New Trends in Home Improvement eCommerce

Radial Research recently completed a consumer survey focused on eCommerce and the home improvement industry. We interviewed Brendan Lease, Radial’s Director of Product Marketing, to unpack the latest trends for the industry. The interview has been edited for clarity and conciseness. 

How does the home improvement space differ from other retail categories? 

“In general, it’s a lower penetration industry for eCommerce than many of the others we’ve talked about recently, like sporting goods and fitness, home furnishings, or the traditional eCommerce-heavy categories like apparel, footwear, and cosmetics. It comes in at just around 14% of online purchases, which does make sense in a lot of ways considering the wide variety of products in this category. Everything from lumber to paint to toilets to tools to screws to garden items falls into this one, so you can imagine there’s some different buying behavior here.” 

What will online shopping look like for the home improvement industry over the next 5 years? 

“Right now, home improvement has a pretty healthy growth rate at 7.1% for eCommerce, which will jump up online sales from 14% to 16% by 2028. While the penetration isn’t huge compared to some other categories, we’re still looking at a pretty solid $70B base for year-end 2024, growing to over $92B by 2028 [per EMARKETER]. To give you a sense of that scale, that $92B projection is about the same size as sporting goods and fitness ($53B projected), jewelry ($12B), and cosmetics/beauty ($28B) combined. It’s a fairly large sized category for online purchases. It just so happens that a lot of other non-online purchases happen in home improvement, too. 

As younger generations explore this category a bit more, I think we could see more growth acceleration. But it’s hard to predict at this point if that will really take off or if it will remain on the same trajectory.” 

How comfortable are consumers with buying home improvement products online? Are there products they avoid purchasing online? 

“Just because the eCommerce penetration isn’t high, the likelihood to purchase isn’t necessarily low across the board, it’s just that smaller items have a higher likelihood for online purchase and are also more frequently purchased. Not a lot of stuff in this category can be considered regular purchases—beyond some seasonality around garden items. Most consumers tend to buy this stuff when they need it, so the peaks and valleys are a bit less predictable. For instance, about 25% of consumers said they purchase garden items annually, 22% said they would purchase when needed, and about 30% said they purchase monthly or every few months. Compare that to power tools, where 43% of respondents said they would purchase when needed. The responses for hand tools for both indoor and outdoor were similar, with most falling into the “when needed” category. Same with paint and accessories. 

At the end of the day, it’s not massively dissimilar to the other splits we’ve seen in other surveys. Larger, more expensive items tend to have a lower and less frequent propensity to purchase online, while cheaper, smaller items tend to be more online-friendly and more frequently purchased online. 

And not surprisingly given what we’ve learned in other surveys, Millennials are the most eager to purchase these items online across the board. The younger you go, the higher likelihood they will purchase online. Note that for this survey we had a bit of a different sample than some others. This survey focused on a slightly older demographic [25+], as many in Gen Z are not really in the life stage where they need to purchase and use a lot of home improvement items just yet. It will be interesting to see how trends track moving forward though, as Gen Z seems to have a higher propensity to take on DIY projects than some other generations. They have a lot of maker influencers in the demographic which could help spur additional growth here.” 

What obstacles do retailers face when selling home improvement products online? 

It’s all about quality, quality, quality. Across the board, consumers wanted to see the quality in person before making the purchase, with the lone exception being accessories [screws, nails, etc.] where they need the item fast (24%). And hand tools are balanced between quality and speed. If you think about it, this makes sense. If you need a specific screw or tool, you probably need it quickly because you are building something or fixing something. Unless you can get same-day delivery, then going to the big box or local home improvement store likely makes more sense.  

Another element was right size/right fit. This is especially true for accessories at 27%. You definitely need the right item to accomplish your goals.  

Let’s talk about shipping, too. Shipping costs are a top obstacle for bigger items, like outdoor power tools. They’re more expensive to ship.  

Finally, I expected things like the need for expert help in person to score higher here given how bigger home improvement retailers lean on their in-store expertise as a key value add, but it didn’t come up all that much. Paint was the only item where that category cracked the top three, which makes sense given that a lot of times you’ll need to use special blends to match colors. But even then, only 12% of respondents said that was a major obstacle to buying online. 

