After an interesting summer and in conjunction with similar trends in other industries, supply chain issues and inflation are impacting all sides of the home improvement equation.
Reasons for Home Improvement Product Delays
In November, 1 in 2 DIYers reported cost of materials as the reason for project delays, compared to 1 in 3 the month prior. It's not unknown that costs are rising, but for the DIY segment, rising materials are especially prohibitive to completing home improvement projects as they are already an option to reduce costs by doing the work themselves.
“Do It Yourself” Homeowners are reporting the top reasons for project delays being:
- Material prices - 47%
- Material availability - 46%
- An unlisted reason - 27%
Contractors are reporting the top reasons for project delays being:
- Material availability - 49%
- Material prices - 37%
- COVID concerns of homeowners - 36%
While material availability over cost is the top concern for a majority of contractors, a sweeping 80% of contractors are reporting increased material costs. To combat these rising costs,
- 44% of contractors are passing the increased costs to their clients.
- 38% of contractors are splitting the increased costs between the company and the client.
- 17% of contractors are fully absorbing the increased material costs.
There’s been a notable shift over the last two months where contractors have realized the higher material costs are here to stay, so they are making larger business decisions to safeguard their slim margins for Q4 of 2021.
“Do It For Me” Homeowners are reporting the top reasons for project delays being:
- Material availability - 35%
- Lack of laborers - 29%
- COVID concerns of workers- 26%
While DIFMs are reporting that the main reason for project delays or stoppage is due to COVID concerns of contractors, this may be a conflation or general false assumption as Pros are currently reporting that the main reasons for project delays or stoppage are due to rising COVID concerns of homeowners and rising materials costs.
There appears to have been a sort of fork in the road that Pros encountered through the past month as more distinct conclusions have been drawn about project delays being due to outside market forces (costs and homeowner sentiments) than about internal staffing enablement and safety.
Brand Switching is Rising Back to Busy Season levels
In November, 16% of DIYers reported trying a new home improvement brand for the first time and 19% of DIYers reported trying a new supplier for the first time.
29% of Pros reported trying a new home improvement brand for the first time and 32% of Pros reported trying a new supplier for the first time - up from 25% in October.
22% of DIFMs reported trying a new home improvement brand for the first time and 26% of DIFMs reported trying a new supplier for the first time.
As brand loyalty wanes due to lack of availability or timeliness, less established brands with less supply chain constraints have the opportunity to prove their product value proposition among about one in five buyers who are willing to give what’s available a shot.
Trends in Smart Home Automation
DIFMs reported 2-3x more trouble acquiring Smart Home Devices and Hardware than in months prior. Why? The semi-conductor, aka "chip", shortage is another raw material shortage impacting the home improvement market. Demand for Smart Home Devices has been growing steadily for the past several years, and increased further during 2020 and 2021. Both within primary residences and as convenience and security measures for secondary residences, a range of smart home automation devices are desired by the DIFM segment.
Trends in the Paint & Coatings Industry
Now, coming out of the summer busy season, contractors are not reporting issues with labor shortages, but 3 in 4 have had material shortages in the past month, notably paint and paint supplies. Why now?
Inventory that kept paint demand satisfied through the spring and summer has not been rebuilt to the level before the Texas freeze in 2021. A majority portion of petroleum refining occurs in Texas, so the backlog in production of this raw material has slowed the rebuilding of paint inventories. Because DIYers were highly active in the spring and summer completing paint projects around their homes, usage was up and supplies were not able to be maintained. Brand switching is high in this industry segment right now and we anticipate seeing market share changes burgeon over the next few quarters.
As focus on home improvement and maintenance shifts from the exterior to the interior, 44% of DIYers expressed intent to paint a room and 31% of DIYers expressed intent to paint or stain an item.