Hearth & Home Magazine - 2019 November Issue by Hearth & Home

THE VOICE OF THE HEARTH, BARBECUE AND PATIO INDUSTRIES

NOVEMBER 2019

Â®

2020

MaRcH

THROUGH ALL FOUR SEASONS.

REGISTER NOW FOR INDOOR-OUTDOOR LIVING’S LIVELIEST EVENT. HPBExpo 2020. NEW ORLEANS. Trends are changing, seasonal distinctions are becoming less clear, and the boundaries of hearth, patio, and barbecue products are overlapping. The ever-evolving consumer demand for the latest in indoor-outdoor living has created new, year-round business opportunities, and HPBExpo 2020 is the most efficient, informative, and exciting place to get ahead of these emerging trends and meet the people that could jump start an entire year’s worth of sales. It all happens in New Orleans—the city that celebrates the very indoor-outdoor living experiences that your business brings to life.

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| CONTENTS | FEATURES An Abundance of Will 10 In 2003, the hearth industry was mature, retail space had been allocated, and new players entered the field at their own peril. That didn’t deter Holly Markham.

The Sky’s the Limit 24 Who would have guessed, way back in the ’70s

and ’80s, that some consumers would pay hundreds of thousands of dollars for a fireplace? (Answer: no one)

Travelin’ (Family) Man 34 How Jonathan and Janessa traveled the land,

signed up 300 new dealers and, oh, yes, had time to make a baby.

Buckets of Ideas 40 Here’s a load of good ideas on how to promote your outdoor products, put on events, tie-in via social media, and keep your customers coming back.

Meet the Millennials 46 Millennials value experiences over things, doing over acquiring, traveling and seeing the world over being wealthy.

Designed to Sell 68 3-D design software can help retailers sell more

outdoor living products. (Psst! It could turn out to be your best salesperson.)

A Gathering of Knowledge 74 Sales reps tell us that hearth products are selling well, but dealers are treading cautiously around the NSPS 2020.

Road Block or Opportunity 82 Changing emission regulations present an opportunity.

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34 46

DEPARTMENTS

Perspective New Products

90 Business Climate

Stock Watch

Ad Index

Parting Shot

Who Reads Hearth & Home?

JOURNAL

A PUBLICATION OF THE HEARTH, PATIO & BARBECUE ASSOCIATION

ON THE WEB News

Here’s Why Median Household Income Did Not Grow Most Americans Have Been Spoofed

Recipes Napoleon Grills’ Roasted Garlic Stuffed Turkey Breast With Gravy Bull Outdoor’s Spiced Pumpkin Latte Cake Bars

On the Cover A see-thu, high-end fireplace makes a dramatic statement in this main room.

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Copyright ÂŠ 2019 by Village West Publishing. All rights reserved. Reproduction in whole or in part without written permission is prohibited. All advertising is subject to approval by the publisher. Please address all correspondence to Hearth & Home, P.O. Box 1288, Laconia, NH 03247, (603) 528-4285, (800) 258-3772, FAX: (603) 524-0643. Hearth & Home, The Outdoor Room and Vesta Awards are registered trademarks of Village West Publishing. Village West Publishing is not associated with, and has no financial interest in, the Hearth, Patio & Barbecue Association. Hearth & Home (USPS 575-210/ISSN 02735695), Vol. XL, No. 12 is published monthly by Village West Publishing, 25 Country Club Road, Ste. 403, Gilford, NH 03249/P.O. Box 1288, Laconia, NH 03247. Subscription price $36 per year; $60 (USD) in Canada; $120 (USD) overseas (first class, airmail only). Single copy price $15 (includes postage and handling) in U.S. and in Canada. Periodicals postage paid at Laconia, NH and at additional entry office. POSTMASTER: Please send address changes to Village West Publishing, Circulation Department, P.O. Box 1288, Laconia, NH 03247.

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| Perspective |

Millennials: How to Reel Them In

hile the Baby Boomers may have more money, the Millennials have more time, and that’s something that money can’t buy (or so they tell me). Those in the Millennial generation will be your customers for many generations, so it’s time to get to know them a little better. | Trend Report |

SPECIAL REPORT SPONSORED BY

TREND REPORT

MEET THE MILLENNIALS Millennials value experiences over things, doing over acquiring, traveling and seeing the world over being wealthy.

By Lisa Readie Mayer

illennials are not your future customers; they are your current customers. They are here. Now. Today. Whether you’ve been anticipating this moment with excitement or apprehension, the generation – at 73 million strong – has finally arrived as bona fide adult consumers. The world’s largest generational cohort thinks, lives, eats, works, and shops differently from the generations that preceded it. But considering they wield $200 billion in spending power, it behooves both manufacturers and retailers to understand this group and what makes it tick.

Defining the Generations Though age parameters vary slightly depending on the research organization, Pew Research Center defines today’s generational groups this way: Silent Generation: Born 1928 to 1945, and age 74 to 91 in 2019, the generation came into the world in times of war and economic insecurity, and as a result, has always been a small cohort compared to other generations.

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Baby Boomers: Born between 1946 and 1964, and currently 55 to 73 years old, this generation is named for the surge in post-World War II births. Baby Boomers came of age in a time of social and culture change, and have considerable wealth. The generation began retiring about 10 years ago and many are looking to downsize. Gen X: Born 1965 to 1980, and age 39 to 54 today, this frequently forgotten generation is 65 million strong. Still raising families, and sometimes caring for parents as well, they have disposable income and will be part of the workforce for at least the next 25 years. Millennials (a.k.a. Gen Y): Born between 1981 and 1996, and ages 23 to 38 currently. (Read on; we’ll do a deep dive into this generation on the following pages.) Gen Z: Born between 1997 and 2015, and age 4 to 22. These socially conscious, digital natives have never lived in a world without the Internet. The group is on the threshold of becoming the largest generational cohort at 78 million, and studies show it wields significant spending power, as much as $143 billion.

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In this issue of Hearth & Home, you’ll find an extensive article on the Millennial generation by Lisa Readie Mayer. Right now, those in that generation were born between 1981 and 1996, and are between 22 and 37 years old. That means they could be just getting their BA from college, or that they’ve already spent 19 years or so in the workplace. Mayer spent countless hours tracking down recent surveys of that cohort – so that you wouldn’t have to (we know how little time everyone has these days). In the following pages (18, to be specific) you will learn a great deal about customers with whom you will be working for decades to come. So do yourself, and your business, a favor and read this article word for word. Then copy it and pass those copies to others who work with you. After all your key people have read it, get together and discuss what you’ve learned,

and how it relates to your business. For example, in this article you’ll read that Millennials are into retro brands, ’90s fashions, TV shows, etc. During the first week of October, my wife Jackie and I spent that time in the City of Quebec. We stopped at a (very) small restaurant, sat at the bar, and the bartender asked what kind of music we liked – what kind of old music, that is. You see, he had a great collection of LPs from time passed. We heard some Big Band tunes, a bit of Sinatra, and a touch of Caruso, and loved it all. Could you do the same in a retail store? Of course. But that might be effective only if a good deal of your customers were still young. Do you sell grills, and do you demo those grills a few times a week? Millennials love food and entertaining. Fifty-eight percent of Millennials consider themselves to be “foodies.” In the article, Mayer says that “Millennials want information about their food, including how it was grown or made, where it came from, and who made or cooked it. They are interested in artisanal ingredients, authentic dishes, and cooking techniques.” Hit the bookstore, or Amazon, and find cookbooks that showcase various foreign cuisines. You’ll be the hit of the younger generations! Millennials are also enamored of their backyards, and in particular fire pits and the company they attract. They like authentic things, so we suggest that you have woodfueled fire pits on display (along with the gas versions). Never display a fire pit without two or four comfortable (preferably deep-seating) chairs. At that point, you’re not selling just a fire pit, but a lifestyle. Which, by the way, is precisely what your customer wanted in the first place. Now, get your group together, perhaps at 8am, which gives you two hours before you open the store. Talk, brainstorm, then act. Reel those Millennials in like a fish in the river.

Click here for a mobile friendly reading| experience www.hearthandhome.com NOVEMBER 2019

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| Manufacturing |

In Santa Fe, The Firebird has built long-term relationships that give it strength in its market area.

With 4,000 sq. ft. of showroom space, The Firebird has room for close to two dozen top brands.

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ABUNDANCE

OF WILL

In 2003, the hearth industry was mature, retail space had been allocated, and new players entered the field at their own peril. That didnâ&#x20AC;&#x2122;t deter Holly Markham.

In the northern reaches of Norway, a Gyrofocus hanging fireplace, by Focus Fires, brings warmth to those who have come to enjoy the scenery and wildlife. Click here for a mobile friendly reading| experience www.hearthandhome.com NOVEMBER 2019

| 11

| Manufacturing |

By Richard Wright

olly Markham is well known in the hearth industry – now. There was a time, however, when that was not the case, a time when she had to knock on retailers’ doors and convince them that she was a serious player, with quality products, and in for the long haul. Hearth & Home: When did you get involved in hearth products? Holly Markham: “I got involved in hearth products in 2003.” Why?

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Markham: “Because I was working on my business, which was originally to identify interesting products in Europe and possibly import them. I started out with smaller products, but I was gravitating more toward larger products. I realized I liked building materials, but I guess it was really because they crossed my path. I saw them (fireplaces) at a design show in Europe. It was called 100% Design. I just couldn’t believe how they looked, and they seemed fairly different from what I was familiar with here. “Then I approached a couple of companies in England and asked them about their fireplaces. Their attitudes were, ‘You Americans keep contacting us.

We don’t know what to do.’ I offered to follow up with some of them because I was curious to see what the reaction was. Were they curious? Were they serious? Was there really a need in the marketplace? “I guess it naturally evolved from my own gravitation to building materials, to a sales background where I was able to qualify the leads, and then it led me to doing the investigative work of calling on them. “They got me in touch with someone at the HPBA, who then referred me to Bob Ferguson. I had to understand it because things in Europe didn’t meet code. The H Series in European Home’s showroom. INSET: Holly Markham.

Around this time, Hearth Fires was doing something fairly similar. They just were not working with Bob Ferguson. Then Montigo was working on a clean aesthetic, and Town & Country did have a clean aesthetic. It was just that it was the big, more traditional opening. It wasn’t a linear look, and it was still with the logs, and what people wanted was a lower profile. “Back then, I heard all the time how much people hated the logs – ‘I hate the logs. I hate them.’ I just wanted to import, and to do the stones as media. Everburn is probably more the company I wanted to be. I just didn’t understand how to do it. Then it just became, ‘Ok, we will license the design and then we will get it made over here.’ “So slow and steady, and I guess knowing economics, made the difference. It’s like there is a barrier to entry. It’s a lot of work, but it means that it’s harder to do. Once I finally had a fireplace shipping, people would come out of the woodwork saying, ‘Oh, I was going to do this. Want to partner up?’ Sometimes I started to give them homework because I liked the idea of a partner. “I sometimes would say, ‘Can you research?’ and I would give them something to research; then they wouldn’t come back. So people had the idea, and I think the bigger companies were holding back waiting until it really took off. I think most of them thought it was a fad.”

“Coming out of the recession around 2010-2011 is when dealers had a little more confidence that this (look) was here to stay. Then the bigger companies were bringing on their more modern designs. What I see now in dealer showrooms is that contemporary is about 60% of the showroom. “There was one dealer I went into in Massachusetts; I didn’t have anything approved, so it was probably around 2004. It was like a hole-in-the-wall fireplace, just kind of simple without the louvers and it didn’t have glass. It had stones on the top, and I said, ‘This is something I’m working on and I’m wondering if this would be of interest to you.’ He said, ‘Already been done.’ He was Fire and Ice. Ever heard of him?” Yes.

Markham: “Then I went back and learned about them; they were early into that whole fresh glass look. But I thought it was interesting that my thing with stone (media) was the equivalent of something with glass. So it was almost like saying to customers, you can go into a furniture store and you get one choice of a sofa. That was the mentality; there’s one modern product, therefore we’re done here. “I pushed back, and what helped me was the homeowners. I don’t think I knew enough to create the market. I thought that (the concept) was pretty cool and beautiful, but when, when, when (was it going to take off)? That’s when I said, OK, I’m going to invest some money. I figured if I could make 10, I knew I could sell 10, and kind of go from there.”

What year are we talking about when they still thought it was a fad? Markham: “In 2008 they still thought it was a fad. In 2010, the bigger companies were coming around to the contemporary design. The bigger companies, like Regency or Napoleon, I think they were looking at the volume and they were questioning if there was enough volume to make a decision. Of course, this is just me guessing, but what I felt was they had to see more traction. “What we heard from the dealers was they had a lot of leads, but it was difficult getting them to display. Some were early adopters, but most held back saying, ‘I don’t think this is going to last.’ Then you combine it with the 2008 recession and, of course, they don’t want to be taking on new products (during a recession).

Two electric fireplaces greet visitors as they enter the European Home showroom in Middleton, Massachusetts. On the left is the E60, a 60-inch, three-sided electric fireplace, and on the right the E32H, a 32-inch single-sided electric fireplace.

www.hearthandhome.com | NOVEMBER 2019 | 13

| Manufacturing | During this time, was your husband, John, already on board? Markham: “I started the company in 1999. We were shipping our first fireplace in 2005, and John left his company (First Data Corp.) in 2006. He was working with mutual funds, and was always a fix-it-type person. The fireplace business suited him since he could be hands-on. He is also very patient, and dealers like working with him because he never walks away from a problem. He always fixes things, and will help to train so that installers are learning as well as installing and fixing.” You mentioned that you like building products. Give me an example of some that you imported.

created a lot of custom shapes. We still do mailboxes. We just don’t have them on our website. We have the Cadillac of mailboxes. “They come in from Belgium and are super-heavy, stainless steel. You just feel the weight when you open the top. They retail for about $950. I wasn’t afraid of the technical side of it because, before I started my business, I worked about 10 years in high-tech sales. I worked first in hardware, in circuit boards, and then in software on some networking software systems. I’ll never know things as well as a real technical person, but I always knew there was that middle road, which is you understand a lot of it, and then you have to convert it to layman’s terms. “It wasn’t so much that I wanted to own a company. I really saw an opportunity. I wanted some income. I wanted the

John and Holly Markham share a laugh in their showroom.

Markham: “There is a brand of recycled, solid-surface material that’s called Durat. We were the importer. I guess you could compare it to Corian. It’s very architectural. It’s technical, because I find that working with architects, things get technical very quickly, and we have to work with fabricators. We imported the sheets and

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flexibility of working from home, and I gravitated to building materials. I think that is how people find people in the fireplace industry. Most people don’t come to you with knowledge of fireplaces. I guess I just said, OK, I’ll give this a shot. It wasn’t that I loved the technical side. It was more that I was willing to learn.

“One thing I did do that helped me a lot is to buy code books, such as the national building codes and local codes, because I found a lot of times the inspectors would say no to our Vision fireplace. It had an open front. I would have to show them in the code book that screens were required if it was a wood-burning fireplace, and then I would work with OMNI and we would write a letter to explain why it meets the ANSI standards, and there is nothing in the code book that forbids it.” You mentioned the Vision fireplace. Was that the first one you brought in? Markham: “Yes. It wasn’t so much that we brought it in. We licensed the design from Gavin Scott. He is an English designer. We are the manufacturer. We do the drawings. We maintain the listing. We order in quantity. That is how it has worked with Vision. But sales of the Vision have tapered off for us. It’s a B-vent and we sell very few of them. What’s selling is our H Series, and that is a linear vent-free. “I know, you probably don’t care for vent-free. But we worked with Derik Andors (Ferguson, Andors & Co.), and we brought some into our house. There was no smell, and no water running down the walls, and we’ve had no problems at all with them. But the goal is for it to look good. I don’t want to sell something that doesn’t look good, and that, of course, is safe. “I saw Vancouver was going toward Zero Net – this goes back a couple of years – and I thought, wow, we’ve got to make sure we’ve got something if cities go in that direction.” There are many people in the industry who think that the future will be electric fireplaces. Now there are locales in Canada and the U.S. that won’t even let a gas line be put into new developments, and, for decades now, wood has been banned in a number of areas. So there is not going to be a lot of choices left but electric. Markham: “It certainly is a lower cost. We had a woman who came in the other day just looking for ideas, but she needs four fireplaces for her house. The decisions she had to make, and where to vent and what to do, overwhelmed her. An

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| Manufacturing | electric was a nice option for her because she would get a good-looking fireplace (without any hassle). It also fits the need for when you’re not able to make a huge investment, but you want something warm and cozy in a gathering area.” What about Pat Moynihan at SÓLAS? Are you still working with him? Markham: “Yes, he makes our H Series. That’s our vent-free units. We order a lot from him. He’s a great guy. His son David is really coming up to speed.” How many employees do you have? Markham: “We have 12 full-time employees.”

Markham: “No. It’s never the right fit. They might have a similar product, or the percent commission they would need is really too much for us. I’m envious of a company that can use reps successfully. We did have one rep, and we were paying either 8% or 10%. We thought it would be better to sell less and make something than be trying to do a big volume and have nothing left. We never found the right rep for the right margin. “We’re making more of an effort to get out and visit our dealers. Right now, for example, my husband, John, and Kevin Simpson, who is one of our sales reps, are doing a pass-through on Truckee, California, Sacramento, and going up to Idaho; I had just done Tucson and Vegas. As long as dealers know that when they need

Markham: “The gas products are all made by European Home in the United States. With the electrics, European Home is the manufacturer and the importer. Element 4 comes in as a completely finished product.” Focus is certainly the same, correct? Markham: “Yes, that’s right. It comes in finished and Focus is made to order, whereas Element 4 we stock and so we ship from our stock.” Are you still purchasing Gavin Scott’s designs? Markham: “We license the designs from him, and we manufacture them

View from the entrance of the showroom, along a corridor of contemporary fireplaces.

Tell me how you go to market, dealerdirect, distribution? What do you use? Markham: “We are just dealer-direct.” Smart lady, so you must have reps? Markham: “Believe it or not, we do not.” Really?

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something, you’re there. You need a part – Boom! it’s going out the door. Then dealers get some training, and then yearly or twice a year visits from us. That seems to be okay.” Let me sort something out here. Is Pat Moynihan the only company making product for you in terms of your designs, and then you have Gavin Scott’s designs, and, of course, Element 4 and Focus Fires.

through Pat Moynihan at SÓLAS. I pay Scott a royalty based on how many we sell, but it was Bob Ferguson’s company that kept the aesthetics, but redesigned the burner and the box to meet code, and then Pat manufactured it. “We want to communicate that we are the company, but we are also a brand, and then there are other brands that we import.”

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| Manufacturing | Got it. (Now we’re looking at the European Home site.) I see two outdoor products under the European Home brand. Are those the only two outdoor products you have? Markham: “Under the European Home brand yes. Focus also has some outdoor fireplaces.” Talk to me a bit about the Element 4 line. Markham: “Yes, it is one of the leaders in Europe for direct-vent fireplaces. They have really pushed the design. An Element 4 product was a Vesta Awards finalist a few years ago. Look at the fireplace called Summum. You probably won’t like the name, but the product is great. “What is unique about it is it has a really cool burner and that is what I love about Element 4. They are always being innovative with burner systems, so this has what we call a real log burner, and it looks like the flame is wrapping around the bark of the log.

“What I really appreciate about Element 4 is that, instead of doing a heat dump, they have sophisticated burners and so you get a really big Btu range. Summum has a range of 13,000 to 50,000. I wish more companies would do that instead of encouraging people to send the heat outside; it’s a waste of energy.” In which areas of the country do your products sell best? Markham: “They sell best on the East Coast. We still do a good amount of business throughout the country and in Canada, but I think we’re here on the East Coast and dealers have that comfort level, and I suppose we probably visit them more. I would say 30% of our business is on the East Coast.” Which brand is your best seller? Markham: “The best seller is Element 4; that’s because it’s a wonderful brand,

but also because of its direct-vent fire. Focus does a good business. I don’t know the percentage it makes up, but it is very steady. It is just a more unique product, so it really grabs that upper 1% where they are doing a home all in glass and looking for something incredibly unique. It certainly gets us talking to leading architects. It’s interesting that Focus sales are at least 30% on the East Coast. But it is selling everywhere. We are selling into almost every state.” Which product is your best seller in the Element 4 line? Markham: “It’s called the Lucius. It’s a peninsula-style direct-vent. So you’ve got three corners of glass.” The peninsulas and islands were all the rage going way back before you entered the industry, and then it died out. It’s people like you and Spartherm who are bringing them back. Which of your brands have wood fireplaces? Markham: “The only brand is Focus, where we can burn wood.” Is the Focus wood product ready for 2020? Markham: “No. The models we’re selling today were designed in the ’60s so they are iconic, but Focus is now in development for some product that will have the EPA Phase 2 approvals. Right now we’re not selling those. So we will be a little bit behind that requirement. But we are actually selling quite a bit of Focus with gas, a gas conversion kit.” How many dealers do you have? Markham: “We have 95 displaying dealers, and 45 who are active with us but don’t yet have a display.” What is your forecast for your business in 2020?

From the Element 4 line of products, the Sky T makes an elegant entrance to this sophisticated home.

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Markham: “We are forecasting moderate growth, because there is still a lot of confidence in the economy, although I do hear people say they feel like it’s going to slow down.”

Thoughts about Holly from one who knows her well

at Moynihan knows Holly Markham well. He is president of SÓLAS, his own brand of gas fireplaces that are wallmounted, and he manufactures for other companies as well, including Holly Markham’s European Home. Hearth & Home: We’re impressed that somebody would have the guts to enter this mature industry, knowing nothing about it, and somehow pull it off and create a company that seems to be growing in a considered and steady manner. Tell us about Holly. Pat Moynihan: “I first met Holly in 2004, that’s going back 15 years. I was introduced to her by Bob Ferguson (Ferguson, Andors & Co.). My comment to her the first time we met was, ‘You are one hell of a brave lady to be jumping into the fireplace industry.’ But Holly managed to identify the need for contemporary gas fireplace products before many in the industry knew what contemporary was all about. “We have been working with her since then on a contract basis. We build some of her products. She does all of the development. She does all of the product design, and she has managed to build an impressive brand and impressive company over the last 15 years. Like you, I have got a lot of admiration for what she has achieved.” Am I correct that the brands you build for her are the Vision and the H Series? Moynihan: “Yes. Everything we do for her is gas. The first product we did build for her was actually called the Vision, and I think it was aptly named because she did have a vision about contemporary products that nobody had at that time.” That is not in the line anymore, the Vision? Moynihan: “Correct. I think she has dropped it, although at times we make bits and pieces. We also make the H Series, a vent-free product, and we also do some outdoor products for her.”

I’m blown away that she is actually designing products. That’s not a minor task, and usually is done by someone who has been in the industry for a length of time.

Pat Moynihan.

Others have tried to market the Focus line, and another product from France, but somehow they could never make a go of it. Moynihan: “Yep. You know, sometimes in this industry being one step removed, and not having the history, and not having some of the biases that people have in this industry is a good thing. Holly came from a totally different industry. She was not involved in hearth. She was not involved in consumer products at all, but saw stuff in Europe that she felt had a place in the U.S., and recognized something that industry veterans just did not see at that point in time. I mean, 2004 was way before there were any contemporary gas products in the U.S. It took until 2010 or 2011 before the U.S. woke up to contemporary products.” Her ability to get retailers to take products such as Element 4 or, in particular, Focus products is pretty remarkable. That is pretty far out stuff. Moynihan: “It is pretty far out stuff, but she has a certain personality and a certain vision that a lot of people don’t have. I think people like to do business with companies that have personality, and she certainly has personality. She has vision. She built a brand that is very focused and knows what she is about, and that is all she is interested in doing. She is not looking at what everybody else is doing and trying to copy them, or replicate them. She was paddling her own canoe from the beginning.”

Moynihan: “Yes. She is listening to what her customers want, and bringing them the products that they want. We have all worked with her and helped her in certain respects, but she is the one driving the product design and specifying what she feels the market needs, and it’s based on customer feedback, not on what everybody else in the industry is doing.” Perhaps too many manufacturers don’t listen to their dealers. Moynihan: “That is my opinion, and too many of them are focused on what everybody else in the industry is doing rather than coming up with a vision and knowing what their brand is all about, and pursuing that relentlessly. That is what Holly has done. Have you visited her facility in Massachusetts?” No, but I will. Moynihan: “It’s well worth visiting. It really reinforces the fact that she knows what her brand is all about, and is focused on her business and pushing her vision of what contemporary hearth products are all about. It’s quite an impressive showroom that she has down there.” I’m still surprised that somebody could enter this mature industry and do what she is doing with products that are far from the norm, some of them anyway. But I have always loved the Focus products. They are just beautiful. If you have the right house, the right spot, they’re terrific. Moynihan: “Yep. I have to admit that, when she first came to visit us in 2004, there was a certain amount of skepticism in my mind as to whether or not we wanted to get involved, or whether or not she would survive, but it has been a very worthwhile relationship for the past 15 years.”

