Have you heard of the “Diderot Effect?” The concept was inspired by 18th Century French philosopher Denis Diderot’s essay, “Regrets on Parting with My Old Dressing Gown.” In it, he relates how the gift of a new scarlet dressing gown sparked a snowballing of spending on upgrades to the rest of his home and possessions, after they suddenly looked shabby in comparison to his elegant new gown.

The Diderot Effect is in full force when someone buys a home. It kicks off a spiral of additional purchases to update everything from trash cans to furniture to outdoor living spaces. This social phenomenon helps to explain the findings of a Mintel Research report: “The patio and outdoor living market continues to steadily gain momentum parallel to the improving economy and housing market.” To put it simply, home sales and home renovations drive investment in Outdoor Room projects, new grills, fire pits, and patio furniture.

According to the 2017 “U.S. Houzz Landscape Trends Study,” 55% of homeowners creating outdoor living spaces spend $15,000 or more. The report finds they’re buying outdoor lounging furniture (36%), fire pits (32%), outdoor dining furniture (28%), grills (20%), patio heaters (10%), built-in cabinetry/storage (8%), sinks (5%), refrigerators (5%), and pizza ovens (3%).

Why are so many willing to make such an investment? According to the Houzz study, homeowners are spending about seven hours per week in their outdoor space during the warm-weather season, and about two-and-a-half hours in colder weather.

A recent report from the American Institute of Architects reveals that 69% of architects say interest in outdoor living spaces is up; 61% say their clients are more interested in blending indoor and outdoor spaces; and 45% say outdoor kitchens are growing in popularity. Further, 29% of architects say outdoor living rooms are the most popular “special function” rooms requested by their clients; 2% say rooftop decks, and 4% say three-season porches or sunrooms.

Given the National Association of Realtors’ report that existing home sales are at their highest level in 10 years, the Diderot Effect should ensure, at least in theory, that sales of Outdoor Room products will follow.

Here’s a look at some of the trends impacting the category:

Haley collection by Summer Classics.

Housing Trends

According to the U.S. Census Bureau, the average size of a new-construction home decreased in 2016. The National Association of Home Builders (NAHB) expects home sizes to continue to decline as a result of more first-time Millennial home buyers entering the market, and to reflect a change in consumer preferences across all income brackets for smaller houses with more features and amenities.

More than two-thirds of consumers say they are willing to trade size for features, according to the survey, with the top-requested amenities including a separate laundry room, energy-efficient elements and appliances, a patio, exterior lighting, and a full bath on the main level. As home sizes continue to decline, the NAHB predicts that fewer outdoor kitchens will be included by builders in the average new home.

However, since experts say outdoor living spaces become even more important to people as interior living spaces shrink, this omission by builders creates an opportunity for retailers of outdoor kitchens and outdoor living products to satisfy this unmet demand.

Flo Fire Table from Brown Jordan.

Remodeling Market Increasing

The low inventory of existing homes available for resale, rising home prices in most of the country, and increased buyer competition are sparking a strong uptick in the remodeling industry, according to a report by the American Society of Interior Designers. Studies by Houzz, the NAHB, and the real estate website Zillow all forecast a climb in home remodeling spending this year – as much as 8%, according to The Joint Center for Housing Studies at Harvard University. Research firm MetroStudy expects remodeling activity will continue to grow for at least the next two years.

Home improvement resource Angie’s List indicates that a desire for open floor plans, and changes in family dynamics such as young adults moving back home after college or elderly parents moving in with their adult children, are driving most remodeling projects.

The Better Homes & Gardens “2017 Home Remodeling Trends Report” reveals that consumers are looking for ways to add extra living space without the expense of putting on an addition, by converting basements and attics, and adding Outdoor Rooms. The report also shows that consumers want good flow between the kitchen, eating and living spaces, and a connection between indoors and out.

