In our most recent white paper, we took a closer look at the home improvement and decor sector. We examined how recent economic shifts are affecting the industry and how consumer attitudes are changing as the pandemic fades into the background and inflation takes center stage. Read on for some of the highlights, and check out the full report here.
Renters Are Buying More Home Improvement Products
Shifts in home ownership can have a significant impact on the home improvement sector. Now, homeowner rates are dropping in 2021 for the first time in five years, and rising housing prices and increasing rental costs are making it difficult for potential buyers to enter the market. With fewer homeowners, home improvement retailers may need to turn their attention to renters if they want to reach a growing customer base.
The good news is that many leading home improvement brands are already attracting a healthy share of renters. We looked at the trade area population for home improvement’s leading retailers and, using census data, we segmented the housing in the trade area into homes occupied by homeowners, renters, or vacant housing residents. (Vacant units are often defined as units for rent, sale, for seasonal or occasional use, and units for migrant workers).
The trade areas of some of the biggest home improvement brands – such as Home Depot, Ace, and Lowe’s – had a smaller share of homeowner occupancy, and a greater share of renters, than the national average. In fact, of the six home improvement and hardware stores surveyed, only Menards’ trade area included more homeowners than the share of homeowner occupants in the wider population. This means that many of those who already regularly shop at Home Depot, Ace, and Lowe’s are renters rather than homeowners.
While some of the renters are likely contractors who are visiting home improvement retailers to stock up on professional supplies, many are also individuals and families who are investing in DIY hobbies or in their current rental housing.
As rental prices continue to increase, more renters are likely to hold on to their current rental units and invest in their space instead of moving to a more expensive apartment or house. Given the large share of renters shopping at home improvement stores, brands that find a way to increase a renter’s basket size may well see a significant improvement in their bottom line.
For more insights into the home improvement and decor sector, download our white paper here.