In Q1 2023, the home improvement category continued to recover from a sluggish housing market and the significant pull-forward of demand over the pandemic. Midway through 2023, we dove into the visitation metrics for the category leaders – The Home Depot and Lowe’s Home Improvement – to take a closer look at foot traffic to both brands.
Visits Keep Climbing
Despite a cool housing market overall, new, single-family home sales likely played a part in the continuing resilience of Home Depot and Lowe’s in H1 2023. New homes require plenty of finishing touches inside and out – from fixtures and paint to landscaping and patio furniture – and warmer weather appears to be encouraging consumers to take on these projects.
Since the end of Q1 2023, year-over-year (YoY) visits gaps have tightened every month for both Home Depot and Lowe’s, narrowing to just 4.2% down for both brands in July 2023.
Big Homes and Wallets
Diving deeper into the demographic characteristics of Lowe’s and Home Depot’s visitors indicated that Home Depot drove more traffic from wealthier and larger households in H1 2023: Trade Area Analysis revealed that in H1 2023, consumers in Home Depot’s captured market had a median household income (HHI) of $74.4K – higher than the median HHI of Lowe’s captured market ($69.1K). Home Depot’s trade area also had more persons per household (2.67) than Lowe’s (2.58). This suggests that Home Depot’s visitors may reside in larger family homes – with the potential to need more improvements and upkeep – and have the budgets to take on more projects.
While a captured market with a higher median HHI and more persons per household may be an advantage for Home Depot in some respects, the trade area differences between the two brands also highlights the success of Lowe’s brick-and-mortar strategy. Lowe’s recent emphasis on rural consumers and smaller projects is likely driving fresh traffic from consumers that don’t typically visit Home Depot – something that could even more important considering the recent decrease in cross-shopping between the brands.
Taking on the Pros
While Lowe’s and Home Depot have the potential to drive foot traffic from different consumer segments, both retailers have established strategies to cater to professional contractors. Further analysis of visitor demographics revealed that both Lowe’s and Home Depot had a higher share of visitors from professional industry categories than the nationwide average.
According to the STI: Workplace dataset, the share of construction employees in Lowe’s trade area was 82% higher than the nationwide average while Home Depot’s share was 74% higher in H1 2023. The brands’ captured markets also had an outsized share of workers in “Installation, Maintenance, and Repair,” “Farming, Fishing, and Forestry,” and “Building and Grounds Clearing and Maintenance.”
Notably, Lowe’s large market share from the “Farming, Fishing, and Forestry” segment could indicate that its new store concept with widened farm and ranch offerings is already succeeding in attracting these professionals.
Bring it Home
A struggling housing market continues to take its toll on visits to Home Depot and Lowe’s. However, these brands remain resilient by finding ways to build strong foot traffic foundations. In H1 2023, new home buyers presented an opportunity for home improvement retailers as did rural markets and Pro consumers.
For updates and more data-driven foot traffic insights, visit Placer.ai.