DIY Home Improvement Industry Research

According to statistics, in 2022, the global DIY home building materials retail market will reach 830 billion US dollars. Among them, the North American market size is 448 billion US dollars, and the main merchants are Home Depot and Lowe's; the European market size is 210 billion US dollars, and the main merchants are B&Q, Leroy Merlin, and Obi; the Asia-Pacific market size is 172 billion US dollars, the main merchants are Bunnings Warehouse, etc..

Overview of main merchants

Home Depot (US): Sales increase $6.2 billion, or 4.1%, to $157.4 billion in 2022, with 240 million square feet of store space. A stronger U.S. dollar negatively impacted fiscal 2022 net sales by $339 million.

B&Q (UK): With sales of 16 billion pounds in 2022, it operates nearly 320 stores in the UK, Poland, and other places.

Leroy Merlin (France): Sales in 2022 will be 13 billion euros, with more than 210 stores in many countries and regions.

Bunnings Warehouse (Australia): 2022 sales of A$10.5 billion, with more than 260 stores in Australia and New Zealand.

2. The overall situation and future prospects of the industry

Overall, the DIY home-building materials retail industry will benefit from the increase in home demand, and the overall growth rate will reach 5% in 2021. The trend of improving the living standards of middle and low-end consumer groups has also driven the demand for related products.

However, due to rising logistics costs and rising prices of core raw materials, the gross profit margins of various merchants are under certain pressure. Coupled with the weak offline consumption affected by omicron, the same store growth will slow down to 2% in the first quarter of 2022.

In the long run, with the improvement of living areas and consumption demand for transformation, the average annual growth rate of the DIY industry is expected to remain above 4% in the next five years. Offline stores will be deeply integrated with online business to enhance customer experience, thereby increasing customer unit prices and repurchase rates.

3. The industry is facing major problems

Raw material prices fluctuate greatly: Dependence prices of wood, aluminum and other raw materials continue to rise, bringing higher cost pressures to DIY retailers. The overall technical level is relatively low, relying on third-party logistics support.

• The rise of live broadcast e-commerce challenges the traditional model: like over there, through live broadcast interaction to meet DIY needs, it will bring a certain impact to offline stores.

• Rise in labor costs: There is a shortage of labor in the United States and other places, and the cost of middle and low-end workers continues to rise, which also increases the cost of DIY services.

• Offline stores are about to be saturated: the layout of offline stores in the traditional European and American markets is basically mature, and it is difficult to expand on a large scale.

• Highly competitive: The DIY retail market is highly competitive, and price wars and competition for market share are the norm.

4. Typical enterprise technology applications

Taking Home Depot as an example, it took the following actions to solve the problem:

• Continuous investment in the company's Internet strategy, aiming to simplify operations and provide customers with high-quality services; simplify customer interaction; provide customers with a better online shopping experience. Committed to building the fastest and most efficient home improvement product distribution network.

• Establish an independent procurement center, directly set long-term pricing with raw material suppliers, and reduce procurement cost fluctuations.

• Introduced an online design assistant based on AR and VR technology to help users remotely and virtually display DIY plans.

• Actively promote the "rental" business to meet temporary small-scale DIY needs and lower the threshold for users.

• Intelligent online customer service The level of roboticization continues to improve, effectively solving the problem of labor shortage.

• Deep integration with third-party logistics providers to realize order integration services.

The above measures have improved the customer experience and effectively reduced the cost and consumption threshold. The operation of Home Depot has basically continued to be stable.

1. The overall operating conditions and future prospects of the selected industry

In 2022, affected by inflation and other factors, the overall growth rate of the DIY industry will slow down to 4%. Many businesses are facing cost pressures. However, from a long-term perspective, with the continuous release of home renovation demand, the DIY industry still has good development prospects, and the epidemic has also brought new opportunities to the industry. For example, due to the home isolation policy caused by the epidemic, more consumers began to try DIY, which brought new growth points to the industry. In the future, I expect that the DIY retail industry will carry out more exploration and innovation in digitalization, personalization and sustainability.

2. The main problems currently facing the selected industry

As mentioned earlier, the main issues currently facing the DIY retail industry include a fierce competitive environment, e-commerce challenges, and supply chain issues. These issues not only affect the profitability of the industry but also challenge the operational efficiency and customer satisfaction of enterprises.

3. Analysis of technical solutions adopted by typical enterprises

Take Home Depot as an example. In response to the challenges of e-commerce, Home Depot has launched a new online shopping experience, which includes:

• Provide rich product information to help consumers make purchase decisions

• Simplify the shopping process and improve shopping efficiency

• Provide real-time logistics information to enhance consumers' shopping experience

This solution not only solved consumers' online shopping needs but also successfully increased Home Depot's online sales, proving its effectiveness.

4. Solutions to the current problems faced by the selected industry

In view of the problems faced, I propose the following innovative solutions:

a. Use big data and artificial intelligence technology to improve the accuracy of product recommendations and improve consumer satisfaction, so as to stand out in the fierce competition. Use blockchain technology to create a "smart supply chain" to track the source of materials in real-time. Explore proprietary technologies to enhance online and offline experience, and innovate the "smart retail" model.

b. For the challenges of e-commerce, enterprises can not only improve their own digital capabilities but also try to conduct in-depth cooperation with e-commerce platforms and use the traffic advantages of e-commerce platforms to acquire more customers.

c. In response to supply chain problems, DIY companies can cooperate with suppliers to develop new environmentally friendly raw materials to reduce costs and increase efficiency. At the same time, enterprises can use supply chain finance to improve the liquidity of the supply chain and reduce operating costs.

5. Prospects for the future development direction of the industry

In the future, the development of the DIY retail industry will pay more attention to sustainability and personalization. In terms of sustainability, companies will pay more attention to environmentally friendly product design and production to meet consumers' green needs. In terms of personalization, companies will use big data and artificial intelligence technologies to provide more accurate product recommendations and more personalized services to enhance consumers' shopping experience.

DIY retail will become an "ecosystem". The company can provide integrated services from raw material research and development, production, and processing to home improvement. Use cutting-edge technologies such as AR/VR to create new scenes of "smart transformation". At the same time, it pays attention to cooperation with local governments, supports grassroots public construction, and deeply integrates third-party logistics, financial and other services.