The Better Homes & Gardens study notes that when it comes to remodels, “opulence is out, quality is in.” People are increasingly considering cost versus value, and combining both custom and off-the-rack elements on the same project. According to Angie’s List, consumers who engage contractors prefer to work with those who offer “one-stop shopping” and will handle all aspects of a job from design to completion.

Bazza MGP by Telescope Casual.

Do-It-Yourself

A growing trend in the remodeling sector is do-it-yourself projects. A recent survey by home design website Zillow Digs, shows 40% of consumers started a do-it-yourself project last year and 75% tackled one in the past three years. Online marketing and market research firm Venveo reports that of those who pursued a DIY project, 39% did it to save money, and 47% did it for enjoyment and the desire to personalize their home.

Venveo notes that 84% of DIYers search online to get ideas for projects, with 88% saying they watch how-to videos on YouTube. Sixty-five percent say they would be more likely to buy from a company or store that offered DIY videos.

The DIY trend is particularly strong among Millennials. According to Venveo, 52% of DIYers are between ages 24 and 44. Avid viewers of home-improvement shows and YouTube how-to videos, Millennials “overwhelmingly prefer” do-it-yourself projects to enhance their living spaces, according to the Better Homes & Gardens study.

Debra Haase, president of Sierra Outdoor Designs, says, “Everyone wants to enhance their backyard with entertainment options, but not everyone has the budget or desire to hire out for a huge custom project.” Retailers can sell the company’s modular cabinetry systems as DIY kits. “The components ship knocked-down and two people can assemble each modular cabinet with an Allen wrench in about 30 minutes,” she says. “Or retailers can charge a fee to assemble it for the customer.”

Unfinished kits for islands, fireplaces and fire pits are available from a number of manufacturers, including Easy Outdoor Kitchens (EOK) by Barbeques Galore, Stone Age Manufacturing, FireRock, and Belgard. Consider hiring a mason to teach a class on how to finish the kits with stone or stucco, and offer them to customers who purchase these unfinished products.

Retailers can tap into the do-it-yourself trend by hosting classes for Outdoor Room projects that incorporate other products you sell and can be completed in a day or weekend. These “Saturday Spruce Up” seminars might cover instructions for building an outdoor bar, a bench, fire pit, pergola, backyard movie theatre, or other Pinterest-inspired projects.

Target spendthrift Millennials with a session on “Outdoor Room Decorating Tips on a Budget” taught by a local designer. Charge tuition for each of these classes, just as you would for a cooking class, but offer to put the fee toward a purchase.

Retailers can further connect with DIYers by posting project ideas, before-and-after photos, and how-to videos on their website, YouTube, Facebook, and Instagram pages. Invite customers to share photos of their completed projects, as well.

There’s an ulterior motive for going after do-it-yourselfers. According to Zillow Digs, 40% of those who attempted a DIY project regretted it. Venveo reports 56% of do-it-yourselfers handled part of the project before calling in a professional to complete it. You may end up getting the job anyway.

Gemini Grill from Napoleon Grills.

Outdoor Room Design Trends

HGTV’s report, “Trends in Backyard Design for 2017”, indicates outdoor living spaces with areas for grilling, dining and sitting, indoor-like furniture and fabrics, and seamless flow between interior and exterior living areas, are still very hot. One post-recessionary change, however, is an evolving preference for “better quality, less bling.”

According to the report, consumers are increasingly opting for “quality, value-priced backyard elements that are more understated” with fewer bells and whistles, over “showy, pricy, over-the-top landscape projects.” For instance, according to the report, homeowners might opt to build a deck for their Outdoor Room, as a less-expensive alternative to grading the site and constructing a masonry patio with retaining walls.

Outdoor kitchens remain a key element of an outdoor living space. The National Kitchen & Bath Association’s (NKBA) “Design Trends Report” reveals that 43% of NKBA designers have experienced increased requests for outdoor living spaces, and 69% recently created an outdoor kitchen. According to the NKBA, besides a grill, these projects increasingly include a fire pit, pizza oven, weatherproof cabinetry, refrigerators and music systems, as well as defined areas for dining and relaxing on indoor-style furniture.

