Just a few years ago, as consumers scrambled to turn living spaces into offices and adapted to the confinement of lockdowns, online spending in the home and do-it-yourself (DIY) categories exploded.
Consumers dived into DIY projects with enthusiasm, tried their hand at interior design and remodelled with gusto. They indulged their green thumbs, cultivated their outdoor spaces and, with nowhere to go, transformed portions of their properties into dreamy destinations. However, that surge in online home and garden purchasing activity has been curbed in recent months with workers returning to offices, shoppers readjusting to a mix of online and in-store, and widespread economic pressures tightening purse strings.
And yet, the pandemic produced a new generation of DIYers, with boosted confidence and interest in improving their homes. Office workers remain aware of the possibility of remote work in future roles, and functional and versatile spaces continue to be highly valued. These factors are likely to translate into an ongoing willingness to spend in these categories and provide opportunities for smart brands and retailers that adapt to provide great multi-channel consumer experiences.
To harness the potential for future growth, strategic steps are needed now to navigate current headwinds. We suggest five key areas in which to concentrate efforts in the coming months.
Building on Existing Strengths
For brands with strong consumer engagement, marketplaces have become thriving outlets to sell directly to consumers. They can also be used as tools to test marketing strategies or even product lines before bringing them to brick-and-mortar stores. Retailers with strong sales and regular visitors on their own websites could also consider launching their own marketplace, inviting new or niche brands to find new audiences while also bringing their loyal consumer base with them.
Investing in retail media advertising — point of sale product presentation — has risen significantly as online consumer shopping behaviour reflects economic realities and shoppers compare products more regularly. Depending on the product type and specific advertising format, retail media can yield advantages in brand recognition and sales.
Fostering the Human Connection
Despite the overall convenience of online browsing and the increasing ease of online transactions, DIYers welcome input from those who understand their perspective. Whether the format is a real-time virtual video chat with experienced staff members or a how-to video tutorial that deepens the consumer’s knowledge of a particular tool or process, abundant opportunities exist to bridge the gap between online and in-person shopping needs in a meaningful way.
This strategy enables enormous creativity. You can bring in experts, such as interior designers, renovation specialists, landscape architects or power tool manufacturers to consult with consumers upon request or to offer advice to all shoppers.
Implementing Visual Aids
Buyers love to see how products will look in their home. Augmented reality (AR) or three-dimensional (3D) viewing options allow them to visualise it in context, heightening their interest and confidence in a product.
This technology may help drive sales in combination with visits to brick-and-mortar stores as well. Potential buyers who become intrigued by the look of a certain type of flooring or a piece of furniture they’ve viewed in person may continue to research the look and “try it out” in their own home before feeling confident enough to purchase.
Exploring Innovative Tech
In a time of economic uncertainty, slowing sales have historically triggered reactions such as deepened discounts and promotions in an effort to attract more consumers. Instead of leaning fully into this tactic, we suggest leveraging the ability to use a more personalised and intelligent approach.
Improvements in the checkout process or options for faster or more cost-effective fulfilment tend to be highly attractive to shoppers. Brands and retailers can also investigate the use of AI to enhance customer communication and identify weaknesses in engagement without cutting too deeply into profit margin. With pressure on brands to deliver a seamless e-commerce experience, investigating solutions that offer a centralised system can help to consolidate fulfilment and advertising strategies. Choosing the right partner can help brands save time and resources by automating key functions and providing the necessary insights to help scale the business effectively.
Partnering to Profit
Third-party marketplaces, including Amazon, can be especially valuable for small, non-premium brands to expand reach and build a consumer base.
For brands that are exclusively available online, partnering with retailers with an in-store presence boosts brand awareness and provides a sales outlet, especially for products in high demand in a particular geographic area or with a specific audience segment. Well-matched partnerships between online brands and in-store retail benefit both parties and could lead to additional opportunities.
Regardless of the specific strategies involved, home and DIY brands and retailers must focus on connecting and engaging with consumers while managing margins. Customer relationships are key to sustaining sales and driving growth in the months to come.
Interested in learning more? Check out our recent white paper, Re-imagining Growth: The Online Home and DIY Market in 2023. It goes into greater depth on each recommendation and includes examples and stories of brands and retailers who have navigated the ups and downs of the market in recent years.