HIRI event starts strong, raises cautions
Chicago — Before the first speaker could take the podium at the Home Improvement Research Institute (HIRI) Fall Conference, a residential construction report for September stole the show with news of a 15.0% increase in total starts.
The tone was set. One presenter pointed to an average forecast of 924,000 starts in 2013, a figure drawn from 10 estimates ranging from a high of 1.1 million and a low of 800,000.
But home improvement retailers were also warned of various challenges — among them were the rise of the mass merchant and the move to online shopping.
A Stevenson Co. presentation pointed to the emergence of discount retailers as a source for home improvement project materials (see chart). Lurana McParland of Stevenson described the 27% shopping rate for stores such as Walmart, Target and Meijer as a possible “game changer” for home improvement retailing. And Walmart is going hard at home improvement with a Projects Made Simple that blends in store simplicity with online details.
Amazon, meanwhile, is expected to expand in home improvement. Keep an eye on Amazon’s Subscribe & Save program, according to Kantar’s Laura Kennedy. It’s an automatic-replenishment program that started in grocery and is spreading to new categories — including the hardware store staple of pet supplies — with 5% to 15% discounts. The online giant is also looking to “snag pros” with a replenishment program called Amazon Supply, she said.
Hardware stores were offered a slice of good news, also. As Kantar stats showed 11% of all shoppers said they are visiting hardware stores more often than they did in the previous year, younger customers said it more. Generation Y had 13% step up their hardware store shopping, and Generation X had 14% do the same.
Hovering over all the numbers are societal trends that are changing the way we shop. As a result, home product marketers need to adapt to a world of instant communication and online damage control, according to Winston Ledet, chief operating officer for Premium Retail Solutions and former Home Depot merchant.
Almost 40% of consumers are using social media to research home improvement, Ledet said. “If you’re not managing this part of your business, then you’re leaving a huge amount of value on the table.”