The DIY Consumer - US - March 2008

Table of Contents

• Scope and Themes
• What you need to know
• Definition
• Data sources
• Sales data
• Consumer survey data
• Abbreviations
• Terms
• Executive Summary
• Market Size: Broad home channel market vs. smaller DIY market
• Competitive Context: Housing downturn, green trends and imports
• Segmentation: Flooring shows strong growth, as do electrical and "other" DIY products
• Retail Channels: Home centers dominant, despite slowing sales in 2007
• Home sales are key to current downturn in DIY market
• Home repair and renovation fall in 2007
• Media and the Internet drive and shape DIY market
• Baby Boomers and younger, multi-ethnic DIYers
• Home Depot posts sales decline for first time in 2007
• Branding strategies of the largest DIY retailers
• Innovations in green products, retailing strategies and departments
• Advertising and promotion
• Purchasing of DIY products and retail choice
• DIY activity, attitudes and information for DIY projects
• Gender: Traditional gender roles shape DIY activity, outreach to women is warranted
• Age: Younger DIYers take on more projects and tend to use the Internet for information
• Income: Income drives DIY activity overall
• Ethnicity: Asians and Hispanics are enthusiastic DIYers and key to growth in market
• Barriers to DIY activity: Money, skills and tools
• Market Size and Forecast
• Slower growth predicted in broader home channel through 2012
• After strong growth through 2006, sales slow in 2007 with the slumping housing market
  • Figure 1: Total U.S. sales and forecast of broader home channel market at current prices, 2002-12
  • Figure 2: Total U.S. sales and forecast of broader home channel market at inflation-adjusted prices, 2002-12
• Within more limited DIY-only market, uneven growth prevailed in 2002-06
  • Figure 3: Total U.S. sales and forecast of DIY market at current prices, 2002-12
  • Figure 4: Total U.S. sales and forecast of DIY market at inflation adjusted prices, 2002-12
• Competitive Context
• Key Points
• Downturn in the housing market has dampened DIY sales in 2007
• Gloomy housing prognosis for 2008, although federal legislation could stimulate market
• Suffering losses and facing market saturation, home centers limit expansion and take a more conservative approach
• Green living trends fuel environmentally-friendly products and practices
• Energy conservation and concern with energy costs drive green movement
• Government activity and legislation drives demand for green products
• Changes in building codes and promotion of green homes
• Government promotion of energy efficient practices and products
• VOC regulations
• Imports play major role in DIY market, also pose safety concerns
• Segment Performance
• Key points
• Paint sales stagnate while innovations in flooring drive sales
• Sales in the "other" category show growth above market average
  • Figure 5: U.S. sales of DIY products, segmented by type, 2004 and 2006
• Segment Performance--Paints, Wallpapering and Supplies
  • Figure 6: U.S. DIY sales and forecast of paints, wallpaper and supplies, 2002-12
• Segment Performance--Flooring
  • Figure 7: U.S. DIY sales and forecast of materials for hard surface flooring, 2002-12
• Segment Performance--Electrical Supplies, HVAC
  • Figure 8: U.S. DIY sales and forecast of electrical supplies, heating and cooling equipment, 2002-12
• Segment Performance--Plumbing
  • Figure 9: U.S. DIY sales and forecast of plumbing supplies and equipment, 2002-12
• Segment Performance--Tools and Equipment for Painting and Wallpapering
  • Figure 10: U.S. DIY sales and forecast of tools and equipment for painting and wallpapering, 2002-12
• Segment Performance--Other DIY Products
• Building materials
• Windows
• Lumber
• Tools
  • Figure 11: U.S. sales and forecast of other DIY supplies, 2002-12
• Retail Channels
• Key points
• Home centers maintain as building material dealers see sales tumble
• Specialty retailers and hardware stores struggle to maintain market share
• Department stores see sales fall while general merchandisers carve out growing share of DIY market
  • Figure 12: U.S. sales through home improvement channels, by retail channel, 2005 and 2007
• Retail Channels--Home Centers
  • Figure 13: U.S. home channel sales through home centers, 2002-07
• Retail Channels--Other Building Material Dealers
  • Figure 14: U.S. home channel sales through all other building material dealers, 2002-07
