The future of the home improvement market; corona impact
A couple of months ago, I wrote an article on the impact of the corona crisis on the European home improvement market. Quite surprisingly, after an initial slump (closed DIY stores & general negative outlooks), this market thrived.
With hindsight, this is actually not that strange. Consumers started to spend more time indoors in their houses due to lockdowns and being forced to work from home. In doing so, two of the three main drivers behind the surge in home improvement jobs were fulfilled; without the need to travel to the office and limited outdoor activities, more time was available to start home improvement projects and by spending more time indoors, consumers were confronted with possible home improvement projects much more. With this I mean that by spending more time at home, consumers suddenly saw that the walls could use a new paint layer or that their 'home office' could do with some improvements.
The third element in this equation is budget. The need and time were there, but doing home improvement jobs also requires money. Due to the lockdowns, consumers suddenly had more budget available, as spending on things like restaurants etc. plummeted. Furthermore, the holiday season(s) were badly compromised, so less money was spend on holidays as well.
From April onward, we have interviewed consumers in 11 European countries about the impact the corona pandemic had on their home improvement behaviour (full free report is accessible via our website. Link can be found in the comments below) . In April, already 19% of European consumers indicated that they were conducting more home improvement jobs than usual due to corona. Among millennials, this was even 25%. And this effect persisted. In our latest measurement of January 2021, 23% of the European consumers indicated that they are conducting more home improvement jobs. Again, this was the highest among millennials (31%). The majority of the jobs done throughout the last couple of months, were decorative jobs.
Not all was positive tough. One major element of the European home improvement market is DIFM or do-it-for-me. However, many consumers were and still are wary of having professionals working in their homes. In our latest measurement, 50% of the European consumers stated that they would rather postpone DIFM jobs for now. At its height, this was 71%. So for professionals working mostly on residential renovation projects, the corona crisis is having a clear negative effect.
Now for the key question; will this surge in home improvement jobs continue in 2021? The short answer is yes. Our indications point towards a continued high level of home improvement jobs done. 27% of European consumers are expecting to spend more money on home improvement jobs in 2021 than they did in 2020. That being said, for the coming 3 months the share of consumers stating they would be doing more jobs is more or less the same as the group stating that they would do fewer jobs. This means that the amount of jobs done would most likely stay on the high level of 2020. However, more money per job is spent, which could be an indication that consumers are picking up larger jobs.
So what could potential barriers be? The most obvious one is the end of the corona pandemic, either due to mass vaccinations or a more organic decline of the infection rate. This would lead to more spending on holidays, going out to eat etc., and thus decreasing both the time and budget available for home improvement jobs. But this might still take some time.
Also, hard lockdowns during which the DIY stores are forced to close (like in the Netherlands at the moment) will have a negative impact. Even though consumers are ordering home improvement products online at a higher rate than ever before, closure of the DIY stores will have a negative impact for sure.
Now what will happen in the long term? Our expectation is that, at the moment the corona virus in under control, we will see a sharp drop in home improvement behaviour. The market will basically reset. After that, the market will recover and continue its growth path as seen in the last couple of years. A positive development is that many millennials in Europe have conducted a home improvement job, liked it, and learned from it. This should bode well for the future of the home improvement market in Europe.
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