The rise or fall of DIFM in home improvement?
The European home improvement market is both a traditional market and a changing one. The market has been dominated by the large DIY chains and this will most likely remain the case for many years to come. The very nature of doing home improvement jobs did not change much over the past decades. This does not mean that the home improvement market in Europe is immune to change, it just happens slower and more gradually than in for example the fast moving consumer goods market. Again, this is inherent to the industry and the fact that home improvement behaviour did not change significantly over time. Now there are some key trends affecting the market, slowly evolving the market in a certain direction instead of being a revolution. An obvious contender here is online buying & orientation. This has a profound impact on the home improvement market, but the overall trend is moving slower than in the consumer electronic market for example. However, the trend I would like to cover in this article might be less obvious, but not less impactful for the market; DIY vs DIFM.
The drivers behind more DIFM
During the last couple of years, or until 2019 to be more precise, there was a slow but gradual shift towards more DIFM in the total amount of home improvement jobs done in Europe. In a span of 4 years, the share of DIFM jobs increased from 33,5% to 37,5%. The key drivers behind this mainly revolves around age.
On the one hand, the population in Europe is aging. Obviously, there are significant differences between the countries, but the overall conclusion can be drawn. The baby boom generation is increasingly faced with home improvement jobs that need to be done, but they are no longer willing or no longer capable to do these jobs themselves. As this age group represents both a large group within the demographic build-up of European society and a group that used to be avid and experienced DIYers, they are contributing to the shift towards more DIFM.
On the other hand, we have a younger generation (millennials) who are traditionally less DIY-savvy (both in terms of DIY experience & confidence) and are more often renting their house instead of owning it (thus doing less in terms of home improvement). Furthermore, they tend to value and invest their time in a wide variety of activities, but not so much in DIY jobs. This age group is also contributing towards the shift to more DIFM jobs instead of DIY jobs.
The drivers towards more DIY
Up until 2018, our data coming from the European home improvement monitor (a survey among 26,400 European consumers in 11 counties) supported both the story above and the trend towards more DIFM. However, in 2019 we see that the shift towards more DIFM is halted and in fact, the share of DIFM decreased. Is this just an anomaly? A year in which for some reason fewer jobs where outsourced? I do not think so, as there are also drivers towards more DIY.
First and foremost, it is all about the costs. In this case, labour costs. In the years prior to 2019, we have seen the wages for labour in the construction and installation market steadily increase. It is basic economics. On the one hand, we clearly see a higher demand for professionals working in the construction and installation market (serving both the B2B and B2C market). On the other hand, the availability of labour did not increase and in many (mainly Northern European) countries actually decreased due to severe shortages of labour in the construction and installation market.
So the cost of labour increased, which had a dampening effect on the share of DIFM and a positive effect on the share of DIY in the total. There is another aspect that encouraged more DIY jobs related to higher costs and lower availability of professionals. This is the time consumers sometimes had/have to wait for the professional to start working on their job.
The impact of corona
So we can discuss the drivers and barriers towards more or less DIFM. I believe that in 2019 the pivotal moment was reached where the demand and supply where no longer in balance. This could have more or less sorted itself out. We clearly see that there are many companies who want to jump into this market segment. From DIY retail chains offering installation services to more Eastern European workers and local semi-professionals (white van guys) offering their services. But we saw the share of DIFM drop down even further in 2020 (and this is also expected for H1 2021).
Despite a booming home improvement market in many European countries driven by the fact that consumers had more time, budget and need to improve their home, the corona outbreak had a further negative impact on the share of DIFM. One of the key drivers for this further drop was the outbreak of the corona crisis and consequently the hesitance of consumers of having professionals conducting home improvement jobs in their houses. This January, 50% of European consumers still stated that they would rather postpone DIFM jobs if possible, due to the corona crisis. Now obviously, this is their sentiment. If they want the job to be done bad enough, they will still hire professionals. Also, not all jobs are suitable for DIY, so in some cases they cannot avoid hiring professionals (think of plumbing, tiling etc).
So now for the key question, what will happen in the future? Well, this is very much depending on the same drivers we discussed earlier. It is mostly a question of to which side the pendulum will swing. Will the construction and installation industry be able to solve (or partially solve) the labour shortage? Or will the growing interest of DIY chains and semi-pros in DIFM jobs turn out to be a success? Then the labour cost would decrease and the availability would increase, leading towards a continuation of more DIFM.
If the industry will not be able so solve this issue, we will not see a rise in DIFM or in fact could see the increase in DIY jobs done continuing. Especially as a broader audience than normal experienced doing DIY jobs and in many cases both improved their DIY skills and enjoyed doing the jobs much more than in the pre-corona situation.
My personal expectation is that the share of DIFM will remain under pressure, as I do not see the labour issues being sorted any time soon. The construction industry is going through the corona crisis relatively well and the demand for professionals will remain high. That being said, I do not think the share of DIFM will drop very significantly either, as more and more parties are seeing the potential for the DIFM market and are coming up with interesting initiatives. The age pyramid of European society will also not forever lean more heavily towards the older generation, thus creating more balance in the demand and supply for DIFM.
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