Hardware Retailing The Industry's Source for Insights and Information
Using propriety data, Numerator helps companies understand their customers and identify growth opportunities by providing more visibility into more consumers across more channels. In its The Income Divide: Implications for the Home Improvement Sector report, Numerator shares how the income divide between homebuyers is impacting the home improvement industry. Hardware Retailing sat down with Maegan Blane, consultant with Numerator, to learn more how independent retailers can appeal to both ends of the income divide. Blane has been with Numerator for three years, working primarily with home improvement and general merchandise clients to deliver data-driven insights and strategic recommendations. Prior to joining Numerator she worked in consumer insights at PPG Paints, focusing on understanding consumer behavior and market trends within the coatings industry.
Hardware Retailing (HR): What are the factors currently impacting homeownership affordability?
Maegan Blane (MB): Unfortunately, home prices and mortgage rates have skyrocketed in recent years, while incomes have not kept pace. Prospective homebuyers, especially first time buyers, are facing more difficulty than previous generations to enter the market. They’re faced with saving for larger down payments, covering higher closing costs and often having to compromise. This may mean choosing a smaller home, settling for a less desirable location or delaying their purchase altogether.
Maegan Blane (MB): Unfortunately, home prices and mortgage rates have skyrocketed in recent years, while incomes have not kept pace. Prospective homebuyers, especially first time buyers, are facing more difficulty than previous generations to enter the market. They’re faced with saving for larger down payments, covering higher closing costs and often having to compromise. This may mean choosing a smaller home, settling for a less desirable location or delaying their purchase altogether.
HR: How does this erosion in affordability impact home improvement demand?
MB: With more money spent on housing costs—whether this is rent or a mortgage—home improvement shoppers have to make sacrifices. Some discretionary, nice-to-have projects can wait, while essential repair projects can’t. To stay on top of maintenance, many shoppers may cut back on luxuries or even other household or personal necessities. Shoppers may be willing to compromise with a less expensive fixture but may still opt for the high-end power tool as that purchase may have long-term value. Ultimately, each decision reflects a personal balancing act shaped by a household’s financial situation and priorities.
MB: With more money spent on housing costs—whether this is rent or a mortgage—home improvement shoppers have to make sacrifices. Some discretionary, nice-to-have projects can wait, while essential repair projects can’t. To stay on top of maintenance, many shoppers may cut back on luxuries or even other household or personal necessities. Shoppers may be willing to compromise with a less expensive fixture but may still opt for the high-end power tool as that purchase may have long-term value. Ultimately, each decision reflects a personal balancing act shaped by a household’s financial situation and priorities.
HR: How is the makeup of home improvement shoppers changing?
MB: Younger shoppers are entering the space with project confidence. How-to videos and instructional resources are at shoppers’ fingertips and empower younger shoppers to take on new and sometimes complicated projects. However, the Boomer generation is still driving spending as they may be more likely to age-in-place and need to modify their home to their changing lifestyle and needs. Across generations, shoppers are increasingly turning to online retailers and exploring multiple retailers to compare options and secure the best deals.
MB: Younger shoppers are entering the space with project confidence. How-to videos and instructional resources are at shoppers’ fingertips and empower younger shoppers to take on new and sometimes complicated projects. However, the Boomer generation is still driving spending as they may be more likely to age-in-place and need to modify their home to their changing lifestyle and needs. Across generations, shoppers are increasingly turning to online retailers and exploring multiple retailers to compare options and secure the best deals.
HR: What opportunities exist to increase engagement or frequency among lower-income consumers despite affordability constraints?
MB: While lower income home improvement shoppers are understandably more price-sensitive, they still aim to maximize the value of every dollar spent. It may be riskier to buy a lower-priced product with a shorter life span vs a trusted brand with a higher price tag that will bring long term value.
MB: While lower income home improvement shoppers are understandably more price-sensitive, they still aim to maximize the value of every dollar spent. It may be riskier to buy a lower-priced product with a shorter life span vs a trusted brand with a higher price tag that will bring long term value.
Warranties can be an excellent way to ensure consumer confidence and promote brand recognition and trust. Large discretionary projects may take a back seat for lower income shoppers, but manufacturers and retailers can push the smaller projects and “lower lift” projects versus huge remodels. Financing, payment plans and layaway plans are another great way to make home improvement purchasing more feasible.
