Key Takeaways

• About 50% of architects agree that producing a complete project specification package is time-consuming.
• When asked about the digital transformation journey of their practice, only 5% of architects indicated that their practice was on its way to completion.
• Architects have lost clients to third-party competition and developers willing to finalize the procurement process without proper research and evaluation despite insufficient data leading to 14% of construction rework.
• Building material costs increased by 13% in 2021, with builders reporting record-high prices of timber, steel, and bricks up to 80%.
• Architects are under high pressure to deliver digital projects, with 85% of the indicating pressure and 41% citing high/extremely high pressure from their organization in 2019.

Introduction

Time-Consuming Specification Process

• The process involved in describing the right materials to bring a design to fruition is a significant challenge for architects. Although the specification process is necessary, many architects find it boring and time-consuming.
• However, the specification process is critical to construction projects, as it reduces risk, and the project could fail without enough and the correct data regarding materials to use.

• About 26% of architects write out specifications from scratch, more than half of them (57%) copy and paste from previously used specifications, and 16% reuse the previously identified specs entirely.
• When consulting architects regarding the top challenges of the specification process, 50% indicated that it is time-consuming to produce a complete project specification package. In comparison, 39% said they found researching and identifying the right products for the project time-consuming.

 

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Adopting New Technologies

• Several new technologies have replaced manual processes such as measuring, drawing, and project management, facilitating digital transformation in the architecture/construction industry.
• Although a more significant number of architects are leveraging digital processes such as Building Information Modeling (BIM), mobile, and immersive technology, adopting new technologies has led to other challenges.
• BIM has evolved to become a staple technology for architects. However, many professionals cited barriers to using BIM, such as the "cost associated with digital surveys required to make 3D models of existing structures" for refurbishment structures.

 

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• About 69% of architects indicated cost as the primary challenge to adopting new technologies.
• When asked about the digital transformation journey of their practice, only 5% of architects indicated that their practice was on its way to completion.

 

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Prioritizing Design Quality over Cheap Construction

• Architects face significant issues with prioritizing design quality due to industry preference for low-cost materials and speedy delivery.
• As indicated earlier, the specifications process is often time-consuming. Subsequently, architects have lost clients to third-party competition and developers willing to finalize the procurement process without proper research and evaluation despite insufficient data leading to 14% of construction rework.
• Land shortage and regulatory restrictions also contribute to the hastiness of clients for quick building solutions. Architects thus find it challenging to "carry their vision through value engineering and into the completed project."
• About 53% of US contractors indicated that time constraints and the need for hasty solutions are the most significant risk factors affecting decision-making.

Value Engineering

• The recent increase in the cost of building materials is diminishing the role of architects in construction.
• Although value engineering has been an issue in the construction industry for architects and constructors, supply chain constraints and rising material costs have shifted the final specification process to the general contractor overseeing a project instead of the architect.
• Building material costs increased by 13% in 2021, with builders reporting record-high prices of timber, steel, and bricks up to 80%.
• Considering that contractors need to meet client timelines and make product availability guarantees, "the role of architects has become idyllic more than concrete."

Pressure to Deliver Digital Projects

• Architects face significant pressure from their organizations to fulfill their digital transformation goals by delivering digital projects.
• About 68% of architects indicated problems with having the right technologies to facilitate this transformation, and 80% cited data challenges to leveraging mobile and IoT technologies.
• However, 78% of architects indicated that their organizations have moved beyond planning their digital transformation strategies to implementing them for project delivery.
• Subsequently, architects are under high pressure to deliver digital projects, with 85% of the indicating pressure and 41% citing high/extremely high pressure from their organization in 2019.
• During the pandemic, the demand for digital projects increased to 48% across the US, UK, France, and Germany. Roughly 13% of organizations are in the planning phase of digital transformation, compared to 22% in 2019.
• However, 86% of architects said COVID-19 made it more challenging to obtain the right technology.

Research Strategy

Key Takeaways

• Competition in the interior design service market has increased due to the difference in the pricing of services. High competition and low barriers to entry have been identified as major negative factors impacting the industry, and 17% of interior designers in the United States are concerned.
•  39% of interior designers voiced their concern about managing consumer concerns about costs, ranking topmost on the list of challenges they face.
• Interior designers’ dependence on subcontractors to turn their remodeling plans into reality has been afflicted due to the shortage of qualified construction personnel. This concern ranked 3rd place on the list of 14 likely challenges faced by interior designers.
• Although 22% of interior designers stated 'difficulty finding prospective clients ' as a challenge for the industry in the United States, internationally, the industry is expected to experience a $24 billion increase by 2025. Thus, supplying a market of potential clients.

