Americans have a long history of home improvement dating back to the early 20th century… when the Sears, Roebuck and Co. catalog sold homes in the mail that could be purchased and assembled by anyone with a basic understanding of carpentry. Ever since then, the “pickup truck” has been an American staple that helped push homebuilding in the suburbs and beyond. Gottlieb Daimler built the first-ever pickup truck — dubbed vehicle No. 42 — in 1896. And by 1925, Ford began offering an optional truck bed in its Model T Runabout. Four years later, Chrysler produced the first half-ton Dodge pickup truck and other car makers followed suit.
Keep on Truckin’
Truck sales were already gaining traction prior to the pandemic. Among the best-selling vehicles of 2019, three trucks captured the number one, two and three positions: the Ford F Series, the Dodge Ram, and the Chevrolet Silverado.
In 2020, truck sales continue to be strong, despite general economic uncertainty. In fact, truck sales of all types are up. Ford Motor Company just reported that pickup truck sales hit their best third quarter in 15 years. With the help of stronger retail sales and rapidly recovering commercial sales, F-Series Q3 retail sales are up 10.1 percent over a year ago… back above pre-pandemic sales levels. In what is being called a “victory for the trucking industry,” the Freight Transportation Research Associates (FTR) reported that new sales of Class 8 trucks totaled approximately 40,100 for October — an 83 percent increase from October 2019… and a 26 percent increase from September 2020.
Contractors are focusing more on remodeling and home improvement projects, and truck sales are soaring. What’s more, there’s been a new spike in popularity for the electric truck market. Electric truck makers such as Tesla, Rivian, GM/Hummer, and Bollinger are currently racing to dominate the electric truck market, with several reasonably price models already on the market or in development.
General Motors unveiled its brand new 2022 GMC Hummer EV in a 30-second ad spot that aired during Super Bowl LIV and is planning to run a second Hummer EV ad during the 2021 Super Bowl. Meanwhile, Lordstown Motors has announced that its Endurance electric pickup truck is on track for production in September of 2021. And Ford recently revealed that the 2022 E-Transit, an all-electric version of the automaker’s best-selling cargo van, will be available at the end of next year. It seems fitting that Tesla, manufacturer of the best-selling plug-in and battery electric passenger car and the futuristic Cybertruck, also slated for delivery late next year, is joining the S&P 500 after posting a fourth consecutive quarterly profit.
What’s Driving Truck Sales
There are many reasons truck sales are improving.
The construction and renovation trades, which rely heavily on trucks, have not been as hard hit as other industries. For the most part, work that takes place outside has been able to continue with modifications made to ensure social distancing.
On the homeowner side, the pandemic has kept many people in their homes for months — a factor that has motivated many homeowners to consider small construction projects to make their homes more livable and useful. Some economists believe the need to make homes more attractive and comforting in unsettling times has permanently changed America and that the surge in home improvement we’re seeing may very well be permanent. Trucks are proving to be a vital part of getting the job done.
All of this is good news for building product makers.
As trucks are demonstrating that they are a “pandemic proof” commodity, so too are building products. Home economist Max Anderson recently reported that deck construction was up 275 percent from March to July of this year. Hiring landscapers was up 238 percent. And fence construction installation was up 144 percent during the same period. Good news for our channel. Says Anderson, “In terms of measured history in the United States, this is the highest level of home improvement spending we’ve ever seen.”
Both Lowe’s and The Home Depot continue to see strong growth during the pandemic. According to Craig Menear, chairman and CEO of The Home Depot, “The third quarter was another exceptional quarter for The Home Depot as we saw the continuation of outsized demand for home improvement projects, which has led to sales growth of more than $15 billion through the first nine months of the year.”
The Bottom Line
Building product manufacturers need to be prepared for this new wave of motivated do-it-yourselfers and increased remodeling activity. This may mean taking a closer look at current product lines and considering modifications that can make the products more convenient to sell. And easier to transport to and from LBM dealers or big box retailers.
And it may require brands to reevaluate their B2B market strategy to include different messaging targeted toward smaller contractors along with B2C outreach as well. Kleber & Associates can help. For more information email Steve Kleber at email@example.com.