Home Improvement Market

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Home Improvement Market

Home improvement customers in the United States are looking for eco-friendly products. They prefer greener options for their home improvement projects.
Homeowners are exploring the available options to get funding to finance their home improvement projects. They are willing to borrow money, aiming to improve their property value. In fact, 56% of them would borrow money from a family member or lender.

Home Improvement Market: Overview

  • In 2018, home improvement expenditures in the United States reached $394 billion.
  • The North American Retail Hardware Association expects that expenditures will grow in the next few years, amounting to $465 billion by 2022.
  • Thirty-four percent of home improvement product sales were made online in 2017.
  • According to the Houzz & Home survey, on average, millennials invested $26,200 on home renovation projects in 2016. These investments reached $27,300 in 2017.
  • According to the Houzz & Home survey, on average, millennials invested $26,200 on home renovation projects in 2016. These investments reached $27,300 in 2017.
  • In 2018, a homeowner spent, on average, $7,560 on home improvement products, increasing from $6,650 in 2017.

Demographic Profile

  • Millennials are more likely than any other generation to get involved in home improvement projects.
  • People belonging to this age cohort are spending more on improving their houses’ value.
  • The average age is 37.7 years.
  • A study published by the Joint Center for Housing Studies (JCHS) found that families making more than $120,000 in household income are more likely to spend on home improvement projects, spending averagely $5,400 annually.
  • The same study found that 87.5% of home improvement customers are white.
  • Among the households that pursue home improvement projects, more than 50% are married-couple families with children.

Psychographic Profile

  • Home improvement customers are looking for eco-friendly products. This demand is shaping the industry in the United States.
  • They prefer greener options, including vegetable roofs and photovoltaic roofing.
  • One of the reasons behind the renovation decision is cutting "utility costs by replacing windows and opting for energy-efficient thermal insulation."
  • Similarly, their home improvement journey is triggered by environmental health risks, as they believe that "some aspects of their home are negatively affecting their household’s health."
  • Home improvement customers are also cautious consumers. To protect their investments, they won’t buy a product without conducting exhaustive research.
Attitudes Toward Home Improvement
  • Fifty-three percent of home improvement projects are done by hired professionals, with baby boomers being twice as likely as millennials to hire professionals.
  • Among these projects, 72% are interior projects, while 28% are exterior projects.
  • Forty-seven percent of home improvement projects are DIY projects, with interior and exterior projects accounting for 77% and 23%, respectively.
  • For those who decide to hire a professional, the main reason behind this decision is a finished product with better livability or functionality.
  • Those who DIY their projects have higher satisfaction rates with the final results.
  • Seventy-seven percent of customers reported feeling a sense of accomplishment after completing a home improvement project, while 58% expressed their happiness to see the completed project. Moreover, 38% report having a feeling of satisfaction.
  • According to a Path Velocity online survey, "three out of four homeowners are interested in personalized experiences with home improvement products." Additionally, the survey found that homeowners are "six times more likely to share their satisfaction with a building or home improvement product on Retailer Websites, Consumer Review Sites, and Facebook versus sharing it on Twitter, Pinterest, Instagram, or Houzz."
  • Families that are more likely to pursue a home improvement project "spend a lot of time on the go and therefore tend to eat out regularly."
  • Typically, they spend their weekends doing remodeling and home improvement projects.
  • They spend about 4-7 hours weekly commuting. Moreover, they spend a significant amount of money on car maintenance.
  • Being home improvement enthusiasts, they enjoy working on DIY projects and other home improvement projects. They also enjoy watching DIY-related networks.
  • Since they are engaging more in completing home improvement projects, they make frequent trips to home improvement stores, driving their SUV or minivan.
  • Home improvement customers are technology-savvy customers. Thus, they are comfortable with new technologies. They "embrace the convenience of completing tasks on a mobile device."
Purchase Habits and Spending Habits
  • Homeowners are exploring the available options to get funding to finance their home improvement projects. They are willing to borrow money, aiming to improve their property value. In fact, 56% of them would borrow money from a family member or lender.
  • Thirty-three percent are willing to borrow money from retirement funds to finance a major home improvement project.
  • Fifty-two percent of "homeowners who have done a home repair or improvement project over the past two years were easily able to pay for the majority of them."
  • The average home improvement spending was $7,560 in 2018, increasing by 17% from 2017.
  • Home improvement spending is five times higher than spending on home maintenance projects (for each $1 for home maintenance, $5 for home improvement projects).
  • The image below highlights how home characteristics could predict the total spending on home improvement projects.
Media Consumption Patterns:
  • During the project planning phase, customers are using the following types of traditional and modern media as their source of information:
    • TV shows: 13%
    • Magazines: 8%
    • Books: 5%
    • Websites: 24%
    • Videos: 8%
  • Customers are also increasingly using media sources as a source of inspiration. Sixteen percent look for inspiration on Pinterest, while 18% get inspired by searching the internet.
  • Facebook, YouTube, and Pinterest are the most used social media platforms for home improvement activities.
Motivations and Triggers
  • According to the Home Improvement Research Institute (HIRI), the top motivators for homeowners to start a home improvement project are the need to repair or replace (25.9%), routine maintenance (22.9%), modernize, upgrade, and redecorate (21%), and an increase in finances (17.5%).
  • According to the Houzz & Home survey, the top renovation triggers among homeowners who recently renovated their homes are the following:
    • "Wanting to do it all along and finally having the time/financial means": 56%
    • Customize a recently bought home: 27%
    • "Addressing damage due to home age and insects": 16%
    • "Adapting to recent changes in lifestyle": 16%
    • "Planning to sell the home soon and wanting to increase its value": 11%
    • "Addressing damage from a natural disaster": 6%

