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Economizing in the Home: DIY Retail - US - July 2009

Mintel’s research detailed in this report shows that households across the income spectrum are cutting back on spending in areas ranging from basic repair services to major home renovations. This report focuses in particular on economizing efforts in the area of home improvement, including DIY activity oriented towards saving money. It examines the changing retail landscape as consumers turn to discounters and alternative retail channels such as thrift stores and Craig’s List to save money. It analyzes branding and advertising, with a focus on how retailers are re-shaping brand identity and reaching out to customers with special offers, energy-saving products and loyalty clubs.

The depth, scope and nature of DIY economizing in the home varies with gender, income, age, ethnicity and household make-up. The exclusive consumer data in this report is analyzed for distinct demographic groups.

This report provides insight on how home and garden retailers and suppliers can capitalize on the following trends:

  • Slashed budgets on non-essential purchases, redecorating projects, and renovations
  • Consumer efforts to cut back or stop using professional home and garden services, ranging from basic handyman services to more specialized services such as pest control and snow-clearance
  • Behavioral changes consumers are making to cut energy bills
  • Home improvement products consumers are buying and installing to cut energy
  • Interest in “green” products that save energy

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Consumer survey data
          • Advertising creative
            • Abbreviations and terms
              • Abbreviations
                • Terms
                • Executive Summary

                  • Recession drives down confidence and propels economizing and saving
                    • Shifting consumer behavior offers opportunity to re-brand and build loyalty
                      • HHs with children, women and Hispanics cutting back most
                        • Consumers cut back on replacements, repairs, redecoration and renovation
                          • As consumers cut lawn and garden services, DIY sales stand to gain
                            • Promoting gardens and “staycations”
                              • Energy-saving practices and products used by vast majority of consumers
                                • Drop in use of maintenance services an opportunity for DIY alternatives
                                  • Consumers turn to alternate retail channels as the largest retailers adapt
                                    • Low prices becomes central to major retailers’ branding efforts
                                      • TV advertising showcases cost-cutting and value
                                        • Hispanics economize aggressively and take on energy-saving DIY tasks
                                        • Insights and Opportunities

                                          • Green marketing marries savings with eco-friendly lifestyle
                                              • Figure 1: Degree of concern relative to enviroment, October 2008
                                              • Figure 2: Belief that shopping habits make a difference in the world, October 2008
                                            • DIY programs showcase “green” houses and energy-saving projects
                                              • Codes, regulations and legislation spur demand for “green” building and DIY products
                                                • Private label warrants expansion in home improvement arena
                                                  • Figure 3: Incidence of buying store brand products, May 2008
                                                • Use of e-coupons may be developed for home improvement
                                                  • Figure 4: Attitudes towards online product coupons and promotions, by gender, February 2009
                                              • Inspire Insights

                                                  • The Simple Life
                                                    • Trend: Stress Society: Stress has become enemy number one
                                                      • Trend: Slow it all down
                                                        • Trend: Authenticity: The renewed search for authenticity of meaning in our lives
                                                          • Trend: Non-Standard Society: The end of one-size-fits-all
                                                            • What it means for the market
                                                              • The Singles Market
                                                                • Trends: Emerging Social Forces: The rise of the Single Person Urban Dwelling
                                                                  • Nomadic exploration
                                                                    • What it means for the market
                                                                    • Factors Driving the Need to Economize

                                                                      • Key points
                                                                        • Collapse of housing market precipitates downturn in home improvement
                                                                          • Figure 5: Sales of new and existing homes, 2003-08
                                                                          • Figure 6: Sales of new and existing homes, first five months of 2009
                                                                        • Falling real estate values shrink household wealth and limit home equity
                                                                          • Figure 7: Case-schiller U.S. national home price index, January 2000-January 2009
                                                                        • Stock market collapse further diminishes wealth
                                                                          • Figure 8: Dow Jones industrial quarterly observations, 2001-09
                                                                        • Rising unemployment compounds economic worry
                                                                          • Figure 9: U.S. unemployment rate, September 2008-May 2009
                                                                        • Confidence shaken, consumers slash discretionary spending
                                                                          • Figure 10: University of Michigan’s index of consumer sentiment (ICS), 2001-09
                                                                        • Consumers limit spending and increase saving
                                                                          • Figure 11: Outstanding consumer credit, by credit type, 1980-2009
                                                                        • Disposable income rising in 2009 as consumers begin to rebuild wealth
                                                                          • Figure 12: U.S. personal income and consumption, September 2008-April 2009
                                                                        • Rebuilding wealth is a long-term project
                                                                          • The psychology of financial losses determines future behavior
                                                                            • Effective branding now will engender loyalty
                                                                              • Expenditures on housing fall in 2008
                                                                                • Figure 13: Distribution of household expenditures, by consumer unit, 2003-08
                                                                            • Who is Economizing at Home?

