Is Your Home Improvement Brand Ready for the Online Sales Experience?

By: Dave Sladack

November 14, 2017


According to The NPD Group, the volume of home improvement products sold online is swiftly approaching $11 billion, a growth of 41% over last year. Both Home Depot and Lowe’s are seeing double digit, year-over-year growth in online sales. With emerging competitors in the category like Amazon, retailers are placing a much stronger emphasis on the online shopping experience. Because if they don’t, they’ll be left behind.

And while that rapid growth sounds encouraging, $11 billion is a very small portion of the $422 billion in total online retail sales Mintel estimates for 2017. And for both Home Depot and Lowe’s, online sales only account for less than 10% of overall volume.

eMarketer recently tracked several product categories, as part of a larger overview, and the three related to the home – DIY/Home Improvements, Household Appliances and Furniture/Homeware – were among the lowest in performance preference to purchase online – second only to grocery items.

So, why do home improvement products lag behind other categories in online purchasing? Is it the DIYer one-project-at-a-time mindset that suggests a homeowner wants to buy everything they need for a project at once (and at the moment they’re ready to begin)? Or is it the physical experience of seeing, touching, and exploring options in person, which limits risk since you’re experiencing a product first-hand. Or, when eMarketer reports 45% of Home Depot’s online orders are for in-store pickup, perhaps the order-to-door experience is just not quite there yet?

The NPD Group tracked several home improvement categories and found momentum for online purchasing is building. While overall online sales are not yet at the volume of many other product categories, year-over-year growth is robust in every product category they analyzed – the lone exception being outdoor living. A closer look at the report suggests consumers see a convenience factor in making online purchases of disposable replacement products like light bulbs and air filters. Similarly to buying books and movies online, products like lightbulbs are an easier e-purchase as you can better pinpoint needs through an online search rather than navigating the cluttered lighting aisle. Furthermore, these items aren’t usually destination triggers for a store visit, but rather micro moments that occur when the experience of a burnt-out bulb or realization the filter is due to be changed occurs at the time of discovery.

So, here are a few ways brands can jumpstart online buying adoption to optimize their business:

1. Pay attention to the smart phone experience. Mintel says desktop is still the dominant platform for online shopping, but mobile is closing the gap quickly, as mobile-based retail sales jumped by 94% from 2015 to 2017, and now account for more than 37% of all online purchases.

2. Apply the Google Micro-Moment Mentality. Even for higher-end durable goods like washers and dryers, an online purchase may be a welcome experience. Think of the GenX homeowner who is pushed to the max for time. When he gets a call from his aging, widowed mom, while at his kid’s soccer game, that her washer quit working, the “Guilty Son Complex” becomes magnified. But with the right online experience – from ordering through delivery, this problem can be solved completely through the smart phone.

To apply this mentality, Google suggests three key steps:

Be There – Have an online presence where consumers search for solutions – like YouTube videos and trouble-shooting sites along with a strong paid search and keyword strategy.

Be Useful – Offer a clear portfolio of washers online with apples-to-apples comparisons and easy-to-access ratings and reviews that make the selection process much easier online than in person. Some retailers even incentivize the online purchase over the in-store purchase to ensure they capture the sale while also encouraging online usage to build loyalty and data history.

Be Quick – Make the purchase process painless. Apply available manufacturer rebates, select delivery times and track the order all from the smart phone, so the next call from mom is one of praise and gratitude for helping her to have clean clothes again so quickly.

3. Encourage more subscription-based programs. Think about auto-replenishment programs for light bulbs and air filters that offer convenience. And similarly to clothing subscription services like StitchFix, retailers could work with suppliers to develop seasonally-themed home improvement subscription boxes, like outdoor living samples during peak gardening season.

NPD says 25 to 44 year olds already account for 50% of all e-commerce home improvement dollars spent. As Millennials, who make up a large portion of this age group, continue to buy homes and invest in home improvement, the time is now for the category to deliver on the e-commerce experience this generation will expects.

Originally published in HBSDealer's November Issue.




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