With everyone spending more time at home than ever before, the role of “home” is dramatically increasing in importance both in terms of functional and emotional roles of our lives. As our homes evolve into the place for everything, my research team and I have been studying what that means for brands now and even after quarantine restrictions lift.
Modern consumers are no longer tethered to the idea of living near work. The usage of space balances between the aesthetic and the pragmatic. While two years ago the rage was the open concept home, now with kids doing school work next to their parents in a Zoom meeting on top of the family dog barking, privacy and individual space becomes part of the equation.
Living a more sustainable lifestyle is part and parcel of what consumers aspire to do, and home energy consumption has become a bigger focus as more time spent at home means more variable usage and expense. A sustainable, energy-efficient home is quite a selling point for many buyers.
I spoke with Allan Merrill, CEO of Beazer Homes, to learn not only what he is seeing in the home building market in the midst of a pandemic, but also what his predictions are for the near future.
Jeff Fromm: How are homes and home building evolving through the pandemic? Obviously, people are spending a lot of time at home.
Allan Merrill: There are a lot of things going on because of the pandemic in the housing sector. There’s a new appreciation that the home isn’t just shelter. It’s not just a place to sleep. It’s where we’re working, raising our kids, and having our recreation either in the home or in the immediate vicinity of the home. The characteristics of the home and the neighborhood are being looked at through a lot of additional lenses. This has led a lot of folks to make the decision that it is time to change things because the current home may not stand up to those new requirements.
Fromm: What are some of the key trends builders like these are seeing in terms of what consumers are looking for?
Merrill: Most consumers would have heard the expression, “open concept.” It looks great and it feels great if you’re having a party. But, when you think about your home as a place for your kids to be in school while you are doing Zoom meetings for work, an open concept home doesn’t work very well. You actually need privacy and discrete spaces for specific activities. The most interesting design theme for us is trying to figure out how to create enough openness for those gatherings, but also include private and purpose-built spaces for the things that the home is being used for.
A lot of traditionally unused space is being filled in to become a fourth bedroom, a study or a loft. People can get more usable space that they need because they are using their home differently. It’s amazing the nooks and crannies that exist in homes that can be reconfigured into really usable space.
Fromm: What is the role of affordability in terms of what consumers want and what they can afford so that somebody doesn’t maybe overspend relative to what is appropriate?
Merrill: There’s a lot to the topic of affordability. One of my big concerns as a home builder is before we break ground, the costs associated with getting ready to build a home have been accelerating significantly. It’s hard for us to have a price point that is accessible for many reasons. Think about neighborhoods where zoning requirements are only for bigger homes and only for larger lots. Well, bigger homes and larger lots are more expensive. Part of the affordability challenge is looking at our neighborhoods, looking at our communities and saying a good mix would include some smaller homes, some smaller lots, so that we could have price points that are more attainable for a larger share of home buyers.
We have to have a bigger umbrella as we think about homes and home ownership and make sure that we’re more inclusive as opposed to exclusive. We should rethink this notion of not wanting smaller homes near bigger homes. We need to expand the supply of housing to affect overall affordability and go further. More supply will help us address affordability and attainability, but if we’re going to encourage supply, we can’t have everything be bigger.
Fromm: Are you seeing a shift in where people want to live?
Merrill: Previously, people often wanted to move out to the suburbs because they get more space and more affordability but the commute kept them tethered to the central business district. What’s happened in the pandemic is that organizations globally have realized that remote work can be productive. Now, each organization has to find their own equation, but major employers are effectively liberating their employees to live and work where they want most of the time. This opens up different markets, communities and sub markets where affordability can be attained. I think cities are durable and are amazingly resilient in reinventing themselves. I think our cities are going to have to evolve because at this moment, with the ability for consumers to move further away and stay employed without being tethered to the city, cities are going to have to innovate their value proposition to be vibrant.
Fromm: How’s the online digital buying experience evolving? Personally speaking, I’m a little nervous about being out in public and I’m assuming many consumers are trying to spend a fair amount of their energy and time in a digital ecosystem.
Merrill: It has been fascinating to see, and it’s been a rapid change. We have a huge percentage of consumers who are willing and interested in engaging with videos and pictures before they come and visit us. We can demonstrate the product pretty effectively before they visit virtually. Consumers still do want to walk in the home, and that’s where we’ve taken other steps. Many of our communities now allow people to schedule self-led visits. The model homes are equipped with security devices so buyers can receive a key code to visit when their schedule allows.
That kind of flexibility is new to us and I think it’s responsive to this environment. The other thing we’ve really focused on is keeping our sales offices open by appointment only, so that we can make sure that we have a safe, secure, and clean experience. For example, after we walk somebody through a home and they’ve touched solid surfaces, we have a cleaning protocol to make sure that the next customer that we have the privilege of hosting can be confident that the experience that they have has received that attention.
Fromm: Any predictions for design trends that we should watch as we think about next gen homes?
Merrill: Homes that have features and characteristics that are highly energy efficient, have immediate payback for consumers. Energy consumption is often surprising to a lot of homeowners when they realize that when they’re living in their homes more vigorously, more extensively, that that cost of occupancy can be variable. We’ve committed that every home we deliver by 2025 will be net zero ready. And we’re absolutely pushing the industry to have homes be self-sufficient. To my knowledge, we’re the only ones in the industry who’ve done that. It takes some time, but as soon as we made the commitment, we’ve had partners come forward who want to help. Product manufacturers are going to be a big part of our solution but also, the attention to detail in the construction process makes an enormous difference. Well insulating a home, making sure that the seals and the caulking and all of the details at the foundational level are looked after have a huge impact.
Fromm: Can you speak a bit more on your commitment to every home Beazer delivers to be net zero ready by 2025?
Merrill: We care about price, but we really care about innovation and sustainability, and that’s driven our decisions. Our commitment was really rooted in the four corners of our purpose. I looked at our employees, our partners that provide us with labor and materials, our shareholders and our customers. If we can move the needle in a substantive way to more energy efficient homes, who benefits? In anything that simultaneously advances the value for all four of those constituents, we ought to immediately do.
The base of everything that we do are the communities that we operate in. We’re finding cities that will talk to us about zoning for our product where they wouldn’t put a competitor because our homes are different. I want to be an employer of choice. How do you do that? You show that you’re invested, that you stand for something, that you care. I want to be a partner of choice. We may not be the biggest builder, but I want the brands like Sherwin-Williams and DuPont, who are major partners of ours, to realize they pack a powerful punch because they’re all in with us.
What have you done to connect with consumers amid the pandemic? What more can you do to better meet your brand loyalists’ needs? Check back here through March for more insights, interviews with global leaders and ideas in response to COVID-19’s impact on how we live and define home during and post-pandemic.