The NKBA report notes outdoor kitchen designs are following their indoor counterparts with workflow arranged in hot, cold, wet, and dry functional zones, and plenty of work surface, storage, and island seating incorporated into the designs. Other trends include good lighting and sound systems controlled by a smart phone.

The American Society of Landscape Professionals indicates the three most popular outdoor design elements requested of their members include fire pits/fireplaces, wireless/Internet connectivity, and lighting. House Beautiful also reports that “smart” technology, including furniture with built-in docking stations, is “in,” while oversized furniture and decorative elements are “out” – both indoors and outdoors – in favor of smaller-scale furnishings, especially as the home footprint shrinks.

According to the National Association of Landscape Professionals (NALP), “cozy” Outdoor Room designs are trending. The NALP report says consumers want to create a sense of comfort and contentment through fire pit gathering spaces, circular seating nooks to encourage intimate conversations, water features for soothing background sounds, and lighting to add ambience.

Garden Design magazine’s 2017 “Garden Design Trends” study backs this up. The report suggests customers are beginning to move away from clean lines and modern designs in favor of a more old-fashioned, DIY aesthetic blending old and new elements, and natural materials such as wood, stone, and railroad ties for a “more authentic and real” look.

But don’t be too quick to kick modern sensibilities to the curb. Contemporary design is still extremely popular, especially in high-end urban settings. Russ Faulk, chief designer and head of product for Kalamazoo Outdoor Gourmet, says, “We’re seeing outdoor kitchen designs become stronger and more diverse. In the beginning, we mainly saw classic looks with more stone, but today there is a full array of different styles being applied, including fluid integration with modern architecture.”

Faulk says the company’s sleek, new, modular Arcadia Cabinetry line features a modern aesthetic that appeals to many designers and urban dwellers. Modern, premium-quality, modular outdoor kitchens also are available from Hestan Outdoor, Danver, Brown Jordan, DCS, and more.

Regardless of style preference, Faulk offers a tip: “Our most successful retailers are the ones that build strong business relationships with the designers, architects, landscape architects and other specifiers who are creating outdoor kitchens in their areas.”

The rooftop garden at New York’s Metropolitan Museum of Art. Photo Courtesy: ©2017 Infinity Canopy. www.infinitycanopy.com Ben Kulo Photographer. www.benkulo.com.

Urban Oasis

Not surprisingly, Outdoor Rooms with modern designs are often found in urban settings. The design website Houzz studied the most popular photos of urban outdoor spaces uploaded and saved in “ideabooks” and found common design trends: contemporary styles, sleek lines, space-saving elements, and charcoal, white and black color palettes. It also found that urban Outdoor Rooms incorporated the clever use of “living walls,” lattice screening with vines, and large potted plants to create privacy and form “room dividers.”

The National Association of Landscape Professionals (NALP) reports the urban “green roof” movement is gaining momentum on apartment buildings, office skyscrapers, downtown convention centers, and other commercial spaces. Further, the growing number of trendy rooftop bars and restaurants also serve to inspire city dwellers to create environments for relaxing and entertaining in postage-stamp backyards, courtyards, balconies, and rooftops.

Even New York’s Metropolitan Museum of Art has its own rooftop garden with a pergola, comfortable seating, a cocktail bar, dining service, garden plantings, an art installation, and stunning views of Central Park. (The seasonal venue attracted half a million visitors last year.)

The American Society of Landscape Architects (ASLA) says rooftop gardens rank among the top 10 most popular landscape design elements. Design-build firm Chicago Roof Deck and Garden has doubled its business each of the past three years, and Chicago-area builder Lexington Homes is outfitting a development of row homes with rooftop decks, fenced-in yards, and balconies.

King Blue Condominiums and dozens of other residential buildings in Toronto offer rooftop resort-style living, and The Hepburn, with four grilling islands, two fire pits, a pool, outdoor shower, cabanas, and luxurious seating, is one of many Washington, D.C., apartment buildings with a rooftop oasis.

