Episode 25 – Mark Mitchell
The Future Of How We Buy Building Materials
How will the supply of building materials look in the future?
Mark Mitchell is the author of Building Materials Channel Marketing and the lead strategist behind Whizard Strategy, helping the building materials industry solve tough sales and marketing problems. Whizard Strategy is changing the way building materials companies market their products and services—it’s less about the chequebook and more about the strategy. As a dynamic speaker, business strategist and marketing expert, Mark brings ideas that create change, increase sales and stop spending for the sake of spending.
Mark is also recognized as Top 10 Thought Leader in Building Material Channel Marketing by Channel Instincts
Are Amazon coming to supply our building materials?
Well, it hasn’t been done in construction? Why hasn’t there been an Amazon to come in and completely just turn how we buy material? Why has that not happened yet?
The people who have tried… There’s been a few people who have tried that I thought originally, “Oh my gosh, this could be the Amazon of building materials if they do this right.” And what I found was that they were experts in the digital world, but they had no clue about building materials. So I was, I was shocked to look at… Okay, here’s the CEO of this company that has millions of dollars to set the system up, and I looked on LinkedIn and I was shocked that he didn’t know a single person building materials. He’s not connected with the CEO of Kohler or GAF or Owens Corning or DuPont, whatever. He had no connections.
So he literally was going, without that customer knowledge, he was setting up a digital marketplace, and that was a big blind spot for them. They just assume, “Well, we know how people are. We know how people buy. We know that whatever.” And so it ultimately failed.
Then we also have Wayfair coming in and selling furniture, but then saying, “Hey, we could also sell these building materials, primarily to the Do-it-yourself or the consumer, versus the pro.” And so what I’ve seen is some smart distributors, we’ll say ABC roofing, realize this and making it as easy as possible for their roofing contractor customers to be as digital as they want. If you still want to come in to our local distributor, stop, you’re welcome anytime. Here’s our showroom. We’ve got a guy behind the counter that can help you. But if you would like to… It’s Nine o’clock at night, sitting in your underwear, in your lazy boy chair, you’d like to come in and place an order and have it delivered to the job site tomorrow, online, you can do that.
Yeah. It’s gonna be the way it’s going to go. Surely it’s gonna be the way it’s going to go. It amazes me that it hasn’t happened yet. There is you’re there, you’re so right that there is a start-up graveyard for material marketplaces, and it’s an interesting one. It feels like Amazon could do it if they wanted to do it, but they might not get the bulk material. So I feel, personally, that Amazon will come in and take over your fasteners… Anything that could be put in a box and delivered, I think Amazon will win on-
I keep waiting for Amazon to buy Lowe’s. Okay? Our second biggest, behind Home Depot, big box, because they bought Whole Foods, and they’ve integrated Whole Foods very nicely into their Amazon thing. So if I were Amazon, I was looking at different categories of, “What do we do next?” building materials would certainly be up there and a company like Lowe’s that just hasn’t gotten its act together in the last couple of years, continues to struggle, I think might be an attractive buy because now I have… I don’t know the number, 1500 locations around the United States that if you want a big bathtub, it can be delivered there for you and then they can deliver it to you or you can pick it up.
And the interesting part is companies like Home Depot who are very innovative in terms of technology they’ve got some really smart stuff going on. But if Amazon decides to do that, look at number three, look at number four as an entry point… The problem them big companies face is Amazon has done this in the past, they can underpin that business with, say AWS. They can run that on a loss and literally just start to kill the market, which is dangerous for other companies.