• Retail Channels--Floor Covering Stores
  • Figure 15: U.S. home channel sales through floor covering stores, 2002-07
• Retail Channels--Hardware Stores
  • Figure 16: U.S. home channel sales through hardware stores, 2002-07
• Retail Channels--Wallcovering and Paint Stores
  • Figure 17: U.S. home channel sales through wallcovering and paint stores, 2002-07
• Retail Channels--Nurseries, Garden Centers, Farm Suppliers
  • Figure 18: U.S. home channel sales through nursery, garden centers and farm suppliers, 2002-07
• Retail Channels--Outdoor Power Equipment Dealers
  • Figure 19: U.S. home channel sales through outdoor power equipment stores, 2002-07
• Retail Channels--Department Stores, Mass Merchandisers
  • Figure 20: U.S. home channel sales through department stores and mass merchandisers, 2002-07
• Retail Channels--General Merchandise Stores
  • Figure 21: U.S. home channel sales through all other general merchandise stores, 2002-07
• Market Drivers
• Home ownership is important driver of DIY activity
  • Figure 22: Undertook home improvement in the past 12 months by home ownership, May 2006-June 2007
• New and existing home sales drop sharply in 2006 and 2007
  • Figure 23: Sales of new and existing homes, 2002-07
• In longer term, the housing market should recover and drive DIY sales
• Maintenance, repair and improvements expenditures fall in 2007
  • Figure 24: Expenditures for residential repairs and maintenance, and improvements, 2002-07
• Media influences spur interest in DIY activity
• The Internet takes a growing role in the DIY market
• Demographic drivers: younger homeowners and Baby Boomers
  • Figure 25: Population by age, 2002-12
• Demographic driver: an increasingly multi-ethnic population
  • Figure 26: Population by race and Hispanic origin, 2002-12
• Leading Companies
• Key points
• 2007 is a challenging year for all major retailers, especially Home Depot
• Smaller retailers may be better positioned to attract DIYers in future market
• Mixed results from 2005-07 for the five largest DIY retailers
  • Figure 27: Sales of leading DIY companies, 2005 and 2007
• Brand Qualities
• Home Depot--a "back to basics" brand--focused on innovation and service
• Lowe' s--a softer, more female-friendly brand with exclusive, trusted product lines
• Menards--an eclectic, value-oriented "catch all" store, rooted in Midwestern tradition
• Wal-Mart--the "Low Prices--Always" brand gives company leverage with casual DIYers
• Sears--A once highly reputed brand sees prestige and sales decline
• Hardware co-operatives emphasize quality and highlight personal customer service and accessible help
• Innovation and Innovators
• Key points
• Green products and practices are an important area of innovation
• Innovations in technology and style
• Innovations in retailing: new formats and retail approaches
• Home Depot--New "Designer Center", "Project Store", "Store Standard" pilot and smaller format stores
• Menards--Expanded product offerings, "store within a store" and joint retail centers/housing developments
• Hardware Co-operatives: focus on new websites, new store designs and customer service and eco-based initiatives
• Innovative retailing strategies in key segments: paint and tools
• Paint: expanded offerings, design centers, color matching services and new kiosks
• Tools: "Store within Store" format, expanded private label offerings and hands-on stations to try products
• Advertising and Promotion
• Overview
• Advertising expenditures of the largest retailers
  • Figure 28: Major home improvement store advertising spend in measured and unmeasured media, 2005 and 2006
  • Figure 29: Advertising spending in measured media, by category, 2006
• Advertising profiles for major retailers and hardware cooperatives
• Home Depot
• Lowe' s
• Menards
  • Figure 30: Television ad -- Menards, 2007
• Wal-Mart
• Sears
• True Value
• Ace Hardware
• Do it Best
• Usage--Products Purchased
• Key points
• Homeowners and upper-income families are key groups to target
  • Figure 31: Undertook home improvement in the past 12 months by home ownership, May 2006-June 2007
  • Figure 32: Undertook home improvement in the past 12 months, by marital status, May 2006-June 2007
  • Figure 33: Undertook home improvement in the past 12 months, by age, May 2006-June 2007
  • Figure 34: Undertook home improvement in the past 12 months, by household income, May 2006-June 2007
