Ferguson CEO says state of kitchen and bath industry is excellent
:Ferguson Enterprises COO Kevin Murphy cited a projected 3.25% growth in gross domestic product, falling unemployment and an upward trend in consumer confidence.
Ferguson Enterprises COO Kevin Murphydeclared the state of the kitchen-and-bath industry is excellent, citing a projected 3.25% growth in gross domestic product, falling unemployment and an upward trend in consumer confidence in his speech Jan. 21 during Design & Construction week in Las Vegas.
Ferguson Enterprises COO Kevin Murphy. Photo credit Ferguson
In giving the National Kitchen & Bath Association State of the Industry address, Murphy followed in the footsteps of plumbing company executives such as David Lingafelter, president of Moen, and Michael Werner, CEO of Globe Union Group. Murphy alluded to Werner who said in his 2012 speech: “Our future is starting to look very bright. In fact, I project that your 2015 speaker will say the words: ‘The state of our industry is excellent.’”
Murphy, whose company ranked No. 1 in Supply House Times’ 2014 Premier 150 listing of the nation’s largest distributors of plumbing and piping products with 20,000 employees, 1,400 locations nationwide and $11.6 billion in total sales ($2 billion online), also quoted a number of Ferguson’s builder and remodeler customers in his speech. They say they are “quite busy” and “growing at an exponential rate.”
The age of existing homes is helping to drive the remodeling market, he said. The average age of houses was 35 years in 2011 compared with 23 years in 1985. A number of factors are driving home building: demand for second homes; immigration; replacement of existing homes; and household growth.
Having sufficient labor to meet accelerating construction activity is an industrywide concern. Murphy said the “heart of the business is people development.”
“We need to create an environment that creates a career — not just a job,” he said. “People development is critical to a company’s growth and success.” He cited strong employee development programs, a multichannel experience and the need to embrace the changing expectation of customers as today’s key opportunities for innovative businesses. He also cautioned audience members that “change is the new normal” and to “fear the status quo.”
Today’s consumers are more empowered and informed —enabled by technology, he said, noting that 36% of projected ecommerce sales will come via mobile devices. Consumer expectations are changing as well. He said the factors driving this change include the availability of information on-demand and the desire for a personalized experience.
“Smartphones [which enjoy a 103% market penetration] are controlling our lives. They’re enabling the consumer,” he said. “The consumer is absolutely engaged with information on demand. The personalized experience is here to stay. Consumers demand transparency because of their access to information on demand. You’ve got to be ready to explain the value of purchasing your product.”
Murphy said personalized, multichannel experiences will continue to be an important part of the sales equation moving forward. He said the “internet of everything,” the online dimensions of people, process and data coming together in cyberspace to provide the modern purchasing experience, will generate some $14.4 trillion in value over the next decade.
“We have to approach our business to use technology to drive productivity to take care of our customers,” Murphy said.