Australia's forgotten bathrooms
Bathroom markets too narrow?
Ageing in place has developed many solutions
Ageing in place has developed many solutions
 
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Bathroom retailers are missing viable markets, without a good reason. Time to disrupt?
HNN Sources
This is an edited version of the Bathroom feature. To read the entire version, go to the PDF magazine:
HI News V3 No. 6: Australian's forgotten bathrooms

While kitchens may still remain the "king" of home renovations, there is little doubt that bathrooms are rapidly catching up. Surveys in the US and the UK indicate that the two are coming closer to parity.

A survey based on data collected from the US National Association of Home Builder's Remodeling Market Index (RMI) survey, which measures conditions in the remodelling market, showed that kitchens and bathrooms topped the remodel list for 2015, with kitchens hitting 81% and bathrooms 79%.

Those numbers are based on home renovation businesses reporting their most common jobs.
US National Association of Home Builder's Remodeling Market Index survey

A UK report from MTW Research shows that spending on bathrooms has increased by GBP230 million over the six years between 2010 and 2016. UK homeowners are thought to have renovated some 830,000 bathrooms during 2016.
MTW Research

For Australia, the Housing Industry Association (HIA) paints something of mixed picture of the future for bathrooms overall. It predicts that when it comes to the installation of new bathrooms, these numbers will drop from 441,200 in 2015/16, to 338,900 in 2018/19, a decline of over 23%. This will occur as new home construction slows, according to the HIA.

However, the decline in new home construction will likely support an increase in renovation activity. While the HIA does not forecast renovations, it suggests that the number of bathroom renovations will continue somewhere around 220,000 a year through 2018/19.
Housing Industry Association on bathrooms
Beneath the numbers

While predicted numbers are nice to have, they don't really go that far in telling the real story of bathrooms. After a period of some consolidation in bathroom trends, from 2010 to 2016, HNN is seeing some signs of a more complex market developing. Rather than being influence by strong market signals from just a few sources, there are demographic and cultural differences starting to emerge that will change the nature of the bathroom industry as we move towards 2020.

Of the trends that we do see emerging, it seems useful to concentrate on four of them in particular: ageing in place, the polarisation of the market, and, perhaps the most important, something that HNN is going to call "design dissonance".
Ageing in place

The easiest trend to spot, and one which is receiving much more attention internationally than in Australia, is ageing in place. The bathroom is a particular focus for the changes that older Australians need to make to their houses if they continue to live at home and not move to an aged care facility. Falls are a real health menace for older people. In 2011-12, 96,385 people aged 65 and over were hospitalised for a fall-related injury in Australia. This is three and a half times as many people who were 45 to 64 years old, according to statistics collated by the Australian Institute of Health and Welfare.
Australian Institute of Health and Welfare

According to ABS statistics dating back to 1995, falls in the bathroom are a high risk, especially for men. Some 7.7% of all falls by men took place when bathing, showering or dressing, while the number was just 3.3% for women. For both genders, falls resulting from a slippery surface underfoot were 10.3% of the total.
Bathrooms present risk: ABS statistics

It would be possible at this point to quote from a number of surveys and studies which indicate that, despite there being solid evidence of the demographic increase in people over 70 years of age (something that will ramp up still further by the middle of the next decade), and lots of well-meaning plans and governmental initiatives, there is little evidence that much has been done to improve house safety for the elderly.

Beyond these elements - the statistical weight of more older people, the lack of action, despite good intentions - there is another factor to consider, which is simply culture. Many of us have a fixed mental image of what it is to be older, which can include rapidly declining health, frailty, lack of mental acuity, and simply not being "with it".

The reality of older people today is that there is far more variety than there once was. Fewer people have lived physically tough lives, more have had good nutrition constantly, most have received medical care far beyond what was possible a generation ago. Some people certainly do (unfortunately) age according to the expectations of past generations, but many do not, and it's quite likely that the "spritely" 75 year-old will become the usual, rather than the exception.

