The Home Improvement industry has been on a steady growth path of late. In 2020, the industry was valued at USD 887.53 Billion and is projected to have a growth rate of around 4.5% yearly and by 2026 we are looking at an industry worth more than USD 1.2 Trillion globally.
The rising number of millennial homeowners who have varied tastes in designing their perfect space and the infusion of smart home components in the industry are giving rise to a whole new dimension in the sector. To add to that, the COVID 19 pandemic altered the daily lifestyle of millions of people worldwide. As people sheltered at home and found themselves with time saved from commutes at hand, they turned their attention to their living (and now working) spaces. Home Improvement projects, large and small, mushroomed everywhere.
A sizeable population of people has adapted to new ways of working for long durations from the comfort of their homes. Employers too found remote working to be useful and not impacting productivity, and they too do not want to rush to bring everyone back to the office. This is opening up newer Home Improvement opportunities.
With work from home becoming a norm, there will be a huge push for ergonomic workspaces at homes which will ultimately lead to more Home Improvement budgets being planned by consumers. Another key driver of growth in the Home Improvement industry is the rapid proliferation of digital in consumer markets.
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From ideas to purchase and implementation, consumers are increasingly depending on digital channels for their Home Improvement plans. Let us examine 4 ways in which digital is driving a Home Improvement boom:
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The big one – Internet Influence
Today there are over 4.6 Billion people with access to the internet or more than half of the global population (to put things in perspective). Surveys have pointed out that nearly 22 % of consumers who take up a Home Improvement project have been doing so under the influence of ads they viewed on social media or the internet right from their smartphones. For Home Improvement companies, this means that they have a huge consumer base lurking on the internet that plan their Home Improvement budgets purely from online references. As the internet population grows, so will the influence it has on planned investments made by consumers on a variety of Home Improvement projects.
A significant number of customers purchasing products for their Home Improvement projects still have a residual preference for a physical look and touch before buying the product. Additionally, there are challenges in shipping large items to homes from long distances for fully online purchases. Returns would make the experience even more complex. However, several major Home Improvement retailers have brought in a blended e-commerce model of operations wherein store inventory information, models, and demonstrations can be availed by customers online and then the product can be picked up from a nearby store after physical inspection. All promotions, offers, and pricing are available for reference online and the customer can even purchase without visiting the store if he or she doesn’t want a physical visit. Industry leaders have announced massive investments to make their businesses more friendly to e-commerce or, more precisely, to deliver the best omnichannel experience for customers whether they pick up products from the store or browse and purchase online.
Smart Home Growth
Over the past couple of years, there has been a marked increase in the number of smart home devices that people purchase. While initially, the focus for smart devices was entertainment like controlling music and video content with voice commands, today there are smart devices that manage almost all facets of a home from HVAC to lighting, plumbing, and security. The global smart home market is pegged to grow to a staggering USD 135.3 Billion value by 2025 and more smart home investments will result in more Home Improvement projects surrounding them so the home dwellers can exploit the full capabilities of these devices. As more consumers get to know the capabilities of digital platforms to make their homes smarter and safer, they will be tempted to buy goods that help improve the experience by integrating seamlessly with smart home tech. This is a reason why smart homes propel the growth of the Home Improvement sector as well.
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Informed Buying Decisions
An increasing number of Home Improvement companies are innovating to help customers make easier decisions. For instance, some offer an augmented reality-enabled app to help customers visualize the placement of lighting fixtures in a room. Such technology helps customers be better informed about their buying decisions and can drive their purchasing journey forward. In the past, customers had to buy a product and get it installed and then only have a complete look and feel of how the product integrated into their homes. For fear of purchasing the wrong product, many deferred their buying decision. This perception has changed thanks to the proliferation of digital avenues. Digital innovations are reducing the dissonance in the buying decision and lowering the entry barriers for even first-time Home Improvement shoppers.
These examples show that the Home Improvement market may well be propelled into its next level of growth thanks to the growing interest of digital-savvy consumers. With more innovative IoT and AI-enabled home devices and connectivity products being launched in the market, the scope for sustained growth of spending from consumers is growing. Home Improvement retailers will be racing to adopt digital means to capitalize on the coming growth.