Customer Journey

  • According to Behance customer journey mapping, the journey consists of five main phases, from ideation to remodeling preparation. The phases are ideation, budget, research contractors, hiring, and preparing for remodeling. This journey map "covers the research, planning, and purchasing parts of a home remodel, up until the actual remodeling begins."
  • During the ideation phase (highlighted in yellow), homeowners are looking for remodeling suggestions from family, friends, Pinterest, and industry leaders, such as Lowe's, Home Depot, and Houzz, among others.
  • When they start setting their budget (highlighted in brown), there would be two options. First, if the budget is affected by their savings, they would calculate their budget to cap to what they are willing to pay. On the other side, they have a "pretty straightforward idea," they will quicken the whole budgeting phase.
  • When researching for contractors (highlighted in orange), homeowners reach out to family, friends, and co-workers first. Then, they will look for contractors on Nextdoor. Once they identify some contractors, homeowners will look for more details on trustworthy reviews on platforms, such as Yelp and Angie's List. They will also contact the contractors to understand more.
  • During the hiring phase (highlighted in green), homeowners will ask for quotes from their contractors. After examining the different offers, they will choose a contractor. Then, they will sign the contract and pay a down payment.
  • Infosys created a customer journey for home improvement and furnishing projects. The journey mapping consists of eight phases: Awareness, discover & attract, influence & interact, purchase, use, support, manage, and advocacy.
    • Awareness: This phase is the product browsing phase. Homeowners look for inspiration through digital mediums.
    • Discover and attract: Customers are discovering their options and comparing products before making the final purchase decision.
    • Influence and interact: Customers are looking for advice from family and friends and interacting with the store for details.
    • Purchase: After taking the purchasing decision, customers "seek faster delivery options/channels."
    • Use: Customers use digital mediums to learn more about assembling and using the product/furniture. Thus, they will start using the product.
    • Support: "Customers seek the flexibility of delivery scheduling and ease of raising return requests online, even for purchases made in-store."
    • Manage: Customers are demanding integrated loyalty management to get benefits for their purchases.
    • Advocacy: If a store succeeds in the previous steps, it will earn the customer's advocacy.
  • Instead of heading to local brick-and-mortar stores to choose and order a product, homeowners are using digital alternatives, such as online portals and e-commerce stores. Similarly, they are not looking for recommendations at local stores anymore, instead, they are reading online reviews.
  • Eighty-two percent of customers expect to get a response within 10 minutes after reaching out.
  • The top categories, researched by both professionals and consumers, are the following:
    • General home improvement: 72%
    • Pro services: 66%
    • Building materials: 60%
    • Inspiration: 58%
    • Furniture and décor: 58%
  • According to internal Microsoft data, about 60% (three out of five) of consumers "spend more than a month to complete their purchases."
  • The consumer journey to complete a purchase took an average of 38 days for consumers, while it took 32 days for home improvement professionals.

Friction Points

  • According to a Zillow study, the biggest challenge to making home improvement projects are:
    • "Being able to pay for what they want to do": 49%
    • "Trying to figure out how many things will cost": 47%
    • Finding the time to DIY: 46%
    • "Not knowing what or when things will break": 45%
    • Find the right professional: 44%
    • Finding the inspiration: 34%
    • Struggling "with getting their spouse or partner on board with their plan": 25%
  • NerdWallet found that 31% of homeowners don't accomplish home improvement projects because they are not prepared to cover repair costs.
  • The main barriers when planning to redecorate or furnish a room are costs (57%), time (39%), finding room elements (38%), laziness (24%). (Screenshot here)
  • According to the Home Improvement Research Institute (HIRI), the main reasons canceling or postponing home improvement projects from getting done are being unable to afford the actual costs (58%), not having enough time to finish the project (26%), being unable to decide what to buy (18%), and concerns related to financial stability (15%).