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| High-End Luxury Fireplaces |

Who would have guessed, way back in the ’70s and ’80s, that some consumers would pay hundreds of thousands of dollars for a fireplace? (Answer: no one)

THE SKY’S THE LIMIT! By Bill Sendelback

he good news is that newhome construction in the U.S. continues to improve. The bad news is that fewer of those new houses include a fireplace. Construction of single-family new homes increased 4.4% over 2018, reaching an annual estimate of 919,000 units, according to the National

24 | NOVEMBER 2019 | www.hearthandhome.com

Association of Home Builders (NAHB). But the incident rate of homes with at least one fireplace has fallen to 41%, according to the U.S. Census Bureau, down from a high in 1996 of 59%. That means, with a consistent 5% of new homes including two or more fireplaces, 54% of new homes built in 2019 didn’t include a fireplace. Most of those new single-family homes that did include a fireplace were low-priced, low-

margin Builder Boxes. But while sales of these low-end fireplaces may be waning, the good news is that sales of high-end, even luxury, high-priced, high-margin fireplaces are growing, offering hearth product dealers new and profitable markets. Travis Industries

“It’s exciting what the customer wants in high-end fireplaces, and what we can turn

into reality,” according to Perry Ranes, vice president of Sales for Travis Industries. “And customers are demanding more customization.” In high-end gas fireplaces, Travis offers its Fireplace Xtrordinair (FPX) in Premium and Pro Builder Series, and its DaVinci Custom line. “Both our FPX and DaVinci lines are selling very well,” he says. “Last year we saw 8% sales growth in the FPX line, and we expect at least that much sales growth this year,” says Ranes. In the FPX line, Travis offers more than 50 options, not including face options. The FPX Premium line features Travis’ GreenSmart control

system that steps down the burn rate as the selected temperature approaches. The FPX ProBuilder Series is a linear line with fewer options for a more economical price. The entire FPX line offers lasercut fronts. “It’s astounding how many variations are possible in our very popular DaVinci Custom line,” Ranes says. “We can produce anything you want in multiples of three feet.” In its DaVinci line, Travis soon will offer a “certain type” of venting that is patented but not yet revealed. Six-foot, single-sided designs have been the most common in DaVinci sales, he says. Travis recently engineered and

installed a 66-ft. DaVinci fireplace in San Francisco, “but we can go much bigger,” according to Ranes. “It’s very important to keep our dealers in the loop on all our products, but especially on these high-end models. We have mandatory dealer training and a lot of additional American Institute of Architects training,” Ranes says. This is in the indoor/outdoor living room of The New American Home 2019, with two Travis Industries’ DaVinci Custom Fireplaces that mirror each other (one is inside and one is outside).

Click here for a mobile friendly reading| experience www.hearthandhome.com NOVEMBER 2019

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| High-End Luxury Fireplaces |

Phoenix TrueView gas fireplace from Heat & Glo.

technically not a direct-vent model, the Phoenix is as close as you can get to a directvent without a glass front. The Phoenix, available in a 42-inch size, features a “mechanical draft with an electronic brain” that allows the combustion air needed by the fireplace, but will not allow the fireplace to operate under negative draft or in “unsafe” conditions. The Heat & Glo Phoenix’s suggested retail prices range from $7,100 to $7,600, depending on options. “This has been our most successful first-year product launch,” Shimek adds. “High-end fireplaces are really a fun category. You are really building a room around these fireplaces. This market has a lot of energy, and it’s opening new sales doors for dealers,” Shimek concludes. Stellar Hearth Products

Hearth & Home Technologies

There are three market segments for fireplaces, according to John Shimek, senior vice president of Product Innovation at Hearth & Home Technologies (HHT); low-end starter models for first-time homeowners, mid-range fireplaces, a segment where sales have slowed according to Shimek, and a growing segment of high-end luxury fireplaces. “That segment definitely has more momentum,” says Shimek. “Those consumers have always had money to spend. As this high-end luxury fireplace market grows, we’ll always have a higher incident rate in those higher-end homes.” Shimek explains that the lower overall incident rate of fireplaces in new-home construction is because the large homebuilders are growing in areas where the fireplace incident rate has always been low. Linear styling is not a trend, Shimek says. “Linear styling with its cleaner, more minimalistic look, engineered to allow a TV set to be installed above it, now has a solid foothold in the market, particularly in the high-end models.” New from HHT in this high-end fireplace market is its Heat & Glo Phoenix TrueView traditional-styled but cleanfaced gas fireplace. A finalist for Best of Show honors at the 2018 International Builders Show, homebuilders described the Phoenix as “exactly what homeowners want,” according to Shimek. “Although

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Sales of their high-end, custom, gas fireplaces are up 89% at Stellar Hearth Products, a division of Hearth & Home Technologies, according to Ross Morrison, general manager. “Our sales have been on the East Coast and West Coast, but now we’re seeing sales growth in the MidAtlantic and Southeast regions. Much of our sales increase is the result of architects and designers visiting our website.”

Custom fireplace by Stellar Hearth Products.

Morrison says most sales in the past have been simple linear models, but now he sees more demand for larger, taller, more vertical styling. “With larger glass, designers have asked us to raise the burners so that the flame is more visible.” A recent example of Stellar’s ability to build almost any fireplace is an L-shaped fireplace in a Montana home. One leg of the fireplace was 9-ft. long with a 30-degree offset elbow to a 24-ft. leg. Stellar’s Solitude model was Gas Products category winner in the 2018 Vesta Awards. The company’s Envision Series was a finalist in the Art of Fire competition in that same Vesta Awards program. “Our Galaxy Series has been our ‘bread and butter’ line,” says Morrison. It is available in 4-, 5-, 6-, and 7-ft. sizes in stock or semi-custom models. A taller model is available in single-sided, seethrough, bay, left or right corners, foursided, and pier styles. Outdoor models have become more in demand for Stellar. “Forty percent of our quotes are for outdoor installations,” says Morrison. Stellar’s suggested retail prices range from $16,000 to “a couple hundred thousand,” says Morrison.

ICC/RSF

Sales of the Renaissance line of woodburning fireplaces from ICC/RSF are selling very well in all markets, says Dan Bonar, vice president – Residential Products. Featuring a large glass front for large flames and a big fire view, the EPA-qualified Renaissance models are designed for high-end homes where the homeowner wants the aesthetics of a large fire without the heat. The Renaissance Rumford 1000 model was the Wood Fireplace winner in the 2008 Vesta Challenge for low emissions, and the newer Renaissance Linear Split Pane model was a finalist in the 2017 Vesta Awards Wood Products category. The Renaissance line now includes an EPA-qualified Rumford 1500, and a new, smaller Uptown 600 model. Suggested retail prices for ICC/RSF’s Renaissance line range from $5,500 to $11,000. ICC/RSF promotes its fireplaces to architects and designers throughout North America, but all of its sales go through its dealers. “These are very large dollar sales, and the dealer margins are higher,” according to Bonar. “The installations can be a little more complicated so dealers need to be more knowledgeable about our products.”

The Rumford 1500 by ICC/RSF.

Napoleon Fireplaces

“Low-end and mid-range fireplaces are showing more growth in units sold, while high-end fireplaces are growing more rapidly in dollars and are more profitable for dealers,” according to Napoleon Fireplaces’ John Czerwonka, vice president of Hearth Sales. Sales of highend fireplaces are “taking off” in metro areas, he says. Regionally for Napoleon, fireplaces are selling well in California, the Pacific Northwest, the Mid-Atlantic region and parts of the Midwest. “The Southeast, not so much.” As part of Napoleon’s Hot Spots research and design guide promotion, the company has hosted 300 related events nationwide for architects, homebuilders, designers, and dealers. “We found that we have all missed the boat for the last 10 years by not recognizing, recommending, and selling fireplaces that were appropriate to the home and the homeowner,” says Czerwonka. “These groups now are much more educated about the stylish and appropriate new fireplaces recently available.”

Napoleon’s Altitude X Series.

New from Napoleon is its High Country wood-burning fireplaces in traditional and linear styles, all with guillotine glass doors. New in the company’s gas fireplace offerings is its Luxuria line in linear styling and available in “good, better, and best” models, plus a see-through series. Napoleon’s Linear Series was the Gas Products winner in the 2017 Vesta Awards. Napoleon’s HD and HDX fireplace models have sold very well, says Czerwonka, but are being phased out in

favor of the company’s new Altitude and Elevation Series featuring elevated LED ember beds and accent lighting. “We’ve shown the Altitude and Elevation models to our dealers, and the consensus was that they are the best fireplaces they have ever seen,” he says. Suggested retail prices for Napoleon’s high-end fireplaces range from $5,000 to $15,000. “We’re using standard sizes, but with these new high-end models we’re focused on putting elements of custom fireplaces into residential applications.”

www.hearthandhome.com | NOVEMBER 2019 | 27

| High-End Luxury Fireplaces | Ortal

“This year started slow, but we’ve had a great sales year,” according to Kevin Rantin, vice president of Sales and Marketing for Ortal. “We’ve always done well on the West Coast, but now we’re doing quite well on the East Coast, too.” Ortal offers a very wide range of “high quality, contemporary, frameless” gas fireplaces in single-sided, corner, threesided and see-through models, plus standalone models. “We’re seeing more interest in units with taller fire viewing areas,” says Rantin. “Most are about 16 inches high, but we’re seeing viewing areas as high as 24 inches. We’re also seeing an uptick in sales of our stand-alone models as well as our 360-degree island models.” Suggested retail prices for Ortal models range from $2,500 to $20,000. New from Ortal in its high-end gas fireplace offering is its H Series featuring a 22-inch-high fire viewing area and Ortal’s Cool Wall Technology that allows installation of a TV above the fireplace, or the unit to be recessed without needing a power vent. Rantin promises more new Ortal models shortly.

The City Series, San Francisco Bay by Regency.

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200H Front Facing clear gas fireplace by Ortal.

Regency Fireplace Products

Regency Fireplace Products is seeing its sales of high-end fireplaces grow by double-digit percentage increases, according to Glen Spinelli, president.

“These new, larger fireplaces with more features are meant to look unique and to make a statement in the home,” he says. “Homeowners are willing to spend as much as $50,000 for this unique statement. Cost is not a factor.” The suggested retail prices of Regency’s models range from $6,000 to $20,000. “These new high-end models are taller with larger flames. Some customers want heat but some do not. Most models offer no restrictions on clearances to combustibles. That is what designers want – to be able to put the fireplace wherever they want. The technology of these highend models has really pushed forward in the last six or seven years, and that technology is trickling down to lower-priced models.” Regency’s City Series is a modern, linear gas line in 40- and 72-inch models, plus left and right corners and piers. New in that line is the City 60, offering taller glass and available with power venting. Also new from Regency is its G800, a 36-inch gas model with top or rear vent and a suggested retail price of as much as $7,000. The Alterra CF780 is a new, larger wood-burning fireplace with traditional rectangular, but clean-faced, styling. It also features a guillotine glass door. “These models offer future flexibility for the customer since gas logs can be installed in them,” says Spinelli.

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| High-End Luxury Fireplaces | Town & Country

The Town & Country line of traditionalstyled, high-end wood and gas burning fireplaces from Pacific Energy Fireplace Products have “always sold well,” according to Cory Iversen, National Sales manager. Now Pacific Energy has introduced its Architectural Series, a line of linear, semi-custom, premium, ultra-high-end gas fireplaces. This new, big linear series is available in sizes from 3- to 8-ft. in one-foot increments. Models include sophisticated controls that also measure gas pressure, and includes installation and maintenance modes. “We could sell more of our Architectural Series but we’re taking a slow, measured approach to introducing it because it’s so important to have all the bugs ironed out. And we want to make certain we can keep up with demand,” says Iversen. “We want to be sure these (units) are trouble-free.” The Architectural Series is aimed at high-end homes and commercial applications. Suggested retail prices range from $10,000 to $20,000. Pacific Energy is promoting the new line to architects,

The Architectural Series by Town & Country.

designers, and custom-home builders with all sales leads passed on to its dealers. “Most of our Architectural Series dealers already sell our Town & Country line,

so this is such a good fit,” Iversen says. Architectural Series dealers must display the product, and that installation is done by factory personnel as dealer training. Spartherm

Spartherm 700–ZC Fireplace.

30 | NOVEMBER 2019 | www.hearthandhome.com

Spartherm sells primarily high-end gas and wood-burning fireplaces and freestanding stoves, manufactured in Germany. While selling mostly in eastern Canada and the eastern U.S., sales of its models have been “steady” this year as it attempts to expand to other North American markets, according to Markus Aumann, Export Sales manager. “We’re known for our angled units, but we also offer a full range of single-faced fireplaces that are priced to be competitive with the larger, single-faced models manufactured in North America. But sales of our single-faced units are more difficult since there are so many of these available from many manufacturers here.” Spartherm, however, is increasing its range of products, including a line of 2020-certified wood-burners to be introduced in spring 2020. Spartherm also offers its Wood Premier Edition available in single-sided, left and right corner, and three-sided models, all with glass doors that rise up to allow an open fire. Spartherm’s Varia high-end, woodburning fireplace was the Wood Products winner in the 2017 Vesta Awards.

| High-End Luxury Fireplaces | Wittus – Fire by Design

Wittus has been importing, distributing, and retailing high-end wood and gas European stoves and fireplaces for 40 years. Wood-burners start at a suggested retail price of $4,000 and range up to $10,000. Wittus’ gas fireplaces start at $2,500. “Our customers always want highend, contemporary fireplaces, but we’ve definitely noticed an uptick in inquiries for see-throughs and fireplaces with larger fireboxes,” according to Alyce Wittus, vice president. “People now want more choices and custom designs. We now are offering more styles and shapes most of which can be clad with any type of façade including stone and marble. The retractable glass doors on some models can be opened to enjoy a cozy fire or closed for greater efficiency.” Moberg Fireplaces

The Arte 3RL-100h from Wittus.

Just when you thought that a very custom, high-end fireplace might top out at $100,000, Moberg Fireplaces comes on the scene with very, very high-end, true custom fireplaces that start at $100,000 and top $1 million! Walter Moberg, president and CEO, sells his one-of-a-kind masterpieces all around the world – literally. “Our client base continues to be dominated by wealthy business owners,” he says, “but a new sector is emerging with high-end amenity spaces for condominiums. We are now more involved in projects in Europe than ever before. Our sales are robust and growing, along with the expansion of very high-end homes and museums. “We continue to specify and provide traditional/classical wood-burning masonry fireplaces for larger homes, but we also produce one-of-a-kind ANSI-listed gas fireplaces that are both fire sculptures and mechanically controlled for extreme environments.” Gas fireplaces continue to dominate Moberg’s business “except in very highend residences where the client demands the ‘real’ thing.” Moberg designs both contemporary and traditional styles, but he says there is “some tiredness” with linear styling. Installation of Moberg’s creations are done by local contractors in each country, but Moberg’s staff supervises each installation. No, Moberg does not sell through hearth product dealers.

Moberg Glass Fire with ceramic stone hearth.

32 | NOVEMBER 2019 | www.hearthandhome.com

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| Sales |

friend Jesse Jonath an and fam ily a Fou rth of Bontrager ser vin g up . Ju ly fea st, Breeo-style

Fa mi ly time: Jonathan Mi ller wit h wife Ja nessa and son Weston, in front of the ir home on the road.

Y) L I M A F TRAVELIN’ ( MAN How Jonathan and Janessa traveled the land, signed up 300 new dealers and, oh, yes, had time to make a baby. By Lisa Readie Mayer

n “The Fellowship of the Ring,” the first novel in “The Lord of the Rings” trilogy by J.R.R. Tolkien, he observes that, “Not all those who wander are lost.” In fact, Jonathan Miller spent years wandering the U.S., and, along the way, found 300 new dealers for his Breeo Smokeless Fire Pits. The innovative products were launched at the HPBExpo in March 2014. Designed with a secondary combustion system to burnoff and eliminate smoke, and double-walled construction that stays cool on outer surfaces while burning 30% hotter than typical fire pits, they generated a lot of buzz at the trade show, even winning Vesta Awards for Best Outdoor Hearth Product, and Best-in-

34 | NOVEMBER 2019 | www.hearthandhome.com

Show Outdoor Room Product. Miller says he “naïvely” expected dealer orders to come rolling in. Instead, he heard crickets. “I thought, if we are going to stay in business, we need to figure out how to get dealers and grow sales,” says Miller. So he loaded up a trailer with fire pits and started driving from dealer to dealer, calling ahead to say he would be stopping by, but otherwise without an appointment. Upon arrival, he would ask for the owner, give a little demo in the parking lot, and then make an offer they couldn’t refuse. “I’d say, ‘If you buy a fire pit right now at a 30% discount, you can become a dealer; no minimums. I’ll send you credit paperwork for the next order,’” he says.

After three days on the road, Miller had set up 11 new dealers in eastern Pennsylvania. Most placed follow-up orders for at least four or five more fire pits. “I said, ‘I think we found our strategy,’” he recalls. Miller’s extended road trip started in earnest when he bought a used, 17-ft. Casita Travel Trailer, hitched it to his

“This sales strategy was predicated on an old-school, hit-the-road mentality,” he says. “As a start-up company selling a high-quality, American-made product, I felt I couldn’t just have a rep or distribution company set up accounts and handle sales. As the owner, (I felt) it was important to get face time with retailers in order to form

“Food brings the connection to a deeper level. We are now shifting from a product focus to a lifestyle focus that emphasizes live-fire cooking. Our goal is to build a community of like-minded people who are passionate about and engaged in the Breeo brand.”

Everything is made in Breeo’s Lancaster facility in the heart of Pennsylvania’s Amish country. Miller says distribution and sales are strongest along the East Coast, where Breeo’s Zentro fire pit inserts are its most popular product. In the Midwest and in Western states such as Colorado, California, and Oregon, its Double Flame stainless-steel portable fire pit is the top-seller. Miller says most Breeo customers don’t share his fondness for off-the-grid living. “That community is still fairly small and often price-driven,” he says. “We have a Made-in-the-U.S. product, so our price

— Jonathan Miller

SUV, and hit the road with wife Janessa. They implemented the unorthodox sales technique from Massachusetts to Florida all spring. Then, as summer approached, he and Janessa headed west, visiting dealers all along the way. As children of missionaries, both Jon and Janessa were used to moving and living in far-flung locales, but they embraced this wanderlust lifestyle with passion. The newlyweds lived out of the Casita full-time for two and a half years, camping on U.S. Bureau of Land Management lands, and rigging up a makeshift cell tower and Internet hot spot so Jon could run the business, and Janessa could take online college classes and work as a freelance writer and editor, remotely. Their office window routinely overlooked majestic mountain ranges, scenic meadows, or wildlife-filled woodlands. The company water cooler was often a crystal-clear stream, and most meals were prepared over a Breeo fire pit. When they weren’t visiting dealers or exhibiting at trade or home shows, the Millers went backpacking, hiking, and canoeing. “If you called our company’s 800-number for the first two years, it would likely be answered from some mountain out West,” Miller says.

relationships and make deals. You can do trade shows, but a visit is personal with undivided attention,” Miller says. To further connect with dealers and consumer customers, Janessa documented their adventures on the company’s social media pages and the couple’s blogs – “Unbound Nomads” and “Earthly Vagabond.” Their inspiring photos of stunning scenes of nature, cozy campfires, and off-the-grid pursuits, hooked followers who journeyed along virtually and vicariously. The vagabond business plan proved effective. According to Miller, the unconventional approach netted more than 300 dealers, and bumped sales from $90,000 in 2014 to $740,000 the following year. Sales have grown steadily ever since. In 2018, the company saw a 40% increase; this year, sales are on pace to climb 30 to 35%, Miller says. “We’re growing about as fast as we can handle the production and service.” Breeo’s wood-burning fire pits and related accessories are available in stainless steel or high-temperature-painted-steel finishes. Its freestanding fire pits range from lightweight, portable models to sophisticated, modern-looking units with fire-glass accents. The company also offers fire pit inserts for stone or paver surrounds.

cooking Ch icken and veggies the Double over the open fire on and grill. Flame 24-inch Fire Pit

point is higher. Our key customers are middle-class or above-average-income men, who are interested in the outdoors in some way. It may be mountain biking, hunting, fishing, or camping, but their outdoor affinity is the strongest common denominator. Affluent consumers not interested in the outdoors typically buy a gas fire pit. Our customers have an aspirational connection to the outdoors.” Click here for a mobile friendly reading experience www.hearthandhome.com | NOVEMBER 2019

| 35

| Sales | marketing content that will help build our brand, educate the public, and create consumer demand,” he says. “We want to create a lifestyle brand so consumers will walk into dealers asking for Breeo.” Initially, Miller mainly used Facebook to connect with Breeo’s 17,000 followers on the platform. He calls YouTube a “tough nut to crack for brands” – the company has 400 followers – but says Instagram has been “growing tremendously.” Breeo now has over 6,500 followers on the platform – up from 1,000 followers last year – with a goal to reach 10,000 this year. With the exception of the company’s introductory product-information video, which has garnered 7.5 million views since it was posted in 2016, Miller noticed that food- and cooking-related content triggered the most engagement. A video

about the smokeless feature. We’ve found that customers who are cooking on the product are much more engaged with it. “Picture this scenario: A guy goes to church Sunday morning and talks about what the family did Saturday night. He might not talk about the great smokeless campfire they sat around, but he will talk about the great steaks they cooked over it. Food brings the connection to a deeper level. We are now shifting from a product focus to a lifestyle focus that emphasizes live-fire cooking. Our goal is to build a community of like-minded people who are passionate about and engaged in the Breeo brand.” He says Breeo products fit into the “exploding” trend of charcoal- and pelletcooking. “For years, most people cooked over gas grills, but they offer low entertainment value, require little cooking skill, and don’t

has already Start ’em young: Miller cat ion in edu beg un son Weston’s r. the art of gri ll ma ste

The company sells mainly through brick-and-mortar dealers, with limited availability online. “We protect our dealers through MSRP enforcement online; our website price is higher than someone can buy it for at a dealer,” Miller explains. “Selling online has allowed us to educate the public, so it’s important to be there, but we make it easy for a consumer to find it locally through our dealer-locator page.” Setting Down Roots and Getting Social When the Millers were about to become parents to son Weston, now almost 18 months old, they sold the Casita and bought a house in Lancaster City, Pennsylvania, about 20 minutes from Breeo’s headquarters. “We needed more stability for the baby, plus Breeo’s needs were changing,” says Miller. “Originally, we went on the road to set up dealers, but Breeo had reached the point where we had an established dealer network and were growing faster than we could keep up. “We now have an inside Sales manager and independent reps on the road, so, for the past year, my role has shifted to developing

36 | NOVEMBER 2019 | www.hearthandhome.com

gu s sizzle Ribeyes and aspara eo’s very Bre of one r away ove es. first fire pit prototyp

about using a Breeo fire pit as a live-fire grill has nearly 1 million views, and other cooking videos regularly rack up tens of thousands of views. The realization inspired a shift in marketing focus for the company. “Since we started the company, we focused on promoting the product – smokeless fire pits,” says Miller. “But when someone has friends over to sit around the fire pit, the fact that it’s smokeless is discussed once. It’s a great idea, but the next time those guests come over, the conversation is not

position the user as a grill master. Primitive fuel sources provide higher entertainment value and better flavor because of the smoke and flames. “Someone who cooks with these fuels is perceived as more skilled. For cutting-edge early adopters who traded gas grills for Big Green Eggs 15 years ago, cooking over a live wood fire is the next logical step in the progression. Our goal is to become one of the major brands to offer quality wood-fired cooking products.”

These festivals, and the resulting social media content, will help launch the company’s new line of cooking-focused products, due out this fall. “We’ve always had grids and accessories that allow you to cook right on our fire pits, but these exciting new products will enhance that experience,” says Miller.

Fire episode of the “Live Mi ller record ing an oti fy, Sp , ailable on iTu nes Cook ing Podcast” (av and Stitcher).

