July’s HIRI webinar revealed how trend and lifestyle changes following the pandemic are providing fresh opportunities, as the need to innovate becomes more important than ever.
By Robert Isler
Kitchen and bath spending has been on a tear over the past year, but it’s just part of the rabbid pace of broader consumer spending — up a healthy 21% through July, compared to the same period last year. And with disposable income up, there’s more to come, according to findings shared at a Home Improvement Research Institute presentation last month.
Featured speaker Joe Derochowski began by quoting Yogi Berra: “You can observe a lot by watching.” Derochowski, VP and Industry Advisor for market research firm NPD, detailed spending patterns outside of home improvement — what’s driving them, why they are relevant, what the industry can learn from them, and how to capitalize on them.
The reason for the robust spending, which shouldn’t come as a surprise, is the increase in disposable income for most families. The savings realized by the forced cutback in experiential spending, combined with new-found income from government stimulus programs, has led to a 7% increase in disposable income for the average consumer.
So which categories have been growing fastest as a result? Sports equipment, small appliances, technology, toys and video games have been leading the way. And what were the drivers? According to Derochowski’s findings, they were “boredom, stress, germs, comfort, working from home and the concept of casualization.”
Footwear, apparel, office supplies and beauty products were among the categories that lagged, a reality created by the pandemic seclusion.
Returning to the winners, computer monitors were up by 95% in unit sales against their previous record high. Keyboards gained 41% and mice — the tech kind — jumped 22%, as employees scrambled to adjust to their new work-from-home status. Home fitness grew by 125% over 2019. Air purifiers, hand sanitizers (and anything related to them) were flying off the shelves. Mobile game usage grew by 66% vs. 2019, and PC games by 40%. More than 70% of us now immerse ourselves in such activities.
The next 10 to 20 years will be the most critical time to ramp up investments in marketing and innovation, since K&B businesses will not only be competing against each other, but also against other categories for consumer dollars.
DIY during the pandemic was also a winner, and wasn’t just limited to home improvement. Auto maintenance, haircuts, and a host of other categories popped as well, as consumers had both the time and the inclination to take things into their own hands.
Based on these and other findings, Derochowski suggested to the audience that they take a closer look, get creative, and determine how they can market their specializations to take advantage of these emerging trends. For instance, serious gamers need a different type of lighting. Is it being offered? Closer to home, food prep became more serious and continues to offer promise, as home chefs hone their skills. Over 80% of meals are prepared at home, with the overall percentage of meals made at home increasing by 2% to 9% during the pandemic. Multiply that by 330 million people, and it’s huge. Food storage has taken off as a result, up 19% over last year, and 33% vs. 2019. “So what can we do to help ensure that there is space for all those leftovers?” asked Derochowski. Enter the prominence of increased storage and pantry space.
Floorcare is up by 31%, counter cleaning by 100%, and there are 11 million more pet owners than before the pandemic — which also amplifies the need for cleanliness. According to Derochowski, we are becoming a more germaphobic society, so what can those in our industry do to address the need for cleanliness and minimalism?
Floorcare is up by 31%, counter cleaning by 100%, and there are 11 million more pet owners than before the pandemic.
As 22% of workers use a dedicated office at home and another 25% work from a flexible home space, he posed several questions: how can the K&B and interior design industries take advantage of it? Are we adjusting our business capabilities to work with this new remote reality? During the Eighties and Nineties, there was a separate formal room for dining. How many use a formal room now? “Homeowners now want versatility and casualness. They want calm,” he said.
To market to this changing reality on a broader level, Derochowski suggested that designers spend less time on technical aspects of products and more on addressing consumer pain and frustration — not a new concept, but one worth repeating. The example he gave was to focus less on thread count of bedding and more on how it will result in a deeper, more restful sleep experience. He explained that we all must find the “er” in anything we do commercially: faster, cheaper, safer, better.
Derochowski shared another interesting trend. He wondered why 39% of all popular restaurant traffic is drive-through, while only 8% are delivery orders. “Is it a time-control issue or perhaps consumer reluctance to pay a delivery fee?” He segued into the issue of digital orders vs. traditional, noting that 51% of home environment orders are online and 49% for personal care, while only 12% of orders for the home improvement industry are online. Much is due to the nature of the business, but he can still see HI growing from that current 12% to 20%, since the need to meet consumers when and where they wish to shop will only increase.
Addressing other findings potentially pertinent to home improvement, Derochowski noted that 63% of all households consist of just one or two people. His findings also suggest that kitchen remodeling doesn’t begin until homeowners are in their late 30’s or early 40’s. By the time they become empty nesters around age 55 to 58, they tend to focus on travel for a few years, then either upsize, downsize or remodel. “Any way you look at it,” he continued, “the math is in our favor.” Adding to that is the fact that we are eating, working and living more at home, setting up the K&B and overall home improvement industries for steady growth.
Derochowski focused his concluding remarks on short-term and long-term opportunities. He began by noting that since 2020 was such an aberration, all future comparisons should use 2019 as the base. For the short-term, he rattled off a number of concepts, and spoke of helping people feel more comfortable as they work from home, leveraging outdoor living and kitchens, addressing a change in eating patterns and helping make indoor entertaining safer.
Longer-term, his findings suggest that kitchens and outdoor grilling, as well as health and wellness, will remain important for years to come. Multi-generational living space opportunities will increase as well. Key to it all is to meet consumer needs for versatility and the new casualness.
Most important though, is to invest in marketing and to be innovative, since K&B businesses will not only be competing against each other, but also against other categories for consumer dollars. In fact, Derochowski’s belief is that the next 10 to 20 years will be the most critical time to ramp up these investments.
