Why are so many clients delaying projects?

Converting leads into sales is never guaranteed, but delays to projects that clients are seemingly happy with are giving major cause for concern to retailers. Toby Griffin investigates

One of the biggest frus­trations and concerns among retailers at the moment is the ongoing struggle to get clients to ‘push the button’. 

We’re not talking about customers who’ve just shown an interest in the company or made an enquiry. We’re talking about clients that are seemingly happy with all aspects of a project delaying signing on the dotted line and putting the project in motion. 

So, what’s causing it? What effect does it have and what can we do about it? 

We are in the midst of a fast-developing economic picture and even the sharpest minds in the country have been caught out by stubbornly high inflation. As we go to press, efforts by the Bank of England to use the interest rates to reduce inflation are not having a significant effect. So the country is facing a double whammy of higher mortgages and day-to-day products and amenities becoming increasingly more expensive.

The industry is a luxury one and it can be an easy decision to delay a room renovation when there is so much uncertainty in the air. This is, however, bad for business.

I asked a broad range of those within the industry if consumers really are taking longer to put the wheels in motion on orders.  

“Absolutely, yes,” says Becca Cranfield, director at Athena Stonecare. “We’re finding that clients are having to prioritise and compromise more when it comes to their home impro­ve­­ments. More and more clients are also seeking out multiple quotes, which adds to the turnaround time.”

69% of retailers said economic uncertainty was the main reason for customers delaying sign-off on projects

kbbreview LinkedIn poll

Talisa James, senior designer at The Kitchen Depot in Hemel Hempstead agrees: “People are definitely taking longer to decide. In general, they seem more reluctant to want a kitchen ASAP and are looking months ahead instead. A lot of it is down to economic concerns.”  

But there are different experiences out there. Scott Richards, showroom manager at Bathroom and Kitchen Planet in Stirling, says: “Business is very funny at the moment. There seems to be no rhythm to follow. I used to be able to track the peaks and troughs based on previous years and experience, but that seems to have disappeared. The volume of leads is still greatly down on last year, but our conversion rate is high.”

Mark Keily, show­room manager at Clonmel Plumbing Supplies in Ireland, is not finding customers taking longer to push the button on projects and is, in fact, currently very busy.

Despite mixed feelings and experiences among retailers, as Tom Reynolds, chief executive of the Bathroom Manufacturers Association, points out there is a general slowdown. 

Volumes down

“At the BMA we collect monthly statistics, which show that in the course of the past six months things have become really bumpy,” Reynolds explains. “Price increases have made the market seem bigger, but sales by volume are quite significantly down.

“Anecdotally, we’re finding that some brands are reporting that the top-end of the market is doing OK, the bottom-end is holding up – often through distress purchases – but the middle is becoming squeezed.

“The KBB sector is resilient though, but forecasting is a massive challenge and our industry is so closely linked to the health of the housing market.”

Looking into this further, I contacted Simon Philipp, the co-founder of Plany, a company that monitors UK planning applications for his take.

“The housing market and home improvements, partic­ularly in the kitchen and bathroom areas, are often connected,” he explains. “Changes in the housing market can influence home­owners’ decisions regarding home improvements, while renovations and upgrades can also have an impact on
the housing market. Having an on-trend kitchen and bathroom can influence buyers’ decisions in making offers quickly.”

Interest rates

He adds: “However, interest rates are at their highest level since 2008, property prices have already started to fall and fewer homeowners are selling or purchasing new homes. With such high rates of inflation and increasing building costs, homeowners may be put off building their new extension and this will have a ripple effect on the purchases of new kitchens and bathrooms. From current data and trends, we have seen an influx in planning applications being submitted and approved in 2023. We believe that homeowners are preparing for the future and waiting for inflation to drop and interest rates to stabilise.”  

So, Philipp’s assessment does point to the fact that there is an appetite out there for new kitchen and bathroom projects, but consumers are taking a wait-and-see approach.

Alex Jenman, director of Gains­borough Kitchens, blames economic uncertainty, saying: “We’re a postponable purchase. A lot of people are doing the legwork so they can budget ahead for when they feel comfortable to press the button. Our customers typically have the money but are spreading out the big spends, so it might be a holiday this year, but a kitchen next year. The good news is that a lot of these sales will come in when the economic news gets better, or when we all adjust to it being bad and we’ll have done the hard work already.”

That seems to be happening already, with Cranfield of Athena Stonecare saying: “We have a steady stream of new enquiries and are also seeing a lot of clients we provided quotes for up to and over a year ago getting back in touch to go ahead.”

So, are there potentially other reasons why customers might delay a purchase? 

According to Richard Hibbert, managing director of KSL Interiors in Sudbury and KBSA chair, it’s not all about the money.

“Waiting on building quotes, structural engineers, architect redraws, etc, are some of the most frequent excuses,” he explains. “In our experience, it’s not so much about the money at the moment.” 

Mark Evans, managing director of Mark David Kitchens in Saw­­bridge­worth, agrees, adding that one of the biggest causes of consumers delaying projects right now is their ability to find the right builder or fitter. 

For context. I asked retailers to highlight the average length of time from first enquiry to order taken in a less challenging economy. 

Time to order

“It really varies based on the customer type, but for refurbishment jobs,” explains James from The Kitchen Depot, “it probably takes two weeks from enquiry to order if it is turned around quickly.” 

This is similar to Richards at Bathroom and Kitchen Planet’s experience, who says straightforward designs take around one week, while with larger, more complicated designs one to two weeks and longer if working with a developer. 

Keily at Clonmel Plumbing Supplies finds it to be longer – “usually four to six weeks… but it all depends on fitters’ availability.”  

With turnaround times seemingly growing, the real question is how are retailers coping and what are they doing to help bring sales forwards?

“The project timescale/start date drives the decision-making primarily,” explains Richards. 

“And our quotations are valid for 14 days in an environment of forever increasing prices.

“I always arrange a follow-up appointment or phone call with the customers in our last meeting so they can set time aside to discuss things further. If they answer that, great we’re onto a winner. If they don’t, I will try twice over the following week and see if they come back to me. I aim to be attentive and personable without coming across as ‘salesy’.

James explains the Kitchen Depot’s stance: “If people don’t leave a deposit after the quote, we usually try to book a follow up appointment. We have a work phone and so if people don’t answer the call after a few days, we text them and will follow up a few days later if we’ve had no response. 

“When people talk to us on the phone, we usually set time frames with when we will be back in touch and give a reason.”

Summarising the economic effect, Dave Roland, managing director of Long Eaton Appliances in Nottingham puts it frankly: “Let’s be honest about the current situation. The Government needs to bring down inflation. Interest rates are the highest they’ve been for many years. I honestly think the Government don’t want consumers pending until inflation falls.”

Must the industry shrink to reflect current conditions? Or perhaps we just need to weather the storm.