Home Service Industry SWOT
The home service industry is undergoing a myriad of technological changes through the Internet of Things, artificial intelligence and payment technology. This has led to many reactions and more are expected over time. Such changes also mean that the environment will present opportunities and threats to existing business.
- Many traditional providers of services in the home service industry are keeping up with matters that are close to customers. This is in line with sustainability and the reduction of carbon footprints to play a role in thwarting climate change. By engaging in composting activities, partnering with companies like The Compost Company, and making use of reverse osmosis technology, companies just like Pool Chasers Podcast and MIL-SPEC Landscaping are helping the market to keep clients engaged.
- With low barriers to entry and the rise of Amazon and Google services within the industry, consumers are guaranteed to have more and better options to choose from.
- A noticeable weakness is the tendency for businesses in home service to not be proactive but rather be reactionary to situations. This can be linked to inadequate planning, and if there is some planning, only planning for the short-run with no consideration for the long-run.
- There is a weakness, as pointed out by Shawn King (Owner of Florida Leaks) and Katie Pearse (Owner of The Maid Mentor), with business owners in the home service industry when it comes to responding to customer needs. The root of this stems from the majority of such business owners not adapting to technological change and not addressing issues pointed out by customers as swiftly as possible.
- Sachin Mohan, the VP of corporate relations and marketing at the Tree Care Industry Association, mentions how there is a weakness that lies within the sales tactics implemented by businesses in the home service industry, especially in the tree business. The crux of his argument is on how information is highly accessible on topics in many fields and how customers in the home service industry now wish to be incorporated in the processes and activities rather than be left on the sidelines, as a result.
- Matching demand with supply in this industry can prove very tedious because home service providers are difficult to locate, are not where they are needed at certain points in time, and are not showcasing their services to the right audience, in the right location, which can be remedied by a robust Search Engine Optimization (SEO) strategy for digital marketing
- The home services market is highly fragmented, which means that there are low barriers to entry. This is due to the fact that aggregators operate in the market, offering customers services that follow a penetrative pricing strategy regardless of quality. Hence, providers have to offer better quality service within a similar pricing range to remain competitive.
- There is the potential for high employee turnover within the industry because of the expansion within the market. The bargaining power of employees in the home service industry is rising, and with that in mind, service providers will have to offer better salaries, benefits, working conditions, and bonuses to retain their staff.
- With technological disruptions currently happening in the market through artificial intelligence (AI) in applications, opportunities exist for businesses that operate in the home services market to embrace these changes and adapt, to generate more leads, and increase their bottom line.
- Opportunities are there for home service providers to get more acquainted with social media platforms for communicative purposes, as these channels appeal to the current generations of users and would be able to respond better to marketing done through channels like Instagram.
- Google, through Google Adwords, is shifting towards a system where listing can become fully paid via searches. This presents opportunities for players in the home service market to engage in to maximize future economic benefits.
- Just as technological disruption can be viewed as an opportunity, it can also be viewed as a threat to businesses who do not adapt to these changes. This is a result of the change in generational thinking and how millenials now want service provision to be more convenient and faster. There has been a shift from what was considered luxury then and what is considered luxury now, with some formerly luxury services viewed as necessities which some adapting providers are offering. If the rest of the home service providers cannot offer this, then their bottom line is threatened because of increased pricing volatility, which is already a challenge.