ECI Survey: LBM industry continues to invest in tech, ecommerce
ECI Software Solutions has released findings from its 2022 Lumber, Building Material and Hardlines (LBMH) industry survey that examined how organizations in the LBMH sector have responded to recent growth and where they see opportunities in the future.
The LBMH industry is expected to face headwinds as so much activity in the space revolves around home construction and DIY projects, both of which are expected to slow down as interest rates and prices increase, ECI said.
However, LBMH businesses are emerging from a strong year of growth.
Sales volumes, margin, and revenue have all been trending in the right direction. Online sales, in particular, rose dramatically as a result of the market-wide shift to web-based, socially distanced shopping.
According to ECI, with extra capital on hand, LBMH leaders have been able to invest more in technology to keep up with digital trends and expand online capabilities
Findings from the survey indicate that LBMH business owners are currently concerned about three primary threats:
- The cost of materials/goods (65%)
- A potential recession (55%)
- The ongoing pandemic (49%)
However, many businesses have increased investment in technology infrastructure (55%) to address these concerns, specifically to enable them to expand ecommerce offerings (58%) and maintain a competitive advantage in the market (54%).
The LBMH industry witnessed an "ecommerce explosion" during the pandemic as customers grew more comfortable with purchasing building materials online and other forms of socially distanced shopping, ECI said. Consequently, business leaders have adapted their strategies to prioritize online shopping experiences.
The survey found that 63% of LBMH professionals consider ecommerce to be one of the most important features in running their businesses, ahead of customer relationship management (41%) and cloud functionality (36%).
Although many expect a performance dip in the coming year, LBMH businesses have good reason to be optimistic.
Consumers have readily accepted new ecommerce channels, and companies that launched effective solutions were able to take full advantage. The good news is that any investments in online capabilities will continue to generate attractive returns in a post-pandemic world.
“LBMH businesses that hope to compete during and after the coming recession will need to lean further into digital tools, like ecommerce, that boost revenues and lower costs,” said John Maiuri, president of the LBMH Division at ECI. “Being online will not only be the status quo in the future, but it will be a critical driver of innovation and differentiation. To do this at scale, leaders will need tools that integrate seamlessly with other business software.”
To read the full report and learn more about how technology, click here.
Commissioned by ECI Software Solutions, OnePoll surveyed 200 U.S.-based software decision makers in the lumber and building materials industry in July 2022.