To realize this goal, Miller amped-up the food-focused content on the company’s social media platforms, including droolworthy cooking photos, videos, and recipes shot in scenic locations. Breeo’s “Mystery Meat” video series, created in partnership with a Pennsylvania-based meat company, features Miller unwrapping a cut of meat, and prepping and cooking it over a live fire. These and other videos, all produced in-house at Breeo, are posted on the new “BreeoTV” channel that launched in February on YouTube. The company has teamed with Derek Wolf, creator of the “Over the Fire Cooking” Instagram site, dedicated to grilling over a live wood fire, with 800,000 followers. Over the last year, the influencer has collaborated with Breeo on sponsored posts, cooking videos, and other content. “People in the fire pit space know Breeo, but we’re not as known in the wood-firedcooking space,” says Miller. “Aligning with Derek puts us in that community.” Since August, Miller and Wolf have also joined with grilling expert Christie Vanover, creator of the “Girls Can Grill” blog, to create the “Live Fire Cooking Podcast.” Each 30-minute, bi-weekly podcast features the three experts delving into a different wood-fired-cooking topic or technique. “We want to be the voice of the industry and this lifestyle community,” Miller says.

Miller, whose parents were originally from Canada, plans to create additional outdoor-cooking content, as well as winter-camping content, at the tiny house he recently built on a remote, wilderness property six hours north of Toronto. The tiny house offers slightly more room than the camper, but the amenities are still rustic: a fresh-water spring, an outhouse, and a “sauna shower-house.” Eventually, a solar system will be installed to generate electricity for cell phones and laptops. Miller explains that continual content creation is important because, “Social media used to be a nice thing to have; now it means life or death for a business,” he says. “People live on their phones, so you have to get active on social media. This applies to retailers, as well. You don’t need to hire a marketing company. Today’s phones take great-quality photos, so get shots of what you’re cooking, your sale items, your displays, and post them online.” The company has started partnering with some of its dealers on wood-fired cooking festivals, offering demos, food tastings, giveaways, and discounts on Breeo fire pits. “The amount of sales and engagement at events is amazing,” says Miller. “You can draw 1,000 people to a hearth shop in one day. When you do events you get attention, and when you leverage those events on social media, you get the best of both worlds.”

More Wandering Awaits He’s about to take to the highway again soon, traveling westward across the U.S. to introduce the new products, visit dealers, and create social-media-marketing content. This time, with toddler in tow, the family will live out of their newly purchased, previously-owned, 1992 Mitsubishi Delica Star Wagon, an olive green, four-wheeldrive, diesel van, imported from Japan with right-side steering controls that they’ve outfitted for camping. “This van will allow us to go more off-road than we could pulling a camper,” he says. “The more adventure-ready your vehicle, the cooler the campsite.” Miller says he and Janessa are “getting antsy” to be on the road again. Who knows what they’ll find when they get lost.

www.hearthandhome.com | NOVEMBER 2019 | 37

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| Ideas to Sell More Grills |

BUCKETS OF IDEAS Here’s a load of good ideas on how to promote your outdoor products, put on events, tie-in via social media, and keep your customers coming back. By Lisa Readie Mayer

ompetition is fierce these days. Small, independent barbecue retailers have to contend with low-ball Internet sellers, Big Box stores, and increasingly, dealers in unconventional channels such as appliances, butcher shops, and garden centers, that are now selling grills. Then there are the customers; they have growing expectations about in-store experiences, while at the same time demanding the best deals.

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But, as the saying goes, “When the going gets tough, the tough get going.” We know retailers are a tough breed. With that in mind, it might help to shake up your marketing with some new promotions, exciting events, and compelling social media content designed to get shoppers in the door and start your cash registers ringing. This latest in our ongoing series compiles a baker’s dozen of clever marketing ideas from smart retailers. Some are from barbecue dealers, others are plucked from different industries,

but all are field-tested, practical, and implementable. We hope they will inspire you to try something new, and make it easier to compete in a tough environment. Promote DIY Weekend Projects Looking for a way to build a Millennial customer base? Host do-it-yourself workshops. The generation that grew up watching HGTV gets inspired on Pinterest, and learns how-to lessons from YouTube, and is not DIYing to save money. Rather, Millennials enjoy the experience of creating, and the opportunity to personalize a project.

loyalty programs According to Coinstar’s Do It Yourself Home Improvement Survey, 40% of Millennials tackle DIY projects because they find them fulfilling. The study also finds that the generation likes projects to be completed quickly – 80% say they have an “urgency to complete” the task. HPC Fire Inspired offers Ready-to-Finish gas fire pit kits. The round, square, octagonal, or rectangular pits are pre-assembled with a burner, propane-tank access door, ventilation panels, and a Hardiboard shell that’s ready to finish with any noncombustible brick, block, tile, or stone. You can host in-store workshops for purchasers (or prospective purchasers) on how to finish the fire pits. A bonus: The kits come with a free, downloadable BILT app with easy, step-by-step, interactive, 3-D instructions for customers to refer to when they’re doing the project.

EP Henry, a manufacturer of paving stones and retaining-wall products, offers simple wood-burning backyard fire pit kits that can be completed in a weekend. Available in several different sizes, shapes, and stone finishes, the kits include all necessary stone blocks, caps, copper fire bowls, grates for wood and cooking, a mesh spark dome, as well as an installation guide. Other do-it-yourself workshop ideas: make-and-take homemade sauces, marinades, spice rubs, and flavored oils; a pre-holiday DIY gift workshop on smoked salt, nuts and cheeses; a patio herb planter that makes a handy grill-side companion. Take it Outside This Thanksgiving According to HPBA, 14% of grill owners prepare at least part of their Thanksgiving dinner on a grill or smoker. With some promotion and a little guidance, that rate could be even higher among your customers. Starting in October, push the benefits (#1 flavor; #2 frees up oven space; #3 bragging rights…) of cooking the bird outdoors. Cook and sample turkeys every weekend, and include kamados, smokers, pellet grills, and gas grills in the rotation. Hold Thanksgiving-themed classes covering different techniques – spatchcocked-andgrilled, grill-roasted, rotisseried, smoked, and/or fried turkeys, as well as side dishes on the grill. Stock up on brine mixes, roasting racks, thermometers, and other related accessories. Promote, promote, promote through in-store signage, your website, and social media. Grill Brush Buy Back Promotion With problems surrounding low-quality grill brushes frequently in the media, barbecue retailers have seen sales boosts from grill-brush-replacement promotions. In the spring, hold a “Grill Brush BuyBack Week,” a tongue-in-cheek promotion promising a $5 certificate (or other offer) toward the purchase of a new grill-cleaning accessory for every old, gnarly grill brush turned in; no questions asked. Educate your customers – in store and through social media – about grill brush safety and alternatives to flimsy grill brushes. Display a selection of wood paddles, metal grid scrapers, nylon scrubbers, grill wipes, and other non-

bristle cleaners, in a prominent spot with attention-grabbing signage. Mimic lawenforcement officials and announce the final results, noting how many dangerous grill brushes the campaign “got off the streets,” while sharing a photo of the collective cache on social media. What Steven Says… When barbecue oracle Steven Raichlen talks, people (i.e. your customers) listen. You should too. His widely read blog BarbecueBible.com is required reading for grilling and barbecuing enthusiasts, and a goto source for recipes, techniques, tips, arcane barbecue facts, and product information. Consider setting up a “What Steven Says…” display in your store that spotlights whatever he’s featuring on his blog. For instance, if he’s talking ribs, you might showcase barrel smokers, pellet grills, kamados, rib racks, sauce mops, rubs and sauces, wood chips, charcoal, and rib cookbooks.

If he’s posting about cold-smoking salmon or cheese, create a display with smoker boxes, pellet tubes, wood chips, and pellets that help customers cold-smoke on their grills. You should be prepared to talk with customers about the featured technique, recipe, or product – so if that means brushing up on your skills, do your homework first. Click here for a mobile friendly reading| NOVEMBER experience www.hearthandhome.com 2019

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| Ideas to Sell More Grills | Burgers with the Big Guy You’ve heard of Breakfast with Santa, why not Burgers with Santa? A family-friendly burger-cooking class that includes a meetand-greet with the “Big Guy,” is sure to be a popular alternative to the typical pancake events. For dessert, offer a makeyour-own custom s’mores buffet. This unique experience is fun for the kids, but it’s also a great way to get their parents and grandparents into the store to remind them that grills and accessories are perfect for gift-giving. To drive home the point, top grills with big red bows; tie ribbons around cookbooks and thermometers; and display ready-to-go accessory gift packages around themes such as pizza on the grill, ribs, and kabobs. Gift Card Giveback Another tried and true holiday-season promotion: the gift that keeps on giving. For every $50 gift card a customer buys, they get a $5 gift card (or $10 on a $100 card purchase) to spend on themselves in the store in January. Your customer will appreciate the freebie, and it’s a good way to drive traffic during a slow season for barbecue sales. Community Cookout One Canadian retailer holds “Community Cookouts” throughout the summer season. Local sports clubs, school teams, volunteer groups, and other non-profits are invited to schedule one of the weekly events and hold a barbecue fundraiser at the store. The organization invites its members, sells tickets, and keeps the proceeds, and the retailer provides the food – a hot-offthe-grill selection of meats, pizzas, and light bites. Guests mingle in the store’s indoor and outdoor displays, and receive a discount on any merchandise purchased at the event and throughout the following week. According to the retailer, it’s good for the community and great exposure for the store, usually resulting in sales, both at the event and down the road. Make Loyalty Alluring Research shows it costs six to seven times more to gain a new customer than to keep a current one, and increasing customer retention just 5% increases profits at least 25%. Loyalty Clubs are a great way

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Besides retaining customers and growing sales, loyalty clubs have another benefit for retailers: access to important and useful customer information. Collect email addresses, street addresses, birthdates, and any other facts you think might be important, on the enrollment form to gain insight into your customers and help you market to them more successfully.

to strengthen relationships with current customers, ensure return visits to your store, and grow sales. Reward regulars with free product after a designated number of charcoal, pellet, or gas fuel purchases. The same can be done with sauces, seasonings, rubs, and other consumables, or after taking a certain number of cooking classes. Offer members-only perks such as priority registration periods for cooking classes, and early access to storewide sales. Invite members to exclusive, in-store V.I.P. events, and offer tips, recipes, and other useful content through club emails. Follow the lead of car dealers and retain customers through what could be yearslong lulls between major purchases, by offering annual maintenance and ongoing repair services.

Annual Service Contracts Create a recurring income stream by offering an automated, annual, service-contract program with a pre-season home visit for grill inspection, clean-up, and tune-up. Homeowners with outdoor kitchens could have the option of contracting an end-ofseason winterization service, as well. Besides supplementing the bottom line with the service fees, these visits are a way to uncover other needs, such as replacement parts, a new grid-cleaning accessory, stainless-steel cleaner, a new grill cover, or maybe even a new grill, thereby growing product sales. These items could be carried on the truck and sold on the spot, or ordered and paid for during the visit and delivered or shipped to the customer after the call. Introduce information about the service program whenever a customer buys a grill or outdoor kitchen, promote it on your website and through social media, and send personal email reminders to your customer list about scheduling service appointments.

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| Ideas to Sell More Grills | Court Campers Interest in camping is soaring – particularly among Millennials. According to the Kampgrounds of America 2019 North American Camping Report, more than seven million new U.S. households have started camping in the last five years – 56% of them Millennials – bringing the total number of campers to nearly 79 million. People are camping more often, too, with a 72% jump in households who camp three or more times per year. Target this enthusiastic group with the latest portable grills, premium coolers, portable fire pits, cast-iron camping cookware, and other live-fire cooking gear. Host campfire cooking classes in your store. Cross-promote with nearby camping or glamping sites (search www.hipcamp. com to find ones near you); reach out to any nearby RV Clubs or Meetup camping groups to see if there are opportunities to partner; invite local experts to give talks on topics such as foraging, hikes, and campsites within driving distance. The effort should reap rewards: Forbes reports customers who attended retailer L.L. Bean’s events and classes spent 30% more with the company the following year. Timing is Everything Being nimble is one of the key advantages small, independent retailers have over Big Box stores and online sites. While their promotions are planned far in advance with little opportunity for flexibility, indie retailers can turn on a dime to adapt email and social media marketing to take advantage of local events, news, and even the weather. Here’s an example: You read the local grocery-store circular, notice what’s on special, and then respond with an email blast and Facebook and Instagram posts announcing, “Ribs are on sale this week at Shop Rite! We have smokers, wood chips, spice rubs, rib racks, and more to help you make the best ribs ever. Here are five tips from our barbecue pros…” During Friday-night-lights season, congratulate the hometown high school team on their win (…or good effort?), and remind fans you carry lots of tailgating gear. The same would work in a college or pro-sports town. If there’s a food, music, or film festival in town, find a way to tie in to the concept. “Did you go to Chili Fest this

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weekend? We have cast-iron Dutch ovens for making your own award-winning chili on the grill at home.” Watch the weather forecast. Is unseasonably warm weather predicted for a winter weekend? Get out in front of it and remind customers of the

include outdoor fireplaces or fire pits, patio heaters, an outdoor bar island, an outdoor kitchen, pizza oven, commercial-rated comfy outdoor furniture, and dining tables, outdoor televisions, and possibly even a pergola, pavilion or shade sail for shelter. It’s a win-win: You sell a lot of product

opportunity to satisfy a midwinter craving for charcoal-grilled steak. Conversely, if snow is predicted, promote that ceramic kamados hold heat and perform well in cold-weather conditions, and invite customers to submit a pic of themselves grilling in the snow. The first chilly night forecasted? Convey the message, “You can still entertain outdoors this weekend with one of our gas fire pits or patio heaters. We have them ready to go.” You get the idea.

and the restaurant now has expanded (and inviting!) space to accommodate more customers and increase income. An added bonus is the opportunity for ongoing crosspromotions (e.g. the chef could teach some cooking classes at your store).

Restaurant Rescue Like retailers, restaurateurs are always looking to get new guests in the door. According to restaurant and bar industry digital newsletter “Daily Rail,” an inviting outdoor space might be just the way to do it. It reports, “Restaurant operators need to stop treating their patio or terrace like an afterthought. It’s time to transform it into a comfortable area for guests to enjoy – and one that will give a competitive edge over your competition.” With that in mind, scope out restaurants in your area that are not making good use of their outdoor space, and approach the owners with ideas to maximize this commercial opportunity. Whether the need calls for an outdoor dining patio, a rooftop bar, and/or a cool space for listening to live music, your proposal might

A Final Word About Housekeeping We’ve said this before, but after randomly perusing retailer websites, it’s apparent we need to say it again: Make sure your website and Google business profile page include upto-date information on store hours, product offerings, events, and promotions. Also, the latest blog posts on your website should not be circa 2016. (You would be surprised… or, then again, maybe not!) As for the appearance of your store, look at it – both inside and out – through a customer’s lens. As retailing expert Ted Topping says, “You must inspect what you expect.” Is the check-out counter cluttered? Do you see fingerprints on the stainless-steel grills? Are there leaves and dust in the Outdoor Room display? Have you been merchandising accessories the same way for years? If so, your store might be in need of a spruce-up, or at the very least, some attention to housekeeping. “It’s all part of creating a pleasant experience for shoppers,” he says.

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| Trend Report |

SPECIAL REPORT SPONSORED BY

TREND REPORT

MEET THE MILLENNIALS Millennials value experiences over things, doing over acquiring, traveling and seeing the world over being wealthy.

By Lisa Readie Mayer

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Click here for a mobile friendly reading experience www.hearthandhome.com | NOVEMBER 2019

| 47

| Trend Report | important” dropped nine points, religion According to the ARF Cultural Effectiveness dropped 12 points, and having children Council, multiracial and multiethnic births dropped 16 points. Those 55 and older were in the U.S. climbed from 5% in 1980, to nearly twice as likely as 18- to 38-year-olds 10% in 2000, to 14% in 2015. to rank these things as “very important.” The so-called “Genderless Generation” Millennials value individuality and despise According to a study by Pew Research is blurring the lines between genders sweeping generalizations – particularly those Center, “Millennial Life: How Young and traditional views on masculinity and made about their own generation. Indeed, Adulthood Today Compares with Prior femininity. INC. reports younger Millennials with ages ranging between 38 at the leading Generations,” Millennials are better and Generation Z are spearheading the edge, to 23 at the tail end, the group spans educated than previous generations, with growth in awareness and acceptance of very different life stages, making universal 39% having a bachelor’s degree or higher. non-binary, transgender, and gender-fluid descriptions difficult and unwise. That being This compares to just 15% of the Silent lifestyles, and are supporting companies such said, there are definite trends and distinct Generation, approximately 25% of Baby as Sephora and Tiffany & Co. that feature patterns that identify the cohort. Boomers, and 29% of Gen Xers who had diversity in advertising, and have introduced college degrees at the same age. genderless makeup, fashions, jewelry, and What’s Important to Them The study finds this educational other products. Millennials value experiences over things. attainment is responsible for a broadening “Wellness” is a key focus for this They are not interested in “acquiring,” they income gap within the Millennial generation. generation, and it’s fueling growth in prefer to be “doing.” Pew Research calls a college degree, “the fitness pursuits, self-care regimes, and dividing line between Millennial Haves and products made with botanical ingredients. Have Nots.” Despite the student loan debt The group is concerned about getting that often accompanies a degree, the study proper sleep, wants to connect with notes “Millennials with a bachelor’s degree nature, and gets behind products that are doing as well as or better than Gen Xers, promote body-positivity. Baby Boomers, or older Americans (the Silent Generation) at the same age. Millennials What’s on Their Minds? Generation, quarter of Baby and about Gen Xers of Millennials’ top without roughly a bachelor’sadegree are doing worse.”Booers The “Deloitte Globalthree-in-ten Millennial Survey when thefinds same age. Millennials and(29%) Gen Zers arethey morewere 2019” that Millennials and Gen ambitions and aspirations diverse and multicultural than any other Zers feel increasingly pessimistic about the are traveling and generation, and the trend is expected to grow. world. While 45% reported being “hopeful” seeing the world.

Who Are the Millennials?

57%

When asked to identify their top ambitions and aspirations, “traveling and seeing the world” was identified by 57% of Millennials as their number-one priority, according to the “Deloitte Global Millennial Survey 2019.” Of note: this desire was stronger for women (62%) than men (51%). Earning a high salary and being wealthy ranked second (52%) among their top ambitions, but when asked if the goal was attainable, Millennials ranked it last. Slightly less than half (49%) in the Deloitte survey said they wanted to own a home, and 46% said “making a positive impact in their communities or society at large” was a top goal, placing higher than having a family (39%). According to a study by The Wall Street Journal and NBC News, Millennials place a lower priority on values that were hallmarks of their parents’ and grandparents’ generations. Since 1998, the number of Americans who rank patriotism as “very

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Millennials are better educated than prior generations Educational attainment of 25- to 37-year-olds (%)

14%

Less than high school grad

13%

30% 30%

28%

43% 28% 21%

21%

Some collage Bachelor’s degree or higher

25%

40%

41%

High school graduate

13% 15% Silent (1968)

39% 25%

24%

Early Boomer (1982)

Late Boomer (1989)

SOURCE: PEW RESEARCH CENTER.

29%

Gen X (2001)

Millennial (2018)

in 2017, that figure dropped to 26% this year. They are disillusioned with their lives, jobs, financial situations, and traditional To help relax and generate societal institutions, and are mistrustful of feelings of calm and the mass media, the government, religious, well-being, Millennials and business leaders. Deloitte calls the are turning to yoga, cohort “Generation Disrupted” and says meditation apps, “continuous change and upheaval” in society and their everyday lives have “created ASMR videos of a population that is different at its core.” repetitive soft sounds Deloitte reports the group has “a palpable and behaviors… deterioration of optimism and a wide variety of . . . anxieties weighing on their minds.” Millennials are stressed out. According to the American Psychological Association, license, and spend most of Millennials report the highest stress levels their free time inside, alone, of any generation, and 39% say their stress and on their phones. has increased in the last year. By contrast, The Deloitte Study shows climate change/protecting the environment is the top worry for Millennials, cited by 29% of participants, and far ahead of income inequality/wealth distribution, which comes in second on the list of concerns at 22%. of Millennials’ top To help relax and generate worry is Climate Change feelings of calm and well-being, and protecting the Millennials are turning to yoga, meditation apps, ASMR videos of enviornment. repetitive soft sounds and behaviors, and “slow-TV” programming, 36% of Gen X, 33% of Baby Boomers, featuring hours-long, yule-log-like and 29% of the Silent Generation report coverage of mundane activities such as increasing stress levels. ironing, a cargo ship’s voyage through Despite – or perhaps, because of – 24/7 the ocean, or a days-long train ride connectedness with other people through through the mountains. their mobile phones and social media, 30% Millennial trends-monitor YPulse of Millennials said they always or often feel reports a record number of young people are lonely, 27% said they had no close friends, not having sex. The General Social Survey and 22% felt they had no friends at all, reveals 23% of 18- to 29-year-olds have not according to a survey by market research had sex within the past year, nearly double firm YouGov. With numerous medical the percentage reported in 2008. While reports linking chronic anxiety, isolation, female celibacy rose 8% in that period to a and stress to inflammation, a contributing total of 18%, male celibacy nearly tripled to factor in high blood pressure, heart disease, 28% during that time. The trend is blamed and cancer, this state of being could be a on a greater percentage of young men living harbinger of long-term health effects for at home, and “excessive tech use.” the generation. It doesn’t appear to be any better for Other Interests Gen Z. According to Pew Research Center, CB Insights reveals Millennials would 36% of 12- to 19-year-old girls say they rather travel than pay off debts or feel “extremely anxious” every day. Most buy a home. YPulse trends newsletter teen girls indicate their best friend is their reports that more than half of Gen mom. They are less likely than previous Zers and Millennials have cut back on generations to work, date, or have a driver’s daily expenses to afford to travel more.

29%

“Generation Wanderlust” is driving airlines to add routes to more exotic and far-flung locales to appeal to the generation’s desire for different and unique travel experiences. YPulse also reveals older Millennials are willing to spend more on travel experiences such as preferred economy class and luxurious camping known as “glamping.” In fact, Millennials are fueling a surge in camping in general. Kampgrounds of America reports 56% of all new campers last year were Millennials. The health-conscious generation is into fitness; 76% of Millennials report exercising weekly, versus 70% of Gen X, and 64% of Baby Boomers, according to a CB Insights report. Millennials have been called “the most nostalgic generation ever.” Despite not having a long past to pull from, the generation longs for the “good old days.” They are into retro brands, ’90s fashions, and TV shows, movies, and other nostalgia from their childhood. The trend is attributed to the fast pace and disruption in the world today. According to The Wall Street Journal, this generation is obsessed with selfies. It has led to a surge in makeup sales – they want to look good in those close-ups. But selfies are also responsible for a far more serious Millennial trend. CNN reports that more than 250 people worldwide have died taking selfies between 2011 and 2018, most of them were males under the age of 30. The incidents are rising as people strive to capture the ultimate selfie in unique and often dangerous locations in pursuit of “likes.” A penchant for posting everything from selfies to dinner-plate pics, has led manufacturers to develop products with Millennials in mind. One example: Driscoll’s Berries introduced a limitedtime-only line of blush-pink Rosé Strawberries and Rosé Raspberries. The berries match the color of trendy, oftenInstagramed, rosé wine.

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| Trend Report |

Foodie Culture: What They’re Eating and Drinking Millennials love food and entertaining, and are more engaged with food than any other generation. According to a report by consumer trend data company Mintel, 58% of Millennials consider themselves “foodies.” They regard the foods they eat, the beverages they drink, and the way they cook as a form of self-expression, a personal representation, and part of their pursuit of experiences. Millennials want information about their food, including how it was grown or made, where it came from, and who made or cooked it. They are interested in artisanal ingredients, and authentic dishes and cooking techniques.

The generation is more experimental in what they eat and drink, and, according to The Wall Street Journal, craves new flavors, textures, and taste experiences. The Specialty Food Association reports the exposure to global cuisines while traveling is propelling Millennials’ interest in trying and learning to cook different ethnic cuisines. Food is one of Millennials’ top monthly expenses, according to YPulse. A study by Rabobank finds Millennials spend more

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on food than any other generation, a direct correlation with their penchant for organic, grass-fed, free-range, all-natural, artisanal, and other premium-priced foods. Trend expert Tom Mirabile told attendees of the 2019 International Home & Housewares Show, that young consumers do not consider cooking a women’s task, but rather a “craft or skill.”

95% of young Millennials say they cook at home weekly, more than any other generation.