In Maspeth, New York, NYC Fireplaces & Outdoor Kitchens has seen growth in its rooftop Outdoor Room business in Manhattan and Brooklyn every year since it started five years ago. The company works mainly with designers, architects and builders on custom projects, but also has installed a number of high-end, modular kitchens from Brown Jordan and Kalamazoo Outdoor Gourmet.

There’s plenty of seating for a crowd (was the sunken chat pit once a pool?). Photo Courtesy: ©2017 National Association of Landscape Professionals and the associated member company.

Beyond the Sunbelt

National homebuilder Toll Brothers is now offering Outdoor Room options at its luxury developments in colder climates. At the new Reserve community in Holmdel, New Jersey, with homes priced between $1.3 and $1.5 million, the model home features a poolside pavilion over a stone patio with outdoor kitchen, pizza oven, bar seating, and pendant lighting. Indoor living areas flow outside through glass and screen walls that completely retract.

Rob DeMassa, business manager for Outdoor Designs & Living in Fairfield, Connecticut, says interest and awareness of the Outdoor Room reached this southern New England area relatively recently, but business is now “exploding.” He says, “People want more than just a grill on a patio. They want a kitchen where they can put on a show, while guests watch from seats at the bar. They want a great entertaining space.”

Most of the company’s work is custom, with stone islands and granite counters the most popular finishes. “Customers want a pretty, functional space,” he says, “but since they can’t use it year-round, they tend to limit built-ins to a gas grill, refrigerator, and trash-recycling, pull-out cabinet.”

Faulk says the company is seeing “significant growth” in the Northeast, Midwest, and Canada. However, he emphasizes that product durability is particularly important in areas where weather can be extreme. “We’re based in the Midwest,” he says, “so we put a lot of emphasis on engineering our products to withstand harsh climates and perform just as well on a frigid winter day in Kalamazoo as a pleasant day in Los Angeles.”

Nick Straubel, director of marketing for Summerset Professional Grills, says 80% of the company’s grills are sold as built-in units for outdoor kitchens. “Built-ins are really gaining in popularity all over the country,” he says.

A cozy niche is created by Eldorado Stone and a narrow pergola. Photo Courtesy: ©2017 Eldorado Stone. www.eldoradostone.com.

Millennials Impact the Category

A survey of Millennials by the Urban Land Institute in “Builder Online,” indicates that 70% expect to be homeowners by 2020. But a study by apartment rental website Apartment List, reveals this aspiration may not be realistic. The study shows that while 80% of Millennials want to buy homes, 72% say they can’t afford it. In fact, 70% of Millennials surveyed had saved less than $1,000 for a down payment.

Just 30% of “older” Millennials, ages 25 to 34, say they would be able to save enough for a 10% down payment in the next three years, and only 15% could achieve that goal in one year. Still, experts say the generation will influence the homebuilding and remodeling market for decades to come, so it’s important to understand what makes this group tick.

The good news is Millennials are particularly interested in creating outdoor living areas for socializing with family and friends. According to the Urban Land Institute, 60% of Millennials say having an outdoor living space is a must-have and, more so than any other generation, they desire a patio, deck, or porch.

A study by Better Homes & Gardens shows 75% of Millennials want relaxing outdoor spaces with vegetable gardens, fenced enclosures, decks, and “she sheds” for entertaining. Builder magazine reports 51% of Millennials want to decorate outdoor spaces like indoor spaces, with comfortable seating, fire features, exterior lighting, dining areas, and outdoor kitchens.

There’s just one thing holding them back: lack of funds.

Market research firm IRI reports 55% of Millennials say they are sacrificing to make ends meet. The report suggests this is due to their “stage of life,” student loan debt, and the lingering impact of the Recession, but also because of the generation’s thrifty nature. An eMarketer Retail Report calls Millennials the “Frugal Generation,” and says the group has developed a habit of careful and conservative spending, especially when it comes to material things. It says 86% shop for lower-price brands, a rate considerably higher than the population average of 74%.

