I remember several posts during the Great Recession that equated marketing spend in a downturn to the driving skills of Formula 1 racing teams: tap the brakes as you enter the turn and accelerate as you exit.
Years later, I think this advice still makes sense in some cases for marketers of premium brands. But I also see it as a metaphor for where consumers seem to be as we approach Q4 in 2024. I think we’ll see many consumers tapping the brakes and/or waiting on the sidelines until rates come down and we get through the election, at which point I believe we’ll see some pent-up demand unleashed, as consumers put the proverbial pedal to the metal in the new year.
The National Kitchen & Bath Association recently published a Market Outlook that illustrates a fairly flat market in terms of both new construction and remodels, with one out of four consumers taking a “wait and see” approach until after the elections. Obviously, the interest rate environment is contributing to the situation, as well, but most pundits believe that the Fed will decrease rates at their upcoming meeting in September.
If rates fall – and if we have an election that avoids chaos – and if we avoid any sort of black swan event (a lot of if’s…) then I believe we’ll see those “wait and see” consumers come off of the sidelines and join others in building and renovating again – not to mention refinancing their mortgages.
NKBA also notes that nearly two million homes will enter their prime remodel years over the next few years, and recent homebuyers will be looking to upgrade many of the new homes that they had to settle for, due to affordability constraints.
If this logic train makes sense to you – and if you perhaps are seeing consumers on the sidelines in your own businesses – then you have approximately 120 days to prepare for the potential rebound in Q1 of 2025. Don’t be caught flat-footed. Prepare to accelerate just as your customers come out of the turn.
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