According to a survey by food trends newsletter “The Spoon,” 95% of young Millennials say they cook at home weekly, more than any other generation. About half cook between five and seven times a week, comparable to other generations, however, the group is least likely to cook at home every day. One reason for this could be Mintel’s finding that 57% of Millennials believe meal-planning takes too much time. As a

result, the generation eats out often – an average of 90 times per year, according to “Food Navigator.” This is especially true of Millennials with children, according to consumer research firm The NPD Group, which reports a 5% increase in foodservice visits among Millennials in 2018, compared to flat restaurant-industry sales overall. Dinner is the meal Millennials eat out most often, and at fast-casual restaurants with lots of menu choices, including healthy options. This is a generation of snackers, grazing on mini meals throughout the day. Trend expert Tom Mirabile says many Millennials have replaced one meal of the day with two snacks. He also says Millennials are less likely to eat around the kitchen table, with many eating in their bedrooms or on the couch. What’s On the Plate? Millennials are less loyal to food products and brands than their parents. They are more open to trying new and unique brands, particularly those that align with their nutritional preferences or “represent them.” Sixty percent believe their generation is more health-focused than other generations, and they prefer all-natural, less-processed foods with fewer ingredients. YPulse reports 50% of Millennial and Gen Z shoppers buy organic food, versus 30% of Baby Boomers; 20% buy organic “all the time,” compared to 8% of Gen X and 7% of Baby Boomers. Millennials are credited with growing sales of plant-based foods, frozen foods (particularly those that are healthy and plant-based), and CBD-oil-enhanced foods and beverages. According to “Food Navigator,” 57% of Millennials say they follow a special diet, such as plant-based, vegan, keto, Whole 30, or paleo. A significant number also report cutting back on sugar, carbs, meat, or other foods. This makes it challenging to host dinner parties, but Millennials persevere nonetheless. The generation loves to entertain, and according to “Food Navigator,” hosts an average of 41 dinner parties annually. Shifting Millennial tastes are accused of killing processed foods such as soda pop, mayonnaise, canned tuna, American cheese, and breakfast cereals, leaving food companies scrambling.

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| Trend Report | According to the The Wall Street Journal, the cereal industry is trying to turn around sagging sales by repositioning some of its products as snack foods, packaging it in individual bags to appeal to snack-happy Millennials. The generation likes bold flavors and spicy cuisines, and food companies are revamping offerings with spicier flavor profiles targeted to Millennial preferences. For instance, spice maker McCormick & Company has teamed with the online, step-by-step recipe-video platform Tasty – a Millennial-fave – to develop a line of co-branded seasoning kits. The spice blends, labeled Fiery, Zesty, Jazzy, Hearty, and Savory, are featured in a series of Tasty video recipes, created with the generations’ palate in mind. Liquids and Libations There is a “sobriety shift” and “moderation movement” within the generation. According to a Bank of America Merrill Lynch study, more than 30% of Millennials report cutting back on alcohol, up from 22% last year. Bars, restaurants, and beverage companies are responding with introductions of low-tono-alcohol “mocktails,” non-alcoholic rosé wines, drinking vinegars, and other virgin libations. When they do drink, many Millennials often opt for hard seltzer as a lighter and lower-alcohol alternative to mixed drinks. Millennials also like wine – they consume 42% of it in the U.S., helping to grow wine sales 33%, according to YPulse. Mintel reports Millennials are fueling the 125% growth in canned wine, and are the targets for new “lower-pricedpremium” wine labels. Millennials prefer craft beers over massproduced brews, and are, in part, responsible for the 1% decline in sales of big-brand beers in 2018. During the same

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period, sales of craft beers produced by smaller, independent brewers grew 4%. For Millennials, discovering craft beers is in keeping with their pursuit of experiences. Millennials are also credited with driving huge growth in sales of coffee, seltzer waters, plant-based milks, and kombucha, a fermented tea drink.

In the Workplace: Financial Statement Depending on their position on the generational age continuum, Millennials are likely to report different workplace experiences and outcomes. The “Great Recession,” according to “Business Insider,” is responsible for the distinction. Older Millennials, who entered the workforce during the economic downturn, faced a challenging job market, stagnant wages, and greater and longer-lasting financial difficulties. Younger Millennials, who started working during the improved, post-recessionary economy, faced better job prospects and pay, and have been able to save more. Overall, according to YPulse, Millennials are “well-educated, entrepreneurial, and digitally savvy” in the workplace, and “thrive when working in fast-paced business environments, solving challenges, and creating new business models” that disrupt the status quo. Millennial employees want workplace policies and perks such as flexible work hours, sabbaticals, and ample paidtime-off. Thanks to technology, they feel untethered to a desk and desire the opportunity to work from home or remotely, at least occasionally. YPulse reports these trends are “becoming the norm as young people prioritize their time and experiences over the hours they clock in at their desks.”

The Next Generation Workplace Study from management firm 15five, reveals young workers expect employers to foster an atmosphere of work-life balance that supports their psychological wellbeing. They also want frequent feedback from managers.

72%

of Millennial women are now in the workforce – more than any other generation at the same age. According to Pew Research, 72% of Millennial women are now in the workforce – more than any other generation at the same age. This is driving an expectation of gender equality at work, including equal pay for women, and flexible family leave policies for both sexes. A study by professional staffing and executive search firm The Addison Group, finds Gen Z (44%) and Millennials (41%) negotiate salary more than Gen X (33%) and Baby Boomers (19%). It also reveals 45% of all employees believe Millennials get the most favoritism in their workplace, as a result of their digital prowess. Contrary to popular belief that the generation job-hops frequently, Pew Research reports nearly 80% of Millennials have been in their current jobs at least 13 months, and about half have been with their employer for at least five years. According to The Addison Group, salary is the most important determinant of job loyalty for Millennials (62%). For Gen X (63%) and Baby Boomers (67%), it’s satisfaction with the work they do. Gen Zers require good work-life balance (64%) to earn their loyalty. Millennials are behind the “Slow Work” movement, a counter-response to Baby Boomers’ hectic pace, work-related stress, and burnout. The philosophy, which advocates periodically skipping the commute and working from home, taking midday naps, “timeboxing,” and “monotasking” instead of multitasking, is said to improve quality of life and productivity.

The Wall Street Journal reports Millennials are embracing the “Gig Economy” as a lifestyle choice. It notes the practice of taking freelance jobs or “side hustles,” such as driving for Uber, is a trend that’s here to stay. According to the Deloitte Global Millennial Survey 2019, 80% of the generation finds the gig economy appealing. More than 60% of Millennials indicate they would take a side hustle to supplement existing income. Although only 6% currently take gig jobs instead of full-time work as their main source of income, 50% say they would consider doing so. Millennials’ annual salary is

20%

less than Baby Boomers made at the same age, when adjusted for inflation.

What’s in Their Wallets? Improvements in workplace culture have not included the paycheck for many Millennials. According to “Business Insider,” the average Millennial makes $35,592 in annual salary, 20% less than Baby Boomers made at the same age, when adjusted for inflation. According to the The Wall Street Journal, Millennials are “in worse financial shape than any preceding generation, and may never recover.” “Business Insider” estimates the average Millennial’s net worth at about $8,000 – a decline of 34% since 1996, and lower than Gen X’s or Baby Boomers’ net worth at the same age in inflation-adjusted dollars. The report reveals 58% of the generation has less than $5,000 in savings. Many Millennials are saddled with student load debt. Pew Research Center reports 34% of people ages 18 to 29, and 22% of ages 30 to 44 still owe on student loans. The youngest Millennials, graduating in the class of 2018 last year, left with an average student loan debt of nearly $30,000.

Not surprisingly, many Millennials are not financially independent. Country Financial reports 53% of Millennials get help from parents or other family members to pay for rent, cellphone, groceries, and gas. Bank of America puts the number even higher – its survey shows 79% of parents are financially assisting their young-adult children with the likes of tuition, student loans, rent, and other bills. Often portrayed as blowing their income on avocado toast, “Business Insider” reports that Millennials are actually financially savvy, disciplined spenders, and working hard to catch up. It says 75% have a budget and stick to it. Most are contributing to their 401(k) and saving for emergencies. According to YPulse, on average, Millennials say 31 is the age when they finally feel like they’re “adulting.” The majority believe purchasing a home makes them a grown-up; slightly less believe it’s buying a car. For 32%, buying a coffee maker is their adult-milestone moment.

Milestone Monitor Routinely mocked for living in mom’s basement and parenting puppies rather than children, Millennials have long been accused of “failing to launch.” While that is decidedly not the case, the generation has taken significantly longer than previous generations to hit traditional major milestones. In fact, the The Wall Street Journal describes Millennials as, “Playing catch-up in the game of life.” But that situation is finally changing, particularly for the older members of the cohort, who are now well into their 30s. To assess how the generation is doing on meeting milestones, it makes sense to break the group into two segments that more accurately reflect the different life stages within the cohort’s broad age range. Older Millennials – about 31 to 38

years old – are more likely to have started hitting milestones such as getting married, having children, and buying homes. Young Millennials – approximately 23 to 30 years old – are more likely to be single, building a career, and either renting apartments or living with parents.

51%

of 18- to 34-year-olds are currently single without a steady romantic partner.

Love and Marriage Pew Research Center estimates that 46% of Millennials age 25 to 37 are married. That is down from 83% who were married at the same age in 1968, and reflective of a downward trend in marriage since then. According to a Nuveen Real Estate study, 51% of 18- to 34-year-olds are currently single without a steady romantic partner; the figure was 33% in 2004 and 45% in 2016. Millennials are interested in marriage, but they are putting it off. According to Pew Research Center, in 1968, the average age to wed was 21 for women and 23 for men. Today, it’s 28 for women and 30 for men. But the good news is that the generation is finally beginning to marry and form households. Wells Fargo Securities forecasts that, if current trends continue, there will be 1.54 million new Millennial household formations annually for the

www.hearthandhome.com | NOVEMBER 2019 | 53

| Trend Report | next five years. This is significant because getting married and having children are the two biggest predicators of home ownership, and home ownership drives sales of products across a multitude of industries. The way people find mates is changing. “MarketWatch” reports a study from Stanford University and the University of New Mexico shows nearly 40% of heterosexual couples and 64% of samesex couples now meet online. Millennials’ and Gen Z’s comfort with the digital space is replacing singles bars, introductions by family and friends, work, and school as the way to meet a romantic partner. When they do get hitched, Millennials are increasingly likely to ask for a prenup. According to the American Academy of Matrimonial Lawyers, 62% of divorce attorneys have seen a greater number of requests for prenuptial agreements, with over half indicating the trend is being driven by Millennials. The reason, according to the report, is likely due to the cohort waiting longer to marry and wanting to protect their accumulated financial assets.

52% of the generation says parenthood is one of their most important lifetime goals

… and Baby Carriage Although they have also put off having children, Millennials do want a family. According to Pew Research Center, 52% of the generation says parenthood is one of their most important lifetime goals – well ahead of the goal of marriage, at 30%. Pew’s data indicates 40% of Millennials are now parents, with more than 1 million Millennial women giving birth annually since 2016. Even so, the cohort is on track to have fewer kids than previous generations, according to the Institute of Family Studies. It estimates Millennials will have a total of 75 million children throughout their child-bearing years.

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Millennial moms are older than previous generations, a trend that started in the 70s and continues today. The average age of a firsttime mom has risen two years in the past two decades, according to The New York Times. It reports a correlation among older parenthood, higher education, and socio-economic status. The average age of a first-time mother with a college degree is 30.3 years old; without a college degree, 23.8 years old. Millennials may be delaying having kids, but in the meantime, they are becoming pet parents. Millennials make up 35% of U.S. pet owners, and 76% of them (versus 50% of Baby Boomers), say they pamper their pets, splurging on the likes of organic, vegan, and grain-free pet foods, spa treatments, and other indulgences. YPulse reports 25- to 34-year-olds spend the most on wellness supplements for pets, such as CBD chews and fish-oil pills, noting, “Products that were considered luxuries by earlier generations are now considered essentials by Millennial pet owners.” Millennials also practice parenting on plants. In fact, indoor plant sales are way up, a trend that YPulse theorizes is because plants “offer a sense of caregiving and responsibility.”

Forming Households: The Boomeerang Generation About 20% of Millennials – more than 14 million – live with their parents today, more than double the 6.8 million that lived at home in 2000, according to a study by Zillow. The number of boomerang Millennials (so called because they have returned home after college) is growing, despite the fact that the unemployment rate for Millennials has fallen from 19.5% in 2010 to 10.3% in 2019. According to “Builder Online,” this suggests that young adults are “struggling to afford independent housing even while holding a job.” Young Millennials are having difficulty coming up with the funds to move out on their own. With monthly rents steadily escalating – up 2.5% in the last year alone – a Zillow study found today’s renters need 18

47% of 18- to 34-year-olds in New Jersey lived with their parents in 2015

months longer than their parent’s generation required 30 years ago to save for a security deposit and other up-front rental costs. Living at home can be an effective strategy to save for a security deposit on a rental, a downpayment on a home purchase, or other significant expense. In fact, Zillow reports living at home rent-free can get Millennials into homeownership three years sooner than if they were paying rent for an apartment. The National Association of Realtors indicates younger Millennials are the most likely to move directly from their parents’ home into homeownership. Nine percent of older Millennials bought a multigenerational home with their parents to boost affordability. Location, Location, Location Not surprisingly, expensive metro areas such as San Francisco, New York, Miami, and Los Angeles, have a greater share of boomerang Millennials – 31% on average. According to the U.S. Census Bureau, the rate is highest in New Jersey where 47% of 18- to 34-year-olds lived with their parents in 2015, up from 36% in 2005. The situation is better in areas such as Seattle, Austin, Portland, Kansas City, and Denver, where only about 15% of Millennials live at home. When Millennials move out of the nest, they are likely moving to places such as Dallas; Seattle; Portland, Oregon; Columbia, South Carolina; and Norfolk, Virginia – the top five cities for Millennial migration, according to the U.S. Census Bureau. With the exception of St. Paul and Minneapolis, Minnesota, the top 25 cities where Millennials are moving are all in the South and West; no Northeast cities made the top-25 list. The study finds New York City, Chicago, and Miami are losing the most Millennials.

According to Ernst & Young, overall, the number of Millennials living in the suburbs (38%) compared to cities (37%) is pretty evenly split. However, among Millennial homeowners, it shifts to 41% living in the suburbs and 31% living in cities, with affordability being a key reason. Many Millennials are combining the best of both worlds by buying homes in urban-adjacent suburbs, allowing them to be close to employment opportunities, have a shorter commute, and enjoy access to city lifestyles and entertainment, but at more affordable prices.

home purchases for many Millennials, according to YPulse, “basically, the only way to get your foot in the housing door is to have a degree, even if it comes with debt.” The “high cost of living” prevents 45% of 23- to 38-year-olds from becoming homeowners, according to YPulse. Comparatively, 38% of Gen X and 31% of Boomers cite high living costs as an impediment. Lack of affordable housing – particularly in urban areas – is another factor keeping the

Homes’ Viridian at Esencia in Rancho Mission Viejo, California, a community targeted to the Millennial move-up homebuyer, has 72 single-family homes starting at over $1 million. It Took a While, But It’s Finally Happening! The good news is, at long last, Millennials have officially entered the housing market. According to the National Association of

Home Sweet Home Speedbumps on the Highway to Homeownership Research shows Millennials have a strong desire to own a home. A survey by online loan marketplace LendEDU indicates 89% of 23- to 38-year-olds “wish to become a homeowner at some point in their lives,” versus 11% who say they never want to own a home. The dream, however, is often thwarted or delayed by the struggle to save for a downpayment. U.S. Census Bureau and Department of Housing and Urban Development data from August 2019 shows the median purchase price of a newly-constructed home is $328,400. The median purchase price of an existing home is about $267,000, up 3.5% from a year earlier, according to the National Association of Realtors. In some areas of the country – particularly the Northeast and California markets – home prices can skew significantly higher. According to Nuveen Real Estate, factors such as declining home affordability, student loan debt, lower income levels, and stricter lending requirements, are common impediments that delay or prevent Millennial home purchases. Student loan debt is the reason 31% of Millennials put off buying a home, according to Forbes. “Builder Online” puts the figure at 61% for younger Millennials. The National Association of Realtors estimates student loan debt delayed a Millennial first-home purchase by a median of two years. There is a catch-22 regarding student debt and homeownership, however. While education-related loans do, in fact, delay

Toll Brothers at Blackstone - The Retreat Collection, and Aracena Contemporary Model.

generation from buying a home. According to Nuveen Real Estate, over the past three years there has been a 20-point decline in the Home Affordability Index – a measure of how much income is required to qualify for a loan. But not all Millennials are struggling to afford a home. Some have substantial budgets, thanks in part to being older when they first buy, with higher incomes and greater wealth amassed from saving while living at home, inheriting money, or receiving downpayment assistance from parents. This segment of the cohort sometimes skips the entry-priced starter home entirely and opts for a larger, pricier property. Toll Brothers, the nation’s largest luxury homebuilder, reports nearly 25% of its buyers are under age 35, with average contract prices over $837,000. TRI Pointe

last year Millennials represented

37%

of the nation’s total homebuyers, the largest share among all generations.

Realtors’ “2019 Home Buyers and Sellers Generational Trends Report,” last year Millennials represented 37% of the nation’s total homebuyers, the largest share among all generations. According to Zillow, the cohort accounted for 56% of first-time homebuyers.

www.hearthandhome.com | NOVEMBER 2019 | 55

| Trend Report | A study by Genworth Financial estimates more than two million first-time homebuyers bought a single-family home in 2018. The Census Bureau’s “Housing Vacancy Survey” shows homeownership has been on a steady growth trend since 2015. Though still down from its peak of 69.2% in 2004, the overall homeownership rate for U.S. households hit 64.8% in 2018. According to the National Association of Home Builders’ “Eye on Housing” report, 36.5% of Millennials owned a home by the end of 2018, up half a percentage point from 2017. Zillow reports that the number of rental households declined by 754,000 between 2016 and 2018, signaling a transition from renting to owning.

22% of Millennials say they plan to purchase a home within the next 12 months.

It appears the trend will continue. According to the National Association of Home Builders’ “Housing Trends Report,” 22% of Millennials say they plan to purchase a home within the next 12 months. A study by LendEDU indicates 65% of Millennials who do not currently own a home, expect to become homeowners within the next one to five years. “MoneyWise” reports that, over the next decade, nearly 45 million Millennials will turn 34 – the median age of first-time homebuyers, according to Zillow – and enter their prime homebuying years. According to “MoneyWise,” that translates to “7.4% more first-timers than during the last decade.” Who’s Buying? At a median age of 34, Millennials are older than previous generations when buying their first home. They are also not as likely to be married. The National Association of Realtors’ “2019 Home Buyers and Sellers Generational Trends Report” reveals 63% of recent homebuyers

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41%

of Millennials made an offer on a home without first seeing it in person.

were married and 34% were unmarried. In the latter category, 8% of homes were bought by unmarried couples, most of whom were under age 29. A combined 26% of homes were bought by single people, with single females (17%) far outpacing the number of single males (9%) buying homes. Single female homeownership – it’s as likely to involve single Millennial career women as older single women downsizing after divorce, retirement or the death of a spouse – is a growing trend, up 11% since 1981, according to US News & World Report. Though Millennial homeownership rates are climbing, attaining this American dream is not uniformly realized within the generation. A study by The Urban Institute reveals 40% of white Millennials own homes today, however, the same is true of only 13.4% of African Americans, 27.2% of Asians, and 24.6% of Hispanics. The report also indicates the likelihood of Millennials owning a home is 9% greater if their parents owned a home, a trend that could continue to “perpetuate (homeownership) disparities among white, black, and Hispanic Millennials.” In a highly competitive market with very limited affordable housing stock, 41% of Millennials made an offer on a home without first seeing it in person. Comparatively, 30% of Gen X and 12% of Baby Boomers have made an offer sight-unseen. The trend has been growing for the past two years, with the help of proliferating online real estate resources. Interestingly, while Millennials are buying homes, Baby Boomers are increasingly selling them and renting instead. A study by real estate website RentCafe shows the homeownership rate for those 65 years and over is declining, while the number of renters in that age group has grown by 43% over the last decade, faster than any other age group. The trend

is especially prevalent in Sunbelt cities such as Austin, Texas, where the number of 60plus renters grew 113% in the last decade. Paying for It For Millennials, the desire to own a home is often at odds with the ability to afford one. According to “Builder Online,” an analysis of U.S. Census Bureau data shows median home prices have risen more than 120% since the 1960s, yet median household income has only increased 29% in the same period. More recently, home prices jumped 47% between 2012 and 2018 while, comparatively, wages rose just 16%, according to the National Association of Realtors.

72%

“Builder Online” reports median gross rents climbed 72% over the last five decades The situation is not much better for renters. “Builder Online” reports median gross rents climbed 72% over the last five decades, more than double the growth of adjusted incomes. The predicament makes it more difficult to save for a home and transition from renting to buying. YPulse says, to make home purchasing more affordable, young buyers are looking for homes in less costly areas and making lower downpayments. Today, the median downpayment amount for first-time homebuyers is 7%, according to the National Association of Realtors. Doing the math, that translates to an $18,700 downpayment on a medianpriced existing home, and about $23,000 on median-priced new construction. Paying a 20% downpayment, which avoids additional mortgage insurance, would require coming up with $53,400 for that median-priced existing home and $65,680 for the median-priced new-construction home. Of course, in many areas, homes cost far more than the median price and would require a considerably larger downpayment.

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ESTABLISHED 1976

| Trend Report | A study by Apartment List shows nearly half of all Millennials currently renting haven’t saved a penny toward the downpayment on a home purchase, and only 11% have saved $10,000 or more. According to Bankrate, Millennial homebuyers estimated they would need three years on average – more than any other generation – to save enough for a downpayment. However, Bankrate says there is frequent confusion over how much downpayment is actually required to purchase a home. Its research shows 51% of Americans did not know the minimum-percentage

63%

of Millennial homeowners regret their purchase downpayment requirement. Only 2% of respondents knew about available FHA loans requiring as little as 3.5% down, and conventional loan options requiring between 5 and 20% down. (Regardless of the type of loan, additional mortgage insurance is typically required with downpayments less than 20%.) A report from Zillow shows half of all first-time homebuyers rely on two or more sources to fund their downpayment, often parents or family members. Bankrate research reinforces that finding; it says 33% of Millennial homebuyers received some or all of their downpayment as a gift from family or friends. Realtor.com reports that, since January 2017, Millennials have taken the lead in mortgages purchased. In 2018, Millennials took on 47% of all new mortgages, compared to 36% for Gen Xers and 17% for Baby Boomers. The cohort also is responsible for 42% of new mortgage loans by dollar volume, the largest of any generation. Buyer’s Remorse When they do finally buy a home, a Bankrate study shows 63% of Millennial homeowners regret their purchase, compared to 44%

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TRI Pointe Group - Sundance at Cordes Village, Residence 2, Mountain House, California.

of U.S. homeowners overall. Unexpected maintenance expenses, buying the “wrong house,” and buying in the “wrong location” top the list of regrets.

What Millennials Want in a Home Quality Over Quantity Millennials have distinct ideas about what they’re looking for in a home. For one thing, size matters. The generation regards the oversized and often cheaplymade “McMansions” that Baby Boomers coveted, as symbols of excess. In fact, the The Wall Street Journal points to a glut of huge, million-dollar homes languishing on the market in many areas, as a result of Baby Boomers downsizing; Millennials don’t want them. The cohort has no desire to waste money on unused formal living spaces, impractical furnishings, and superfluous “stuff.” Instead, the article says, young homebuyers prefer smaller, modern-style homes in walkable areas. “Business Insider” reports first-time Millennial homebuyers purchased an 1,800 sq. ft. home, on average. According to the U.S. Census Bureau, the average size of a home in the U.S. has declined for the last three years. The average new single-family house was 2,549 sq. ft. in 2018, down from 2,624 sq. ft. in 2016. The Home Innovation Research Lab’s “2019 Builder Practices Survey” says

the size decline is driven by demographics; more Millennials are buying homes, and smaller homes appeal to their preferences and budgets. Millennials are also influencing the characteristics of new-construction homes. According to a study by the Home Innovation Research Labs, the number of single-story homes is increasing today, as are homes with crawlspaces or slab foundations. The total number of rooms and closets in the home is down, and the number of homes with gas-fueled appliances and heating is down, as well. These costcutting measures not only keep the price of the home down for Millennial buyers, they allow for the inclusion of higher-end features and finishes Millennials desire, such as two-car garages and hardwood or ceramic-tile flooring, all of which are increasing in new construction. According to the NAHB, new townhome construction is on the rise, up 24% in 2018, as builders target Millennials transitioning from rentals to homeownership. Townhouses accounted for 14% of all new-home starts in 2018. Often tricked out with features such as two-car garages and private balconies, decks, or rooftop outdoor living areas, townhomes offer the size and characteristics of a single-family home, the premium amenities Millennials have come to expect, and the city-like walkability they desire, but at a lower price point. Another benefit: the low-maintenance, “lock-and-leave” townhouse lifestyle allows Millennials the time and ability to pursue travel and other experiences.

