Which Home Improvement Retailers are the 'Smart'-est?

With home improvement products rapidly trending digital, retailers in the hardware and home center channel are offering an increasing array of “connected” and “smart” WiFi-enabled merchandise to shoppers who come to them via any route – on foot, online and on the omnichannel path to purchase.With that trend in mind, Field Agent surveyed nearly 2,000 homeowners and audited more than 150 stores to examine issues like what sets home center retailers apart, why “smart” home electronics appeal to consumers, how store brands are faring vis-a-vis manufacturer brands, and how in-store, online and mobile marketing each play a role in goosing sales lift.Field Agent undertook the study, titled “Home Improvement Retail in the Digital Age: Issues in Selling to Today’s Home Improvement Shoppers,” after realizing that the larger trend toward digital retail had reached home improvement, says Chris Medenwald, marketing manager.“In-store ads are slowly giving way to [mobile applications], and many of the mainstays, like light bulbs and garage-door openers, are evolving into a more connected version of themselves,” he says. “We think it’s highly meaningful as it affects home improvement retail and how home improvement [consumers] shop. It’s all about exploring how home improvement retailers are serving connected shoppers with connected merchandise.”In the first of a multi-part series, Pathfinders spoke with Medenwald about the survey’s findings with regard to how various home improvement retailers and brands stack up in consumers’ minds. The next few monthly installments of the series will look at who, what, when and where homeowners are connecting virtually, discuss the Field Agent store audit, and delve into the marketing mix among the store, online and omnichannel.Two Home Center TowersA survey of 1,000 homeowners who at least occasionally make home center purchases showed that The Home Depot and Lowe’s are by far where homeowners shop regularly in the channel, about 80% each. Walmart was a distant third at slightly less than half (48%), while Ace Hardware (21%), Menards (17%) and True Value (10%) lag far behind.The picture is similar when distilled to the 280 Millennial generation homeowners surveyed: 79% named Home Depot, 78% Lowe’s, 53% Walmart, 26% Ace, 18% Menards and 8% True Value. Among 42 verified home improvement professionals, there is some variation: 95% named Lowe’s, 90% Home Depot, 40% Ace, 29% Walmart, 24% True Value and only 5% Menards.When asked to choose the single “go-to” home improvement retailer, Lowe’s edged out Home Depot 44% to 39% among both homeowners overall and Millennials in particular, while Home Depot won more decisively, 52% to 36%, among professionals.Medenwald said he is amazed by how much parity there is between Lowe’s and Home Depot. “It shocked me how neck-and-neck those two companies are when it comes to winning home improvement dollars in general. … It will be interesting to see if one can get the upper hand in the digital age, which is only just beginning.”For now, digital services such as apps ranked dead last among seven retailer characteristics that homeowners said influenced their purchases to varying degrees. “Everyday prices” was ranked the most important feature overall, followed by merchandise selection, sales assistance, store layout, store policies on issues like returns, and services offered such as rentals. “It’s the traditional marketing mix that continues to matter the most,” Medenwald says. Yet that doesn’t mean digital services are necessarily unimportant, he says, especially given the parity between the top two home improvement retailers. “Even something so relatively unimportant could be the tipping point,” he says.Name vs. Store BrandsName brand products like paint and tools continue to be seen as superior to store brands, the Field Agent survey found. Majorities of homeowners overall (52%), Millennials (57%) and especially professionals (74%) were either “extremely” or “very” aware of the distinction, and majorities of all three categories – 55% of homeowners, 53% of Millennials and 67% of professionals – were at least “a little more” likely to buy name brands.In addition, the survey showed that majorities of homeowners and professionals at least “somewhat agree” that both name brand paint and name brand tools are superior to store brands, the survey found. That included 61% of homeowners and 69% of professionals with regard to paint, and 66% of homeowners and 69% of professionals on the question of tools.“If you asked me what surprised me most from this study, it would be shoppers’ continued perception of the superiority of name brands,” Medenwald says. “Because the Lowe’s and Home Depots of the world have put quite a bit into getting their store brands on the same level as name brands, to the point where I wouldn’t think people could necessarily distinguish. Store brands, over time, have become a little more respectable. … Yet all of that [data] suggests to me that name brands are still working from a position of superiority.”For access to the full Field Agent report, click here. Check Pathfinders every month for future installments of the series.