mentoring programs to pay and benefit increases.

• Price and supply: Also expected, dealers cited price hikes and tight supply as another top hurdle. “Our biggest challenge currently is extended lead times and the constant rising costs,” Charlie Parks, owner and vice president of Parks Lumber & Building Supply, told LBM Journal. “Both of these challenges make it extremely difficult to play a consistent and reliable role in our customers’ attempt to get jobs under contract.”

Yet dealers still came through for their customers. “Priority customer retention was over 95% during extremely unprecedented times in which keeping the customer fulfilled was more difficult than ever,” Parks said.

• Acquisitions abound. The trend of dealers gobbling each other up continued. Webb Analytics reported 156 deals covering 693 facilities in 2021. At the same time, 167 new facilities opened.

• Ecommerce growth: Webb Analytics said that 72.7% of the Construction Supply 150 are allowing customers to access bills online, and 58.6% are allowing online payment, a significant increase from 56.7% and 42.3% the previous year, respectively.

On the other hand, online sales are still sluggish, LBM Journal found. “Compared to 2020, fewer LBM 100 dealers—just 31%—say they conducted sales online last year. However, among those companies, more are seeing greater chunks of sales online: 3.9% are seeing 25% to 49% of sales take place online, up from 0% the year before, and 3.9% are seeing 10% to 24% of sales take place online.”

View the full LBM Journal 100 here and download the Construction Supply 150 here.

Image: iStock.com/Foryou13

July 6, 2021July 6, 2021

How Are Housing and Pandemic Trends Impacting LBM Dealers?

Each May, some of the industry’s supply channel-focused publications release annual reports, listing the industry’s leading LBM dealers and distributors as well as the economic trends that have shaped their businesses the previous year.

This year saw the release of two new lists—the LBM Journal 100 and the Construction Supply 150 from Webb Analytics—which were published in May following one of the most unprecedented years in construction history. From the uncertainties at the onset of the pandemic to the housing and remodeling boom that soon followed to the supply and pricing challenges going on now, the building supply industry has been challenged in ways most had never seen before. And many dealers navigated extremely successfully.

Here are a few observations from LBM Journal and Webb Analytics for how dealers and distributors weathered 2020 and what trends are shaping up in 2021.

• Acquisitions continued: LBM dealers continued to scoop each other up. The most high-profile was Builders FirstSource purchasing BMC, growing from 440 locations to 550 locations in the process. But the moves weren’t limited to the big players, with dealers of all sizes taking advantage of opportunities to expand in size and geography via acquisition.

• Retail sales big, commercial suffers: With the surge in home improvement and DIY projects, it’s not surprising that home centers and dealers with heavy percentages of retail customers posted some of the biggest growth last year, as reported by the Construction Supply 150. Unfortunately, companies selling commercial-heavy inventories, such as steel studs and ceiling systems, saw declines. “It’s pretty clear that homebuilding will remain strong, and surveys suggest big-ticket remodeling will rebound as homeowners become less fearful of having remodelers working in their kitchens and baths,” Craig Webb wrote in the CS150.

In looking ahead to this year, a majority of CS150 respondents believe new construction and remodeling will continue to grow, but most expect retail sales, as well as multifamily and commercial, to remain the same.

• Labor remains a challenge: 77% of the LBM Journal 100 reported challenges with recruiting, hiring, and retaining employees, with drivers and yard workers the hardest-to-fill positions.

• The power of relationships: LBM dealers have always touted the importance of employees and customer relationships, but the pandemic drove that home even more. “The silver lining of the pandemic for us has definitely been relationships,” Charlie Parks, co-owner and vice president of Parks Lumber & Building Supply told LBM Journal. “We have developed stronger relationships with our customers, suppliers, and even with other supply houses in the area that we have done some dealing back and forth with during the shortage.”

• Installed sales: More than half of the Construction Supply 150 conduct installed sales. The most popular product categories include entry doors, cabinets, countertops, interior doors, and bathroom vanities.

