Channel Surfing
Home improvement centers/warehouse membership clubs
By Dana French -- Home Accents Today, 7/1/2005
Home improvement centers and warehouse membership clubs own 8% of the home accent market, according to Home Accents Today's 2004 Universe Study. These stores have capitalized on the do-it-yourself phenomenon and buy-in-bulk concept that has swept across the country. The channel's home accent sales are projected to grow 3.7% this year, from $4.9 billion in 2004 to $5.1 billion this year.
The top players in the home improvement center portion of the channel include Atlanta-based Home Depot and Mooresville, N.C.-based Lowe's Home Improvement. A number of smaller regional players also compete in the channel. Warehouse membership clubs include Wal-Mart's Sam's Club, Issaquah, Wash.-based Costco and Natick, Mass.-based BJ's Wholesale Club. Sears' The Great Indoors and Home Depot's EXPO Design Center round out the channel. Together, these retailers sold home accents through 3,853 U.S. door fronts in 2004.
Buyer DemographicsAccording to Home Accents Today's exclusive Consumer Buying Trends Survey, the Baby Boomer Generation currently between ages 41 and 59, accounts for 45% of households buying home accents in home improvement centers/warehouse membership clubs. Baby Boomers are most likely to purchase desk lamps and table lamps, as well as garden and patio accessories through the channel. Boomers' representation in the home accent/gift store channel is slightly higher, accounting for 51% of home accent buyers.
Generations X and Y, currently between ages 20 and 40, make up 19% of households buying home accents through home improvement centers/warehouse membership clubs.
Household incomes of home improvement center/warehouse membership club buyers are evenly distributed among ranges. Households earning less than $40,000 and those earning between $40,000 and $74,999 each account for 31% of buyers, while households making $75,000 or more comprise 38% of buyers. Slightly more than one-fifth of buyers through the channel earn $100,000 or more.
Southerners and Westerners account for a larger portion of home improvement center/warehouse membership club buyers than households buying home accents at home accent/gift stores.
Other demographic characteristics of home improvement center/warehouse membership club buyers:
- 72% are married
- 80% live in a house
- 77% have Internet access
- 43% are parents with children living at home
- 46% work full-time and 16% work part-time
- 21% have a 4-year college degree and 14% have a graduate degree.
The most frequently purchased accents products at home improvement centers and warehouse clubs are reflective of the merchandise carried in the channels. Home improvement centers, in particular, have a very different product emphasis than home accent/gift stores. The top products purchased through home improvement centers include garden and patio accessories, such as wind chimes, flowerpot holders, bird feeders and planters, as well as table, desk and floor lamps. Makes sense when you look at each store's footprint. In 2004, Home Depot's outdoor garden center averaged 22,000 square feet, accounting for 17% of total square feet of selling space. At Lowe's, the outdoor garden center totaled either 31,000 or 26,000 square feet, depending on store size, comprising 21% or 22% of selling space. In addition to live plants and flowers, each garden area stocks numerous decorative planters, pots, statuary, stepping stones and other outdoor accessories.
The mix of accessories at warehouse membership clubs more closely resembles that of home accent/gift stores. The top products purchased there are photo albums, photo frames, clocks and decorative pillows. Flowerpot holders, planters and fountains are also among the most frequently purchased products.
Prices commanded for the products most frequently bought at home improvement centers and warehouse clubs were generally lower than the prices paid for the same categories purchased in home accent/gift stores, with the notable exception of lamps — desk or table. For lamps, consumers typically shelled out more when they made their selection at a home improvement center or warehouse club.
Households spent a median of $16 on a flowerpot holder through home improvement centers/warehouse membership clubs. Nearly half spent $20 or more and 18% spent $50 or more. Two-fifths of buyers purchased two and 27% bought three or more. Half of the households buying a flowerpot holder through the channel have incomes of $75,000 or more; 47% are Baby Boomers and 17% are members of Generation X or Y. In comparison, households buying a flowerpot holder through a home accent/gift store spent a median of $35. While the home accent/gift store buyers are nearly identical in age, they have higher incomes — 66% have incomes of $75,000 or more.
With planters/urns, buyers spent a median of $28 on their total purchase, with 30% spending $50 or more. Planter/urn buyers are similar to flowerpot holder buyers. Nearly half are boomers and nearly half have incomes of $75,000 or more. Households buying a planter/urn at a home accent/gift store spent a median of $45. Again, these households are similar in age to home improvement center/warehouse club buyers and 65% have incomes of $75,000 or more.
Households buying desk and table lamps at home improvement centers/warehouse membership clubs spent more on their total lamp purchase than at home accent/gift stores. Households buying a desk lamp at a home improvement center/warehouse membership club spent a median of $25, compared to a median of $15 at a home accent/gift store. And, table lamp buyers spent a median of $45 at the former and a median of $34 at the latter. Two-fifths of households buying desk and table lamps at home improvement centers/warehouse membership clubs have incomes of $75,000 or more. Once again, the mix offered is a factor. With huge selections of lamps and lighting, both Home Depot and Lowe's provide destination shopping for the category. Last year at Lowe's, sales of lighting, including outdoor and decorative fixtures, totaled $2.1 billion, 6% of the retailer's total sales.