Graeme Hugo writing in a "Policy Brief" for the Australian Population & Migration Research Centre at the University of Adelaide in early 2014 put it like this:
The third dimension of population ageing in Australia is one which is often overlooked and relates to their characteristics. They are quite different to earlier generations entering the retirement stage of the life cycle - economically, socially, and in their values, attitudes and their expectations. This is because each cohort lives through quite different economic, social and cultural conditions, they have different levels of education, world experience, etc. Baby boomers will differ in a myriad of ways from the previous generation of older people. This will also have a major impact on the nature of the care and residential arrangements which they seek, prefer and can pay for.
Australian Population & Migration Research Centre

In terms of the bathroom industry today and how ageing in place affects the markets it serves, it's possible to see that market as splitting into two. At one end of the market - and this is, a little curiously, the part that seems to get much of the attention - are what we might call the "wise and well-off elderly". These are people who, at 65 or 70 years of age, will go systematically through the house where they live, and work out what they need to change in order to go on living there safely for another 20 or 25 years. They get the kerb removed from the shower (a major source of trip-and-fall), the bathroom floor resurfaced with non-skid rubber, install a walk-in sitting bathtub, put a bench in the shower, add brighter lights everywhere, and so forth.

For many people, even in the bathroom industry, that is how they think of ageing in place, and its market potential. It is well-off couples or individuals who can spend $20,000 to $40,000 getting their house kitted out for a comfortable life as an older person.

Yet these wise and well-off are, without doubt, a smallish minority, and the real need for ageing in place as it applies to bathrooms is far more general, more broad, and actually more urgent. For example, a March 2011 report for the NSW Ageing Disability and Home Care, Department of Human Services, entitled "Housing And Independent Living: Environmental and built factors for maintaining independence in older age" went around looking at where older people in New South Wales were living to assess how well those dwellings met their needs as older people. This is some of what they discovered, just for bathrooms:
  • 96% did not have a folding seat in the shower
  • 77% did not have a slip-resistant floor surface in the bathroom
  • 76% did not have a slip-resistant floor surface in the toilet
  • 40% did not have an easy to reach shower tap
  • 91% did not have a provision for a grab rail near the toilet
  • Additionally, 62% had problems because they did not have shower or bath grab rails to aid them.

  • Looking at overall conditions in these homes, the report states that 27% of them had eight out of a possible 25 potential hazards, and were thus at high risk of causing injury.

    This is not a market that needs to go out and spend $25,000 on kitting up the bathroom to a comfortable standard. Look at the list of things that are wrong: that's about $3,500 to maybe $6,000 that needs to be spent. To at the very least stop a 75 year-old getting a nasty fright and bad bruise, if not winding up in hospital with a broken limb, with all the potential health risk that come with being elderly and bed-ridden, that is not a significant cost.

    Now, here is the thing. We'll be looking at this more closely in the section on polarisation of the market, but go to the really very well done Bunnings bathroom gallery at:
    Bunnings bathroom gallery

    There are about 20 bathroom combinations on display there. Click through them all. Now tell me, how many grab rails did you see?

    Yeah. None.

    That is not in any way a dig at Bunnings. You could look at any of a half-dozen bathroom companies, and while they may sell grab rails, it's not there in the marketing.

    You simply are not going to see a bathroom visual display carousel for bathrooms that lists the Modern Minimalist Bathroom, the Timeless Allure Bathroom, the Black Vogue Bathroom, the Pamper Bathroom, and then the Ageing In Place Bathroom.

    And there is a good, solid, sound sensible reason for this. Really. We all know as retailers that if, say, a thirties-ish couple were to be browsing through an online bathroom catalogue, and they came across an image of handrails, non-slip mats and a shower with a folding seat, well, one of them at least would likely crawl under the bed with a pillow over their head moaning softly for an hour. For sure.

    This is, very explicitly, a retail problem, in the sense that it is a bit of an unthinking reflection of some outdated cultural notions about ageing itself. To be very clear, HNN is not making the kind of argument that if you don't have doggy doors specifically designed to accommodate blind, left-handed Beagles, you are somehow discriminating against their owners as a minority. Not at all.

    There is a good, solid market out there. At least for two or three years, it seems likely that if this market were properly explored, it could bump revenues from bathrooms up by around a good 3% or so. Yet even the ultimate market rationalist, Bunnings, which declares itself as being always on the look out for expansion markets everywhere, a company whose former CEO would declare he wanted to sell toilets to everybody everywhere without barrier or obstacle, cannot overcome a cultural bias from the past, and actually overtly market to old people.

    Built into this is also a reflection of just how fragmented the bathroom industry really is. Compare it to, for example, the solar power industry. Solar power went out and campaigned to get some massive subsidies from governments to help cover the cost of solar power installation in homes, both because this would be good for the environment, and because it would help with loading and resilience of the urban power grid. Estimates put the amount spent by government to subsidise solar roof panels in Australia for FY 2015/16 at $726 million.