                                                                              • Key points
                                                                                • Two thirds have cut spending; families and Hispanics economizing most
                                                                                  • Figure 14: Changes or plans to change spending to save money, by gender and presence of children, March 2009
                                                                                  • Figure 15: Changes or plans to change spending to save money, by age, household income and marital status, March 2009
                                                                                  • Figure 16: Household income distribution, 2007
                                                                                  • Figure 17: Changes or plans to change spending to save money, by race/Hispanic origin and by employment status, March 2009
                                                                              • Redecoration, Renovation and Replacement

                                                                                • Key points
                                                                                  • Almost half cut back on non-essential purchases for the home
                                                                                    • Figure 18: Incidence of cutting down on replacement or non-essential purchases for the home, March 2009
                                                                                  • One in five has cancelled plans to redecorate or renovate
                                                                                    • Figure 19: Changes in home purchases and redecoration/renovation plans, March 2009
                                                                                  • Middle-income HHs cancel redecorating and renovations
                                                                                    • Figure 20: Changes in home purchases and redecoration/renovation plans, by household income, March 2009
                                                                                  • Those with children show broadest range of changes in spending and plans
                                                                                    • Figure 21: Changes in home purchases and redecoration/renovation plans, by children in HH, March 2009
                                                                                  • Tough time for handymen should be high times for consumer sales
                                                                                    • Figure 22: Handyman/household repair service, changes in service in the past 12 months, March 2009
                                                                                • Lawn/Garden Service and Supplies

                                                                                  • Key points
                                                                                    • One in three users have cut landscaping services
                                                                                      • Figure 23: Landscaping services, changes in service use in the past 12 months, March 2009
                                                                                    • Lawn mowing services remain popular, but suffer reductions
                                                                                      • Figure 24: Lawn mowing service, changes in service use in the past 12 months, March 2008
                                                                                    • Consumers slash use of other lawn care services
                                                                                      • Figure 25: Lawn care services, changes in service use in the past 12 months, March 2009
                                                                                    • Changes made to home repair or lawn/garden services by income
                                                                                      • Figure 26: No change in use of lawn and handman services in the past 12 months, by household income, March 2008
                                                                                    • Seven in 10 reduce spend on lawn/gardening supplies and projects
                                                                                      • Figure 27: Cut back on lawn/garden supplies or projects, March 2008
                                                                                    • Income shapes the extent of reduced spend on lawn/garden supplies
                                                                                      • Figure 28: Cut back on lawn/garden suppplies or projects, by household income, March 2009
                                                                                    • HHs with children greatly reduce spending on lawn/garden
                                                                                      • Figure 29: Cut back on lawn/garden suppplies or projects, by children in HH, March 2009
                                                                                  • Energy-Saving Products, Repairs and Activities

                                                                                    • Key points
                                                                                      • Some 84% report making some changes to lower home energy costs
                                                                                        • Figure 30: Activities and purchases to lower energy costs, February 2009
                                                                                      • Energy-saving activities vary with life-stage
                                                                                          • Figure 31: Activities and purchases to lower energy costs, by age, February 2009
                                                                                        • Married and with children take more energy-saving measures
                                                                                          • Figure 32: Activities and purchases to lower energy costs, by marital status and children in HH, February 2009
                                                                                      • Household Maintenance Services

                                                                                        • Key points
                                                                                          • Reduction in service seen for pest control
                                                                                            • Figure 33: Pest control service, changes in service use in the past 12 months, March 2009
                                                                                            • Figure 34: New pest control products, 2009
                                                                                          • Interest in pest control service highest for those aged 65+
                                                                                            • Figure 35: Pest control service, changes in service use in the past 12 months, by age, March 2009
                                                                                          • Substantial cuts in service for chimneys, eaves, and siding
                                                                                            • Figure 36: Television ad, Stanley Steemer, march 2009
                                                                                            • Figure 37: House maintenance service, changes in service use in the past 12 months, March 2009
                                                                                          • Snow removal/plowing
                                                                                            • Figure 38: Snow removal/plowing services, changes in service use in the past 12 months, March 2009
                                                                                          • Changes made in household maintenance services, by household income
                                                                                            • Figure 39: Has used pest, snow removal or home maintenance service, by household income, March 2008
                                                                                            • Figure 40: Has made no change in use of pest, snow removal or home maintenance services in the past 12 months, by household income, March 2008
                                                                                          • Pool cleaning
                                                                                            • Figure 41: Pool cleaning or maintenance, changes in service use in the past 12 months, March 2008
                                                                                        • How Retail is Changing to Fit New Needs