Lights! Fire! Action! This is certainly a well-appointed Outdoor Room. Photo Courtesy: ©2017 STB Landscape Architects. www.stblandarch.com.

Gardens Grow

According to the color experts at Pantone, “greenery” is the color trend of 2017. The yellowy-green shade is bringing a feeling of outdoors into interior spaces through decorative items, fabrics, wall colors, and plants. But outdoors, experts say the American yard is shrinking.

The 2017 “U.S. Houzz Landscaping Trends Survey” reveals 28% of homeowners are reducing their front lawns, and 14% say they are removing them entirely. Nearly 73% of landscape architects surveyed by ASLA say consumers are requesting reduced lawn areas. NALP also reports homeowners are reducing the size of traditional lawns and incorporating native grasses that require less water, fertilizer and maintenance.

The 2017 “Garden Design Trends Report” from Garden Design magazine says consumers want to cut back on day-to-day maintenance and are choosing slow-growing dwarf shrubs that need less pruning and upkeep. Homeowners also are requesting pollinator-friendly gardens with nectar-producing plants to naturally attract bees, butterflies, hummingbirds and other pollinators.

HGTV’s “Trends in Backyard Design” for 2017 shows an increase in “blended gardens,” combining edibles with ornamentals, and notes more homeowners are carving out space in the backyard for vegetable gardens, fruit trees, bees and chickens.

A stacked-stone fire pit provides a focal point for this Outdoor Room. Photo Courtesy: ©2017 Paradise Restored landscaping & exterior design. www.paradiserestored.com.

Growth in Prefab Options

Tom Parks, vice president of Coastroad Hearth & Patio in Shallotte, North Carolina, says adding a design professional to the staff helped the store “easily double” its outdoor kitchen business in 2016. Another factor in the growth: adding a selection of modular, prefab, and partly finished island options. “These plug-n-play units are less time-consuming and easier for us to execute, so they’ve allowed us to do more projects,” he says.

Value-priced, prefab outdoor kitchens, now available from an increasing number of manufacturers, also greatly expand the customer base for Outdoor Rooms. For instance, Bull offers outdoor kitchens starting at $3,500 for a simple island with a grill, storage and a refrigerator ($2,500 without refrigerator), putting it within reach of homeowners with modest budgets.

Other value-priced prefab or modular outdoor kitchens are available from Summerset Professional Grills, Coyote Outdoor, Sierra Outdoor Designs, Outdoor GreatRoom Company, Napoleon Grills, Saber Grills, Select Outdoor Kitchens, Sunset Bay Outdoors, Housewarmings, NatureKast Outdoor Cabinetry by Trex, and others.

Simplicity is most-often elegant as well. Photo Courtesy: ©2017 FireRock Building Materials. www.firerock.us. Luker Photography. www.lukerphotography.com. Christopher Architecture & Interiors. www.christopherai.com.

Retailers: Ya Gotta Be In It to Win It

In today’s increasingly difficult retail climate, Outdoor Rooms can be a bright spot for independent brick-and-mortar retailers. According to Hearth & Home’s latest reader survey, 53% of specialty retailers now sell the concept of the Outdoor Room, and 68% report more of their customers are creating Outdoor Rooms.

These smart retailers get the math. When you sell a freestanding grill, you sell one product – and if you’re lucky, some complementary accessories. But an Outdoor Room sale often includes multiple appliances, island cabinetry, a fire pit or fireplace and, consequently, adds up to a much bigger payday. Even retailers who don’t get involved in design and construction, but simply supply the appliances on Outdoor Room projects, can see a big boost to the bottom line.

“Selling a custom outdoor kitchen requires more than a simple online transaction,” says Faulk. Offering outdoor kitchen products and services helps distinguish retailers from online sellers.