Most Home Improvement and Hardware Dealers Are Doing Fine And Some Are Doing Much Better Than Others

Many news stories you read about COVID-19 are negative given the pandemic’s impact on our lives. However, there is also some positive news, and you need only to look at the hardware and home improvement channel to find it.

Despite the COVID-19’s devastating effect on many companies and their employees across the nation, hardware and home improvement retailers have once again shown their resilience in trying times. Home improvement shoppers and DIY projects remain quite active. They are starting and completing projects often as a direct result of COVID-19.

As industry market research experts, we rely on data to tell the story. There are two sets of data evidence that support the positive news. The first is results we are seeing from our COVID-19 Home Improvement tracker conducted each week in partnership with the Home Improvement Research Institute (HIRI.org). The second set of data is sales results from our clients and colleagues across the country.

COVID-19 Home Improvement Tracker Results

The COVID-19 Home Improvement tracker shows that 60%+ of DIYers continue to complete projects and plan to complete projects in the coming weeks. Why they are starting these projects makes great sense. It is primarily because they are “home more often” and have “more spare time”.

As for these DIYer’s shopping behavior, there has been a slight decline in their “shopping in-store”. But there is an increase in online purchases either delivered or pick up at the store. Almost 70% of these DIYers indicated that they are buying online, (instead of in the store) because of COVID-19. Not surprisingly, 90% mentioned “health and safety” as the reasons.

Home Improvement Company Results Show Growth

The Farnsworth Group has also been keeping in contact with our clients and others to gauge how well their companies are doing on sales and addressing other impacts of COVID-19. The results are quite positive. While individual company results vary across markets and type of dealer, most of our clients are seeing robust sales increases.

The sales increases range from high teens to 35%. Some sales are 50% higher and more year-over-year. So why are some doing better than others?

The larger sales increases are being experienced by higher-performing and best of class operators. We cannot help but think that their market research and research-based strategies have helped them in becoming market leaders.

These dealers are market-focused and execute customer-centric strategies across all the variables of the retail mix. Going into the COVID -19 crisis, they were already aligned with their customers’ wants and needs. They identified unique customer segments and developed communications for the segments they serve. They are their market’s stores of choice. They are stores that customers know and trust. They are now the stores that customers are counting on even more in these crisis times. Here is what some of these “high performance” operators are saying about the role research has played to position their store as a market leader.

“Through our research with The Farnsworth Group, we have gained insights on increasing customer satisfaction and understanding growth opportunities.”

“Our research allowed us to understand our customers’ top priorities and how well we deliver on these priorities. It also showed us what wasn’t important to our customers, things we thought were, so we can better align our resources.”

The Importance of Market Research

In looking at our higher-performing retail clients, several areas stand out where their market research provided solid direction:

• Price strategy:  Recognizing the importance (or not) of price in their markets and knowing their brand’s price image. In the last recession, we saw DIYers shift from shopping stores with “competitive” prices to those with “lowest” prices. With skyrocketing unemployment and the level of price transparency in our marketplace, dealers who already have a solid grasp on pricing will be even bigger winners.

• Service strategy:  Understanding their customers’ definitions of service (by segment) and how it is changing.The definition of service is being re-written. Websites are now a major component of service as customers increasingly shop and buy from the safety and comfort of their homes and businesses. they expect efficient and safe delivery of their purchases whether curbside, in the store or delivered.
• Merchandise strategy:  Right products. Being in stock. “Deals.”  Being in-stock with what your customers expect has always been a major customer satisfaction priority.  Now it is paramount.
• Online strategy:  Instant information on products, availability and prices supporting online purchase options. Having a customer-friendly online strategy has been the lifeline for many dealers during these times of restrictions. Customers new to online shopping for hardware and home improvement are not going to abandon online when the crisis subsides.
• Advertising and communication: Understanding the transition from traditional to digital.

While no one is sure of the new reality of retailing post-pandemic, one thing is for clear, it is changing and will be very different. But we all know that changes always provide great opportunities.

DIYers’ attitudes and behavior have changed overnight. The quicker you understand how your customers have changed, the quicker you can refine your product, price, service and communication strategies to meet these new needs.