Consultants predict "ease back," not "bounce back"

By Mike Duff

Home centers, hardware stores and lawn and garden centers can take steps to mitigate the effects of the recession, said Retail Forward’s Steve Spiwak, vp and manager of the home improvement program, and Nick McCoy, senior consultant.

Retail Forward, a consulting group, sponsored the "Home Improvement Retailing: A New Blueprint for Growth" webinar to look at prospects for 2009 and concluded that a real recovery probably will not take place until 2010, after the existing inventory of unsold homes sells through.

Retail Forward is looking for a 4 percent to 5 percent decline in home improvement store sales -- those from home centers, paint and wallpaper specialists, hardware stores, specialty building materials retailers and lawn and garden outlets -- in 2009 with a modest improvement in 2010 based, in part, on comparisons with the past few weak years. Rather than a bounce back, Spiwak characterized what is likely to happen in the immediate future as an “ease back” that will return the sector to 2006 sales levels only after several years.

For now, consumers are shifting their focus from big projects to smaller and more immediate tasks, which has the effect of favoring hardware stores and home and garden centers, the two home improvement segments that enjoyed positive sales in 2008. Many consumers find hardware stores and lawn and garden centers easy to shop for small projects and a good place to get advice on the kind of regular maintenance and room painting projects they are willing to take on today.

To improve their positions and prospects, home centers need to increase customer service, according to Retail Forward. That's something they are pursuing through initiatives such as Home Depot’s Aprons on the Floor program and by hiring available trades professionals to provide better advice to customers.

Home centers also need to expand the range of low-cost services they offer. Consumers are moving into do-it-yourself mode, although reluctantly in many cases. Those normally disinclined to take on home projects themselves may be coaxed to pay for a service that appears like a bargain.

The big-box home centers have already launched several efforts that build on consumer trends, McCoy said during the Feb. 26 webinar. Still, big boxes and other home centers can take advantage of consumer-trend opportunities by:

- Enhancing eco-friendly products and service and communicating those improvements. He pointed out that, although Home Depot has expanded its green efforts and was an early adopter of in-store green labeling, only 18 percent of consumers recognize its commitment to sustainability, according to Retail Forward's statistics.

- Upgrading Web sites. Visits to Home Depot and Lowe’s Web sites were up in 2008, while store visits were down or flat. Adding project information, planning tools and related services can sustain a store’s relationship with consumers who are putting off major projects.

- Making stores friendlier to women. The range of products available makes 52 percent of women say they enjoy shopping home improvement stores, so adding more items such as cleaning needs and toning down the industrial decor may attract a willing shopper.