Vice President, Director of Planning & Strategy
Although a softening of the home improvement market is predicted in 2014, digital opportunities abound for marketers as double-digit growth is still projected, according to the Joint Center for Housing Studies of Harvard University (JCHS). Matthew Baker, vice president and director of planning and strategy at Arnold Worldwide, advertising agency for clients like Kohler and PUR water filters, spoke with eMarketer’s Danielle Drolet about how best brands can align their digital strategy with the habits and behaviors of today’s DIY-er.
eMarketer: Will consumers be taking on more projects in the coming year or less?
Matthew Baker: We’ve seen double-digit growth. The home improvement sector is inextricably linked with homebuilding, home buying and financing, and the resurgence in the housing sector in the past couple of years. If you look at some of the major studies out there such as the JCHS that looks specifically at home improvements, they are projecting double-digit growth in 2014, as well. It’s going to be a very healthy time. However, they also project a softening as a result of a rise in mortgage rates.
eMarketer: How are consumers in the home improvement sector—whether do-it-yourselfers or those who employ contractors—using digital tools to research projects?
Baker: It is almost now a completely pervasive habit. No matter who or where or with whom you’re doing a renovation project, everybody starts in that early inspiration phase. Some studies show that the early inspiration phase can last between six months to a year while people either raise capital or find the right time in terms of the convenience of the upheaval of your life when it comes to redoing a kitchen or a bathroom. They can spend almost six to 18 months gathering and curating inspiration. The primary exclusive channel for that is digital.
eMarketer: What social media platforms are most popular among consumers looking to start a home improvement project?
Baker: Pinterest is now the third-largest social media platform in the world, and it’s entirely visually driven. It’s the perfect place for home improvement and design. Brands are playing heavily in Pinterest and then pushing out to commerce. Also, Instagram. Hansgrohe, a high-end shower manufacturer, is doing Instagram competitions, asking people to photo journal their homes and their inspirations.
“Brands are playing heavily in Pinterest and then pushing out to commerce.”
But, the publishers are playing a much bigger role. You can’t even talk about the home improvement category now without talking about Houzz, a home design-focused website and online community. It is by far the largest content hub of inspiration in the space. Bigger than HGTV and nearly all of the other publishers combined.
eMarketer: What is Houzz doing right?
Baker: They have more visual inspiration content than any other publisher. They also offer a utility for scrapbooking. It’s called Ideabook, where I can sign up, create and then pull in content through custom filters based on my renovation project. They also have great collaboration functionality, where I can share with my designers, contractors and friends, across social, physical and mobile platforms.
They are doing a phenomenal job, and others like HGTV are trying to do the same. We see a lot of conversation on Houzz from consumers. We recently did some research on behalf of our client Kohler, and Houzz was the most commonly cited tool by the consumers throughout, certainly, the early stages of renovation.
eMarketer: Inspiration aside, is ecommerce gaining importance to this sector?
Baker: Yes, there is growth, which has been driven more by the big-box retailers than it is the brands. Our client Kohler doesn’t offer direct consumer buying. They instead feed The Home Depot machine. The Home Depot has been phenomenally aggressive in the online sales market. You’ll definitely see a lot of growth in online sales directly, but mostly driven by big-box retailers, followed by Amazon.com. Amazon is wading more and more into this space, as it is in every category.
The kitchen and bathroom category makes up the majority of the remodeling growth and dollar spend. Once these consumers have gathered all of their research, including curation and scrapbooking behaviors on social platforms and publishers, they are going to retail. The vast majority is looking at big-box retailers. In-store is where showrooming comes into play, and mobile is a massive factor in their shopping experience.
eMarketer: Is brand engagement the main objective when it comes to using digital for home improvement brands?
Baker: Absolutely. From an engagement perspective, for a brand like Kohler, which has a very strong heritage in industrial design, it’s using digital channels such as Tumblr and Pinterest for a lot of inspiration work, including high-design visual content.
Then, it’s a conversation for brands such as Kohler and others to link from or, where possible, on those platforms to commerce. Marketers are looking to push from inspirational visual content like you have on Kohler Home Ideas to retailers and start to connect the dots to drive commerce from Pinterest and Tumblr.
eMarketer: How is mobile playing a key role in the retail experience?
Baker: Interestingly, in the home appliance world, which is very close to the home improvement segment, consumers are going to brick-and-mortars to see, touch and feel the products, and this is where mobile is having a phenomenal impact. Google’s mobile trends data reports home appliance and improvement as very high on the list of mobile use in retail environments.
For example, while at The Home Depot, consumers are doing one of three things on a mobile device. About 78% of people would rather use their mobile device in that retail setting to research and find out more information on products than actually speak to a sales representative. That’s a very big indicator of how mobile is influential.
“In-store is where showrooming comes into play, and mobile is a massive factor in their shopping experience.”
But if they’re in that space, they are doing research on products. They’re looking at reviews. They are participating in showrooming. A strong mobile presence or using mobile as a platform to engage with people in the retail environment is a big strategic opportunity for these brands and the retailers.
eMarketer: Can you share some best practices on how digital marketers can connect with home improvement consumers?
Baker: Be generous with how you celebrate other people’s achievements in the space, because that says a lot about you, your brand and how you will be accepted into this design and renovation world.
Be narrow in how you focus on your service design-type initiatives. It’s not just about your products and content, but how you are helping people do better renovations and achieve the goals and visions that they’re setting for themselves. Service design is a huge opportunity for brands as long as they don’t try to do everything and focus on an area that is par with their core competency.
Ignore the professional and trade community at your peril. What became very clear in all of our research was the phenomenal influence they have beyond architects and general contractors. How does your brand start to enable a plumber, for example, to be a better expert and a better advocate of your products? What are you doing to help them be a better professional? Work at it from both sides. Not just the consumer. Professional and trades are such a big voice and part of the decision-making process all the way through the journey for consumers.