    The case for subsidising ageing in place bathroom conversion is potentially much better than that for subsidising solar power. Increasing medical costs are of prime concern. Those costs will increase with an ageing population. Spending money on preventative measures in the home to make bathrooms safer makes every bit as much sense as spending on safety in the workplace.

    Imagine a program where trained assessors could help home owners determine what alterations need to be made, then arrange for a 20% to 30% discount on the materials and labour needed to perform the installation. Politically, looking after pensioners, reducing health care costs, just making "mum and dad" feel more comfortable, would surely be something of a winner.

    Yet it is unlikely to happen. Purely because the bathroom industry as it has developed is far more competitive than it is cohesive. There is no effective single voice to speak for the bathroom retail industry as a whole. It is a massive, wasted opportunity.
    Polarisation of the market

    In the home improvement/DIY sector, market polarisation is often masked by failure.

    That's an important statement to make, because of three major Anglo-based markets, US, UK and Australia, it applies more to the home improvement market in Australia than the other two. Can't DIY? Don't have the funds to pay for the high prices tradies charge for the work? Well, then, you are, simply, no longer part of the market.

    Think of it like this: right now, here in Australia, there are probably (conservatively) 85,000 couples under 35 years old with no DIY skills that could scrape up $4500 to spend on either a kitchen or bathroom renovation. That's a $38 million market, and almost no one is really catering to it.

    Instead, what the bathroom market in particular does, is to compete over different parts of the middle market. Reece goes after the higher end of the middle, Bunnings goes after the lower end, and IKEA flits between the two, offering some higher end features at the lower end price points. There is another half-dozen companies that would get allocated different points on that middle spectrum. The upper end of the market has its own suppliers and sources, most of the international companies that distribute directly through architectural firms and some house designers.

    The thing to really think through is this: that little money, few DIY skills market is just going to get bigger. Job prospects in Australia, even for those who go through universities, are not going to get magically better over the next five or six years. And we all know that DIY skills are declining through the general population.

    Much of Western Europe (let alone Eastern Europe) has been in a similar situation for well over a decade. It is almost normal in many countries to not get a "real", decent job before you turn 30, and only then if you've managed to find some work for the six years since you graduated from university.

    It was understanding this, and the way in which European society has developed, that made UK-based home improvement retailer Kingfisher choose to go down a particular path. When Veronique Laury took over as managing director of Kingfisher in February 2015, she was, after years of working for the company, aware of many of its operational inefficiencies, and knew some of what needed to be done to fix that: fewer SKUs, a centralised IT system, more rational staffing of various departments.

    What she also knew, and a basic fact that everyone in home improvement should remind themselves of from time to time, is that if Kingfisher was experiencing slipping sales revenue (as it was), that would come down to one thing: the company was not selling things that people wanted to buy.

    Ms Laury's response to this was to set out and to carefully study the markets where Kingfisher operated - Britain, France, Ireland, Poland, Russia and elsewhere - to discover how people lived, and how Kingfisher could help them improve their lives.

    What Kingfisher discovered was quite surprising. For example, Kingfisher found that in France, 39% of home improvers would abandon a bathroom renovation project well before it was completed. Of course, the comparable number in Australia is ... well, we don't know, do we? And that is precisely the point.

    Perhaps the best story Ms Laury tells about responding to the kind of market needs Kingfisher discovered doesn't have to do with bathrooms, but with fencing. Kingfisher wanted to offer some simple fencing solutions for people, fences that would be so easy to put together that if you could build a tower in Lego you would probably not have a problem.

    As they researched customers' needs as regards fences they discovered something very interesting: the majority of customers only had access to their backyards directly through their house. In other words, any material they used to repair a backyard fence would have to be carried through the front door, down the hallways, probably through a couple of narrow doorways in small rooms, and then out the backdoor.

    To quote Ms Laury's delightful way of describing this:
    Another one is the fence that you see here. This is not a completely new product. It has been developed on the basis on a product that was existing in France. And that was highly successful, but not democratic at all. So you will have different components: you have aluminum, you have wood, you have composite, you have glass, you have those kind of decorative panels. And you can assemble all of that.
    One of the things we learnt from our deep customer insight, as an example, in most people who have a garden, they don't have any way to go on the site. When they have to do things in your garden they have to go through the house. And when you are doing fencing, I promise you that going through your house with those big fencing is not easy. This one is completely disassemble, and you can put it in your car and easily go through your home with those parts. So, this is the kind of things that we do. This is how we are going to bring some new stuff to people in every of our markets.

    That wasn't an insight any other home improvement retailer had come across before. It meant that in designing these easy-to-build fences, Kingfisher would need to design them with smaller components that could be easily carried through a small house.

