Home Depot and Lowe’s are known to be a one stop destination for DIY projects. But in recent years, they’ve both branched out into a different type of home improvement: “soft DIY.”
Experts say the expansion of this category – from decorative vases and pillows to artificial flowers and candles – shows a change in the way people manage their homes, where they are refreshing the house instead of renovating or rebuilding it.
Even though the latest quarterly earnings reports indicate that overall home improvement sales have increased slow motion“decoration” has been one of the fastest growing categories at both companies since 2017, according to CNN analysis of SECOND data.
Home decor sales were steadily increasing at Home Depot and Lowe’s before the Covid-19 pandemic, but experts say the months of lockdown have sparked renewed interest in both kitchen redesigns and adding extras. additional decorative items, such as a fruit basket or blankets.
“Traditionally (decoration), this is where they have underperformed somewhat. People were going there for hard goods,” according to retail expert Neil Saunders, managing director of Global Data, referring to items such as building materials.
“But for the softer side of decor, they would probably go to a general housewares retailer,” he said.
Home fashion doesn’t seem to be the bread and butter of companies like Home Depot and Lowe’s, unlike items like tools and drywall, but it has made significant progress over the past six years. SEC data analyzed by CNN shows that home decor sales doubled at Home Depot and Lowe’s during this period.
View this interactive content on CNN.com
Although the “decoration and storage” category remains the lowest share of Home Depot’s overall sales, it has gained the largest share since 2017, behind appliances.
Decor has grown as a category even more broadly at Lowe’s. In 2018, the decoration of the two brands represented 3.3% of net turnover. In 2022, home decor products accounted for 5.4% of Lowe’s sales, more than the tools, building materials, flooring or hardware categories.
View this interactive content on CNN.com
“Our assortment of private label products has improved our performance with DIY customers, especially in interior design“, Lowe’s said in its 2022 filing with the SEC. last deposit declares that the company includes a full range of decorative products to meet the different needs of customers.
In their most recent annual SEC filing, Home Depot states, “Our industry is highly competitive, highly fragmented and evolving. As a result, the company says it faces competition from a variety of businesses, including home decor retailers.
Increase in sales in the event of a pandemic
The confinement caused by the Covid-19, which has caused travel and clothing sales, led consumers to use their available money to improve their housing. In 2019, year-over-year net sales at Home Depot and Lowe’s were up about 2% and 1%, respectively.
In 2020, Home Depot’s sales grew nearly 20%, while Lowe’s saw sales increase about 24%.
“During the pandemic, (people) were very focused on investing in their homes, as well as their gardens,” said Saunders, the retail expert at Global Data. “And it’s been very beneficial for Home Depot, Lowe’s and some of the categories they sell.”
In 2020, sales of “hard do-it-yourself” products — lumber and garden products — saw the strongest growth, if not one of the strongest, of any other category at both companies. But that growth faltered over the next two years as lockdowns were gradually lifted across the country and large home purchases were made.
It sparked what Barbara Kahn, a professor of marketing at the Wharton School at the University of Pennsylvania, likened to a “second wave” of home projects: decorating.
“(Consumers) did all the groundwork for the new structures for home offices and all these other things during Covid. And now after Covid they don’t spend on it anymore because they already spent on it,” Khan said. “They’re just spending to cool off.”
People adapting to new ways of working since the pandemic, such as remote and hybrid arrangements, have also driven home decor product sales, experts say.
Stores selling home goods have benefited from these trends. Retail sales at furniture and home furnishings stores have increased about 21% over the past six years, according to the U.S. Census Bureau’s monthly retail sales advance survey.
View this interactive content on CNN.com
Sales at retailers that supply home building, repair and maintenance products, however, increased more than twice, or about 43%, over the same period.
While still primarily home improvement retailers, expanding into the home decor business was just a logical opportunity for Home Depot and Lowe’s, Saunders said, especially online.
With sales of home improvement products surging during the pandemic, experts say it was clearly profitable to also focus on becoming more of a decorating destination. Home Depot and Lowe’s also remained open as essential businesses in 2020, unlike many specialty homeware retailers, he said.
Sales were mixed over the past quarter at both retailers, according to the latest SEC data. This includes the home decor category, which was up only about 4% at Home Depot and down nearly 4% at Lowe’s, according to their latest annual reports.
While 2023 has been described as a “year of moderationfor the home improvement market by Home Depot CEO Ted Decker in May, the most recent annual data shows that shoppers are still interested in fashion for the home. Decor sales remain significantly higher at both retailers than before the pandemic.
“People won’t buy a new sofa or outdoor furniture every year,” Saunders said, “but people will buy accent pieces more frequently.”