Fit, Finish, and Features Millennials want flexibility in their homes, with open-concept floor plans and multi-purpose furnishings that can maximize limited space and adapt daily to changing needs. They have high standards regarding the finishes, features, fixtures, appliances, and other appointments for their homes, demanding high functionality, durability, and sustainability, as well as beauty. They prefer a sleek and neutral design aesthetic, accented with pops of bold color, or unique, statement-making features to differentiate their home from their neighbors.’ In the kitchen, the National Association of Home Builders reports 31% of Millennials prefer white cabinets, far greater than the second choice – dark brown – at 18%. Stainless-steel appliances are preferred by 64%, well ahead of black (22%) or white (12%). For counters, 62% of Millennials want granite, compared with 17% who want quartz, 12% laminate, and 7% solid surface. Millennials demand strong Wi-Fi and fast Internet in their homes, serving their need to be constantly connected. These features are becoming particularly critical as Millennials are allowed to work from home more often. Outdoor Living Is Important Outdoor living spaces are vital to Millennials. According to the National Association of Landscape Professionals, 82% of Millennials say having a lawn is the most important priority when buying a home, even ahead of an updated kitchen. Research by TRI Pointe Homes supports this, finding a “big backyard” is important to Millennial homebuyers who see it as an extension of the living space. In response, the company created an optional outdoor amenity package designed to appeal to Millennial buyers at its Viridian at Esencia community in Rancho Mission Viejo, California. Addon options include a fire pit, outdoor kitchen, and choice of a cabana, casita, or an indoor-outdoor “California Room” with sheltered living and entertaining space that can be outfitted with a bar, television, and comfortable furnishings. Eighty-one percent of Millennials consider a patio a “desirable or essential”

home feature, according to a National Association of Home Builders report on home amenities, ranking third on the list of Millennials’ most-wanted home features. The report notes, “It may be a bit surprising that something so nonessential to daily life is the third most wanted (home) feature,” but, it adds, “this is not an outlier.”

16%

of buyers rate a fireplace as an essential home feature.

TRI Pointe Group - Sundance at Cordes Village, Residence 1, Mountain House, California.

Exterior lighting is also on Millennials’ top-10 list of desired home features. Given Millennials’ penchant for outdoor living, it’s not surprising that one-third of newly-built, single-family homes now have a patio or porch, according to the U.S. Census Bureau. The number of sliding doors connecting the interior spaces to those outdoor patios, is up, too. The “State of Home Spending Report” from HomeAdvisor found that, when it comes to home improvement spending, Millennials are more likely to put money toward improving their property and outdoor spaces, while Baby Boomers and Gen X put money into changing the home design or interior aesthetics.

Do They Fancy Fireplaces? An analysis of U.S. Census Bureau data reveals 41% of new single-family homes included fireplaces in 2018. The share of new, single-family homes with fireplaces has been on a steady decline since 2014, when it was at 46%. The National Association of Home Builder’s “Eye on Housing” blog reports gas- and wood-burning fireplaces rank in the middle of a long list of features desirable to homebuyers, suggesting they might be waning in appeal. Only 16% of buyers rate a fireplace as an essential home feature. Since a fireplace adds thousands of dollars to the price of a home, analysts believe the trend is a cost-saving measure. Builders are eliminating the

www.hearthandhome.com | NOVEMBER 2019 | 59

| Trend Report | nice-to-have-but-non-essential fireplace as a way to make the home more affordable. When broken down by sale price, only 21% of homes priced $250,000 to $349,000 had a fireplace. This is the median purchase price-range on new and existing homes today, and is the typical target price for Millennial buyers. Comparatively, 65% of homes priced $500,000 to $999,000 had a fireplace.

Shopping Habits U.S. Millennials have an estimated $600 billion in annual buying power, according to a study by Accenture. The Nielsen Company estimates Canadian Millennials have $13.2 billion in spending power. As consumers, this group behaves differently from previous generations and its shopping habits are disrupting retail. In-Conspicuous Consumers Contrary to popular belief, most Millennials are thrifty and spend wisely. Bankrate calls them the “Cautious Generation,” noting nearly three-quarters of Millennials are limiting monthly spending to build savings. A Gallup poll referenced in Forbes, shows cash-strapped younger Millennials spend $20 less per day than previous generations. A study by the Federal Reserve concludes Millennials spend less money because they have less money. Net worth has been on a steady decline in the country since 1996. When shopping, Millennials prefer to pay with a debit card, prepaid card, or cash; only one in three has a credit card, according to Bankrate. In light of this, some upscale retailers such as Anthropologie are introducing interest-free layaway plans to help Millennials purchase higher-priced goods in installments. What Are They Buying? It’s been widely reported that Millennials value experiences over things. The New York Times says there has been a “significant shift in material culture” within the generation. Investment banking firm Goldman Sachs describes it this way: “Must-haves for previous generations are not as important to Millennials.”

60 | NOVEMBER 2019 | www.hearthandhome.com

The generation has little interest in fancy china, crystal, family heirlooms, formal living room furniture, and other material goods to keep up with the neighbors and maintain a “properly furnished” home. In fact, Goodwill and Habitat for Humanity thrift stores are overrun with household items donated by downsizing Baby Boomers because their Millennial-aged kids don’t want the stuff. Instead, the generation favors minimalism over clutter, and prefers spending money on activities, events, and experiences that make memories. They want to buy a lifestyle, not a product. This notion, along with other changing Millennial preferences, is making and breaking a slew of industries. Millennials are blamed for waning interest in golf, paper napkins, diamonds, and doorbells (young people text to announce they’ve arrived). The 11% drop in sales of men’s shaving products over the last five years is attributed to the many Millennial men who now sport beards, according to “MarketWatch.” “Business Insider” reports the generation doesn’t use liquid fabric softener, causing category sales to plummet – likewise, for bar soap. Despite overall growth in the showerand-bath products category, sales of bar soap fell more than 2% between 2014 and 2015, attributable to Millennials who believe the bars collect germs.

73% of Millennials are willing to spend on live concerts and events

On the flip side, Millennials are driving growth in sales of camping-related gear, houseplants, skincare products, seltzers, fitness wear, and gyms. They also spend more on holidays than other generations – particularly Halloween, Valentine’s Day, and Christmas. Although they are changing the way recorded music is consumed, according to “MarketWatch,” Millennials are solidly behind live concerts and entertainment. The report indicates 73% of Millennials are willing to spend on live concerts and events (versus 65% of Gen X and 55% of Baby Boomers).

Resale, Rental, and Sharing Many Millennials today are not shopping to own, but rather, renting or sharing the products and services they need. Indeed, the so-called “Rental Economy” is booming.

56%

of travelers have stopped using rental cars, shifting to ride-share services instead. Ride-sharing services, such as Uber and Lyft, that drive you where you need to go at the touch of an app, have reduced the necessity for cars. Fortune reports 56% of travelers have stopped using rental cars, shifting to ride-share services instead. Fashion-industry disruptors such as Rent the Runway – as well as a growing number of traditional clothing retailers such as Bloomingdales, American Eagle, and Urban Outfitters – now offer clothing subscription and rental services. Luxury retailer Lord & Taylor – the oldest department store in the country – was just acquired by the rental start-up Le Tote. West Elm, IKEA, and other stores are testing rental programs for furniture and home accessories. Specialty outdoor gear retailer REI recently doubled its rental program, and now offers rentals of camping equipment, snowshoes, skis, snowboards, and other gear at 85 of its 154 total locations, with plans to roll it out to 115 stores in the coming year. Led by Millennials and Gen Z, the resale and consignment market also is exploding. The movement started in the clothing industry as a result of young consumers’ interest in wardrobe “rotation over accumulation,” and a desire to divert some of the 26 billion pounds of clothing that ends up in landfills each year. Sales of secondhand clothing are expected to double to $51 billion over the next five years, according to the 2019 Resale Report by online thrift store thredUP.

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| Trend Report | The resale concept is moving beyond clothing to a host of other goods, as well – including patio furniture and grills – through local online sites such as Facebook Marketplace, Craigslist, Buy Swap Sell, and Nextdoor. Where and How They Shop According to a report from Goldman Sachs, Millennials shop by this mantra: maximum convenience at the lowest cost. They are omnichannel shoppers, with about 60% of Millennials saying they use a mix of online and in-store channels to research and purchase products, according to studies in “eMarketer Retail.” The generation is likely to start the process of researching and comparison shopping online, regardless of whether they ultimately buy a product in-store or online. Reviews (43%) and price (41%) are the top factors that influence what and where Millennials buy, according to the e-commerce newsletter “Digital Commerce 360.” Brick-and-mortar channels are still an important part of the Millennial shopping experience. The Millennial Shopping Report by online coupon platform CouponFollow, indicates Millennials currently make 40% of their purchases in-store. Older Millennials (43%) and Millennial women (42%) are slightly more likely to shop in-store than younger Millennials and Millennial men. A study from consumer analytics firm Buxton shows Millennials spend an average of $57 per in-store transaction, more than any other generation. However, research indicates Millennials are moving away from brick-and-mortar to online shopping. “Digital Commerce 360” reports Millennials are making fewer of their purchases in-store; since 2017 the number has dropped from 53% to 40% of purchases. An estimated 60% of the generation’s purchases are now made online, up from 47% in 2017.

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YPulse reports the number of Millennials who browse and buy only in-store, fell from 18% to 13% between 2017 and 2019, and those who say they prefer to buy in-store after researching online, decreased from 31% to 22%.

39% of Millennials prefer to browse online then purchase online.

Comparative studies show Millennials’ preference for digital shopping is growing, according to “eMarketer Retail.” A 2019 report shows the greatest share of Millennials – 39% – prefer to browse online and then purchase online, up from 30% in 2017. Showrooming – browsing in-store but purchasing online – also is up, from 6% to 8%, according to the study. Tech-savvy Millennials are very comfortable shopping online for more and more things. In fact, a study in YPulse shows 40% of Millennial males and 33% of females would prefer to shop only online if they could. Increasingly, mobile-oriented Millennials are using their phones to shop. Thirty-six percent of digital purchases are made on mobile devices today, up from 16% in 2017, according to CouponFollow’s Millennial Shopping Report. During the same period, the number of digital purchases made on laptops or desktops dropped from 31% to 24%.

A big chunk of those purchases are being made on Amazon. Research in Entrepreneur magazine shows Millennials are the most frequent Amazon customers, with 79% reporting they purchased from the site within the last month. Free and fast delivery is a key motivator for buying online. To avoid shipping costs and get products in their hands even faster, more young shoppers are opting to “buy online and pick up in-store.” According to “eMarketer Retail,” two-thirds of Millennial and Gen Z consumers have tried “click-and-collect.” The National Retail Federation reports about 60% of shoppers did so to avoid shipping costs; other key reasons were speed (pick up the same day) and convenience. They Put Their Money Where Their Causes Are Gen Z and Millennial consumers want to do business with authentic and valuesled companies. The Deloitte “2019 Global Millennial Survey” found 42% of Millennials have begun or deepened a relationship with a company because they believe its products or services have a positive impact on society or the environment. Conversely, 38% have stopped or reduced doing business with a company if they believe its products or services negatively impact the environment, and 37% have stopped because of the company’s ethics or business practices. Cause-conscious young consumers want companies to focus on sustainability. YPulse reports over half of Millennials have taken steps to reduce their own consumption of single-use plastics, and want companies to reduce packaging waste, energy consumption, and greenhouse gas emissions. The generation says it is willing to pay more for sustainably produced products. Companies are responding with products and initiatives that appeal to ecoconscious Millennial and Gen Z consumers. Vogue reports 150 brands have joined the G7 Fashion Pact, with goals of achieving zero greenhouse gas emissions, restoring biodiversity, and preserving the oceans. High-end retailer Nordstrom’s launched a new Sustainable Style online site, offering sustainably made products from sociallyand environmentally-responsible factories

and brands that give back, including Reformation, Patagonia, and Toms. Blanket company Sackcloth & Ashes donates a blanket to a homeless shelter for every blanket purchased and has a page on its website titled “Activism.” Millennials also expect brands to support social-justice causes. According to an article in Forbes, 70% of Millennial consumers consider a company’s values when deciding to purchase a product. According to the ARF Cultural Effectiveness Council, Millennials say they feel pride in wearing or owning products from brands such as Patagonia and Toms that “showcase their values” and “stand for something beyond making a profit.” Remarkably, the study also shows that 45% of Millennials say they are “likely to boycott brands that mishandle social issues.”

63%

of Millennials believe they are “addicted” to their mobile phones. Taking a stand on polarizing social issues can be risky, but according to “eMarketer Retail,” companies are increasingly willing to alienate some consumers to gain the support of the Millennial majority. For instance, a Quinnipiac University poll found 67% of Millennials approved of Nike’s decision to feature controversial former NFL quarterback Colin Kaepernick in its ads, and 34% of Millennials indicated they were more likely to purchase Nike products following the brand’s ad campaign. On the Horizon… Though young, Gen Z is already putting its own mark on shopping and spending. Bloomberg Businessweek reports one-third of Gen Zers believe shopping should also be entertaining. Despite being digitally savvy, they actually like shopping in brickand-mortar stores, particularly in a mall. A report from the International Council of Shopping Centers found that 95% of them visited a shopping center in the

past three months, compared with 75% of Millennials, and three-quarters of them say going to a brick-and-mortar store is a better experience than shopping online. They expect to find products geared to their generation’s tastes and interests.

Where to Reach Millennials Millennials are constantly connected, yet connecting with them is tricky business. Capturing and holding the attention of this distracted generation is a challenge. Businesses trying to reach these digital natives need to revamp their marketing playbook and meet them where they are – which is usually online. The Good, The Bad, and The Ugly of Being Constantly Connected The Nielsen Company reports that the generation spends 11 hours per day “watching, reading, listening to, or interacting with” digital media, up from 9.5 hours four years ago. According to the Pew Research Center, 48% of younger Millennials and 36% of older Millennials say they are online “almost constantly,” compared with just 19% of 50- to 64-yearolds who report similar behavior. A report in Forbes indicates 47% of Millennials say they can’t live without the Internet, and a survey from Techsurvey shows 63% of Millennials believe they are “addicted” to their mobile phones. It’s not hyperbole. Studies show 83% of Millennials sleep next to their phones, twothirds take their phones into the bathroom, and more than half check their phones if they awaken during the night. The obsession is creating serious consequences for the generation. The fear of being without one’s phone, or being unconnected due to a lack of signal or battery power, actually has a name: Nomophobia. The anxiety disorder is recognized by the

National Institutes of Health; it reports as many as 23% of college-age males suffer from the affliction. “Science Daily” explains cellphone overuse actually changes the brain, resulting in imbalances that decrease attention span, and increase depression, insomnia, anxiety, and impulsivity. This is especially true for Gen Z who have never known life without the Internet, and for whom a smartphone is practically an appendage. The Atlantic reports the “iGen” cohort is “on the brink of the worst mental health crisis in decades,” with depression and suicide rates having skyrocketed among the group since 2011, blamed in part on overuse of cellphones and social media. A host of rehab facilities nationwide now offer programs to help treat cellphone addiction. Social Media Engagement While online, chances are good Millennials are engaging with social media. “Digital Information World” reports 25- to 34-yearolds spend an average of 2:37 hours per day on social media, second only to 16- to 24-year-olds who spend an average of 3:01 hours a day on social media platforms. YouTube is one of the top sites visited by Millennials and Gen Z. Social media management platform Hootsuite reports 96% of 18- to 24-yearolds and 95% of 25- to 34-yearolds use YouTube. According to “eMarketer Retail,” 59% of Gen Z and 46% of Millennials have increased their use of YouTube in the past year; the platform now reaches more 18- to 34-year-olds than any traditional TV network. About 37% of 18- to 34-year-olds say they binge watch videos on the platform, according to Omnicore, and a study from Pearson/Harris shows 47% spend three hours per day on the site. Seventy percent of Millennial YouTube users watched a video to learn how to do something, according to Hootsuite. Eighty percent of the generation finds viewing product videos helpful when researching prior to a purchase. And 60% of Millennials say

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| Trend Report | they prefer to watch a company video than read a company newsletter, according to video production company Wipster. In terms of the number of user accounts, Facebook remains a top platform for the generation, particularly the older segment of the cohort. Although Gen X and Baby Boomers are heavier Facebook users than Millennials, 88% of 18- to 29-year-olds and 84% of 30- to 49-year-olds are on the platform, according to “Business Insider.” Ninety-six percent of Facebook users access the site on their mobile phones, spending an average of about 35 minutes per visit. However, the number of Millennial Facebook accounts and active usership rates are on the decline. A 2018 study from the Pew Research Center shows 44% of 18- to 29-year-olds and nearly 30% of 30- to 49-year-olds temporarily deleted the Facebook app from their phones within the last year. Smart Insights reports Facebook lost 2.8 million U.S. users under age 25 last year. Instagram has more than 43 million active Millennial users in the U.S., spending an average of 53 minutes per day on the app, according to “Business Insider.” More than 70% of Instagram users are under age 35. Pinterest, the fourth largest social media platform, is used by 34% of 18- to 49-year-olds, according to Pew Research Center. Eighty percent of Millennial Pinterest users say the platform helps them decide what to buy. Snapchat reaches 75% of 13- to 34-year-olds, according to Hubspot. According to Pew Research, 51% of Gen Z says Snapchat is the platform they use most, followed by Instagram at 46%. Only 10% of Gen Zers use Facebook most often. Reddit engagement is up 50% year-overyear among Gen Z & Millennials.

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56%

of Millennials are willing to share their location and personal information to receive coupons or special offers. According to Wipster, Millennials connect with businesses through social media. About 84% of Millennial Facebook users follow companies on the platform; 76% on YouTube, 50% on Twitter, and 40% on Instagram. But following companies on social media doesn’t guarantee customer loyalty. According to digital technology consulting firm Accenture, Millennials tend to view their social media relationships with companies as “transactional,” or a way to score deals. In fact, a study from Hanover Research indicates 56% of Millennials are willing to share their location and personal information to receive coupons or special offers.

Consuming Content Millennials are cord-cutters. Traditional paid television viewership is on a steady decline among 18- to 34-year-olds, dropping 12% in 2018, on the heels of a 13% decline in 2017, according to “Hootsuite.” It is being replaced with digital streaming services such as Netflix, Amazon Prime Video, Hulu, Sling, and Apple TV. Of course, this trend is happening across all generations, but it is particularly pronounced among Millennials. According to Fortune, 88% of Millennials subscribe to Internet streaming services and 51% subscribe to traditional cable or satellite TV. Comparatively, 69% of overall adults subscribe to streaming services and 65% pay for cable. Whether they’re watching traditional TV or streaming video, Millennials are likely to be multitasking. According to YPulse, 70% of Millennials say they are simultaneously on a second screen – either a computer or phone – and 75% are using social media, while watching a show. As compared to older generations, Millennials are more likely to access news online from apps, podcasts, or even social media. Twitter is the social media platform most used for news. Reading a traditional print newspaper as a primary news source has declined steadily among the generation. Influential Influencers Bloggers, YouTubers, Instagramers, podcasters, and social media celebrities wield a lot of influence over the generation. According to “eMarketer Retail,” 40% of Millennials heed the recommendations of social media influencers, while only 9% of Baby Boomers do. Millennials regard influencers as authentic and objective third parties; Baby Boomers put more credence into recommendations from true industry experts. YPulse calls Gen Z kids “household influencers.” The National Retail Federation reports 87% of parents say their Gen Z children influence family purchase decisions. After seeing a product promoted on social media by a celebrity, YouTuber, or Instagramer, 50% of six- to 16-yearolds have asked their parents to buy it, according to YPulse.

More Millennial Insights As Millennials become your customers, it’s important to understand how they like to communicate and interact with businesses. As anyone who’s ever called a Millennial can likely attest, the generation has largely replaced landlines with mobile phones, rarely answers phone calls (although, given the increasing inundation of spam calls, the same might be said of all generations), dislikes talking on the phone, and almost never uses voice mail.

63%

of Millennials prefer email for communicating with retailers.

The generation likes email, according to Forbes; more than 50% of young Millennials and 43% of older Millennials check email before even getting out of bed in the morning. So, perhaps it’s not surprising that 63% of Millennials prefer email for communicating with retailers, according to Entrepreneur. (Text messaging with retailers was preferred by 14%.) One cautionary note: According to Forbes, 34% of Millennials say they are annoyed by brand emails that are “irrelevant” to them and have landed in their inbox as a result of data tracking and analytics. CNBC reports that fewer than half of the emails Millennials receive are actually opened. When shopping in brick-and-mortar stores, Millennials are happy to avoid salespeople. Believing salespeople have ulterior motives, Millennials are likely to do their own product research online prior to walking into the store. According to “eMarketer Retail,” nearly 70% always or often consult online reviews before making a product purchase; they also solicit friends’ opinions, and use social media to ask for recommendations, collecting what they perceive as trustworthy and unbiased advice before buying. Another interesting fact: A “Bizrate Insights” survey shows over 50% of

Millennials use self-service checkouts. Given their apprehension about salespeople, a low-pressure approach on the sales floor would probably work best.

Courting the Millennial Customer

Opinions About Advertising Possibly for the same reasons they don’t appreciate working with salespeople, Forbes reports 84% of Millennials don’t like or trust traditional paid advertising. They usually don’t pay much attention to it either – Nielsen reports the cohort has the lowest ad memorability score of any generation. However, 57% of Millennials will view brand-sponsored content as long as it’s “authentic, entertaining, and useful,” according to Nielsen. They prefer “brand storytelling” over traditional hard-sell ads. About 85% of Millennials find remarketing ads – ads that follow someone around online after searching a product or topic – to be “creepy” and “annoying,” according to a survey by Clever Real Estate. But that hasn’t stopped them from making a purchase through ads on social media sites – 35% have reported doing so, according to “eMarketer Retail.”

Creating Experiences While Millennials’ love of online shopping is widely reported, 56% of them actually shop in stores weekly (not including convenience or grocery stores) – that’s more than Gen X at 44%, and Baby Boomers at 27%, according to “Grow Wire.” The two main reasons Millennials choose physical stores over online sites: They don’t have to wait for product to be delivered (63%), and they get to see, hold, and/or try on product before buying (59%). According to YPulse, “Retailers tend to think of stores as places to buy, but for Millennials, they’re really places to try.” Creating an experience-driven retail environment is essential to building a Millennial customer base. According to Yes Lifecycle Marketing, 19% of Millennials consider the in-store shopping experience a top factor in determining customer loyalty. An inviting and compelling instore experience could help drive foot traffic and trigger in-store purchases, particularly among the 21% of Millennials who almost always “showroom” (check out a product in-store, before purchasing online), according to YPulse. Let the five senses guide and inspire fun, inviting, and memorable in-store shopping that experience-seeking Millennials can’t get online or at Big Box stores. How? Draw customers in visually with creative merchandising and displays. Create enticing aromas by always burning wood, charcoal, and/or pellets, and tempt taste buds with delicious samples. Engage Millennials with classes and workshops; let them touch, test, and interact with products. If space permits, create a cozy livingroom lounge with comfy furniture surrounding a fireplace or stove so customers can sit, feel the warmth, and imagine it in their own living room. Play music in the store daily; consider hiring a local musician or band that has a Millennial following to play during your store’s biggest annual event. Displays, product selection, and events should be continually tweaked to keep experiences fresh and encourage repeat visits.

19%

of Millennials consider the in-store shopping experience a top factor in determining customer loyalty.

Nearly half of Gen Z and Millennials say they would like to be able to buy items they see on-screen during television shows, according to YPulse, and 26% have actively tried to do so. Now some shows and videos are becoming “shoppable,” with embedded scannable codes that allow viewers to click on and purchase products directly from the screen. For example, the online video tour of Real Simple magazine’s 2019 Idea House is embedded with smart-code technology that gives consumers the ability to purchase more than 300 items featured in the home.

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| Trend Report | hamburger patties, cooked them on the gas grill, topped them with American cheese and a squirt of ketchup, and served them on squishy white-bread buns. Another way Millennials cook outdoors differently: According to a report in The Wall Street Journal, they are “over-indexing on charcoal grilling.” The experience of lighting the charcoal and grilling over fire could be behind the generational trend, or it might be because charcoal grills are typically cheaper than gas grills.

