Prepared by YipitData, Gold Sponsor at HIRI's 2024 Home Improvement Insights Summit. Join us this September 18 and 19, 2024 in Chicago! Learn more and register to attend here.
The home improvement industry finds itself in a unique position after a significant surge in demand during the pandemic. Now, it faces challenges from elevated interest rates and weakened consumer demand. Although the industry's outlook remains positive, with potential for stronger growth on the horizon, caution is advised due to ongoing uncertainty about underlying consumer demand. Gaining a deeper understanding of home improvement shoppers will enable brands and retailers to better navigate a range of potential outcomes.
One way to understand their needs is by analyzing the composition of their shopping baskets.
Cross Category Purchases Have Declined
In recent years, we've noticed a slight decline in cross-category shopping trips, as consumers seem to be making more deliberate choices, likely focusing on one project at a time.
Percent of Purchases That Contain More Than One Major Home Improvement Category
United States, Online + Offline Sales, 2020 - 2023
Cross Category Attachment Rate by Major Category
United States, Online + Offline Sales, 2023
Across major home improvement categories, we've observed a steady decline in the rate of cross-category purchases between 2020 and 2023. Certain categories, such as lighting, electrical, and storage, have experienced double-digit declines, while others, like flooring and indoor gardening, have seen relatively minimal declines.
Opportunities for Driving Cross-Category Purchases Still Exist
Despite the overall softening in demand and the decrease in baskets containing multiple categories, opportunities to drive incremental sales still exist. As an example, we see that buyers of ceiling fans often purchase items in lighting categories, as well as in electrical and painting categories. In 2023, nearly 1/10 customers who purchased a ceiling fan purchased light bulbs and interior light fixtures.
Ceiling Fan Orders - 2023
|
Category |
Attachment Rate |
|
Light Bulbs |
8% |
|
Interior Lighting |
7% |
|
Wiring Devices |
6% |
|
Hardware |
5% |
|
Fasteners |
4% |
|
Chemicals |
4% |
|
Applicators |
3% |
|
Electrical Fittings |
3% |
|
HVAC |
3% |
|
Paint |
3% |
|
Exterior Lighting |
3% |
|
Hand Tools |
3% |
So should brands and retailers begin bundling or cross-promoting these products? It likely depends on the specifics of the categories, brands, and products involved, but evaluating the most commonly attached brands and products may help provide valuable insights.
As we dive deeper, we can see that shoppers who purchased a ceiling fan most commonly purchased a GE light bulb. If we zoom in on the specific light bulbs that were attached, we can see that many are dimmable bulbs.
Given a challenging macroeconomic backdrop, brands have to find ways to not just understand the performance of their products but the reason they're buying. Basket visibility sheds light on the context for the purchase and the problem your buyers are actually trying to solve. Finding opportunities for product bundling and cross-promotion create better solutions for shoppers which yield stronger results regardless of the market environment.
Get More Home Improvement Insights
If you're ready to learn more about the current state of the home improvement market, join us for a complimentary welcome lunch before HIRI Summit sessions kick off. Lunch will be held from 12:00-12:45p on September 18 at the HIRI Summit, happening September 18-19-2024 in Chicago.
About YipitData
With over 205M home improvement data points annually, YipitData has coverage across 8,000 distinct brands and key retailers, including Home Depot and Lowe's, giving you the visibility you need to make better business decisions. Our proprietary approach combines data (physical/email receipt, cc, web-scraped, etc) with predictive modeling to give you the most accurate and granular read on your market performance with only 7-10 days of lag.
