Home Improvement Industry Planning for 2019 Part 2: Buyer and Purchase Behavior

December 10, 2018

Where are customers buying their home improvement products and which projects are they focusing on?

We will dissect home improvement buyer and purchase behavior in this installment in our 2-part Home Improvement Industry Planning for 2019 series. Read Home Improvement Industry Planning for 2019 Part 1: The Big Picture here.

Do customers prefer to buy their hardware materials from a hardware store or online? We will examine where customers buy their home improvement products, which categories they make purchases in, compare online to in-store purchases and include a revenue forecast. At the end, we will answer the question we asked in part 1 of this series: Will 2019 be the year of tackling home improvement projects?

Unless otherwise sourced, all data is from the  Planning for 2019 in Home Improvement webinar presented by Askuity.

DIY Store Selections

Customers can buy materials for their DIY projects from several different types of retailers: home centers, hardware store, warehouse membership club, lumberyard, etc.

The overwhelming majority buy from home centers like Home Depot or Lowes. Hardware stores are locked into the #2 DIY purchase location type. Millennials and Gen X are keeping hardware stores in this spot because they regard hardware stores as having better service, better locations and a better customer experience, home improvement industry expert Grant Farnsworth noted in the Planning for 2019 in Home Improvement webinar.

Below is the percentage of DIY purchases made in home centers, hardware stores, discount stores and over the Internet for the past 5 years.

Home centers:

72% of all DIY purchases in 2018

72% of all DIY purchases in 2016

72% of all DIY purchases in 2014

68% of all DIY purchases in 2012

72% of all DIY purchases in 2010

Hardware stores:

8% of all DIY purchases in 2018

7% of all DIY purchases in 2016

7% of all DIY purchases in 2014

7% of all DIY purchases in 2012

8% of all DIY purchases in 2010

Discount stores:

7% of all DIY purchases in 2018

5% of all DIY purchases in 2016

5% of all DIY purchases in 2014

7% of all DIY purchases in 2012

6% of all DIY purchases in 2010

Internet:

6% of all DIY purchases in 2018

6% of all DIY purchases in 2016

6% of all DIY purchases in 2014

6% of all DIY purchases in 2012

5% of all DIY purchases in 2010

Category Purchases

Now that we have a clear idea of where customers are making their purchases, what purchases are they making? Below is the rundown of trends in 15 purchase categories ranked highest to lowest in 2018.

1. 38% paint/accessories

5% increase from 2016

2. 27% plumbing

8% increase from 2016; highest increase among all categories

3. 24% lumber/building

3% increase from 2016

4. 22% hardware

7% increase from 2016

5. 22% electrical/lighting

6% increase from 2016

6. 21% kitchen/bath remodel

7% increase from 2016

7. 19% lawn and garden

12% decrease from 2016; highest decrease among all categories

8. 15% ceiling/floor covering

5% increase from 2016

9. 14% hand tools/accessories

5% increase from 2016

10. 13% power tools/accessories

6% increase from 2016

11. 11% doors/windows/millwork

1% increase from 2016

12. 11% major appliances

3% increase from 2016

13. 10% wall/window coverings

5% increase from 2016

14. 8% HVAC

3% increase from 2016

15. 8% outdoor living

2% decrease from 2016

Online vs. In-Store Purchases

Customers are still making most purchases from a store, but using the Internet for information-gathering. Consumers use online mediums to collect information about purchases over 90% of the time. Less than 7% of those purchases are made online.

The categories with highest online purchases are:

8% of wall/window covering

7% major appliances

6% of ceiling/floor covering

5% doors/windows

The share of online home improvement product sales in the U.S. increased 34% in 2017. Several categories, including hardware, lighting, ceiling fans, bath, faucets and storage outpaced the overall growth in 2017. Air filters and blinds were the fastest growing home improvement categories in ecommerce in 2017.

Revenue Forecast

The total spend on homeowner improvement spending shows consistent growth in the next few years.

2022 forecast: $324 billion spend

3.2% year-over-year growth

2021 forecast: $314 billion spend

3.5% year-over-year growth

2020 forecast: $304 billion spend

4.0% year-over-year growth

2019 forecast: $292 billion spend

4.8% year-over-year growth

2018 forecast: $279 billion spend

5.7%year-over-year growth

2017: $264 billion spend

6.7% year-over-year growth

2016: $247 billion spend

5.0% year-over-year growth

2010: $185 billion spend

0.3% year-over-year growth

2008: $204 billion spend

-4.1% year-over-year growth

Conclusion

We asked in Part 1 of this 2-part series if 2019 will be the year that consumers tackle home improvement projects. Indicators from part 1 of this series that point to yes:

steady household growth

steady home ownership rates

trend is toward remodeling rather than relocating

homeowners plan to spend $10,000 in home renovations

single-family unit construction projects are increasing; multi-family unit construction projects are leveling off but Millennial demand for townhouses is a growth spot in the multi-family sector

the high consumer confidence level

Indicators from this installment of the series that point to yes:

increases in most home improvement category spending

growth forecast in home improvement spending for the next 4 years

To answer the question, yes. Customers will help keep the home improvement industry thriving with all the home improvement projects they undertake in 2019.

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