In a big year for home remodeling, major retailers in the space are one-upping each other to grab more of the professional market, including building new distribution infrastructure catering to pros and keeping store aisles clear for DIY customers looking for a new faucet.
Accelerated by obstinate supply chain slowdowns, the trend is taking hold among the biggest names in home improvement. As Bloomberg reported on Tuesday (Dec. 2), “Contractors’ needs are very different than the average customer’s, and while they make up only 5% of The Home Depot’s shoppers, they account for 45% of its $132 billion in annual sales.”
Keeping DIY shoppers from causing in-store delays for more profitable pro customers, The Home Depot is investing in distribution centers focusing on larger orders placed by contractors.
Spotlighting one such new facility in Georgia, Bloomberg noted, “The hub is the centerpiece of Home Depot’s plan to ease the complexity of direct-to-consumer sales — and win market share from both its main rival, Lowe’s Cos., and independent distributors.”
To better grasp evolving pro needs, rival Lowe’s released its first Pro Pulse Survey in November.
According to that survey of home remodeling pros, “There is an increased demand for professional help with home improvement projects, with 80 percent of survey respondents saying now more than ever there is a need for home improvement professionals.”
Respondents averaged “nearly 11 projects per month in 2021 and expect that to increase by 45 percent in 2022.”
With that kind of activity, large orders are taking up loads of space inside chain locations, leading to the logistical leap of building freestanding distribution centers.
Ace Hardware is in on the action too. As PYMNTS recently reported, “Ace Hardware announced it will open a 1 million-square-foot retail support center in Visalia, Calif.,” with Corporate VP of Marketing Jeff Gooding saying the chain “continuously evaluates distribution capabilities to ensure we meet our growing business demands and offer the best support and service to Ace retailers and our wholesale customers.”
Home Improvements to Hit $400B by Q3 2022
Distribution centers for home contractors look to remain in high demand as the remodeling renaissance kicked off by COVID is expected to keep growing in the foreseeable future.
In a recent blog, Abbe Will, senior research associate and associate project director, remodeling futures at the Joint Center for Housing Studies of Harvard University, said, “annual improvement and repair expenditures by homeowners could reach $400 billion by the third quarter of 2022,” adding that “several headwinds … could still taper the expected growth in remodeling spending including the rising costs of labor and building materials, as well as increasing interest rates.”
As remodeling retailers reimagine fulfillment for professionals, last-mile logistics will be part of that discussion, because loads of lumber, copper piping and drywall don’t move themselves.
Showing that boom times make strange bedfellows, industry news site Modern Retail reported in October that The Home Depot is the first customer of Walmart GoLocal, a delivery-as-a-service offering that caters to professional customers, wholesalers and other retailers.
Walmart U.S. president and CEO John Furner said, “We’re honored to work with The Home Depot in our shared goal of making fast and reliable local delivery available in every community we serve, including rural and suburban areas, where we both have a strong retail presence.”