Tell Your Social and Environmental Story Use social media, your website, and in-store signage to toot your horn about efforts you make that are important to causeand sustainability-conscious Millennials. Let them know how many pounds of metal you recycle from the old grills and hearth products you haul away. If you sell poly-resin furniture made from recycled materials, tell them how much plastic each chair kept out of the ocean. Point out that the teak dining tables you sell are Forest Stewardship Council-certified. Likewise, share information about the good deeds you do in the community; the charitable causes you support; the end-ofthe-season pizza party you threw for the Little League team you sponsor – with pizza cooked in the pizza oven and served to players and their Millennial-age parents in your Outdoor Room display, of course. Tell about your support of hearth industry stovechange-out initiatives that have improved air quality in different communities. Opportunities for Hearth, Barbecue, and Patio Retailers Food-tech newsletter “The Spoon” reports 25% of young Millennials and 35% of older Millennials currently use a grill to cook meals. But considering the generation is finally getting into the housing market, and a grill purchase typically coincides with a home purchase, grill sales could grow significantly over the next decade. More good news comes from a 2016 Rabobank study that finds U.S. Millennials spend an average of $11.91 per person on food for a barbecue, while cookout hosts of other generations spend an average of $6.90 per person on food. The reason: Millennials are interested in eating well and authentically. For example, if burgers are on the cookout menu, Millennials are much more likely to source organic, grassfed beef from their local butcher, grind it themselves, cook it over a live fire of all-natural, sustainably-sourced lump charcoal, and serve it on a bakery-fresh bun with melted artisanal cheese, a strip of uncured, heritage-pork bacon, and a slice of heirloom tomato they bought at the farmer’s market. Whereas their parents might have bought a sleeve of frozen

say they want to decorate their outdoor space as they would an indoor dining or living room, and nearly a quarter want comfortable outdoor seating, dining sets, and accessories on the patio. Furniture with clean lines and compact footprints appeals to Millennial’s design preferences and small patios. The generation loves fire pits. It is one of Millennials’ most-desired backyard features. A fire pit offers the promise of romantic evenings for two, wholesome family fun, and hip outdoor entertaining. It

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Millennials’ growing interest in camping, opens the door to sales of portable grills, fire pits, and tailgating gear. Grills with color finishes and tech features such as Wi-Fi-enabled controls and apps that monitor temperatures and provide recipes, should appeal to Millennials. Their desire for experiences makes them strong candidates for value-priced modular outdoor kitchens, cart-based or tabletop outdoor pizza ovens, and live-fire grills. These products have fast turnaround times (Millennials don’t like to wait) and provide the outdoor lifestyle Millennials want, at a price they can afford. A Better Homes & Gardens survey shows Millennial homeowners love and want to improve their backyards. More than 50%

is also a relatively inexpensive and attainable entry point to introduce Millennials to the experience of gathering around a hearth, and to the beauty, warmth, and ambiance fire adds to a home. For Millennials, a fire pit could be a gateway to a hearth product inside the home. As Millennials purchase homes and enter their prime spending years, this important and powerful generation is shopping now. Understanding what makes them tick and making the necessary adjustments to your store, product offerings, and marketing mix will help attract and retain this incoming wave of hearth, patio, and barbecue customers. Because Millennials aren’t the future, they’re here right now.

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| Computer-aided Design (CAD) |

DESiGNED TO SELL 3-D design software can help retailers sell more outdoor living products. (Psst! It could turn out to be your best salesperson.) By Lisa Readie Mayer

aybe a picture is worth a thousand words. But when it comes to Outdoor Rooms, that picture may also be worth thousands of dollars in increased sales. Today, retailers can utilize cutting-edge – but still remarkably easy-to-use – design software to create virtual, three-dimensional “pictures” of outdoor living spaces. When used in proposals, these realistic, photolike designs help customers visualize the project in their yards, inspire them, and in the process, help retailers close sales and increase project sizes. Some design programs create a virtual backyard-living environment within a still photograph of the customer’s yard. Others use augmented reality to enable the retailer to design on a tablet in real time right in the customer’s backyard. With a click here and a drag there, realistic, to-scale fire pits, outdoor kitchens, pergolas, water features, plant material,

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and countless other features can be selected from a library of outdoor elements and dropped into position. Don’t like the fire pit on the right side of the patio? Drag it to the left side. Want to see what an outdoor fireplace would look like instead? Swap it out with a click. Want a 3-D bird flying around your 3-D yard while chirping? Sure, just pick the right program. Unlike most CAD design programs, the new design software is inexpensive, intuitive, and easy to master, even for novices. The state-of-the-art programs greatly speed the design timetable and simplify the revision process, so retailers can handle more projects annually. The programs make it super easy to experiment with project elements and visualize potential configurations before the plan is finalized, so they help reduce on-thejob changes, delays, product returns, and other unwelcome surprises. Experts say even retailers who are not involved in the construction of Outdoor Rooms, but merely supply the grills and other built-in accessories for projects, can still benefit from using these types of design platforms. For one, they are a good way to introduce Outdoor Room appliances, elements, and furnishings that the customer might not otherwise have been aware of, or that there may not be room to display on the sales floor.

The realistic designs bring an outdoor space to life, building desire in customers who can visualize it in their backyard and imagine enjoying it with family and friends. Retailers can also share the designs with landscape architects, designers, and masons to educate them about what the client wants. Finally, the video-game-like designs provide a “wow factor” that knocks customers’ socks off and spurs them to tell their friends. There’s an App for That When Patrick Pozzuto was asked to design a small landscaping bed for a friend, it required 10 time-consuming plan revisions using a CAD program to get to the final decision. The frustrating experience inspired Pozzuto to develop iScape, an app that homeowners and professionals can use to design and visualize landscaping and Outdoor Room projects. “Most outdoor design software is expensive, complex, and difficult to use,” says Pozzuto, iScape founder and CEO. “As a landscaper out in the field, I saw these pain points.” Though he initially developed the software with do-it-yourself homeowners in mind, Pozzuto says many professionals use it. “Small shops love that iScape is an app that helps homeowners and professionals design and visualize landscaping and Outdoor Room projects.

it’s easy and makes designing incredibly fast,” he says. “Some people have anxiety about technology; this is good technology that simplifies the process.” The iScape app offers two ways to design an outdoor living space. In one, the user imports a photo of the existing outdoor space and then creates a design over the image by selecting elements such as hardscapes, grills, pergolas, fire pits, outdoor kitchens, pizza ovens, plant materials, and more from the iScape library, and dragging and dropping them into the desired place in the photo. The app’s augmented-reality option allows the user to open the camera feed on an iPhone or iPad and create a virtual 3-D design in real time right in the backyard by inserting outdoor elements into the image. A “Sun Slider” feature even simulates where shade will fall in the outdoor space throughout the day. “It’s very easy to use,” says Pozzuto. “You can walk around the yard with the client and create a design on the spot.” The iScape app compiles all selected elements into a spreadsheet to generate a proposal. Each design revision can be saved for comparison, and the plans can be shared between clients’ family members,

Example of a project design created with iScape app.

design collaborators, and subcontractors. A second-generation version of the app, already in the works, will include a database of retail referral partners. “If a consumer uses the app to design their outdoor space, and has a fire pit in the plans, we will be able to refer that person to a local retailer to purchase it,” says Pozzuto. “We’re hearing from garden centers and outdoor living retailers who have had success using iScape,” Pozzuto says. “They’ve had homeowners create their own designs on the app and bring them in to get a proposal on the project. Other retailers have run promotions inviting customers to bring in a photo of their yard, and the retailer will do a quick design in the store using the app. “It’s a way to get customers excited about the possibilities in their yards, and a way for retailers to grow their business. Homeowners want to enhance their outdoor living areas, but the purchase intent is much stronger

With the iScape app you can build in augmented reality or from an image.

when they can visualize the space. iScape helps them visualize the concept so they make an emotional connection and take the next steps.” To date, nearly 5 million outdoor living designs have been created using iScape; it has 7,000 reviews in the Apple App Store and a 4.6-out-of-5-stars rating. The app recently gained even more traction after Apple CEO Tim Cook touted it as an example of the future of virtual reality in an HBO documentary interview. Professional subscriptions run $19.99 a month (iScape is offering discounted annual subscriptions exclusively for Hearth & Home readers; contact partners@ iscapeit.com). Manufacturers interested in featuring products in the app’s elements’ library, retailers who wish to become referral partners in the iScape network, or any company interested in a custom design app can inquire at partners@iscapeit.com. YARD (Your Augmented Reality Design) is a new augmented-reality outdoor design app from subscription-based software company Structure Studios, creators of other 3-D design programs, including Pool Studio and VizTerra. The intuitive YARD app allows retailers to instantly create 3-D designs on a tablet while standing in the customer’s yard and selecting to-scale images of outdoor kitchens, patio furniture, fire pits, lighting, plant materials, and other elements, and dropping them into the real-time scene. With a few clicks, a design plan can be revised or even turned into a virtual, video walking tour through the proposed outdoor space, complete with special effects such as slow-motion and close-up shots to emphasize specific elements or features. Click here for a mobile friendly reading| experience www.hearthandhome.com NOVEMBER 2019

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| Computer-aided Design (CAD) |

“People tell us their wants and dreams for their backyard and we’ll include it in the design. We can help them visualize a hot tub beside the pool, an outdoor kitchen close to the house, a fire pit seating area.”

— Dean Salvani, Jr. CEO of Backyard Masters

The Payoff “(3-D design software) revolutionizes the design process,” says Dean Salvani, Jr., CEO of Backyard Masters in Farmingdale, New York. “The customer can give me their address and I’ll plug it into Google Earth and their yard comes up in the program. People tell us their wants and dreams for their backyard and we’ll include it in the design. We can help them visualize a hot tub beside the pool, an outdoor kitchen close to the house, a fire pit seating area. “We can show them things they never thought of and can design the outdoor living space right down to the Sunbrella fabric on the patio furniture and umbrellas. Creating 3-D proposals definitely helps us sell more elements and close sales. We can often get a deposit right then and there in the store. “Even if a customer can’t do it all at once, the design broadens their imagination,” Salvani, Jr. says. “They can see the big picture and how they might add to it over the years. When they start to see what’s possible and how cool it is, they want it.” “Consumers have really short attention spans today,” says Jeremy Smith, CEO and president of California Pools & Landscape, a 31-year-old, award-winning, outdoor living design-build firm with two showrooms in the Phoenix area. “Previously, we would sit with them for several hours to talk about what they wanted in an outdoor space and all the possible elements they might incorporate. Today, people want the information quickly, on their timetable, and they want to have the option to research and educate themselves before they come to us.”

70 | NOVEMBER 2019 | www.hearthandhome.com

To that end, California Pools & Landscape developed Dreambook, a proprietary app that customers can download for free to learn about outdoor living possibilities and virtually build their ideal outdoor environment. Available for iOS and Android mobile devices,

water features, the design of the spa, the type of decking, or landscape plants they like,” says Smith. “For instance, people can plan an outdoor kitchen on the app. Do they want a high-top bar counter? Do they want to add a smoker, a refrigerator, or a kegerator? Do they want an outdoor TV? A modern or rustic look? We have 15 different colors of travertine and different sizes of tiles to choose from. What do they want on the countertop? We try to give them as many specific options as possible so people can quickly swap things in and out of the design to create a pretty indepth picture of what they want before they even come to the showroom.” Family members often create individual Dreambooks within the app, according to Smith, and even the kids weigh in on features such as the type of pool slide they want or whether they would like a soccer goal in the outdoor space. “The backyard is a destination area that families can

The California Pools & Landscape app helps consumers design a backyard.

Dreambook allows users to upload an image of their existing outdoor space, then scroll through photo galleries of completed outdoor spaces, as well as individual outdoor elements, for inspiration. Users select their favorite features and place them in the uploaded photo to design their dream Outdoor Room. “The app lets consumers envision the overall space, as well as get narrow-focused on individual features such as fire pits,

personalize and customize according to how they would like to use it. We offer our clients additional living space. We help them make the indoors and outdoors seamless.” California Pools & Landscape is alerted whenever someone downloads the app to build a Dreambook, and the company markets back to the user via email and other targeted strategies. A “Dreamer” also can request a quote directly from the app. Though the app is specific to his business, Smith

| Computer-aided Design (CAD) | says, he’s been surprised by the number of out-of-state folks who use it and bring their designs to a nearby retailer. “Retailers in other parts of the country tell us our app helps them sell outdoor living spaces.” Local customers who wish to take the next step can schedule a free design consultation with a California Pools & Landscape salesperson. The customer’s Dreambook design is used to inform the final, highly-detailed, customized, 3-D design. For maximum impact, plans are presented on 70-inch, high-definition TVs in the showroom. “We virtually walk customers around their whole project on-screen like a video game,” says Smith. “We can show them

the view from inside their house looking out. We can put the neighbor’s house in the plans so they can see how it looks from the neighbor’s yard. The plan is extremely realistic. People have a hard time believing it’s a computer rendering.” Smith says the app has improved the company’s sales-closure rate, and typically expands the number of elements included in a project. Another bonus: lastminute changes on the job site have been reduced significantly. “Getting as close to perfection as possible in the design makes us more efficient and profitable,” he says. “It solves customer paralysis by analysis.” Old-fashioned “napkin sketches,” line drawings, and even 2-D renderings

are dinosaurs, according to the experts. Using 3-D design plans and videos as part of Outdoor Room proposals – and featuring these lifelike designs on websites and in marketing efforts – can increase customer engagement, web-search traffic, leads, and sales. According to Forbes, 64% of consumers are more likely to purchase a product after watching a video. Click-through rates increase over 200% when they’re used in a marketing email. Companies who feature them on a landing page boost conversion rates by 80%. “People are used to and expect really sophisticated marketing,” says Smith. “If you’re selling outdoor living products, you need to use these tools to be competitive.”

BILT App Makes Product Assembly Easy It’s hard to imagine the words “easy” and “assembly-required” ever coexisting in the same sentence, but that is exactly the goal behind BILT Intelligent Instructions. Conceived by a software engineer in 2012 after an IKEAnightstand-assembly gone wrong, BILT is an app that provides interactive, animated, 3-D assembly instructions for products ranging from dollhouses to trampolines. A growing number of grill and outdoor living brands, including Weber, Pit Boss, Louisiana Grills, Vermont Castings, and Backyard Discovery, now offer assembly instructions through the BILT app. The app provides an overview of the tools, estimated time, number of people, and total steps required to complete the task, so users know what to expect before beginning the assembly. It also includes a parts inventory, with a graphic depiction and count for each individual part. The animated, step-by-step assembly video is intuitive to use, simple to follow, and supported by both voice and text instructions. With their fingers, users can pause the instructions, zoom in and out to get a closer look at parts and assembly steps, or rotate the image to view it from a different angle. BILT highlights the part number for each product component to facilitate maintenance, repair, and replacement-part ordering. Consumers can store their purchase receipt and warranty information through the app. It also provides the ability to seamlessly fill out and submit the manufacturer’s productregistration forms and post a product review. “The BILT app creates a better customer experience,” says Angela Meek, the company’s director of Marketing. “It reduces calls to customer support by 30%, reduces product returns by 30%, and increases revenue 8%. Product registrations go up from an average of 2% for paper forms to 13% with BILT, so it helps manufacturers capture valuable data. Plus, products tend to get more positive reviews when they are posted through the BILT app.” The app is ideal for DIY consumers assembling products at home, but it’s helpful to retailers, installers, and service

72 | NOVEMBER 2019 | www.hearthandhome.com

technicians, as well, according to Meek. Though many premiumpriced specialty grills are shipped already assembled, some more moderately-priced lines are not. “Retailers can download the app to help with assembly,” says Meek. “Since it makes assembly easier and faster, it frees up staff time. It also helps retailers accurately identify replacement parts, which is a tremendous help and eliminates errors.” Manufacturers pay per product SKU to have assembly instructions generated by BILT and featured on the app, but the app is free for consumers, retailers, technicians, and installers to download. According to Meek, in addition to grills and smokers, shipped-flat, ready-to-assemble outdoor kitchen systems, pergolas, and other outdoor living products requiring multistep assembly would be ideal candidates for BILT assembly instructions. “There are so many applications for this app,” she says. “Consumers and major retailers expect this kind of experience from manufacturers today.” No word yet on whether the app tells you what to do with the extra screw that’s inevitably left over when assembly is finished.

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| Rep Roundtable |

Ed Coleman — Northeast—

Bob DeYoung — Mid-Atlantic —

Jay Hanson — California —

Shirley Byrd — South Central —

GATHERING OF KNOWLEDGE Sales reps tell us that hearth products are selling well, but dealers are treading cautiously around the NSPS 2020.

Ross Johnson — Southeast —

Kevin Wood — Rocky Mountains —

Tim Snyder — Midwest —

74 | NOVEMBER 2019 | www.hearthandhome.com

Andy Todd — Pacific Northwest —

By Bill Sendelback

ecently, in order to understand what’s happening this year with sales of hearth products in the U.S., Hearth & Home interviewed independent manufacturers’ representatives to get their opinions. We interviewed the following eight reps, interspersed throughout the country: Shirley Byrd – South Central owner of Byrd Marketing Ed Coleman – Northeast president of Coleman & Associates Bob DeYoung – Mid-Atlantic president of DeYoung Associates Jay Hanson – California CEO of J. Hanson Sales/Sierra Marketing Ross Johnson – Southeast owner of Johnson Marketing Tim Snyder – Midwest president of Snyder & Associates Andy Todd– Pacific Northwest owner of Energy Classics

Traditional styling still is strongest in this region, but contemporary styling is “growing quickly,” Byrd says. “In fireplaces, bigger is better, and they don’t have to heat. Millennials are going for the modern look, and price is not a factor.” Dealer inventories of non-2020 certified wood-burners are a concern, says Byrd. “Some have a lot of this old inventory, with a few dealers still with more than 20 units in stock. They are discounting these models and trying to sell them, but this is causing many dealers not to order 2020 models until the old units are gone. Some dealers are really nervous about their unsold pre2020 inventory.” This may result in lower sales of wood stoves in 2020, Byrd believes. “But sales of wood-burning fireplaces will boom next year, along with big, clean, no heat, direct-vent gas fireplaces.” It was a great year for hearth product sales in the Northeast, according to Ed Coleman, Coleman & Associates. “The entire Northeast is doing great, and some dealers are even opening new stores,” according to Coleman. “We’re selling more gas models than wood-burners, partially because of the confusion among dealers about the 2020 NSPS deadline to sell-

off their non-2020 models. Dealers are concerned, and those who are buying wood stoves are only buying 2020 models.” Dealer inventories of non-2020 woodburners have other dealers concerned as these inventories are being heavily discounted. “As an example, a non-2020 pellet stove that retails for $4,500 is now being blown out at $2,500, less than dealer cost,” says Coleman. While sales of gas models, especially large 45- and 60-inch linear fireplaces, lead the way in the Northeast, followed by wood-burner sales, electric fireplaces are doing well with growth in the construction of high-rise apartments and condos, says Coleman. “There are hardly any oil stoves being sold here, but, believe it or not, coal stoves are making a comeback.” Coleman expects a “very strong” 2020. “The ‘Farmer’s Almanac’ forecasts a long, cold spring, so we should see our season start in the spring,” he says. “Hearth dealers are doing well this year and are very positive about next year. But they don’t know what to do with their non-2020 wood-burners since these are not selling this year. Dealers need an extension beyond the May 15, 2020, deadline to be able to sell off their non-2020 inventory.”

Kevin Wood – Rocky Mountains president of Wood/West & Associates

“Last year was a good year in our South Central region,” according to Shirley Byrd, Byrd Marketing, “and everyone is optimistic about this year. Dealers are seeing more people coming into their stores, so they are excited. If there is a negative, it’s that the Internet has become a huge factor for dealers. After coming to the dealer to look at the products, consumers are buying online, and this is affecting dealers so much that some are dropping product categories sold online, including grills. After a bad year for high-end grills, our dealers are all so ready for fall. “Gas hearth products are selling strong, and sales of wood-burners are doing well, particularly in our rural areas.” she says. “Pellet stoves are not much of a factor, but sales of electric fireplaces are growing.”

Amantii is one of nearly a dozen companies Ed Coleman represents. Shown here is the Amantii Symmetry SYM 50-XT Electric Fireplace.

Click here for a mobile friendly reading| NOVEMBER experience www.hearthandhome.com 2019

| 75

| Rep Roundtable | “We’re seeing renewed excitement in dealer showrooms in our Mid-Atlantic area,” says Bob DeYoung, DeYoung Associates. “New products and new designs are being displayed and sold, whether it’s gas, wood, pellet, or electric.” Along with that dealer enthusiasm, DeYoung is forecasting a 15% sales increase of hearth products for 2020 in the Mid-Atlantic region. “All fuel categories are selling well, but gas models are doing especially well thanks to improvements in product burn presentation technology,” according to DeYoung. “We’re seeing a trend away from sales of the usual standard gas fireplace models to new highend models that burn with a more realistic flame but carry a higher price tag.

Reclaimed Wood Collection by American Fyre Designs, which is represented by Ross Johnson.

sales have slowed in many suburban markets and in areas where wood-burners are now ruled out in new-home construction. Yet wood-burners continue to be in demand in rural areas dependent on propane or electricity for heating.” While linear fireplace sales continue to increase in the California market, custom homeowners are looking for “value” even in high-end models, says Hanson. “And value is now under even more consideration as the area’s economy slows.” Wood-stove dealers have spent the last year selling down their inventories of non-2020 compliant models, Hanson says. “Discounts and special offers have helped this sell down, but dealers are worried that future sales of wood-burners will be impacted by price as a result of the discounted prices of these non-2020 models. Dealers have backed off on purchasing any wood-burners that are not 2020 compliant, and they are not placing stocking orders for 2020 models, ordering only units that are pre-sold. “Dealers are very concerned about the weird regulations occurring in California concerning wood and gas hearth products. So their reaction is to make few new product purchases.” Despite concerns about regulatory challenges and non-2020 inventories, the outlook for specialty hearth dealers in California is “pretty strong” since most are dealing with homeowners looking for remodel upgrades or inserts for woodburning fireplaces, Hanson says. “There is a clear trend for upgraded electric fireplaces that need to be installed by a qualified installer,” says Hanson.

“Mid-Atlantic dealers have prepared themselves for the May 15, 2020, NSPS deadline on sales of wood-burners by offering strong discounts on their pre2020 models. Dealer inventories here on those pre-2020 models are lower than expected, but many still have held off purchasing 2020-compliant models. This 2020 deadline has been a real challenge for our dealers.” A newly-passed Master Hearth Specialist state licensing law in New Jersey has been a blessing for dealers in that state by allowing hearth dealers to become licensed for

Ross Johnson, Johnson Marketing, says hearth product sales in the Southeast are up, and most dealers are optimistic. “The dealers who are doing a good job of displaying are doing better, he says. “Dealers are facing pricing issues from mass merchants and online retailers, especially with hearth accessories. Even chimney sweeps now are selling hearth accessories and glass doors, so many dealers are simply conceding the hearth accessory business.” Sales of gas hearth products, including gas logs, are up and doing well, says Johnson. “It has been a tough year to sell woodburners, and pellet stove sales are also down.

76 | NOVEMBER 2019 | www.hearthandhome.com

product installations rather than requiring those installations to be done by non-hearth industry individuals, says DeYoung. Despite some confusing head-scratching environmental regulatory challenges, hearth product dealers in California are doing well, according to Jay Hanson, J. Hanson Sales/Sierra Marketing. “Newhome construction had been heating up, but recently it has slowed down some. Consumer confidence is still pretty good, and there is plenty of sales activity, but the momentum has slowed, making this year a bit slower than 2018.” Hanson says another reason for the sales slowdown is the growing concern about

limiting new multi-family construction to electric products only, and environmentalists’ pressures to limit or eliminate natural gas in new housing starts. “One result of this concern is that some dealers are expanding into electric fireplaces,” he says, “and while speculative new developments of singlefamily homes have slowed, custom-home construction and major remodels continue to grow. “There still is strength in sales of gasheating products in markets where customhome owners want some heat rather than simply decorative models. Wood-burner

| Rep Roundtable | Meanwhile electric fireplace sales are doing well, with electric models now finding their place in the specialty market.” Johnson says that dealers are cutting prices of non-2020 wood-burners to sell off those models, but he is not seeing replacement of those models with new 2020 models. “I’m also concerned that we’ll see some die-off of smaller wood-stove manufacturers that simply cannot afford to develop, test, and certify to the 2020 standard.” While not unique to the Southeast, Johnson points out that many dealers are seeing challenges with their “changing of the guard. More and more old timers are retiring, but fewer in the younger generations are interested in our industry, leaving some dealers with few choices – to pass on or sell their businesses.”

Blaze King’s Clarity CL29 Gas Fireplace Insert, which is represented by Andy Todd.