Most Popular Kinds of Improvements

  • According to the Home Depot–commissioned survey, homeowners are more likely to start with improving their kitchen first (33%), followed by bathrooms (27%).
  • A report published by Houzz revealed that kitchen renovations are the most popular remodeling projects, followed by guest bathrooms, master bathrooms, and living/family rooms, respectively.
  • A survey conducted by the National Association of Home Builders (NAHB), people are more likely to remodel the bathroom (81%), the kitchen (78%), the whole house (49%), other room additions (37%), and door replacements (30%).
  • The most popular interior home improvement projects for all renovators (DIYers and professionals) are bathroom renovations (26% of DIYers and 25% of professionals), kitchen upgrades (19% of DIYers and 17% of professionals), and complete kitchen renovations (9% of DIYers and 16% of professionals).
  • The most popular exterior home improvement projects for all renovators (DIYers and professionals) are roofing (35% of DIYers and 39% of professionals), Vinyl/wood windows (24% of DIYers and 17% of professionals), and Vinyl siding (16% of DIYers and 15% of professionals).
  • Among all types of home improvement projects (interior and exterior), outdoor living projects, including patios, decks, and landscaping, are the most popular (43%), followed by bathroom remodels (31%) and kitchen remodels (26%).

Idea Visualization Tools

  • Choice Home Warranty, CNet, and Curbed have lists of some home improvement tools. From these lists, we chose tools currently used to support idea visualization.
Home Improvement Apps
  • Houzz Interior Design Ideas: Available on iOS, the Houzz app helps users to discover and save home design ideas. With new features like "Sketch" and "View in My Room 3D", users can try more than one million products in their home.
  • Adornably: Available on iOS, the app helps customers to try online products in their homes, making home personalization easier.
  • Visual Inventory: Available on iOS, the app lets users "take a photo of a room, and then tap the value of objects or fixtures in it."
  • Home Design 3D: Available on iOS and Android, the app lets users try furniture from the app's directory in the desired rooms.
Home Improvement Tools
  • HomeZada: This tool helps users to manage their home improvement projects, from shopping to completion.
  • Floorplanner: This online tool lets users make floor plans of their spaces (home or garden), to see what and how it looks like furnished.
  • Autodesk Homestyler: The free tool helps users to visualize their home design, try real products in their spaces, and "even export a shopping list for the hardware store."
  • Colorjive: With this tool, users can complete a paint job for a room, virtually.
Interior Design Apps
  • 3D Spacer: the interior design software helps to get a 3D design for any room in the house.
  • Roomle: The app helps users to plan and furnish interiors.
  • National Kitchen & Bath Virtual Planning Tool: this tool helps users to make and design kitchens, bathrooms, or laundry rooms.
  • Room Hints: With the app, users can take a photo of their rooms, to get advice from designers, prices, design trends, and other design resources.

Innovative Examples: Digital Home Furnishing Tools

Despite extensive research through industry leaders' websites and blogs (Lowe's and Home Depot), industry-related associations (HIRI), research websites, statistical databases, and the public domain, we were unable to identify unique and innovative examples of new digital home furnishing tools and services. Despite the scarce information, we found some examples of innovations done by the largest companies, such as Ikea, Lowe's, and Amazon.
Next, we decided to change gears and find the major awards that recognize home furnishing tools for their digital innovations, and build a list of unique and innovative examples from the award-winning tools. However, this strategy was fruitless since we were unable to identify any awards for home furnishing innovations. Below are some examples of innovative tools and services.
  • IKEA launched its IKEA Place app in 2019. Downloaded two million times, the app uses augmented reality (AR) to help users explore how different furniture could fit in their rooms. Although the app is not the only one using AR for home furnishing, the company is planning new updates that allow users to "digitally place new items into a photorealistic 3D representation of their home," see the effects of an item on the feng shui of their home.
  • "Amazon has launched a new showroom feature allowing customers to shop for furniture" by visualizing the room scene to see how furniture would fit the room’s design. To make their service more useful, Amazon allows shoppers to check out all the items from the final design they chose, using the "Add to cart" option.
  • DigitalBridge uses machine learning, photo-visualization technology, and computer vision to allow users not only to preview their rooms but also to offer visual product discovery options.
  • Lowe’s launched an app called Measured By Lowe’s, which enables users to save their home measurements using AR. At the store, Lowe’s employees help customers to find the best fit for their home based on the measurements saved by the app.
  • Another innovative product, offered by Lowe’s, is the Holoroom How To VR tool which allows users to learn DIY skills in an immersive environment, using a VR headset and controller.
  • Delos and Philips "have introduced adjustable color temperature LED lighting solutions that mimic the progression of natural daylight, helping the body power up and down more naturally."