Home Improvement Trends Offer Positive Sign for Lowe’s, Home Depot
Not all retailers are created equally. While companies including JCPenney, J.Crew, and Neiman Marcus have filed bankruptcy in the wake of COVID-19, Home Depot and Lowe’s have navigated the pandemic largely unscathed as homeowners turn to DIY projects.
Home Improvement: As consumers expect to spend more time at home, they also expect to spend more on their homes. A recent Piper Sandler survey evaluating shifting consumer behavior and spending trends due to COVID-19 found the following data about respondents:
69% plan to spend more time at home over the next 6 months vs. pre-COVID.
18% plan to spend more on their home as a result of staying at home.
13% indicate they will spend more on Backyard Living items, with the highest purchase intent at Home Depot and Lowe’s. (Backyard Living items includes Lawn & Garden product and Outdoor Living product)
DIY is a Win for LOW: Lowe’s YouTube channel is racking up views, indicating homeowner project spend is on the rise, according to Jefferies, which says engagement is often a precursor to deciding on Do-it-Yourself projects. The channel, which counts 840,000 subscribers and includes “how-to” videos, saw a 400% year-over-year increase in views during April, Jefferies said. The firm also points to geolocation data that suggests Lowe’s saw “outsized y/y foot traffic, while site scrapes indicate HD garnered leading y/y web visits.” Between February and April, foot traffic jumped 21% at Lowe’s and 10% at Home Depot compared to a year ago, according to data from SafeGraph.
Fending off Amazon: While Home Depot and Lowe’s have grown synonymous with home improvement, Amazon has been nudging its way into the market. Among consumers planning to spend more or the same on Backyard Living this year, most plan to purchase at Home Depot (77%) followed by Lowe’s (58%), Amazon (52%), and Walmart (51%), according to the Piper Sandler survey.
Source: Piper Sandler’s Consumer/Tech COVID-19 Survey - Part 2
Home Depot’s defense: HD’s investment in digital sales has helped it grow online sales by approximately $1 billion in each of the last six years. In an effort to improve the speed and reliability of delivery for customers, the company set a goal to reach 90% of the U.S. population with same or next day delivery for extended home improvement and maintenance, repair, and operations product offerings.
Looking Ahead: Home Depot reports earnings Tuesday, May 19, before markets open. Lowe’s reports earnings Wednesday, May 20th, before markets open.