“In general, dealers are doing well after a pretty good off-season, but 2019 is still a question mark for dealers concerned about how much dumping is going on with non-2020 wood and pellet stoves.” — Andy Todd Owner of Energy Classics

Hearth product dealers in the Midwest are healthy, and business started picking up in August, according to Tim Snyder, Snyder & Associates. “We’ve seen colder weather in the north, but we really need that first frost to kick things off. Dealers’ biggest challenge right now is finding qualified help that wants to work. Some dealers that do not own their own building are seeing their rent increase to the point where it may not justify continuing to do business.” Direct-vent gas product sales are “huge”, says Snyder. “And despite concerns about getting rid of non-2020 wood-burners, wood-burning appliance sales are stronger than anticipated. There is real concern, an elevated sense of anxiety, about clearing out this non-2020 inventory, but so far dealers and distributors are promoting their non-2020 models and are not giving them away. They are taking a ‘wait and see’

78 | NOVEMBER 2019 | www.hearthandhome.com

attitude, hoping the EPA will extend the May 15, 2020, deadline to sell off these Step I models. That has also caused them to delay purchases of 2020-certified models.” There is more sales activity with pellet grills than with pellet stoves, Snyder says, again because of the 2020 deadline that includes pellet burners. “Although electric fireplace sales through furniture stores are waning as consumers move away from media centers, many more electric fireplaces are being sold through retailers other than specialty hearth product dealers. By selling an electric model that requires no professional installation, the dealer may miss out on a $4,000 to $10,000 gas or wood-burner sale, plus installation of that product.” Gas log sales are very strong in the Midwest, Snyder says. “There was a lull in gas log sales seven years ago, but we had a huge uptick in gas log sales two

years ago. Gas logs are being retrofitted into older wood-burning, zero-clearance fireplaces where the chimney has corroded. The consumer is faced with a new fireplace for maybe $10,000, or a gas direct-vent fireplace insert for $4,000 to $5,000, or gas logs for maybe $600.” Snyder also sees prices of fireplaces, stoves, and inserts increasing because of a “dramatic” increase in the costs of raw materials in part because of tariffs on Chinese steel. “We’re seeing price increases of 10% to 15%, and this, too, is helping gas log sales.” Snyder is “very bullish” on the 2020 hearth product business in the Midwest, even with a presidential election next year, and a trade agreement with China yet to be made. The first half of this year was good for hearth product sales in the Pacific Northwest, according to Andy Todd, Energy Classics. “In general, dealers are doing well after a pretty good off-season, but 2019 is still a question mark for dealers concerned about how much dumping is going on with non2020 wood and pellet stoves. Most dealers have done a pretty good job of selling off those models. They were very careful about early-buys and ordered only 2020 models. It’s still scary for them.” With new-home construction up, that’s helping dealers do well. “Even spa dealers are doing well,” Todd adds.

ENTER

TODAY

2020

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New Orleans, LA March 12 - 14

| Rep Roundtable | Despite concerns about natural gas and carbon footprints in other areas of the West Coast, gas hearth product sales continue very strong in the Pacific Northwest, especially in the cities where gas fireplace inserts are selling well, says Todd. More dealers are interested in wood stoves and in manufacturers offering a full line of 2020-certified models. Some, but not all, are doing well with pellet stoves. “Dealers here are leaving electric fireplaces to the mass merchants,” says Todd. “Because of that low-price competition, they don’t sell well in our specialty hearth shops.

The hearth product business in the Rocky Mountain region is doing well, with new-home construction up, according to Kevin Wood, Wood/West & Associates. “Dealers are concerned about price increases for the new 2020 wood-burners. And the May 15, 2020, NSPS deadline has slowed their wood-stove purchases. There’s not much non-2020 inventory in the field, but what is there is being blown out. The concern among dealers about that blow-out is keeping most dealers from even purchasing 2020-certified models.”

round of this program, it sold out in one day,” he adds. Rocky Mountain area hearth product dealers have a “very positive” outlook about 2020, says Wood, “but some are worried about the economy and a possible recession.” Independent manufacturers’ represen tatives are hired by manufacturers because they know the territories, the products, and the dealers. Hearth & Home interviewed some of the best professional reps in the hearth product industry. Although each territory or region of the nation is different, these interviews show a consensus on important points for the hearth product industry. Important Points: n Hearth product sales this year, 2019, have been pretty good, and sales in 2020 are expected to be even better. n Gas hearth products still are king and are expected to continue to gain market share next year. n Wood-burning product sales have shown slight growth despite dealer, and manufacturer, concerns about the May 15, 2020, NSPS deadline for selling off old non-2020 certified models.

The Evolution 360 by Hearth Products Controls is one of many products that Kevin Wood helps distribute to dealers.

“The chatter from California about possible bans of natural gas in new-home construction is reaching up here now, with a similar ban being considered in Seattle,” says Todd. “Depending on what happens in next year’s presidential election, we may see a more aggressive attitude toward climate change, and that certainly will affect our industry. We need to promote to, and educate, regulators and consumers that today’s hearth products are efficient and that our wood- and pellet-burners use renewable fuel that is carbon neutral.” Todd expects a “very, very good” 2020, and he says his dealers are excited about next year. But he’s concerned about March and April. “It may get ugly with dealers selling off non-2020 models, as an example, $2,500 non-2020 wood-burners for $500. Hopefully, May 15 will see a return to reality.”

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The region is seeing sales increases in gas and electric models, while sales of wood- and pellet-burners are down, Wood says. “Linear gas fireplaces are big sellers. They are now even selling in rural areas, but here they want logs rather than glass or rocks. We’re seeing more sales of highend models. But the biggest trend is cleanfaced, gas fireplaces with the ‘cool touch’ feature, allowing a TV to be installed over the fireplace. And we’re seeing sales increases in outdoor gas hearth products, especially gas fire pits.” Besides concerns about non-2020 woodburners being blown out, dealers are finding it difficult to find labor. “Dealers just can’t find people who want to work,” says Wood. The state of Utah has introduced a program offering a $3,800 tax credit for gas fireplace inserts being installed in wood-burning fireplaces. “For the first

n Dealers are reluctant even to purchase 2020-certified models until their inventories of non-2020 Step 1 wood-burners are blown-out. n Pellet stove sales are very regional with some territories showing flat sales growth and other regions showing pellet stove sales almost non-existent. n Electric fireplace sales are showing strong growth among specialty dealers, although some hearth product dealers are reluctant to offer them. n While fireplace sales are off in less expensive Builder-Box models that are sold to tract-home builders, sales of high-end fireplaces to custom-home builders and for remodels are showing strong growth. The hearth product industry in the U.S. is strong, but it’s changing, and dealers need to keep abreast of these changes and take advantage of them.

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| Viewpoint: New Zealand |

ROAD BLOCK OR OPPORTUNITY? Deck: By Evan K. Harris

Changing emission regulations present an opportunity. By Evan K. Harris

Serene from Woodsman.

82 | NOVEMBER 2019 | www.hearthandhome.com

or those who are old enough, and we are, you may recall the good old days when wood stoves had no regulations; as long as they put out tons of heat and were still burning in the morning, who cared what came out of the flue pipe? Well, turns out we all should have cared, for our own good. The world isn’t getting any bigger, while the human population is – rapidly. We just have to do things differently and better. The customer demanded that old, pre-regulation stoves had high, medium, and a smoldering overnight burn. We accepted that the customer was always right, but it turns out they weren’t always right, either. Now, wood stove regulations in New Zealand are perhaps the tightest and toughest in the world – more on that later. Australia is lowering its emission limit from 2.5g/kg to 1.5g/kg, and even 1.0g/kg in some places. I understand the U.S. and Canada are lowering their EPA pass mark from 4g/hr to 2.5g/hr for cordwood, or 2.0g/hr for cribwood testing. That new level will not be easy for some manufacturers to comply with, but certainly it’s not impossible. If we are to continue promoting clean and

“There will be enough of us out there who will manage to design product that will comply with 2020 EPA requirements, and we will do very well.” — Evan K. Harris WH Harris, Christchurch, New Zealand

efficient wood stoves as an environmentally acceptable way to heat our homes, then we need to do to our stoves what auto manufacturers have done to new cars – design them cleaner and more fuel-efficient. We have been through this, and still are going through the changes. I listened to some major manufacturers and the NZHHA (New Zealand Home Heating Association) stomping their feet and claiming “It can’t be done” when our Council introduced its own test method, on top of government-required testing to AS/ NZS (Australian/New Zealand Standards) 4012 and 4013 for efficiency and emissions. Our company just sat back and listened and did not commit to either argument, but quickly figured out there might be a buck to be made if we could comply with the new regulations. It seemed that the most obvious way to comply with this new and additional test, was to design downdraft wood stoves; essentially, we were right, but most of us underestimated the cost of production. Let me put this new test into perspective. If you test and pass AS/NZS 4012:2014 and AS/NZS 4013:2014 at ≤ 1.5g/kg and ≥ 65% efficiency, then the government will list the stove as a low-emission burner (LEB). If you pass the second round of testing, then the stove is listed as an ultra-low-emission burner (ULEB).

This additional certification allows you to sell into areas where an LEB is not permitted. This new test, named CM 1.6, has some real hurdles in it, and they are….

• Emissions are gathered from a

cold start, no warm-up period.

• Low-burn cycle reload is done

without touching the air control; the stove is left to ignite on low.

• Day one has a wet-wood burn cycle where the fuel is 45% moisture.

•

Day two uses soft and hard wood in some runs.

We had our downdraft stove authorized but knew it wasn’t the future. Somehow we needed to get a conventional stove ULEB authorized. Then a Canadian catalytic stove managed to pass as a ULEB, but that brought a different set of issues, so we understand. In the meantime, we beavered away behind the scenes, working on a conventional stove that had all sorts of features, and new to our stove industry, at least. After close to three years of R&D, nearly giving up, and spending much too much money, we cracked it. We now have a great ULEB stove that has become the #1 seller almost from the day it was released.

Our company used to sell stoves and inserts into the U.S. and Canada in the 1980s, until the EPA testing requirements became law, so we let the market go. But just recently, we read about the shift in EPA requirements starting next year, and wondered how close we were to those figures. Although our Ministry for the Environment (MFE) requires results in g/kg, it is easy to convert to g/hr because the kg/hour figures on each run are given in the laboratory data. When we converted the results from both the LEB and ULEB testing of our new ULEB stove, we found the following: g/kg

g/hour

AS/NZ 4013:2014

0.36

0.7

CM 1.6

0.34

0.4

Surprised, I had the lab check and, yes, the numbers are correct. So we appear to have a stove that is likely to pass EPA 2020 if we ever wanted it to. The question raised in the title is, “Road Block or Opportunity?” I think it is both. Those companies that are short of capital, or skill, or imagination will most likely turn their back on the stove industry, but there will be enough of us out there who will manage to design product that will comply with 2020 EPA requirements, and we will do very well. Don’t be totally surprised if the EPA doesn’t stop at 2g/hr; plan for more changes if you can. Are we going to get our ULEB stove EPA tested? Who knows, but having driven around the Road Block, perhaps we should take advantage of the opportunity now presented. But where should we start? The U.S. and Canada are a long way from New Zealand, down in the South Pacific. Evan Harris; 41 Braddon St, Addington, Christchurch 8024, New Zealand; Phone: 011-64-800-366-1796; evan@hhf.co.nz; www.woodsman.co.nz Click here for a mobile friendly reading| NOVEMBER experience www.hearthandhome.com 2019

| 83

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Sunbrella

Resonate is a contemporary, graphic interpretation of the classic Greek key pattern. Available in four colorways, the bold linework on a fine heathered ground creates a backlit effect that appears to ripple with movement. Phone: (336) 227-6211 Website: www.sunbrella.com

Kannoa

With a handsome profile and urban tropical look, the Nest Collection has sturdy construction of all-weather wicker wrapped around a lightweight aluminum frame. Pieces are finished in graphite topped with plush cushions covered in all-weather Sunbrella fabrics. Phone: (305) 651-9655 Website: www.kannoa.com

Pottery Paradise

Attractive and functional, the Square Fire Pit Table has a mocha coating that is durable and eye-catching. An easy access door is included for 20 lb. propane tank exchange. A full stainless-steel burner has a heat output of 50,000 Btus. The fire pit has extruded aluminum construction and includes a lava glass, table lid, and protection cover. Phone: (510) 243-5159 Website: www.potteryparadiseusa.com

84 | NOVEMBER 2019 | www.hearthandhome.com

Screen Gems

Made from reclaimed wood to offer natural beauty, the Durango Screen is 77 inches tall, reaching for the ceiling and acting as a room divider while lighting up any indoor or outdoor space with ambiance. Phone: Call (310) 545-9091 Website: www.myscreengems.com

Capel Rugs Cast from real birch logs, and handcrafted and painted by in-house artists, the 10-piece Bon-Fyre Log Set has transitional style. The log set offers a vertical presentation of the fire that complements the grand profile and massive viewing area.

Intersection has a lively geometric design made of 100% wool. Sporting wide bands of related colors intersecting in a zigzag-like pattern, the rug is offered in three on-trend colorways: storm, a mix of black, charcoal, and gray tones; sand, a mix of earthy browns; and slate, a mix of crisp blues, white, and gray.

Phone: (800) 654-1177 Website: www.travisproducts.com

Phone: (800) 334-3711 Website: www.capelrugs.com

Travis Industries

Orien USA

Rockwood Retaining Walls

Necessories is a collection of ready-to-assemble outdoor fireplaces, island bars and grills, tables, waterfalls, fire rings, seat walls and pillar kits. With everything needed to build on a properly prepared base, the kits include step-by-step instructions, concrete adhesive, construction gloves, precut block and steel reinforcements.

Perfect for under-counter outdoor kitchen areas, the FS-501MOD is a front-vented, stainless-steel outdoor ice making machine. Made of stainless-steel to prevent rust, the machine also is fully enclosed to withstand the elements and to keep bugs out. The unit produces 44 lbs. of clear ice cubes per day.

Phone: (888) 288-4045 Website: www.outdoorlivingkits.com

Phone: (877) 316-1725 Website: www.orienusa.com

Click here for a mobile friendly reading| experience www.hearthandhome.com NOVEMBER 2019

| 85

| New Products |

European Home

Summer Classics

Designed for comfort, the Luna Arm Chair blends modern and classic style. Inspired by mid-century curved rattan, the arm chair is crafted with a burlap finish from N-dura resin wicker. The herringbone pattern weave and woven corner details highlight the chairâ&#x20AC;&#x2122;s style. Phone: (205) 358-9400 Website: www.summerclassics.com

The Summum 100 C corner style gas fireplace from the Element 4 line produces lively, robust flames on crafted ceramic logs. The fireplace series comes standard with a Real Flame Burner System. The flame height, temperature, and LED illumination are controllable via the intuitive ProControl App. Phone: (781) 324-8383 Website: www.europeanhome.com

Napoleon Fireplaces

The Uptown Patioflame Table is rugged and modern with linear form. Made from durable cast aluminum with the appearance of formed concrete, the lightweight table makes a statement in any Outdoor Room. Phone: (800) 461-5581 Website: www.napoleonfireplaces.com

ICC-RSF

Kingsley Bate

Phone: (450) 565-6336 Website: www.icc-rsf.com

Phone: (703) 361-7000 Website: www.kingsleybate.com

The Le BOL Low Pedestal is an eight-inch tall oxidized patina finish pedestal with four feet for fine-tuning leveling. It is ideal for using with the Le BOL fire pit.

86 | NOVEMBER 2019 | www.hearthandhome.com

The Ojai Collection is reminiscent of old California, with a touch of retro styling. Pieces are relaxed yet modern, and slightly low to the ground. The comfortable collection is crafted from all-weather wicker, handwoven around rust-proof frames. Included are lounge seating and occasional tables in a Sunset wicker color.

Forshaw

The Palmetto Island, a 7-ft. outdoor kitchen, has an AOG 36-inch L series grill with interior halogen lights, and double access doors. Other features are a 20-inch AOG refrigerator, Africa Persa leather granite countertop with eased edge and Eldorado Saddlewood Vintage Range stone. Granite and stone are ready to install at the project site. Phone: (800) 367-7429 Website: www.exterusoutdoor.com

Montigo

Spartherm

The Linear Cassette S600 is a well-sealed fireplace that improves the flue’s draft and protects against sparks. Features are a large window with heat-resistant Schott Robax glass and self-closing door, adjustable feet, and a fire clay brick floor. Phone: +491522 26 44 162 Website: www.spartherm-america.com

Designed with ease of installation, the DelRay fireplace has a slim 14¼-inch framing depth. The sleek, modern firebox fits well in any home, and switching to propane is achieved with a simple conversion kit. Phone: (800) 378-3115 Website: www.montigo.com

Lovinflame

Merritt

Phone: (909) 781-8462 Website: www.lovinflame.com

Phone: (818) 767-0789 Website: www.merrittusa.com

The Lovinflame Tabletop Fire Pit is clean burning, and has a selfcooling system. It is powered by a proprietary burning system and water-soluble, non-toxic fuel. For ambiance and warmth, the fire pit creates beautifully shaped flames that are wind-resistant and vibrant.

Capturing the classic, sophisticated drama of elegant stone, the Limestone Collection has attractive neutral beige veins running throughout the weathered blue to create movement and replicate a stone surface. Serving pieces come in a variety of shapes and styles to complement the collection’s dinnerware.

www.hearthandhome.com | NOVEMBER 2019 | 87

VOLUME 24, NUMBER 6

Journal

A P u b l i c at i o n O f T h e H e a rt h , P at i o & B a r b e c u e A s s o c i at i o n

I’ve seen the future… and it’s cold. Very cold.

ast month the city council of Berkeley, California voted unanimously to ban natural gas piping in new residential construction in their community in an effort to decrease the town’s carbon footprint. This was not an impulsive decision, but one that had been in the planning stages for many months. It was also not unique, as the idea of limiting the spread of new natural gas piping is probably being considered in many communities in both the U.S. and Canada, perhaps in a town near you – or even your own. This is why the debate over how to decarbonize our lives is going to be a battle. Folks have to speak up about the incredible changes that will be facing us as we move to a lower carbon future. Of course, if those of us who like gas don’t show up for the debate, it will be easy to legislate an end to gas lines. It’s not just in California, the debate over ‘zero-net-energy-homes’ is cropping

up everywhere. Some states such as Massachusetts are seriously studying the steps to decarbonization. Pay attention to local green and sustainability programs. I don’t know about you, but personally, I don’t care what heats up the hot water in my shower in the morning, as long as it’s hot! I also don’t have a personal relationship with the fuel my furnace uses to keep me warm in the winter. I do, however, care about cooking with gas and about gas fireplaces. But you can’t have a house with just a little bit of natural gas, because you either have the pipes or you don’t. Gas is such a convenient, low cost energy source that it would be crazy not to use it for your water or heat. Your ability to have those gas appliances is under threat from regulations that ban gas hook-ups, or at least make it very expensive. The last 20 years have proven to a lot of families that it’s always wise to have more than one way to heat your house in an emergency, or even just to have an alternative if the price of one particular energy source goes crazy. In rural areas you may see wood and pellet back-ups. Propane can also be popular in the suburbs. In the city, however, homeowners may increasingly be forced into electric-only offerings and all the associated risk of interrupted supply and sky-high prices.

We’re gearing up for another great event in 2020, in New Orleans. Exhibitors, sales are heating up, so go to hpbexpo.com/exhibit ASAP. Check out what Exhibitors and Attendees have to say about Expo, take a look at the floorplan for booth availability, and secure your spot!

88 | NOVEMBER 2019 | www.hearthandhome.com

Case Study: the importance of multiple fuel sources

ecently, some families awoke to cold showers in parts of California, unless they have gas. They had no coffee or tea, unless they cook with gas. Most critically, if their house was cold this morning they were out of luck, unless they had a heating gas fireplace or a woodstove. (Did you know it went down to 46 degrees in Grass Valley and Sonoma, and was a very chilly 16 degrees in Truckee earlier this month?) Might be hot and dry in many places, but California is a big state… During the recent Santa Ana winds, Pacific Gas & Electric shut off the power to nearly one million customers in California in an effort to prevent wildfires from downed wires. The utility plans to do this again if the weather conditions again elevate the risk of wildfires. These regular windstorms remind us that restricting new homes to just electricity is problematic. Having more than one way to keep warm is a wise strategy for every household. But many communities in California – and elsewhere – are pursuing ways to ban natural gas pipelines in new housing and eliminate one way to stay warm when the electricity is out. This is shortsighted as it limits options, both for technological upgrades in the future, but also just for consumer choice. These bans would make it very hard to stay warm in the case of power outage – whether natural or manmade.

So the key question is: Are we going to show up? Are we going to raise our voices? Or are we just going to watch this process play out and settle for a future without natural gas? It’s up to each one of us to get involved. Get involved in your community, join the local business associations and get to know the homebuilders, and pay attention to the activities of the city council. And get to know your local politicians so they see what your business brings to the community.

Families with natural gas or propane may have had to use candles last night, but at least they’ll have heat, showers, and coffee.

At HPBA, we have the tools to help you, but we need your ears and eyes on the ground, monitoring your local government activity. The future of your store and our freedom to choose natural gas is hanging in the balance.

The HPBA Journal is intended to provide in-depth information to the hearth and outdoor products industries. Statements of fact and opinion are the responsibility of the authors alone and do not necessarily reflect the opinions of the officers, board, staff or members of the Hearth, Patio & Barbecue Association.

Copyright ©2019 by the Hearth, Patio & Barbecue Association. All rights reserved. Reproduction in whole or in part without written permission of the Hearth, Patio & Barbecue Association is prohibited. Direct requests for permission to use material published in the HPBA Journal to media@hpba.org.

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| 89

| Business Climate |

SEPTEMBER SALES

In early October Hearth & Home faxed and emailed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare September 2019 sales to September 2018. The accompanying charts and selected comments are from the 194 usable returns.

RETAILER SALES - U.S. AND CANADA September 2019 vs. September 2018

43%

39%

33%

25% 25%

43%

50%

29%

28%

36%

32% 17%

RETAILERS NO CHANGE

RETAILERS UP HEARTH

PATIO

RETAILERS DOWN

BARBECUE

SPAS

In September, 43% of Hearth retailers were UP, 33% of Spa retailers, and 25% of both Patio and Barbecue retailers were also UP.

13-MONTH YEAR-OVER-YEAR RETAIL SALES September 2019 vs. September 2018

PATIO

HEARTH

19%

12% 9%

Sept 2018

5% 5%

4% 4%

-2%

Oct Nov

Dec Jan 2019

Feb

Mar

4% 5% -6%

Apr May June July Aug

Sept 2019

Sept 2018

2% 2% 2%

Oct Nov

Dec

0% -3%

Jan 2019

Feb

21%

BARBECUE

Mar

Apr May June July Aug

-4%

Sept 2019

SPAS 12%

7% 1% -2% 1% 0% 0% 0% -4% 2% 1% -2% 2%

Sept 2018

Oct Nov

Dec

Jan Feb 2019

Mar

Apr May June July Aug

9% 9% 1%

-11%

-4%

Sept 2019

Sept 2018

Oct Nov

Dec Jan 2019

Mar

4% -7%

Apr May June July Aug

Sept 2019

In September, Hearth retailers led the way with a 5% gain in sales, followed by Spa retailers with a 3% gain. Patio and Barbecue retailers were both down in sales by 4%.

90 | NOVEMBER 2019 | www.hearthandhome.com

WEATHER REPORT RETAILER COMMENTS

For the following weather charts, the numbers for each state reflect the temperature ranking for the period since records began in 1895.

STATEWIDE AVERAGE TEMPERATURE RANKS SEPTEMBER 2019

NORTHEAST New Hampshire: (Hearth) “Good and steady. Weather is holding for now, which is holding off the frantic, last-minute customers.”

New York: (Hearth, Patio, BBQ) “Sales

continue to be awesome! Service and installations booked solid into December. Wood stoves have been selling very well and we haven’t had to discount any of the non2020 units yet. We are totally switched over on several brands. Only six small stoves left and we will be all done with all non-2020 products, including showroom. Glad we started early! Gas fireplaces and inserts also doing very well.”

92 71

109

106

110 103

125

117 125 122 123 124 122 124 124 121 123 122 124 121 124 123 125

124 124

125

103

89 112

121

113

125

76 80 98 104

118 118 121

123

1 = COLDEST / 125 = WARMEST

NATIONAL CLIMATIC DATA CENTER/NESDIS/NOAA

Much Below Average

Record Coldest

Below Average

Near Average

Above Average

Much Above Average

Record Warmest

New York: (Patio, Spas) “The weather

In September, Colorado, New Mexico, Texas, Louisiana, and Ohio had Record Warmest temperatures. From coast to coast, it was the second warmest September since 1895.

