DIY and Home Improvement: The Future is Digital

Home is where the heart is - but it is difficult to imagine anyone wanting to spend quite so much time indoors as we have had to over the past locked-down year. With a lot of time on our hands and rooms having to double or triple up their primary purpose, a serious DIY boom got underway.

Specialist UK home and garden retailer Homebase said it sold enough paint over the year to cover Britain’s iconic clock tower Big Ben almost 10,000 times, with demand particularly high for shed paint and bold hues with personality. In March 2021, Farrow & Ball’s Hague Blue had racked up almost 47,000 hashtags on Instagram and the premium paint firm reported a bonanza year, delivering up to 13 tonnes of its top-quality paint a day at its peak last year, up from about one tonne pre-pandemic. 

US home improvement marketplace Porch.com has suggested that the amount of money Americans spent on home improvement over the course of 2020 was the highest in history. A survey by the firm found that 76% of homeowners in the United States had carried out at least one home improvement project since the start of the pandemic.  

While home improvement retailers were technically allowed to open, considered essential by governments, customers stayed at home and went online instead. DIY ecommerce surged. But what about the future? This report outlines the priorities for the DIY and home improvement sector in a shopping environment defined by new consumer requirements and characteristics.  

The year DIY went digital

In the peak pandemic month of April last year, home improvement app downloads smashed new records. According to data from app intelligence provider Apptopia, in the US, Home Depot’s app reached 706,000 downloads. Lowe’s app was downloaded 527,000 times, while Menards’ app reached 116,000. For all three retailers added together, the downloads were almost 70% higher than in April 2019. 

Also according to Apptopia, in April, downloads of Room Planner, a 3D interior design visualisation tool, soared 233% year-on-year on US smartphones. Wayfair was downloaded 1.7 million times in the month - a new record. 

Pre-pandemic, shoppers were of course already using digital touchpoints, such as mobile apps, social media and videos, along the path to purchase, but the COVID-19 crisis was an inflection point for digital adoption - and this movement was particularly suited to the DIY space. Stuck inside and wanting more attractive and emotionally satisfying home spaces, social media sites, like Pinterest and Instagram, became the ideal forums for inspiration and ideas, while the increased accessibility of  virtual ‘how to’ guides, on-demand instruction videos and DIY livestream events gave confidence to DIY enthusiasts trying a project for the first time as well those looking to challenge their skills.

In the US, Home Depot and Lowe’s, two of the world’s largest DIY retailers, were already in the middle of billion-dollar supply chain transformations and digital investment programmes when the pandemic hit, and so were well positioned to respond quickly. During the year, Lowe’s launched curbside pickup and opened up a direct-to-consumer ecommerce fulfilment centre in California - it’s second - with more in the pipeline as part of an infrastructure programme that will also see it build 50 cross-dock terminals and expand its distribution network. 

Lowe’s moved its main site to a cloud-based platform in 2020 to handle greater traffic and speed up enhancements. It also launched a virtual consultation service called Lowe’s for Pros JobSight, an artificial reality video chat site allowing contractors, plumbers and other “pros” to conduct virtual site visits with their customers and identify repair and maintenance work. Sales at Lowes.com more than doubled in its third quarter financial period ended October 2020. 

Rival Home Depot reaped the benefit of its One Home Depot investment programme it launched in 2017 to blend its physical and digital businesses. The firm, which began live streaming workshops that it typically held in stores pre-COVID-19, said total sales for the year grew by $21.9 billion to $132.1 billion, up by about a fifth compared to fiscal 2019.

Home Depot said ecommerce was responsible for 86% of those sales, with record traffic to its website and other digital touchpoints. 

With the 2021 spring selling season now underway and promising to be even better than last year as a result of the vaccine rollout programme and people bursting to get outside, both DIY specialists have invested heavily in digital capabilities to capitalise on the enthusiasm for home and garden improvement. Lowe’s was giving away free garden-to-go kits for curbside pickup for those who registered online a week before.  
 