• E-commerce expanding…slowly: The construction industry is notorious for slow adoption of technology, but the pandemic helped speed things along. LBM Journal found that while only 33% of leading dealers are offering online sales, 78% said online sales were significantly or slightly higher than the year before. As Webb noted in the Construction Supply 150, “true online shopping is unlikely to become ubiquitous until dealers figure out how to automatically adjust a price based on the customer.”

View the full LBM Journal 100 here and down the Construction Supply 150 here.

Image: iStock.com/ArnoMassee

June 18, 2019June 22, 2019

Why and How LBM Dealers Should Sell Exterior Packages

A home is a compilation of hundreds of decisions and thousands of products. So when it comes to the exterior, dealers that focus sales approaches on the whole cohesive package—and showing builders, remodelers, and their homeowners what those packages look like—may improve opportunities to increase upgrades, boost efficiencies, and further satisfy customers.

Here are a few factors to consider:

Instill buyer confidence: When the exterior is sold as a package, buyers can see what they’re getting as a whole and how it works together, rather than a sum of individual parts. Builders can send buyers to your store to view available products in combination, which is less overwhelming than choosing siding, then trim, then windows. They can get a vision for what the finished product will look like on their home and likely feel better about their decision. This in turn may help reduce change orders down the road that can create hassles for both you and the contractor.

Keep business in-house: Consulting with your manufacturer partners about what you sell versus what more they can provide may help fill gaps in your product offering. For example, stone has historically been a material most dealers do not offer, but Versetta Stone stone siding, which installs like traditional panel siding, offers the opportunity to keep that stone business in house. And by incorporating those products into a systems approach to selling, you can sell the builder on trying that new siding to ensure a cohesive look and to meet buyer demand for multi-textured facades.

Better-looking exteriors: Considering the full façade and thinking of the whole palette collectively may help create more varied, engaging streetscapes and avoid cookie-cutter looks. It also allows for visualization and experimentation with on-trend colors, texture blending, and materials using stocked products.

More upgrades: Similarly, if buyers can see the possibilities of how different products blend on their home, it’s likely they might fall in love with the look—and the upgrades used to make that look—even if it means upping their budget.

Single source: Though portfolios can be created across manufacturers, selling multiple lines from a single manufacturer or brand can add economies of scale because you’re working with the same rep, the same contacts for the PO, and a familiar process. This also means it’s easier to expand to additional product lines, with less paperwork or hoops to jump through at the beginning. In addition, contractors may be more willing to try something new if it’s from a company they already know, use, and trust.

Promoting Exterior Packages
The easiest way to focus selling on the whole façade instead of one-off product selection is to create packages that are easy to choose from and customize. Here are a few ways to do that:

Develop product palettes: Collaborate with your manufacturers to create product portfolios of coordinated product lines and colors that can be sold as is, with stock modifications, or with upgrades. Coordinate this process between different manufacturers, such as your siding/trim supplier and your window vendor, to ensure cohesive looks and material compatibility.

Boral Building Products Color Harmony exterior inspiration boards — Creating façade displays, or even inspiration boards like these, can help buyers visualize how products come together on their homes. This display shows how Boral Building Products’ Color Harmony portfolios of siding, trim, shutter, and stone brands combine for on-trend looks.

Inspire customers: Showcase those palettes and portfolios in a way that reveals how end products will look on the home, whether via simple binders with images, glossy lookbooks, wall vignettes, or inspiration boards. This makes it easy for them to choose an overall look they want instead of trying to visualize and piece together individual parts.

Leverage software: Our Virtual Remodeler tool allows homeowners to select the siding, trim, shutters, and stone, and then see how the combinations will look on their homes. Once a group of products is chosen, the dealer often can get a material list for easy ordering.

Boral Building Products Virtual Remodeler design tool — Boral Building Products’ Virtual Remodeler online design tools allows dealers, their customers, and homeowners to visualize what homes will look like with different products from across the company’s siding and trim portfolio. Once a design is determined, a materials list makes ordering simple.

With so many moving parts, it’s easy for the product selection process to become stressful for customers, pro and consumer alike. Considering exterior packages collectively, rather than a sum of parts, can ease the process while offering direct benefits to your bottom line.