Shopping FactorsThe product's style and appearance are the No. 1 consideration for consumers whether they're buying at a home improvement center, warehouse club, home accent or gift store. The product's color, durability and overall quality receive identical ratings from both buyers and are in a three-way tie as the second most important factors.
After these universally important criteria, buyers at home improvement centers/warehouse clubs place more emphasis on the product's price, size and functionality than home accent/gift store buyers. They also believe the ease of upkeep and care instructions are more important considerations. And, they rate both the manufacturers' reputation and the product's brand as more important factors than households buying at home accent/gift stores.
Three-fourths of home accent buyers through home improvement centers and warehouse membership clubs look through magazines for product and decorating ideas and 69% watch TV programs for information. While 77% of buyers through the channel have Internet access, only 15% log on to look for ideas and information on home accent products and home design. n
| home improvement centers | warehouse membership clubs |
| wind chimes | photo albums |
| flower pot holders | photo frames |
| bird feeders | clocks |
| planters/urns | decorative pillows |
| table lamps | flower pot holders |
| desk/reading lamps | planters/urns |
| floor lamps | fountains |
| stepping stones | framed prints |
| bird baths | throws |
| hose holders | vases |
| bought any home accent at | ||
| home improvement center/warehouse membership club | home accent/gift store | |
| household income | ||
| under $30,000 | 19% | 17% |
| $30,000 – $49,999 | 21% | 21% |
| $50,000 – $74,999 | 22% | 24% |
| $75,000 – $99,999 | 17% | 20% |
| $100,000 or more | 21% | 18% |
| generation | ||
| Generation Y born 1976–1985 | 2% | 2% |
| Generation X born 1965–1975 | 17% | 16% |
| younger Baby Boomers born 1956–1964 | 20% | 22% |
| older Baby Boomers born 1946–1955 | 25% | 29% |
| Happy Days Generation born 1936–1945 | 20% | 19% |
| senior Seniors born 1935 or before | 16% | 12% |
| residence type | ||
| house | 80% | 81% |
| apartment | 7% | 4% |
| condominium | 5% | 7% |
| mobile home | 4% | 4% |
| region | ||
| northeast | 19% | 21% |
| midwest | 18% | 26% |
| south | 43% | 38% |
| west | 20% | 15% |
| home improvement centers/warehouse membership clubs | 8 |
| home accent/gift stores | 23% |
| 2004 estimated | change 2004 to 2005 | 2005 projected | |
| home improvement centers/warehouse membership clubs | $4.9 billion | 3.7% | $5.1 billion |
| home accent/gift stores | $14.6 billion | 3.1% | $15.0 billion |
| Source: Home Accents Today 2004 Universe Study |
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| bought wind chimes at | ||
| amount spent | home improvement centers/warehouse membership clubs | home accent/gift stores |
| median | $20 | $22 |
| under $10 | 20% | 5% |
| $10 – $19 | 25% | 24% |
| $20 – $29 | 25% | 38% |
| $30 – $49 | 11% | 24% |
| $50 or more | 19% | 9% |
| number bought | ||
| one | 59% | 64% |
| two | 18% | 9% |
| three or more | 23% | 27% |
| bought flower pot holders at | ||
| amount spent | home improvement centers/warehouse membership clubs | home accent/gift stores |
| median | $16 | $35 |
| under $15 | 29% | 17% |
| $15 – $19 | 23% | 6% |
| $20 – $29 | 18% | 22% |
| $30 – $49 | 12% | 22% |
| $50 or more | 18% | 33% |
| number bought | ||
| one | 30% | 42% |
| two | 43% | 25% |
| three or more | 27% | 33% |
| bought planter/urns at | ||
| amount spent | home improvement centers/warehouse membership clubs | home accent/gift stores |
| median | $28 | $45 |
| under $15 | 20% | 8% |
| $15 – $24 | 23% | 25% |
| $25 – $49 | 27% | 17% |
| $50 – $149 | 13% | 42% |
| $150 or more | 17% | 8% |
| number bought | ||
| one | 43% | 27% |
| two | 27% | 37% |
| three or more | 30% | 36% |
| bought desk/reading lamps at | ||
| amount spent | home improvement centers/warehouse membership clubs | home accent/gift stores |
| median | $25 | $15 |
| under $15 | 22% | 28% |
| $15 – $24 | 18% | 18% |
| $25 – $29 | 15% | 18% |
| $30 – $39 | 15% | 9% |
| $40 – $74 | 15% | 9% |
| $75 or more | 15% | 18% |
| number bought | ||
| one | 70% | 67% |
| two | 22% | 16% |
| three or more | 8% | 17% |
| bought table lamps at | ||
| amount spent | home improvement centers/warehouse membership clubs | home accent/gift stores |
| median | $45 | $34 |
| under $20 | 8% | 25% |
| $20 – $24 | 21% | 12% |
| $25 – $39 | 21% | 13% |
| $40 – $59 | 12% | 19% |
| $60 – $124 | 17% | 12% |
| $125 or more | 21% | 19% |
| number bought | ||
| one | 60% | 60% |
| two | 32% | 20% |
| three or more | 8% | 20% |
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