Remodeling?s Online Future

The Net will bring the industry together through 'virtual consolidation.'

March 30, 2000
Rod Sutton's Editorial Archives

Remodeling is becoming a retail service, says Ken Klein, CGR, and will result in "virtual consolidation" in the remodeling industry. Klein serves on the board of directors of Homestore.com in addition to running Kleinco Construction Service Inc. in Tulsa, Okla. Homestore.com is the parent company of Remodel.com. He made his comments during the spring meeting of the Remodeling Futures Program of Harvard’s Joint Center for Housing Studies.

Klein says virtual considation means the bringing together of remodeling services and alliances with the flow of information between customers, employees and partners. "The Internet will empower the three: remodeler, manufacturer and consumer," Klein says, based on the demands those constituencies will be making over the next few years.

Consumers, Klein says, are demanding a much more streamlined process. "They want to reduce the 41-week cycle [of a project], including the 16-week cycle to find a remodeler," he says. Klein says 50 percent of the remodeling dollars over the next five years will be spent by baby boomers; one-third of the spending will come from households with incomes greater than $75,000. These consumers will be looking for one-stop shopping, including finding a remodeler, design and loan moneys.

Klein next turned to the remodeler constituency. Using numbers that suggested a universe of approximately 500,000 remodelers, Klein says about 150,000 control nearly $50 billion worth of the market. Of those half a million firms, only 30,000 to 40,000 have revenues greater than $500,000. That group, Klein says, will make the most demands of the Internet.

These remodelers will demand high-quality leads, which will help then attain shorter "sale cycles." Remodelers want the time from lead to close to narrow, providing them with greater efficiencies and more opportunities. This will give them the ability to increase their margins as these leads will reduce sales and marketing expenses.

The final demand remodelers will bring to the Internet will be accuract product and pricing information. Klein says the power of the Internet in remodelers’ businesses will be in the advent of "web-enabled" programs that will help remodelers manage. "The business of remodeling is marketing, branding, sales, administration and production management," Klein says. "This is where the Net will help."

Klein foresees a series of programs available through the Internet that will provide remodelers with the tools they need to manage. The beauty, he says, is that these programs will be "web-enabled," meaning the software will exist online. No software will be needed in the business. "This cuts out IT," Klein says, and eliminates one of the major problems in running software in the business.

Klein’s vision for the Net future of business management includes the following software online: client management, print/mail programs, estimating, communications, and design and selection related to the remodeling project.

Rod Sutton is the Editor-in-Chief for Professional Remodler. Please email him with any comments or questions regarding his column.

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