Why Such Insufficient Innovation in Building Products?
Building material manufacturers, like the majority of suppliers, keep an emphasis on boosting margins through economic situations of scale. They risk being put out of business by a company with technology they didn’t even know existed. While most successful industries are constantly reinventing themselves. Much of the building materials industry is stuck in the Dark Ages, and it makes us wonder, is it all profits over progress?
How quickly will your building material be outdated?
A lot of markets such as technology, customer packaged goods, and apparel, survive on the side, while many building product manufacturers live in the center. They cuddle up where they are comfortable in areas like the consumer, the competitors, pricing, and expenses. One would think they live in a time prior to Blockbuster’s demise and believe they can stand a chance in the face of a global revolution in technology (plus a climate crisis). Building material suppliers and building designers will get left behind if they refuse to innovate, or at the very least jump on the bandwagon of innovation when it’s passing by!
Look at fiberglass manufacturers, when it was initially developed, it was a wonder material. They had material as well as no market competition. They got to a specific size and quit looking for brand-new usages for fiberglass.
They are currently seeing themselves be eaten up by alternative remedies for items like fiberglass insulation that is taking increasingly more market share yearly. Where they used to be viewed as the leaders, they are now merely a provider of an asset.
Building products can take a lesson from Consumer-Packaged Goods
Customer packaged products (CPG) and modern technology firms get on a course of continuous and never ever ending improvement. With ever-green items like a cleaning agent, they enhance sales and margins by buying advancement. The majority of building product firms just seek to pull expenses out, desperate to squeeze out new market share for the same outdated product, selling to the same outdated people. Pepsi certainly was not hard up for cash when they rolled out the latest Pepsi Cafe. They know as a long-standing successful brand that they need to stay on the pulse of the public and be innovating new products.
CPG and also technology businesses are always looking for brand-new products that will make their existing product outdated and create a new resource of earnings. They seek new ideas at trade shows where they are scouting the little start-up that most developing product businesses dismiss due to the fact that they have no scale.
Innovative building, design, and consulting companies additionally observe fads, changes in consumer habits, and new items beyond the typical building products. One more way they live on the edge is by involving innovative manufacturing companies like Intellihot to help them establish new forward-thinking services for their clients. Such as IoT connectivity, hot water 365 services, and smart “learning” technology built into tankless water heaters. Does anyone really believe the tank-type water heater invented 150 years ago is the best “current” option for their building or their client's building? No. Are they afraid of change? Yes. (Poor Blockbuster)
An Open Mind Can Open Doors
Another weakness of a lot of building product businesses is that when they do attempt to be innovative, they approach it with a preconceived notion of a product. Really innovative companies don't think in regard to items but in terms of issues to be solved. They approach technology with an open mind.
When building material item companies do develop an innovative new item, it's generally dealt with as something for the Chief Executive Officer to mention in the annual report to show people that they are attempting to be cutting-edge. But they don't go all-in with the level of sales as well as advertising and marketing support they will certainly require to be successful. They don't put their A team on the product. It fails, and they tell themselves it is because the consumer doesn’t want new innovative products. When it fact it was a failed implementation with a heavy dose of skepticism that wasn’t given the time and energy to evolve into Netflix. (back to the blockbuster reference)
With the chances stacked against any new item success, this is like sending an amateur to Las Vegas to bet with your money.
We see such a possibility for more building product manufacturers to live closer to the edge, become ingenious and also ensure their longer-term success. The most significant change they should make is to see themselves as analytic brand names instead of merely operators of manufacturing facilities.