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Retailers Hope to Find Salvation in Emerging Markets
Chicago (May 1, 2006)- Following a five-year boom, a recent Mintel report predicts home channel do-it-yourself (DIY) sales to slump over the next five years. While housing sales and in-store how-to programs significantly boosted DIY sales over the last five years, this $460 billion industry prepares to overcome the challenges of a cooling market.
Lowe's and Home Depot have both increased mailings of their retail credit card offerings by almost 150 percent in an effort to bolster business, according to Mintel Comperemedia, a competitive intelligence service that analyzes direct mail and print media. According to Mintel's exclusive research, 90 percent of consumers purchase home improvement products at home centers, but few shop at just one type of store. Retailers have placed their hope in three emerging DIY markets: women, Hispanics and baby boomers.
"We saw retailers make many outreach efforts last year," said Justin De Santis, analyst with Mintel. "For example, suppliers introduced new lines of traditionally male-oriented products such as hand tools with ergonomic features, design, and packaging that specifically targeted the female DIYer. There is a major opportunity to provide more targeted products for this group."
To appeal to women who are increasingly taking home improvement into their own hands, major retailers such as Lowe's and Home Depot are offering educational workshops, adapting product lines, and making store layouts more female-friendly. Mintel research reports that close to 60 percent of women surveyed had undertaken a DIY project in the last year.
Do-it-yourself needs are also expected to grow in the Hispanic market over the next five years. Retailers are expanding Hispanic and Spanish-speaking staff while continuing to introduce bilingual signage and packaging. The projected number of Hispanic homebuyers will also drive sales opportunities.
DIY retailers are also focusing their product and service offerings on the baby boomer market, who are predicted to buy everything from high-end furniture to small barbecues at DIY stores. Home Depot's recent acquisition of online company Home Decorators Collection sets the stage for more expansion opportunities that can attract this key group. Boomers growing into the 50-65 year-old bracket will cause that segment to be the fastest growing age group in the U.S. until 2010, and Mintel predicts that installation services sales and one-stop shopping will increase as this market seeks more "do it for me" purchases. "Companies will need to continue providing more programs and services to attract these emerging groups," said De Santis. "They will also need to consider creating more initiatives that differentiate them more solidly from each other. Gaining loyal customers will be important as the DIY competition continues to heat up."
Mintel Comperemedia provides competitive intelligence for businesses looking to advance and improve their direct marketing strategy. Tracking direct marketing (including mail, email and print advertising) targeted at consumers, small businesses and insurance agents, Mintel Comperemedia offers a unique perspective on everything from banking trends to insurance trends to credit card statistics. For more than 38 years, Mintel has provided insight into key worldwide trends, leading the industry for consumer, product and media intelligence.
Joanna Peot
Public Relations Executive
312-628-7946
jpeot@mintel.com