Home Improvement - doesn't it sound wonderful and fun and - if you don’t think about it - almost easy. But it’s never easy, in fact it generally turns out to be a wild - and not very forgiving - adventure. The problem is we don’t know anything about what we’re about to jump into - and worse yet - we don’t know who we can ask to help us - and, even worse yet, we’re doing it in our own home! So, with eyes wide open, how in the world can we venture into these treacherous waters, actually complete the project and still like each other??
Practically, we’re faced with three options: First, we hire someone (a general contractor) and hope he’s honest and good - and will amaze us with how quickly the project gets done - and even under budget!
Our second option, like 35% of homeowners (according to the Remodeling Sentiment Report) who bypass the general contractor, and hire the all the various sub-contractors ourselves and take care of all the scheduling and miscellaneous details on our own.
Our last option is to simply “do it ourselves”. While it’s a bit daunting, 67% of us (the Remodeling Sentiment Report) actually do some of the work ourselves in our home remodeling project.
So whether it’s option 2 or 3, we really need some help because we honestly don’t know how to do these projects but can’t wait to get going on them.
This dilemma for the home owner - I want to do this but I really don’t know how - is a huge opportunity for the smart retailer! Retailers like the Home Depot and Lowe’s realized that they could offer their customers not only the materials and tools but classes and even books so their customers had a really good chance to succeed at home improvement.
While there are local and regional players in this niche, we’re going to limit our discussion to the two national behemoths of the industry, the Home Depot and Lowe’s.
The Home Depot was founded in 1978 with the founders’ vision of a one-stop shopping center for the do-it-yourselfer. The first stores, at around 60,000 square feet each, were cavernous warehouses that stocked 25,000 SKUs compared to the 10,000 SKUs that were available in the typical hardware store or lumbar yard of the day.
The Company knew that “do-it-yourselfers” made up more than 60 percent of the building supply industry's sales volume; and that the majority of them did not have the technical knowledge or expertise to accomplish most home repair or improvement projects.
To solve this problem the Company decided: first, to stock at least 25,000 different items in each store and second, to develop a trained sales staff to remove the mystery associated with home improvement projects. They were convinced that, with the education provided by knowledgeable sales staffers, their customers would gain the confidence to take on more projects at home, coming back to Home Depot outlets to purchase what was needed and get additional advice from sales staff.
From the start, associates were able to offer the best customer service in the industry, guiding customers through projects such as laying tile, changing a fill valve or handling a power tool. Not only did store associates undergo rigorous product knowledge training, but they also began offering clinics so customers could learn how to do it themselves. The Home Depot revolutionized the home improvement industry by bringing the know-how and the tools to the consumer and by saving them money.
The Home Depot is the fastest growing retailer in U.S. history. As the world's largest home improvement chain and fourth-largest US retailer, the company operates about 2,250 stores across North America, Puerto Rico, and China, as well as an e-commerce site. It targets the do-it-yourself and professional markets with its selection of some 40,000 items, including lumber, flooring, plumbing supplies, garden products, tools, paint, and appliances. Home Depot also offers installation services for carpeting, cabinetry, and other products.
For fiscal year ending January, 2011, the Company had revenues of $68 Million; net income of $2.2 Million and income growth of 25.4%.
Lowe's has been helping customers improve their homes for more than 60 years. Founded in 1946, Lowe’s has grown from a small hardware store to the 2nd largest home improvement retailer worldwide.
Lowe’s stores stock 40,000 products in 20 product categories ranging from appliances to tools, to paint, lumber and nursery products. Lowe’s has hundreds of thousands of more products available by Special Order – offering everything customers need to build, maintain, beautify and enjoy their homes. Lowe's operates more than 1,725 stores in the United States, Canada and Mexico. Lowe's is the second-largest US home appliance retailer after Sears.
For fiscal year ending January, 2011, the Company had revenues of $48.8 Million; net income of $2.0 Million and Income Growth of 12.7%.