    Kingfisher has spent about 18 months now beginning to design and build a whole new kind of bathroom system, based on this research, and the kind of concerns it discovered about fencing. The goal of these systems is to embrace the needs of home improvers who have been at least partially forgotten by most home improvement retailers. The systems will be easy to design, easy and inexpensive to install, and adaptable to the very small bathrooms that most houses throughout Europe have.

    Nobody is doing anything like that in Australia. The market is not polarising here around people who have enough money to buy more expensive fittings, and those that are happy to find something that works, that looks nice, and that is easy to install and repair. In Australia, the real polarisation is between people who can do bathroom renovations because they possess the right combination of money and skills, and those who can't do bathroom renovations.

    It's another lost opportunity.
    Design dissonance

    "Design dissonance" is a term we are borrowing from the world of systems design in technology. Perhaps the best definition is this:
    Design dissonance occurs when a product or service sends out cognitive signals that run counter to the desired effect.

    What is being pointed to here is that design does a number of things. It should facilitate the use of whatever is being designed - of course. It should also, perhaps, unfacilitate a bad or unsafe use of what is being used. For example, the safety button on a power tool trigger makes it a little harder to use, but it makes it really hard to use it in an unsafe way, by accidentally starting it up.

    The other main function of design is to contain and communicate a narrative about the things that have been designed. When we purchase an object or simply go to use it, we might have no or just very little experience with that particular object, so we look at its design in an effort to determine how it might perform.

    Of course, this opens up the way for profitable miscommunications as well. A typical one is buying some product in a box, then opening up the box to discover that it is half-empty. The design of the box should have accurately described size or quantity, and instead it has been deceptive.

    Between those two extremes - design that accurately describes an object, and design that misleads - is an area where design can be somewhat ambiguous. The guy who buys a simple family sedan, but chooses the option to have racing stripes on it isn't being fooled into thinking the car is faster than it is. Rather he is expressing something that is aspirational. Either he wishes he could own a sports car instead of a family sedan, or that he could afford a faster car.

    A lot of retail has a high component of the aspirational attached to it. While there is certainly a place for that, from time to time the aspirational begins to overwhelm the basic reality of whatever is being sold. The situation often seems to become one of people buying half-imaginary products for half-imaginary uses.

    At least a part of the Australian bathroom industry seems to be developing toward this. In particular, looking through most of the home design magazines available today, it can be difficult to know what exactly it is they are describing, or, really, why. Take this sample of text from a picture caption in Real Living (ironically) magazine:
    A whirlpool bath (left) with matt black tapware sits among the urban jungle housed in an atrium. Dual sinks and round mirrors (above) provide a contrast to the grid design of the tiling. The greenery of the atrium (right) is complemented indoors with a small flowerbed of grasses that provide a handy border to hide the loo.

    It's a bathroom with a skylight, and underneath the skylight is a glass box with a couple of plants and a bunch of rocks. This sits between the bathtub and the shower. ("Among the urban jungle"? Really? You can just imagine saying to a designer, "I desire an urban jungle to be among".)

    What is just as interesting as the words, is the way the bathroom is portrayed in images in the magazine. There are four pages of content, spread out over six pages in the magazine (due to ad pages), consisting of three double-page spreads. The images on the first of these two spreads are a little confusing and disorienting, in that they make it hard to get a sense of this bathroom. It is only on the final spread that a clear, overall picture of the bathroom is shown - making possible the rather simple description we've provided above.

    What is clear is that the magazine is taking something of a cinematic approach to the architecture it describes. It's not designed, as the magazine in other ways suggests it is, to provide a clear overview of what is going on with this design so as to aid other designers. Instead it is designed to dazzle the eye, to introduce a narrative experience that has to do with "jungles", geometry, and secrets somehow concealed in a small brightly lit room that is wall-to-wall white tiles.

    Often when we venture into territory such as this, HNN falls back on finding some actual practitioners in the real world of whatever it is, the people who actually put things together. When it comes to bathrooms, and what people are really doing, we fell back on Klaus Tietz. Mr Tietz was, once upon a time, a hardware retailer, but swapped over for the other side of the counter and became a specialist in bathroom renovations for the past 15 years.

    His company, Bermagui Bathrooms, did most of its work in Canberra, but he has recently moved location to the south coast of New South Wales.

    This is an edited version of the Bathroom feature. To read the entire version, go to the PDF magazine:
    HI News V3 No. 6: Australian's forgotten bathrooms
    HNN Sources


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