Posted on 12/13/2019 at 10:11PM in Winter 2019: Industry Newsletter
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Indoor plumbing involves moving water and waste from point to point in a house. It has been that way for hundreds of years and will continue to be in the future, but everything surrounding the systems conveying the water and waste and the professionals who install and service it will change. Here are 11 trends that will affect your business.
1. Master Baths Become More Luxurious
Master baths are becoming retreats. No longer merely a place to clean up, in our affluent society they are becoming mini-spas. Women want the spa experience at home and are upgrading their baths to provide it.
2. Living (Aging) In Place
America is aging. At least, the baby boomers are aging. If the World War II generation was America's greatest generation, the boomers are America's most narcissistic generation, the original "me" generation. As boomers grow old, they will seek to remain in their homes as long as possible. It even makes sense economically when the cost of assisted living is factored. Thus, retrofitting existing kitchens and baths to support an aging population will be a growth industry.
3. Plumbing Uses Less Water
Some areas of the country have plenty of water. California's not one of them. California is at the forefront of water conservation and will drive this for the rest of the country whether it is necessary in a particular location or not. Plumbing products and appliances will continue to squeeze down water usage.
4. Efficiency Without a Return on Investment
Plumbing has also reached the point where energy savings has become the goal whether it makes economic sense or not. Energy is being squeezed from the home, without regard for economics. Hence, we have upgraded water heater with paybacks beyond the life of the products.
5. Plumbers are Harder to Find
People are not entering the industry in sufficient numbers to replace the plumbers who are retiring. Ultimately, this will result in higher wages, higher prices, and more DIY for consumers who do not want to pay the price plumbers will need to command to stay in business. Plumbing company owners who manage to recruit from outside the industry and train people up will be in the best position.
6. Regulations Increase
While President Trump has dramatically slowed the relentless march of regulatory overreach by unelected bureaucrats, he has not stopped it. Regulations will continue to burden small business owners. Moreover, since Trump has used "his pen and his phone" to quote his predecessor, stopping regulations through executive order, all it will take is the election of a more regulatory-minded president to bring it all crashing down.
7. Digital Voice Assistant Leads Increase
The yellow pages were replaced by Internet clicks. Long live the Internet. Except, Internet clicks are starting to be replaced by digital voice assistants, like Amazon's Echo, Apple's Siri, and Google Home. More consumers will ask Alexa, for example, to find a plumber or to call a plumber. This gives the companies owning the digital voice assistant more power than the first position on the yellow pages ever gave a plumber over lead flow. Expect them to cash in and either profit from lead distribution or dictate repair payments.
8. Plumbing Becomes Dumbbell Shaped
Mounting regulations, the shortage of labor, and digital voice assistants will squeeze the mid-sized contractor operation with three to ten trucks. Larger plumbing companies can spread the cost of regulatory compliance across more revenue, can create training and apprentice programs in-house, and can build up their own customer following through marketing. The smallest skirt the rules, prefer to operate by themselves or with a partner, and are content to scramble for the crumbs companies like Amazon and Google will toss their way. Thus, the industry becomes shaped like a dumbbell with lots of small companies, a few large ones, and little in between.
9. Plumbing Becomes More Convenient
Convenience is a major trend throughout society. Plumbing is not immune. This will lead to more hot water recirculation systems because of convenience. It will also lead to more Internet of Things (IoT) plumbing products because the IoT is all about convenience. Pressure sensors and water sensors for example, will alert homeowners to leaks instantly while IoT water valves shut off the flow of water.
10. Plumbing Becomes More Health-Focused
Plumbers have always protected the health of the nation. Plumbers will do more by providing porcelain with new sanitary coatings, intelligent IoT toilets that monitor the health of users, and cleaner water through filtration.
11. Everything is Faster
The world is speeding up and so will plumbing. Supply chains will be more integrated and interconnected with parts instantly reordered upon usage and delivered the same or next day (possibly by drone). Installations will become simpler with quick connect fittings and other time savers that speed work for plumbers but also make it easier for the DIY market. Repairs will be less disruptive of the home with trenchless technology, pipe lining systems, and so on.
Though significant, all of these changes essentially involve business as usual. They represent creeping incrementalism. The real risk to plumbers is when the incremental improvements run out and disruptive innovation occurs. It will use existing pieces, assembled in new and unpredictable ways. Just as ride sharing apps upended the taxi industry, disruptive innovation may very well disrupt plumbing.