We last checked in with the home improvement sector at the start of 2023, when visits were beginning to heat up after a muted 2022. With Q1 in the books, we decided to revisit the location intelligence metrics for the category leaders – Lowe’s and The Home Depot – to take a closer look at foot traffic to both brands so far in 2023.
Home Sales Drive Visits
Although a decline in home sales in 2022 and the significant pull-forward of demand over the pandemic are contributing to lagging visits, the home improvement sector continues to show its resilience. As sales of both new and existing homes have accelerated in recent months, year-over-year (YoY) visit gaps for both Lowe’s and Home Depot continue to shrink.
Between March 2022 and April 2023 Home Depot and Lowe’s YoY monthly visit gaps narrowed from 19.2% to 10.3% and 23.7% to 11.4%, respectively.
Remodeled Consumer Behavior
The pandemic introduced many consumers to the joys of DIY-ing, which likely contributed to high cross-visitation between the two biggest brands as consumers familiarized themselves with the space and shopped around for the perfect materials. But as more Americans return to in-person work and unemployment reaches historically low levels, consumers may have less time to invest in home improvement projects. At the same time, DIYers who maintained their interest in the space have likely gained experience and settled on a favorite home improvement retailer. This could be why cross-shopping between Lowe’s and Home Depot has decreased significantly between Q1 2021 and Q1 2023.
In Q1 2021, 38.5% of Home Depot visitors and 46.6% of Lowe’s visitors also visited the other retailer. While in Q1 2023, just 30.1% of Home Depot visitors and 36.6% of Lowe’s visitors also visited the competitor. These changes in cross-shopping behavior in 2023 appear to indicate that Lowe’s and Home Depot's enhanced loyalty programs have encouraged consumers to stand by the respective retailers. And for mission-driven and price-sensitive consumers looking to consolidate trips and save money, strong loyalty programs mitigate the need to comparison-shop for the best deals.
Time for Visits
While those outside the space may view Home Depot and Lowe’s as interchangeable, the decline in cross-shopping between the retailers does indicate that the two chains serve different audiences. Diving deeper into the traffic data also reveals that visits to the two brands follow a different pattern.
Both brands have invested heavily in attracting professionals, but the data suggests that Home Depot may be driving more of the Pro market while Lowe’s attracts more DIYers. In Q1 2023, Home Depot had a larger relative share of weekday and morning visits, when professionals were likely picking up supplies for a job. Meanwhile, Lowe’s had elevated weekend and afternoon visits – times when working DIYers were more likely to stock up on supplies. So whether consumers choose to take on projects on their own or hire professional help, there is a home improvement retailer ready to serve their specific needs.
Room for More Improvement?
With a housing market that’s beginning to heat up as well as demand from both professional and DIY consumers, the home improvement space is well-positioned to make a comeback. Will the home improvement space continue to find success as 2023 progresses?
Keep up with placer.ai/blog to find out.