Renovators splash out in DIY stores
Claire Rogers of Fairfax has a good article on the changing structure of New Zealand’s home improvement market.
Today’s Slap on a deck, bang together a fence, throw up some guttering – no problems, mate. To pinch a slogan, DIY is in our DNA – and we’re tapping into it with gusto… Tim Morris, retail analyst and director at Coriolis Research, says the home-improvement pie is getting bigger because house values are continuing to rise. “You’re more willing to invest in a house because you can get the money back.” That in turn has a halo effect on other spending in the sector, he says. “A bigger barbecue doesn’t increase the value of your house but if it’s gone up by $100,000 in value maybe you’re more willing to spend $2000 on a fancy barbecue”… Morris says the entrance of Bunnings, in 2001, really fired up competition in the previously “sleepy” home-improvement market. “It’s been a good thing for the consumer.” When it comes to DIY, there are a few areas that homeowners are leaving up to the professionals such as roof repairs. Homeowners would rather get in a Denver roof repair company, or one in their area to carry out repairs and we can understand why. The same goes for jobs like anything to do with electrics. It’s always best to have a professional, like these electricians in Roswell, to come out since they have the training and knowledge to do the job safely.
While [outgoing Mitre 10 chief executive John] Hartmann claims Mitre 10 has been taking retail market share off the value-focused Bunnings, Morris believes the latter has the upper hand. Bunnings “does it better” in terms of in-store displays and execution, whereas Mitre 10 is more variable, perhaps due to the fact that it’s a co-operative and not a chain like Bunnings, he says. Bunnings probably has a pricing edge too, as it’s able to point to its Australian pricing when negotiating with suppliers here, he says….
Mitre 10 and Bunnings have strayed outside their traditional product categories – generating extra revenue from selling product lines such as homeware, appliances, and camping equipment alongside hammers, nails and potting mix. Mitre 10 has included cafes in its Mega stores, run by Columbus Coffee. In further good news for consumers that means more competition for the likes of The Warehouse, Briscoes and Noel Leeming and recreational goods suppliers. This means renovators can have more access to various home improvement supplies they might need, from anything such as new cupboard doors to different peel and stick wallpaper designs, for the ability to completely revamp the style of a room or house. It’s awesome that people can engage in their own DIY projects and attempt renovation themselves. Although, there are some improvements where it is better to get a professional to help out. For example if renovators need to use readymix concrete, and are covering a large space, they will find more success with the help of a professional.
Morris says the trend will only increase. “The product overlap is larger than you would think it would increase with time. “Within their big boxes they’ve got a hell of a lot of room and they’re constantly testing things. In retail the store with the best turnover per square metre wins,” he says. Many of the new products are “impulse buys” you’d traditionally have picked up elsewhere, such as torches. The introduction of homeware lines is in response to the greater proportion of female home-improvement shoppers – who Hartmann says largely drive product and project decisions.
But Morris says retailers are also making strategic, long-term moves into new categories such as whiteware. “Ten or 15 years from now when you want to buy a fridge or a stove, you’re probably going to be buying it at what we think of today as a hardware store.”