In the UK, Kingfisher, which owns B&Q and Screwfix, reported exponential growth in sales and profits for its fiscal 2020 period, accelerating its ecommerce progress by at least two years, the firm said. Reporting its annual results to end of January 2021, Kingfisher said it had transformed operations and enhanced capabilities to meet a surge in digital adoption, adding 10 million new online customers. Overall web sales grew 158% year on year to account for 18% of total group sales, more than double the 8% share pre-pandemic.

Click and collect sales at Kingfisher were in high demand, up 226% to account for more than three-quarters of all ecommerce sales, up from 62% in the previous financial year. Garden and home retailer Homebase also benefited from its investment in supporting DIY enthusiasts virtually. It reported almost 7 million visits to its site’s advice pages in 2020, double that of the previous year.  

Meanwhile, in its annual report, Stanley Black & Decker, owner of tool brands Black + Decker, DeWalt and Craftsman, said by May last year, its tool business had experienced unprecedented growth, running between 30% and 40% higher than the previous year in the US, with the “favourable demand trend” extending to Europe and other markets as the year progressed. 

The majority of this growth came from ecommerce. Stanley Black & Decker CEO James M. Loree said that the unexpected surge in online demand “proved to be an all-out test of our supply chain resiliency and ability to serve the growth”. This is evidence of the growing importance of assortment, availability and flexible fulfilment capability in the new and more complex world of retail. 

Loree, who has been steering a massive transformation of the power tools business since his appointment five years ago, predicted double-digit growth for Stanley Black & Decker’s ecommerce business for the foreseeable future in the firm’s 2020 annual report. He said he was focused on investing in digital capabilities and new talent to realise the scale of opportunity.
 

Uniquely positioned to nail ecommerce

"As stuck-at-home consumers discovered fresh enthusiasm for painting, gardening and getting round to small jobs they previously hadn’t the time to do, home and DIY fared well in a challenging and disruptive retail landscape, says Xian Wang, VP, Retail Insight, Edge by Ascential. “In the US sales in this category increased by 5% year-on-year in 2020, while consumer electronics and clothing declined by 15% and 26% respectively, showing a re-prioritisation of household budgets.” 
 
Wang continues: “Home and DIY sales increased by 20% in South Korea in 2020, the best performing market compared to other large markets, and decreased by 12% in Italy, the worst performing market; however, even in Italy home specialists performed better than clothing (-29%), consumer electronics (-17%), and department stores (-22%).  
 
“The pandemic created seismic operational complexities for retail as shopper behavior changed almost overnight. The retailers and brands that were successful over this period were those that could adapt quickly to unprecedented demand for click and collect, home delivery and convenience, while also catering for the accelerated adoption of digital touchpoints, such as social media, YouTube and mobile apps.”  
 
“Even, when the economy opens again, consumer behaviour will not change back and future growth in the category - like all categories, will disproportionately come from online.”  
 
By 2025, ecommerce will make up 28% of market share in DIY and home improvement, up from 21% in 2020 in the US, with similar growth expected in Europe, but in the UK by 2025, we expect ecommerce will account for almost 50% of market share in the category, growing market share by 10% in five years.
 
Jonathan Jagard, Senior Manager, Ecommerce Insights at Edge by Ascential says ecommerce is actually a fantastic opportunity for brands specialising in tools and machinery because of their high average price point, which can offset the cost of fulfillment and distribution.     
 
He adds: “It’s also difficult to commoditise power tools. Banners like DeWalt, Craftsman and Makita have unique brand loyalty. People who use these brands don’t tend to switch like they might mustard or batteries. These DIY brands can enjoy relationships with their customers that can last 50 or 60 years, which is an enviable position to be in. These brands say something about them - they’re part of a community; in a similar way to the relationships some people have with sports teams, like baseball in the US or football in Europe. 

“This makes these tool brands perfectly positioned to take advantage of growing online sales, as long as they are effectively optimising all digital touchpoints to keep strengthening their communities through inspiration, support, entertainment and enablement.”