                                                                                          • Key points
                                                                                            • Increasing competition: thrift stores, Craigslist, and dollar stores thriving
                                                                                              • DIY retailers limit expansion, offer smaller formats, return to core base
                                                                                                • E-mail letters and loyalty clubs
                                                                                                • Brand Qualities: Innovation and Innovators

                                                                                                  • Key points
                                                                                                    • Home Depot: “back to basics” with low prices and “green” options
                                                                                                      • Home Depot’s “Savings Center” brings low prices and special offers to the fore
                                                                                                        • Home Depot promotes energy-saving products and DIY projects
                                                                                                          • Home Depot points consumers to federal tax credits for energy-saving improvements
                                                                                                            • Lowe’s: Collaborative relationships, trusted brands, and low prices
                                                                                                              • Seasonal promotions, sales and online Savings Warehouse
                                                                                                                • “Efficient Home” website showcases energy saving products and projects
                                                                                                                  • Other major DIY and home improvement retailers
                                                                                                                    • Menards—an eclectic, value-oriented store with Midwestern identity
                                                                                                                      • Walmart—the “Save Money. Live Better” brand targets families, value-oriented DIYers and adds a “green” spin
                                                                                                                        • Target homes in on younger, more stylish consumers
                                                                                                                          • Sears and Kmart—diverse efforts to leverage Craftsman brand and service reputation
                                                                                                                          • Advertising and Promotion

                                                                                                                            • Key points
                                                                                                                              • “Money-saving,” “High Value” and “Energy-saving” are central themes
                                                                                                                                • Suppliers showcase cost-saving products and high-value services
                                                                                                                                  • Feldco window ad shows “scary” high heating bill and special offer
                                                                                                                                    • Figure 42: Television ad, Feldco windows, 2008
                                                                                                                                  • 3M Window Film ad emphasizes cutting AC cost and free estimates
                                                                                                                                    • Figure 43: Television ad, 3M window film, 2008
                                                                                                                                  • Baby boomers beckoned to “invest” wisely and get “better value” with remodeling service
                                                                                                                                    • Figure 44: Television ad, bath fitter, 2008
                                                                                                                                  • Retailers showcase low-prices, energy-saving and working on a budget
                                                                                                                                    • Home Depot pairs “It’s time” theme with low-price, energy-saving theme
                                                                                                                                      • Figure 45: Television ad, Home Depot, 2008
                                                                                                                                      • Figure 46: Television ad, Home Depot, 2008
                                                                                                                                  • Race and Hispanic Origin

                                                                                                                                    • Key points
                                                                                                                                      • Online Hispanics show greater and wider variety of economizing activities
                                                                                                                                        • Figure 47: Changes in home purchases and redecoration/renovation plans, by race/Hispanic origin, March 2009
                                                                                                                                      • Hispanics cut back on lawn/garden projects
                                                                                                                                        • Figure 48: Cut back on lawn/garden supplies or projects, race/Hispanic origin, March 2009
                                                                                                                                      • Hispanics make more efforts to lower energy costs
                                                                                                                                        • Figure 49: Activities and purchases to lower energy costs, by race/Hispanic origin, February 2009
                                                                                                                                    • Cluster Analysis