Given that, growing brands should work on getting or improving in-store experiences for consumers, so that they can see and feel the quality of the products. Also, they could consider options like ship-from-store or local fulfillment to drive that quick turnaround from order to delivery.” 

What about returns? 

“There really weren’t a lot of issues overall with returns challenges in this space. That’s good for retailers. In fact, only 35% of respondents said they had ever returned one of these items, so it is not as big of a challenge as it may be in other categories.” 

What influences shoppers when they purchase home improvement products?  

The top two influences were good customer reviews (53%) and available tutorials or videos (43%). That makes a ton of sense in this space. Reviews are critical because you really want to make sure the product is high quality and built to last. And tutorials are key because people need to know how to properly use the product. Most consumers likely aren’t experts in how to do all the projects and fixes that home improvement products enable, so having more step-by-step guidance is important, especially since instructions can be hard to follow a lot of the time. 

Recommendations from family and friends were big, with around 40% saying this was a key driver as well. The categories which had little influence were generally things like influencers (15%) and online ads (19%), so this vertical may just have some more traditional drivers than other categories. These responses may also have been slightly weighted away from those options, given that we had a slightly older sample for the questions.” 

How does this break down demographically? 

“I should note that men had a higher propensity to use product comparison guides versus women, while women leaned in a bit more on customer reviews. But for the most part the gender split was close. 

From a generational perspective, Millennials are the most reliant on tutorials (47%) and reviews (48%). They are looking for that next layer of comfort and confidence so they can properly use the products to achieve their goals. 

In terms of where they find products to buy online, social media tended to be bigger for younger generations (Millennials at 41% versus Baby Boomers at 11%), while traditional search engines like Google were high across the board (around 40%). In-store displays were important at approximately 46% overall, skewing towards older generations.” 

How can retailers encourage shoppers to purchase more home improvement products? 

“Lean in on instructional videos and tutorials on how to use products. Create product comparisons and make sure you encourage item reviews. That will build customer trust and confidence.  Given the focus on quality here, placing items in stores so that consumers can experience them in-person can be key to building that brand recognition and comfort. Then consumers are more likely to purchase items online once they know they will get that high quality experience.  

As we see with many other products, retailers should continue to deliver a great online customer experience, with the proper delivery timeframes and cheap or free shipping when possible. Those are great drivers of purchases and align with what consumers already expect. 

More modern approaches, like digital design tools and even older methods driving peace of mind with warranties were lower on consumers’ lists, so in this category it may make sense to stick to basics. Build strong customer sentiment, offer a great online buying experience, and figure out ways to get your products visible to consumers where they shop.” 

Anything else to add on this topic? 

“Yeah, we did ask one question unique to this vertical: It was essentially ‘how confident are you in assembly/installation for your home improvement projects?’ And we did see a high level of confidence across the board. Sixty-three percent of consumers say they felt very or somewhat confident in completing their projects. This was especially true for men (39% very confident, 72% confident overall) versus women (19% very confident, 55% somewhat confident). It was also higher for millennials in general (70% very or somewhat confident).  

I just found this interesting because there could be an opportunity for retailers to really push the DIY angle on men from younger generations, as long as they have those strong tutorial/instructional resources to support the projects. And as these folks continue to build confidence through successful projects, they may buy more. There is an element of playing the long game here to consider.” 

We’ve completed three industry surveys (home furnishings, sporting goods, and home improvement). Are there trends across the industries we should consider? 

“People are really focused on quality across the board, which is a good note to have as so much buying over the couple of years has been price driven. In these categories you can see why, since for home furnishings and home improvement they are displaying or creating items for and for sporting goods, these items need to be durable to last for a long time through many activities. That indicates that quality and customer experience may be reemerging as a key consumer requirement. And that means positioning brands for the long-term versus simply cutting costs by lowering quality.” 

Follow Radial on LinkedIn, Facebook and Twitter.