• Types of home improvement purchases made in the past 12 months
  • Figure 35: Types of home improvements products purchased in past 12 months, by household income, May 2006-June 2007
• Retailers used for DIY Purchases
• Key points
• Home improvement stores shopped in the last three months
  • Figure 36: Specific home improvement retailers shopped in previous 3 months, by home improvement in the past 12 months and home improvement by self or hh member, May 2006-June 2007
• Number and Type of DIY Projects
• Key points
• Gender roles endure, though female consumer base may be cultivated
  • Figure 37: Type of DIY projects undertaken, by gender, January 2008
• Young DIYers undertake the most projects
  • Figure 38: Number of DIY projects undertaken, by age, January 2008
  • Figure 39: Type of DIY projects undertaken in past 12 months, by age, January 2008
• Outdoor living key for upper income DIYers
  • Figure 40: Number of DIY projects undertaken in past 12 months, by household income, January 2008
  • Figure 41: Type of DIY projects undertaken in past 12 months, by household income, January 2008
• Attitudes--Enjoyment of DIY Work and How Work is Shared and Completed
• Key Points
• Men enjoy and complete more projects
  • Figure 42: Enjoyment of all projects and preference for professional help, by gender, January 2008
  • Figure 43: How work shared/completed, by gender, January 2008
• Younger DIYers more engaged
  • Figure 44: Enjoyment of all projects and preference for professional help, by age, January 2008
  • Figure 45: How work shared/completed, by age, January 2008
• Attitudes and Motivations--Where DIYers Seek Help and Information
• Key Points
• Sources of information on DIY home improvement projects
  • Figure 46: Source of information for DIY projects, by age, January 2008
  • Figure 47: Source of information for DIY projects, by household income, January 2008
  • Figure 48: Source of advice when "stuck" with DIY project, by age, January 2008
  • Figure 49: Source of advice when "stuck" with DIY project, by household income, January 2008
• Attitudes and Motivations--Those Who Don' t Undertake DIY Projects
• Key Points
• Reasons for not undertaking a project
  • Figure 50: Reasons for not undertaking a project, by gender, January 2008
  • Figure 51: Reasons for not undertaking a project, by age, January 2008
  • Figure 52: Reasons for not undertaking a project, by household income, January 2008
  • Figure 53: Things that would motivate taking on a DIY project, January 2008
• Race and Ethnicity
• Key points
• Hispanics are key group to target
  • Figure 54: Undertook home improvement in the past 12 months by race/ethnicity, May 2006-June 2007
• Types of home improvement purchases made in the past 12 months
  • Figure 55: Types of home improvements products purchased, by race/ethnicity, May 2006-June 2007
• Hispanics show strong DIY Interest
  • Figure 56: Number of DIY projects undertaken, by race/ethnicity, January 2008
  • Figure 57: Type of DIY projects undertaken, by race/ethnicity, January 2008
  • Figure 58: Enjoyment of all projects and preference for professional help, by race/ethnicity, January 2008
  • Figure 59: How work shared/completed, by race/ethnicity, January 2008
  • Figure 60: Source of information for DIY projects, by race/ethnicity, January 2008
  • Figure 61: Source of advice when "stuck" with DIY project, by race/ethnicity, January 2008
  • Figure 62: Reasons for not undertaking a project, by race/ethnicity, January 2008
• Simmons Cohort Analysis
  • Figure 63: Undertook home improvement in the past 12 months by household income, May 2006-June 2007
• Appendix: Other Useful Consumer Tables
  • Figure 73: Types of home improvements products purchased, by age, May 2006-June 2007
  • Figure 74: Types of home improvements products purchased, by who undertook improvement, May 2006-June 2007
  • Figure 75: Types of home improvements products purchased, by size of household, May 2006-June 2007
  • Figure 76: Number of DIY projects undertaken, by gender, January 2008
  • Figure 77: Enjoyment of all projects and preference for professional help, by household income, January 2008
  • Figure 78: How work shared/completed, by household income, January 2008
  • Figure 79: Source of information for DIY projects, by gender, January 2008
  • Figure 80: Source of advice when "stuck" with a DIY project, by gender, January 2008
• Appendix: Trade Associations