Introduction

Managing Consumer Concerns About Costs

• Cost management is a difficult thing to handle as an interior designer — particularly when clients have huge expectations. Designers meet clients that demand lavish designs at affordable costs.
•  Unrealistic client expectations concerning budgets is a major challenge facing the interior design industry. Many clients are very strict with their budgets because the interior design pricing is usually high. Little wonder, dealing with consumer concerns about costs was topmost on the list of challenges faced by interior designers today, with 39% of designers voicing this concern.
• Several interior designers find their clientele difficult to satisfy and work with, this is attributable to a perceived lack of value associated with designers by most customers. A study revealed that 63.9% of interior designers think that the public lacks an understanding of the true value of design services.

Increased Cost of Doing Business

• Cost management is one of the toughest things to contend with as an interior designer. In 2016, 61% of design companies noticed remarkable increases in costs. Industry survey reveals that increases in materials, employee wages, marketing, and advertising cut into the bottom line.
• 18% of interior designers expressed concerns about the increasing cost of doing business. Various factors are responsible for the high cost involved in running an interior design business — from workflow inefficiencies to unexpected prolonging of a project or mind change by a customer halfway through the project.
• Additionally, many interior design businesses usually face cash-flow challenges. Often, upfront payment is required for purchasing materials, but customers may be hesitant to make deposits. Delayed payments complicate cash-flow issues for the interior design firm.

Shortage of Subcontractors

• Interior design involves a high level of collaboration, either with fellow interior designers or with vendors and suppliers. The need for the right kind of people to make an excellent team where functions are seamlessly carried out, cannot be over emphasized.
• Ranking 3rd on the list of 14 likely challenges faced by interior designers is 'the shortage of subcontractors'; 33% of respondents considered it a cause for concern.
• Interior design professionals depend on subcontractors to turn their remodeling plans into reality. However, a shortage of qualified construction personnel has been afflicting many businesses and delaying projects, such that 30% of firms stated that lack of subcontractors was a top challenge.

Increased Popularity of DIY

• The do-it-yourself (DIY) market is an indirect competition for interior design firms. When asked about their business challenges, 'increased popularity of DIY' tied for No. 4 on the list of potential challenges and was cited by 21% of interior designers.
• According to 2019 Remodeling Impact Report: DIY, only 41% of respondents stated their preference for hiring a professional when the desired result was better functionality. Projects that included the consumer’s personality to their home were twice as prevalent to do-it-yourself (DIY) than employing a professional.
• Either for financial reasons or sheer preference, some homeowners decide to embark on large remodeling projects by themselves. Without a doubt, more clients or prospective clients are opting to do all or part of their own procuring and may even have their own thoughts about the appearance of the design. Designers now must accommodate these changes by adapting their business model or else experience a decline in business and revenue.

 

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Increased Business Competition

• Because of the fragmented nature of the interior design service market, many participants in the global market are trying to seize the market, thereby increasing competition in the industry due to the difference in the pricing of services. The interior design industry is extremely competitive. According to data, there are about 66,500 interior designers in the United States alone.
• One of the challenges reported by interior designers in the United States is increased business competition. According to the survey, 17% of interior designers are concerned about the increasing number of competitions within the industry.
• With a market size growth of 0.8% yearly on average between 2017 and 2022 within the United States, and an expected increase of 3.1% in 2022, competition in the interior designer space continues to be fierce. High competition and low barriers to entry were identified as major negative factors impacting the industry. And the interior designers’ job market is expected to increase by 4.5% between 2016 and 2026.

Difficulty Finding Prospective Customers

• Ranking 4th place in a study by Statista, "difficulty finding potential clients" is a challenge for interior design businesses in the United States. 22% of respondents think that the difficulty in finding prospective clients is a challenge.
• Worldwide, the interior design services industry is projected to experience more than $24 billion increase by 2025. This should result in a vibrant market of prospective clients in need of professional interior designers to make their dreams a reality.
• According to Chris Ramey who runs the Affluent Insights consultancy, “brand awareness is low, especially for conventional professional interior designers who do not appropriately leverage the internet or execute luxury strategies. The disruptive influence of the media and internet allows mass brands to pose as luxury.” Because many niche interior designers have not invested in consumer-focused branding, they have become more and more commoditized as better marketed brands capture market share, even though the niche brands may offer better quality, superior style, and longer life.

Research Strategy