State of the Industry Report: Lumber Building Material and Hardlines

In the wake of the pandemic and in view of a potential looming economic recession, we recently surveyed 200 U.S.-based Lumber, Building Material and Hardlines (LBMH) software decision-makers to see how they are approaching the coming year. The survey went out to businesses of all sizes, although most participants represented organizations with 10-1,000 employees and were business executives, business owners, or senior managers. Respondents included business executives (22%), owners (37%), middle management (6%), and senior management (37%).

Sales volumes, margins, and revenue have all been trending in the right direction. Online sales rose dramatically due to the market-wide shift to online and socially distanced shopping. With extra capital, industry leaders have invested more in technology to keep up with trends and expand online capabilities. These investments will continue to pay off in the long run.

In this brief synopsis of the survey report and data, we cover some of the significant findings of this year’s State of Lumber, Building Material, and Hardlines survey:

State of the industry in 2022

The survey found LBMH businesses are emerging from a strong year of growth.

• 61% of respondents reported increased revenue
• The increase has been substantial–19% on average for LBMH businesses
• 67% of respondents experienced revenue increases between 6-25%
• 48% say overall business margins have also improved
• 88% of respondents say online sales have increased by an average of 9.4%

Preparing for the future

LBMH business owners are currently concerned about three primary threats:

1. The cost of materials/goods (65%)
2. A potential recession (55%)
3. The ongoing pandemic (49%)

Businesses in the industry are addressing these threats in several ways:

• 55% of leaders are increasing investment in technology infrastructure.
• 46% of leaders are making more financially conservative decisions.
• 46% now require deposits due to price variability
• 45% have increased prices
• 40% have adopted a remote working model
• 39% have changed their product/service offerings
• 35% need customers to pay in full and in advance.

Customers are driving change, according to respondents:

• 58% have created or expanded ecommerce offering to meet customer demand
• 54% have increased investments in technology
• 51% have implemented a BOPIS (buy online, pick up in store) system
• 51% have created/expanded delivery services
• 40% say customers are now demanding faster delivery times

Excitement around digital transformation and ecommerce

What technologies excite LBMH professionals?

• 63% of industry professionals consider Ecommerce the most important feature in running their business
• 41% consider customer relationship management (CRM) the most important feature
• 36% consider cloud functionality the most important feature

What technologies are currently in use?

• 88% say customer relationship management (CRM)
• 80% say ecommerce
• 80% say enterprise resource planning (ERP)

Capabilities LBMH professionals value in an ecommerce solution:

• 50% value online payment processing
• 48% value product information management
• 46% value BOPIS (buy online, pick up in-store) services

What benefits do Ecommerce solutions provide these professionals?

• 71% say organized inventory
• 70% say organized product information
• 66% say higher customer volumes
• 63% say the ability to compete effectively with big-box retailers

How LBMH professionals think about technology investments

How often do they consider new software?

• 42% say annually
• 28% say bi-annually

Factors that influence purchase decisions:

• 61% say the features included in the software
• 59% say vendor brand recognition
• 58% say product reviews
• 54% say price
• 54% say customer service/support

How do purchasing decision-makers find their software?

• 30% looked online and made a decision
• 26% had personal experience or a colleague had personal experience with the software
• 23% were convinced by a salesperson
• 22% were convinced by a friend or colleague

The complete 2022 LBMH Survey Report with the above results and more is now available. By downloading our full report, you will learn:

• How organizations in the LMBH industry have responded to recent growth
• Where the biggest opportunities lay for future-proofing LMBH businesses
• The top five considerations when investigating new technology

Download the full report