In fact, for DIY and garden appliances, like drill sets, trimmers, blowers and other costly home improvement supplies, it is even more important for brands in these categories to understand their share of voice online and the search terms that their target shoppers are using to find their products because of the lifespan of the purchase. 

“The research a consumer does to find shampoo will be nothing compared to the exploration a consumer will undertake to find the right leaf blower and drill set,” says Gregory Grudzinski, Senior Insights Manager, Edge by Ascential. “The pre-shop in DIY/HI is hugely important, and that goes for tools but also for paint and fixtures in the home. Shopper guides and visualisation tools that bring to life how the appliances work and what they can do, and for the home improvement items, how they will look in context will be key to differentiating from the competition early on in the shopper journey.

“Brands can help retailers understand how consumer markets are segmented - a combination of price, functionality and maybe aesthetics. Retailers typically rely on the brands to provide shopper insights and smart brands might be able to use a "give-to-get" strategy to convince retailers to share detailed website data in return for category-building consumer insights.”

Marketplaces - particularly Amazon - will be the engines of future DIY growth

As in other categories, DIY and home improvement have also been subject to retail disruption wrought by Amazon’s power and ability to offer personalisation at scale.  

In the most mature ecommerce market, the US, most shoppers begin their purchasing journey on Amazon. After exhausting the scramble for hand sanitiser and disinfectant wipes at the outset of the pandemic,  the search turned to keywords related to home improvement. From Q2 to Q3 of 2020, the search rank for the term “home improvement” soared from below 40,000 to above 20,000 and this trend has continued into 2021. 

At the end of March 2021, the search ranking for “home improvement” was still climbing, ending Q1 of this year above 15,000.     

Edge by Ascential data shows that many wannabe home improvers may not have necessarily decided on a DIY project before turning to Amazon, with Prime becoming the go-to medium for discovery and inspiration to improve homes and gardens. Home improvement shows on Prime were trending in Q1 of 2020, while the generic search term “home improvement items” soared from a ranking of 450,000 in Q1 of 2020 to almost 50,000 in Q2 of 2020. 

“Once DIY customers had exhausted their general home improvement research, they started to become more specific around supplies necessary for the projects they’d chosen, with the focus being indoors initially and then moving to their outdoor spaces as the weather got warmer,” says Stephanie Demascus, Senior Insights Manager, Edge by Ascential.” 

To put Amazon’s growth in the DIY and home improvement category in perspective, between 2017 and 2019, the marketplace grew US sales in this category by 34%. In 2020, this figure almost doubled, with DIY-related sales of 63%. In comparison, Home Depot in the US grew sales by 64% in 2020 and Lowe’s 74%. 

Edge by Ascential analysts predict that by 2025, Amazon’s US DIY and home improvement sales will almost double from 2020, while Walmart will emerge as a much bigger player and competitor in the space, as evidence suggests that homeowners in the US and other major markets will continue to prioritise their homes even as other discretionary spending shrinks in a difficult economic climate.   
We forecast that Walmart DIY sales will more than double - growing by 114% - between 2020 and 2025. 

“The changes in the shopping landscape that the pandemic has ushered in has been as true in the home improvement category as for others - and possibly more so, with the opportunities to inspire and support DIY enthusiasts through the virtual environment as well as the ease of offering tailored solutions, to home products and accessories like windows or sofas,” says Catherine Martelly, Insights Manager, Edge by Ascential. 

“But at the same time, particularly for supplies, like tools and lawn care appliances, that are technical and complex to use, or smokers or fancy garden accessories like water fountains, product pages (PDPs) become incredibly important. ‘How to’ videos and specific assembly instructions must adequately replace the human customer support buyers would have access to in-store - or brands will be counting the cost of refunds when things go wrong.”
 

To find out more about how Edge by Ascential can help you succeed in digital commerce fill out the form below to be contacted by one of our Edge experts. On top of this, if you are interested in finding out more about how DIY and home improvement brands are adapting to the shift to ecommerce register for our DIY in the Digital Age Webcast by clicking this link now!