New York: (Spas) “In August, cautious

STATEWIDE AVERAGE TEMPERATURE RANKS

was great in September and our customers’ patios were finally getting finished so they were still purchasing hot tubs and patio furniture to complete their space.” consumer spending has rolled over into September. Unit sales are down, however, some large swim spa sales have boosted revenue. In addition, service after the sale has helped. That’s the future.” New York: (Hearth, Spas) “I suppose it

would be foolish to expect customers breaking our doors down, when, on October 1, it’s 82 degrees in the Northeast. Nonetheless, we have experienced a greater than usual number of shoppers. Surprisingly, way more wood-stove shoppers than in recent memory. By the way, we are no longer carrying screens, kettles, tool sets, and similar accessories, as they just gather dust. “Meanwhile, our friends at Amazon will be happy to take your money, my margin, and a portion of our livelihood for these items. And, if the BIG Vent folks are reading this, you need to do a better job implementing and enforcing MAP pricing in defense of the Mom-and-Pop, brick-and-

JULY – SEPTEMBER 2019 104

97 86

75 87

108

102

98 119

125

98 123

105

115

125

114

124

118 121 123 123 120 123 116 119

114 115

109

107

104 114

120 119

107 108 116 118 117

121 122 123

121

122 124

1 = COLDEST / 125 = WARMEST

Record Coldest

Much Below Average

NATIONAL CLIMATIC DATA CENTER/NESDIS/NOAA

Below Average

Near Average

Above Average

Much Above Average

Record Warmest

For the three-month period July – September, only New Mexico and Colorado had Record Warmest temperatures. Nationwide, it was the fourth warmest July - September in 125 years.

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| 91

| Business Climate | mortars that got you where you are today. Heck, I can buy my venting on Amazon at wholesale prices with free shipping at a better price than the supplier. Just sayin’.”

WEATHER REPORT

For the following weather charts, the numbers for each state reflect the temperature ranking for the period since records began in 1895.

Pennsylvania: (Hearth, Patio, BBQ)

STATEWIDE AVERAGE PRECIPITATION RANKS

“We feel that we are ahead of the curve with the new 2020 EPA regulations. We have most of the new stoves and inserts already in the showroom. Early signs show wood to be strong this season.” Pennsylvania: (Patio) “Third quarter was

SEPTEMBER 2019 59

116 118

111

SOUTH Arkansas: (Hearth) “Finally a good retail

“Overall, sales have been consistent, the customer count has been the same as 2018. So we haven’t lost any customers but haven’t gained any new customers.”

— Florida

Florida: (Patio) “Moved to a bigger show-

room this year; more space to show our awesome merchandise!”

Florida: (Hearth, BBQ) “Overall, sales

have been consistent, the customer count has been the same as 2018. So we haven’t lost any customers but haven’t gained any new customers, even with significant housing turnovers. Plus, back-to-school affects customers’ priorities. Still, the holidays are coming!”

92 | NOVEMBER 2019 | www.hearthandhome.com

122

114

83 55

month for wood and gas products despite extremely warm days. Customers are finally thinking fall/winter heating and getting ready. Mostly remodeling jobs, which is OK with us. Come on cold weather.”

123

121

110

about 30% off from last year.”

125

124

116

101 33

1 1

2 95

2 25

18 7 6 3

52 23 18 15

16 1

1 = DRIEST / 125 = WETTEST

Record Driest

Much Below Average

NATIONAL CLIMATIC DATA CENTER/NESDIS/NOAA

Below Average

Near Average

Above Average

Much Above Average

Record Wettest

In September, only North Dakota had Record Wettest precipitation, but Florida, Georgia, Alabama, Mississippi, Kentucky, and West Virginia had Record Driest precipitation.

Oklahoma: (Hearth) “Still warm in Sep-

tember.”

Texas: (Hearth, Patio, BBQ) “Fireplace ac-

cessories continue to decline. Fireplace doors continue to explode in numbers, profits, and mistakes! We are our worst enemy. Doors are complex and detailed. Customers are demanding and sometimes don’t know what they want! Expensive gas units such as the DaVinci moved the profit needle. But all these units require knowledge and technical skills, with most sales in the demanding winter months. “It’s very stressful. There are two kinds of misery – not enough business and too much. I wouldn’t trade with anyone! We have a great sales staff. Labor is a top concern. Millennials want a four-day work week, shorter hours, and more pay! Me too, and I have worked for it! Life is good – mostly!” Virginia: (Hearth, BBQ) “This heat needs

to go away! Traffic has definitely picked up, though. Even though we are down, it was a good month.”

Virginia: (Hearth) “From rain to drought.

From comfortable temperatures to record highs for this time of year. With all that happening, sales dropped and now we all hope for normal autumn weather to return.” MIDWEST Illinois: (Hearth, Patio, BBQ) “Had a very strong month as we continue to make up for a miserable spring!” Indiana: (Patio, BBQ, Spas) “Our grill

sales seem to go in spurts; we go weeks without anybody really looking and then, in two days, we will sell three of them. Our spa sales have been steady but not as good as they could be. We are getting ready to have a spa sale so, hopefully, that will help move some tubs. Our furniture sales are pretty much down to nothing and we are actually thinking of getting out of that part of the market. “There are other larger suppliers that we hadn’t had to work against before, and the Internet is also taking a large chunk. The main part of our company is the

installation and servicing of in-ground pools and spas and when we go back for follow-up calls on the installations we notice all of the boxes and shipping tags that are in the garage or at the curb. Frontgate, Wayfair, and other sites are getting sales that used to come out of our showroom. “I hear rumors of the downturn of the economy; they’re going to cause a recession just because they continue talking about it. I haven’t seen anything slowing down in our part of America and we have major manufacturing happening in our backyard, and they are still moving units at an incredible pace. I have almost the whole year of 2020 already booked and clients are asking what it will take to get in for the spring of 2021.” Michigan: (Spas) “The Metro Detroit

area was like an absolute roller coaster this spring, summer, and early fall; Mother Nature was at the controls. Coming out of September for the second and third quarter we managed to hit 2018 numbers – dollars to dollars. Don’t know how, but

“The rainy weather affected new construction starts in the area over the summer, and we are feeling it now. We are optimistic about the coming months; traffic has really picked up.” — Minnesota

we’re even up against our best year ever. That’s somewhat the good news. “The bad news is labor costs and financing credit-card sales all rose and chopped into profit. New employees

that we hired didn’t perform to any kind of expectation, which also caused lower margins on service and counter sales. Then the Internet, though we have embraced it, remains a real sore spot that appears to be getting more and more attention and time defending our price and the services we offer even though we match legitimate Internet prices. So it was a rough year, but we’re standing tall and strong ready to do another day.” Minnesota: (Hearth, BBQ) “The rainy

weather affected new construction starts in the area over the summer, and we are feeling it now. We are optimistic about the coming months; traffic has really picked up.” Minnesota: (BBQ, Spas) “Kamados are

down.”

Missouri: (Hearth, BBQ) “Barbecue sales

have dropped significantly this year. Portable gas grills are notably down. Pellet grills are dominating the marketplace but are still selling below last year’s level. Hearth products are strong.”

CONSUMER CONFIDENCE 138.4

135.7 134.2 125.1

124.1

100 90

Year Ago

6 Mo. Ago

Jul 2019

Aug 2019

1985 = 100

Sept 2019

The Consumer Confidence Index decreased in September, following a slight decline in August. The Index now stands at 125.1 (1985=100), down from 134.2 in August. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – decreased from 176.0 to 169.0. The Expectations Index – based on consumers’ shortterm outlook for income, business, and labor market conditions – declined from 106.4 last month to 95.8 this month. “Consumers were less positive in their assessment of current conditions,” said Lynn Franco, senior director of Economic Indicators at The Conference Board, “and their expectations regarding the short-term outlook also weakened. “The escalation in trade and tariff tensions in late August appears to have rattled consumers. However, this pattern of uncertainty and volatility has persisted for much of the year, and it appears confidence is plateauing. While confidence could continue hovering around current levels for months to come, at some point this continued uncertainty will begin to diminish consumers’ confidence in the expansion.”

A reading above 90 indicates the economy is on solid footing; above 100 signals strong growth. The Index is based on a probability-design random sample conducted for The Conference Board by The Nielsen Company.

www.hearthandhome.com | NOVEMBER 2019 | 93

| Business Climate |

STOCK WATCH COMPANY – EXCHANGE

SYMBOL

52 WEEK

WEEK ENDING

% CHANGE

HIGH

LOW

30-Aug-19

27-Sep-19

4 WEEK

26 WEEK

52 WEEK

3,025.86

2,351.10

2,926.46

2,961.79

1.2%

4.5%

1.6%

MARKET CAPITALIZATION ($000,000)

Standard & Poor’s 500 (a)

S&P

HNI Corporation (b)

HNI

42.28

29.90

31.19

35.43

13.6%

-2.4%

-19.9%

$1,460.00

Pool Corporation (c)

POOL

204.97

136.83

196.38

199.52

1.6%

20.9%

19.6%

$8,050.00

Restoration Hardware (b)

178.18

84.11

142.35

171.23

20.3%

66.3%

30.7%

$3,240.00

Wayfair (b)

173.72

76.60

112.74

114.04

1.2%

-23.2%

-22.8%

$9,650.00

NOTES: (a) = Standard & Poor’s 500 is based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ. It is considered one of the best representations of the U.S stock market, and a bellwether for the U.S economy. (b) = New York Stock Exchange. (c) = NASDAQ.

MARKET CAPITALIZATIONS

52-WEEK STOCK PRICE CHANGE

($US $000,000) $12,000

30.7%

$10,000

19.6%

$8,000

1.6%

$6,000 $4,000

-19.9%

-22.8%

S&P HNI POOL RH

$2,000

sales recession that started in August carried over into September. The weather has simply been too warm to prompt the reactionary customers to come into the stores. Chilly, fall weather is in the forecast. We’re hoping for that out-ofcontrol, mad dash to the holidays to get into full swing soon!” Wisconsin: (Hearth) “Retail and contrac-

tor sales are steady and strong. 2018 was our consumer spending “high.” Consumer confidence/demand is not at the “phenomenal” levels of 2018.”

Wisconsin: (Hearth, BBQ) “Good

month. Sales are steady. Booked out about four to five weeks.”

94 | NOVEMBER 2019 | www.hearthandhome.com

HNI

POOL 28-SEP-2018

AS OF 27-SEP-2019

Ohio: (Hearth, BBQ) “Our little mini

Wisconsin: (Hearth, Patio, BBQ) “Still

bouncing back from a wet, cold spring and summer. Contractor sales are down because of weather. Seeing some rebound – now, if it only will quit raining.” WEST California: (Hearth) “2019 has been

very, very good so far!”

California: (Hearth, BBQ, Spas) “Great

month for stove sales; the weather has been cooperating and it has been getting colder. We have two crews working and we’re still booked for two months. People are thinking ahead to when we lose power, so wood and gas stoves are big sellers, but we’re still selling lots of pellet stoves. Hopefully, we can keep this up until we catch up!”

27-SEP-2019

California: (Hearth, Spas) “School starting

and heavy vacationing this year hurt our traffic and sales. Looking for a good winter though!” Colorado: (BBQ) “Grills up. Fuel down.” Colorado: (Hearth) “Step 1 wood-stove

sales are racing. The urgency of getting the current models has driven sales up 20% over last year, which was a great year!” Oregon: (Spas) “Things stayed flat this

month.”

Oregon: (Hearth, BBQ) “Seemed cooler

the second half vs. last year.”

Washington: (Hearth, Spas) “Good Sep-

tember. Having a banner year!”

Statement of Ownership, Management, and Circulation PS Form 3526-R (Requester Publications Only) 1. Company Name / Publication Title

2. Publication Number

Village West Publishing / Hearth & Home

CANADA

4. Issue Frequency

British Columbia: (Hearth, BBQ) “Hearth sales continue

strong, but very similar to previous months.”

3. Filing Date

Monthly

6. Annual Subscription Price

7. Complete Mailing Address of Known Office of Publication

October 1, 2019

5. Number of Issues Published Annually

$36 domestic

(if any)

Contact Person

(Not printer) (Street, city, county, state, and ZIP+ 4 ® )

Richard C. Wright

PO Box 1288, Laconia, Belknap County, NH 03247

Telephone (Include area code)

(603) 528-4285

8. Complete Mailing Address of Headquarters or General Business Office of Publisher (Not printer)

British Columbia: (Hearth, BBQ) “Eerily quiet, probably due

to a mild September – hardly any foot traffic or requests for quotes. Will be interesting to see if it will change once it gets cold.”

PO Box 1288, Laconia, Belknap County, NH 03247 9. Full Names and Complete Mailing Addresses of Publisher, Editor, and Managing Editor (Do not leave blank) Publisher (Name and complete mailing address)

Richard C. Wright; PO Box 1288, Laconia, Belknap County, NH 03247

Editor (Name and complete mailing address)

Richard C. Wright; PO Box 1288, Laconia, Belknap County, NH 03247

Managing Editor

(Name and complete mailing address)

Richard C. Wright; PO Box 1288, Laconia, Belknap County, NH 03247

British Columbia: (Hearth) “Consistent interest in hearth, but

little in the way of purchases. No below-freezing temperatures yet, so that may change.”

British Columbia: (Patio, BBQ, Spas) “It has been an up and

down year; sales are decent but we’re not overly busy. The federal election has had a dampening effect on the economy in general; we will see what happens after October 21. September started slow, but finished with a bang – good sales, up in all categories. Still a happy camper!”

“Started the month very strong; slow shipments of EPA 2020 product left the month ending slow.”

— Ontario

10. Owner (Do not leave blank. If the publication is owned by a corporation, give the name and address of the corporation immediately followed by the names and addresses of all stockholders owning or holding 1 percent or more of the total amount of stock. If not owned by a corporation, give the names and addresses of the individual owners. If owned by a partnership or other unincorporated firm, give its name and address as well as those of each individual owner. If the publication is published by a nonprofit organization, give its name and address.)

Complete Mailing Address

Full Name

Village West Publishing

PO Box 1288, Laconia, Belknap County, NH 03247

Richard C. Wright

PO Box 1288, Laconia, Belknap County, NH 03247

Jacqueline Avignone

PO Box 1288, Laconia, Belknap County, NH 03247

11. Known Bondholders, Mortgagees, and Other Security Holders Owning or Holding 1 Percent or More of Total Amount of Bonds, Mortgages, or Other Securities. If none, check box. None

12. Tax Status (For completion by nonprofit organizations authorized to mail at nonprofit rates) (Check one) The purpose, function, and nonprofit status of this organization and the exempt status for federal income tax purposes:

X Has Not Changed During Preceding 12 Months

Has Changed During Preceding 12 Months (Publisher must submit explanation of change with this statement.)

13.

15.

Company Name / Publication Title

a. Total Number of Copies (Net press run)

b. Legitimate Paid and/or Requested Distribution (By mail and outside the mail)

(1)

Outside County Paid/Requested Mail Subscriptions stated on PS Form 3541. (Include direct written request from recipient, telemarketing, and Internet requests from recipient, paid subscriptions including nominal rate subscriptions, employer requests, advertiser’s proof copies, and exchange copies.)

(2)

In-County Paid/Requested Mail Subscriptions stated on PS Form 3541. (Include direct written request from recipient, telemarketing, and Internet requests from recipient, paid subscriptions including nominal rate subscriptions, employer requests, advertiser’s proof copies, and exchange copies.)

(3)

Sales Through Dealers and Carriers, Street Vendors, Counter Sales, and Other Paid or Requested Distribution Outside USPS ®

(4)

(e.g., First-Class Mail ) ®

d. Nonrequested Distribution (By mail and outside the mail)

across the board.”

13,080

6,170

6,134

-0-

-01,152

7,436

7,360

(1)

Outside County Nonrequested Copies Stated on PS Form 3541 (include sample copies, requests over 3 years old, requests induced by a premium, bulk sales and requests including association requests, names obtained from business directories, lists, and other sources)

4,066

3,840

(2)

In-County Nonrequested Copies Stated on PS Form 3541 (include sample copies, requests over 3 years old, requests induced by a premium, bulk sales and requests including association requests, names obtained from business directories, lists, and other sources)

-0-

(3)

Nonrequested Copies Distributed Through the USPS by Other Classes of Mail (e.g., First-Class Mail, nonrequestor copies mailed in excess of 10% limit mailed at Standard Mail ® or Package Services rates)

-0-

(4)

Nonrequested Copies Distributed Outside the Mail (Include pickup stands, trade shows, showrooms, and other sources)

e. Total Nonrequested Distribution

Sum of [ 15d (1), (2), (3) and (4) ]

(See Instructions to Publishers #4, (page #3))

(Sum of 15f and g)

i. Percent Paid and/or Requested Circulation

-0-

572

(Sum of 15c and e)

g. Copies not Distributed

Ontario: (Hearth, Patio, Spas) “Good to see an increase in sales

(Sum of 15b (1), (2), (3), and (4))

No. Copies of Single Issue Published Nearest to Filing Date

12,314

1,186

Requested Copies Distributed by Other Mail Classes Through the USPS®

c. Total Paid and/or Requested Circulation

h. Total

slow shipments of EPA 2020 product left the month ending slow. Just another month in the hearth industry saga. Some people like roller coasters! Year-to-date increases don’t match the YTD expenditure increases. It’s been years – something has to change soon.”

September 1, 2019

Average No. Copies Each Issue During Preceding 12 Months

Extent and Nature of Circulation

f. Total Distribution

Ontario: (Hearth, Patio, Spas) “Started the month very strong;

14. Issue Date for Circulation Data Below

Village West Publishing / Hearth & Home

1,500

4,638

5,340

12,074

12,700

240

380

12,314

13,080

61.59%

(15c divided by 15f times 100)

57.95%

* If you are claiming electronic copies, go to line 16 on page 3. If you are not claiming electronic copies, skip to line 17 on page 3.

Average No. Copies Each Issue During Preceding 12 Months

16. Electronic Copy Circulation

a. Requested and Paid Electronic Copies b. Total Requested and Paid Print Copies (Line 15c) + Requested/Paid Electronic Copies (Line 16a) c. Total Requested Copy Distribution (Line 15f) + Requested/Paid Electronic Copies

(Line 16a)

7,445

7,369

12,083

12,709

61.62%

d. Percent Paid and/or Requested Circulation (Both Print & Electronic Copies)(16b divided by 16c X 100)

No. Copies of Single Issue Published Nearest to Filing Date

57.98%

I certify that 50% of all my distributed copies (electronic and print) are legitimate requests or paid copies.

17. Publication of Statement of Ownership for a Requester Publication is required and will be printed in the 18. Signature and Title of Editor, Publisher, Business Manager, or Owner

, Owner

November 1, 2019

issue of this publication.

Date

October 9, 2019

I certify that all information furnished on this form is true and complete. I understand that anyone who furnishes false or misleading information on this form or who omits material or information requested on the form may be subject to criminal sanctions (including fines and imprisonment) and/or civil sanctions (including civil penalties).

MARKETPLACE

Keep up-to-date on the latest news, trends, data, and events with the leading industry source!

SUBSCRIBE ONLINE For Print and Digital Editions! SUBSCRIBE ONLINE www.hearthandhome.com www.hearthandhome.com ForEditorial Printcoverage and Digital of all threeEditions! industries is provided in every issue.

www.hearthandhome.com | NOVEMBER 2019 | 95

CLASSIFIEDS Help Wanted

BUILDER SALES

Seeking experienced outside fireplace salesperson in DFW area.

Help Wanted

Business For Sale

INSTALLERS

Hearth & Fireplace Showroom

Fireplace Installers needed in DFW area.

Custom Builder Market. Established 2012 and growing. Compensation based on track record.

Must have verifiable experience and own transportation. Great pay and Bonus Program. NFI Certified a Plus.

sales@protexsupply.com

installs@protexsupply.com

Located in the Greater Vancouver Area, 30+ years in business, looking to sell or partner with investor/collaborator.

For more information/details email: fireplacesandmorevancouver@gmail.com

Hearth & Home’s Editorial Invitations 1 Column x 1 Inch Minimum Price per column inch = $175 Call the Sales Department at (800) 258-3772

It’s time for Hearth & Home to publish a collection of the best, most creative, well-designed electric fireplace installations, so that we can all see where electric fireplace designs are going, and how specialty retailers can profit from custom installations. Submit hi-res images, and project details, for possible inclusion in our January issue.

EXTENDED DEADLINE: NOVEMBER 15, 2019 Submit information and images online at www.hearthandhome.com Any questions, please contact Erica Paquette at paquette@villagewest.com

Ad Index Advertiser

This ad index is an additional service provided by Hearth & Home to its advertisers. Hearth & Home assumes no liability for any incorrect information.

Phone

Website

(800) 851-3153

www.americanhearth.com

15, 81

(888) 997-7623

www.apricityoutdoor.com

8, 9

(866) 976-9510

www.blazegrills.com

(800) 521-2855

www.bullbbq.com

Castelle / Brown Jordan

38, 39

(855) 612-9800

www.castelleluxury.com

DCS by Fisher & Paykel

22, 23

(800) 433-8466

www.dcsappliances.com

(888) 295-LOGS

www.eiklorflames.com

(800) 622-1359

www.escalera.com

(703) 522-0086

www.hpbexpo.com

(702) 599-3046

www.lasvegasmarket.com

100

(877) 303-3134

www.louisiana-grills.com

Lovinflame

909-781-8462

Montigo

(800) 378-3115

www.montigo.com

51, 57, 61

(800) 461-5581

www.napoleon.com

20, 21

(866) 606-6330

www.peakseaoninc.net

(888) 726-3445

www.sandhillwholesale.com

Spartherm

+491522 26 44 162

Stûv America

(866) 487-7888

www.stuvamerica.com

Sunset West USA

(760) 599-1021

www.sunsetwestusa.com

Telescope Casual Furniture

(518) 642-1100

www.telescopecasual.com

Valcourt / SBI

(800) 622-1359

www.valcourtinc.com/en/

Valor / Miles Industries

(800) 468-2567

www.valorfireplaces.com

Vesta Awards 2020

(800) 258-3772

www.vestaawards.com

American Hearth / Empire Comfort Systems Apricity / Agio - USA Blaze Outdoor Products Bull Outdoor Products

Eiklor Flames Escalera Hearth, Patio & Barbecue Association IMC – Las Vegas Louisiana Grills / Dansons Group

Napoleon Peak Season Sand Hill Wholesale & Mfg.

96 | NOVEMBER 2019 | www.hearthandhome.com

Page

www.lovinflame.com

www.spartherm-america.com

Who Reads

Mike Gaylord, for one! Vice President of Sales, Agio; Virginia Beach, Virginia

Engineering Specialist at Supreme Wood Burning Products, Montréal

Special Interests/Hobbies: “Spending time with my wife and kids, fishing, golf, being outdoors, DIY home remodeling.” Problems/Issues Facing the Patio Industry: “The biggest thing on everyone’s mind is how the tariff situation will shake out. The second is where the industry market for outdoor furniture will end up in the future. Everyone loves stability, and we certainly would like more information and clarity as to where our industry’s board will decide to locate the show(s). There’s a lot of rumors, but few answers.” Key Trends in the Patio Industry Today: “Best Ways for Specialty Retailers to Combat Internet Sales: DON’T COMBAT IT! EMBRACE IT! Build a robust and modern website for Internet sales. It’s no secret that consumers are buying more and more big-ticket items online.

“You are the driving force of design, innovation, and creativity in the outdoor space. Channel all of that into your website, social media, and blog posts. Offer everything you have in your stores online. You can’t fight a tidal wave with a garden hose. Get a surfboard and ride along!” Forecast for the Patio Industry in 2020: “The industry as a whole will be up, yet channels of distribution are ever-changing. Innovations in logistics and delivery to retailers and consumers will be huge heading into the next decade.” Years Reading Hearth & Home: “Eleven years.” Reasons for Reading Hearth & Home: “I’ve felt for years that Hearth & Home’s in-depth reporting has been a major benefit to the industry. Richard and his team do a great job in helping address issues and topics that are happening in our industry – with objective analysis.”

Click here for a mobile friendly reading experience

| Parting Shot |

VIEWS ALL AROUND

98 | NOVEMBER 2019 | www.hearthandhome.com

orway is perhaps best known for its coastal fjords, but the northern landscape has much to offer in its interior as well. Architecture firm Snøhetta took the opportunity to design a robust but lowimpact building for visitors to immerse themselves in the Dovre Mountain plateau, home to musk oxen, arctic foxes, and reindeer herds that roam amid a rich variety of plants and wonderful views. The pavilion is elemental in its use of a steel skin, glass walls, and an extraordinary wood core. A bank of windows overlooks the Snøhetta Mountain from Tverrfjellet, a plateau at the elevation of 1,200 meters (3,937 feet). The robust organic quality of the wall was achieved by cutting large wooden beams on a CNC machine. The 25-cm square beams were then stacked and secured with wooden pegs to create the undulating effect. The wall looks as though it is deeply weathered, eroded by eons of wind and water. A bump out provides seating next to a suspended indoor fireplace (Gyrofocus by Focus Fires), and the exterior has a similar seating arrangement. The view from the pavilion appears ideal for watching the night sky and the plethora of wildlife, and, of course, the wildlife also have an ideal view into the pavilion. Click here for a mobile friendly reading experience

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