                                                                                                                                        • The Unchanged
                                                                                                                                          • Who they are:
                                                                                                                                            • Opportunity
                                                                                                                                              • Budget Chompers
                                                                                                                                                • Who they are:
                                                                                                                                                  • Opportunity
                                                                                                                                                    • Budgeteers
                                                                                                                                                      • Who they are:
                                                                                                                                                        • Opportunity:
                                                                                                                                                          • Cluster characteristics
                                                                                                                                                            • Figure 50: Household budget changer clusters, March 2009
                                                                                                                                                            • Figure 51: Changes to purchasing of yard and garden supplies, by clusters, March 2009
                                                                                                                                                            • Figure 52: Activities and purchases to lower energy costs, by clusters, March 2009
                                                                                                                                                            • Figure 53: Reduction in use of lawn-related services, by clusters, March 2009
                                                                                                                                                            • Figure 54: Reduction in use of household services, by clusters, March 2009
                                                                                                                                                            • Figure 55: Changes in home purchases and redecoration/renovation plans, by clusters, March 2009
                                                                                                                                                            • Figure 56: Intent to cut expenses for upcoming year, by clusters, March 2009
                                                                                                                                                          • Cluster demographics
                                                                                                                                                            • Figure 57: Clusters, by gender, March 2009
                                                                                                                                                            • Figure 58: Clusters, by age, March 2009
                                                                                                                                                            • Figure 59: Clusters, by household income, March 2009
                                                                                                                                                            • Figure 60: Clusters, by race/Hispanic origin, March 2009
                                                                                                                                                          • Methodology
                                                                                                                                                          • Custom Consumer Groups

                                                                                                                                                            • Introduction
                                                                                                                                                              • Key points
                                                                                                                                                                • Upper-income Hispanics economizing at high rate
                                                                                                                                                                    • Figure 61: Economizing in the past year, by Hispanic origin and income, March 2009
                                                                                                                                                                  • High-income Hispanics cut back on non-essentials, move to smaller homes
                                                                                                                                                                      • Figure 62: Changes in home purchases and redecoration/renovation plans, by Hispanic origin and income, march 2009
                                                                                                                                                                    • Upper-income Hispanics make cutbacks in lawn/garden projects
                                                                                                                                                                        • Figure 63: Cut back on lawn/garden suppplies or projects, by Hispanic origin and income, March 2009
                                                                                                                                                                      • Hispanics of different income levels take varied efforts to lower energy costs
                                                                                                                                                                          • Figure 64: Activities and purchases to lower energy costs, by Hispanic origin and income, February 2009
                                                                                                                                                                      • Appendix: Trade Associations

                                                                                                                                                                        Companies Covered

                                                                                                                                                                        • Ace Hardware U.S.
                                                                                                                                                                        • Aldi (USA)
                                                                                                                                                                        • Amazon North America
                                                                                                                                                                        • American Hardware Manufacturers Association
                                                                                                                                                                        • Big Lots, Inc
                                                                                                                                                                        • BJ's Wholesale Club, Inc
                                                                                                                                                                        • Bureau of Economic Analysis
                                                                                                                                                                        • Costco Wholesale Corporation
                                                                                                                                                                        • Craigslist
                                                                                                                                                                        • Discovery Channel
                                                                                                                                                                        • Do It Best Corp
                                                                                                                                                                        • Federal Reserve System
                                                                                                                                                                        • Google, Inc.
                                                                                                                                                                        • Greenfield Online
                                                                                                                                                                        • Home & Garden Television
                                                                                                                                                                        • Home Depot (USA)
                                                                                                                                                                        • Home Improvement Research Institute
                                                                                                                                                                        • IKEA USA
                                                                                                                                                                        • Kmart Corporation
                                                                                                                                                                        • LEGO Company
                                                                                                                                                                        • Lowe Worldwide
                                                                                                                                                                        • MasterCard Incorporated
                                                                                                                                                                        • Menard, Inc
                                                                                                                                                                        • National Association of Realtors (NAR)
                                                                                                                                                                        • National Retail Hardware Association and Home Center Institute
                                                                                                                                                                        • Orkin, Inc.
                                                                                                                                                                        • Power Tools Institute (PTI)
                                                                                                                                                                        • Reuters Group PLC
                                                                                                                                                                        • Ryobi Technologies (UK) Ltd
                                                                                                                                                                        • SAM's Club
                                                                                                                                                                        • Sears Holdings Corporation
                                                                                                                                                                        • Target Corporation
                                                                                                                                                                        • Terminix International Company L.P.
                                                                                                                                                                        • The New York Times Company
                                                                                                                                                                        • The Salvation Army
                                                                                                                                                                        • True Value Company
                                                                                                                                                                        • U.S. Bureau of Labor Statistics
                                                                                                                                                                        • U.S. Bureau of the Census
                                                                                                                                                                        • U.S. Environmental Protection Agency
                                                                                                                                                                        • University of Michigan, The
                                                                                                                                                                        • US Department of Labor
                                                                                                                                                                        • Walgreen Co
                                                                                                                                                                        • Walmart Stores (USA)
                                                                                                                                                                        • Washington Post Company (The)

                                                                                                                                                                        Economizing in the Home: DIY Retail - US - July 2009

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