The Home Depot and popular opinion agree: the US economy is growing at a rate few could have predicted in 2020. Since then, the nearly constant predictions of a looming recession seem to have quieted in the face of a steady stream of economic good news. Based on recent polling results, many Americans didn’t “get the memo” — and a surprisingly large percentage of them — perceived economic trouble.
When in all candor, there’s little trouble to be found.
- Consumer spending, the biggest engine of the US economy, powered US gross domestic product to grow at a stunning annualized rate of nearly 5 percent last quarter — more than double the quarter before that.
- The 2024 media budget survey reveals a market poised for realignment… major brands are demonstrating a commitment to adapt, with an increased focus on strategic brand advertising.
- The US economy remains better positioned than many of its counterparts in the Group of Seven (G7) across seven major indicators.
- The Home Depot quarterly sales beat Wall Street’s expectations, as homeowners continued to seek more moderate projects and repairs…. propelling the stock as one of the past week’s top performers.
“Similar to the second quarter, we saw continued customer engagement with smaller projects,” according to President and CEO, Ted Decker. A constrained housing supply is keeping home values high… and those with existing low mortgages are tackling smaller repair and remodeling projects. Promotions are back to pre-pandemic levels. And supply chain challenges — are largely in the rear-view mirror — with appliances again at more robust inventory levels at the big box retailer. Interestingly, digital sales increased 5 percent. “[The] most important observation we’ve made is that the worst of the inflationary environment is behind us. A customer who might have remodeled their entire home may be opting for a partial remodel,” explained Chief Financial Officer Richard McPhail. “The consumer — and particularly the homeowning consumer who is our customer — is healthy,” Decker said. “They’re employed. They’ve seen income gains and wealth gains in recent years. They have excess savings and they remain engaged in home improvement.” Yes, cooling inflation increases the probability that the Fed finally may have peaked at increasing rates, projecting lower mortgage costs for the future. The Wall Street Journal appeared to echo the outlook as it reported this week, “Inflation is falling faster than expected across advanced economies, marking a turning point in central banks’ two-year battle against surging prices.”
As we get ready to turn the calendar over, the countdown to 2024 has begun. While many of us are eager to put the challenges of this year behind us… there’s an undeniable sense of optimism in the air.
Reflecting on 2023
Before we set our sights on the future, let’s take a moment to reflect on the journey of 2023. It’s been a year of resilience, adaptation and growth. B2B industries in the builder products channel have navigated through unprecedented changes. Showcasing their ability to pivot, innovate and overcome obstacles… serving as the foundation for a more robust and resilient 2024.
Building on Success
The goal for all businesses is not just to survive… but to thrive. It’s about leveraging the experiences of the past to build a stronger future. Whether it’s refining customer relationships. Streamlining operations. Or embracing new technologies. The key is to build on the foundations of success.
Embracing Innovation
Innovation is not an option… it’s a necessity. The coming year offers a canvas for Building Product Brands to explore cutting-edge technologies, embrace digital transformation and to stay ahead of the competition. From artificial intelligence to blockchain, staying abreast of technological advancements positions businesses to adapt swiftly to market dynamics and meet evolving customer needs.
Strategic Planning for 2024
Success rarely happens by chance. Rather, it’s the result of meticulous planning and execution. Identify market trends. Analyze customer behavior. And align business strategies with the changing landscape. Whether it’s expanding your product line, entering new markets, or enhancing your digital presence… strategic planning sets the stage for a successful new year.
Collaboration and Partnership
The strength of the B2B ecosystem lies in collaboration and partnerships. As we look toward the International Builder Show and KBIS, consider the opportunity for fostering stronger relationships with key partners, suppliers and customers. Let’s discuss how to explore synergies. And ways to seek opportunities for joint ventures. And strategies for creating audience engagements that propels your brand forward.
It’s only 43 days away. If you’d like to learn how a refreshed approach to marketing communication can enhance your business in 2024, send and e-mail to Steve at sk@kleberandassociates.com to get the conversation started.
