American consumers will be spending more time at home this summer as they continue to social distance amid the COVID-19 pandemic, and they are thus examining ways to spruce up their surroundings with home improvements and backyard landscaping projects. Consumers are facing financial strains at the same time, as unemployment rates have skyrocketed in recent months. This has led many to defer payments on large-ticket items such as household goods and furniture.
One installment payment app saw a record year-to-date high on April 5, when app-enabled purchasing volumes at specialty home furnishing stores was 111 percent higher than the daily average for 2020. Also, furniture stores registered a year-to-date high on April 10, with transaction volumes up 61 percent compared to the daily 2020 average.
In addition, the app users’ spending on such areas as home and garden rose 26 percent among Generation Z consumers, 5 percent among millennials and 2 percent among Generation X consumers during the week ending April 11, compared to the previous week.
In this month’s Deep Dive, PYMNTS examines how the lockdown has affected consumer investments in home improvement and furnishings and the impact of retail shutdowns on how consumers shop and pay online.
Demand Rises For Furniture, Garden Supplies
Stay-at-home mandates helped boost shares for online home furniture retailers like Wayfair as consumers sought to refresh their homes while spending more time indoors. Shares climbed 35 percent on May 5 following quarterly results that were higher than anticipated. The eCommerce company witnessed a spike in sales beginning in mid-March, and its executives noted that sales momentum is not slowing down in the current quarter, with revenue up nearly 90 percent compared to the same time last year.
Wayfair CEO Niraj Shah expects customers will continue to invest significantly in their homes for some time to come. The company has been offering flexible payment options to its online customers since October 2016. The temporary closing of physical retail stores in the U.S. has afforded a boost for online furniture retailer Joss & Main as well — it recently posted a 19.8 percent spike in sales in the quarter ending March 31.
Hardware, home improvement and gardening supply retailers are among those benefiting from consumer spending during the pandemic. Consumers working on do-it-yourself home renovations and repairs helped year-over-year sales rise 10 percent in March while consumers were mostly staying home, the U.S. Department of Commerce announced. Lowe’s witnessed an uptick in almost every category, with customers tackling old projects they never finished or beginning entirely new ones, according to Lowe’s CEO Marvin Ellison. Some of the most popular items selling at these stores include power tools, gardening supplies and even firewood.
The eCommerce platforms selling farming supplies, meanwhile, are witnessing greater demand for shovels, rakes and other landscaping tools, with many consumers looking to avoid contact with others in grocery stores by growing their own fruits and vegetables.
Access to flexible buy now, pay later solutions is helping consumers keep their monthly expenses in check while enabling them to easily access products to make their abodes more comfortable and attractive.
European Consumers Show Similar Trends
Similar trends are taking place in Europe, as consumers there take advantage of their time at home to work on projects both indoors and outside. Consumer desire to revamp their home office spaces for remote work setups has led to a significant rise in visits to online home improvement websites, according to recently released Comscore data. Visits to home furnishing sites such as Wayfair or Ikea rose 71 percent in France and 57 percent in the United Kingdom for the week ending April 26 compared to the week ending Jan. 19. Recent data also indicates that consumers are still turning to online shopping as a safer alternative to retail home and hardware stores despite them remaining open in some countries.
Websites and apps focused on architectural design, including Gardeners World and Real Homes, also saw an uptick in traffic. Germany saw a remarkable 91 percent bump and France saw an 84 percent increase in visits to such sites during this same period. Spain experienced fewer visits to those sites during this time, though it has regained some momentum since reaching its lowest point during the week ending March 15.
Some industry observers question whether consumers will lose interest in their backyard landscaping projects, remote workspace makeovers or other upgrades as more restaurants, retail shops and public spaces begin to reopen and even further into the future once the pandemic becomes less severe. Businesses benefiting from the surge in interest in home improvement and garden supplies will have to offer promotions and flexible payment options and further consumer engagement tactics in the meantime to keep demand strong through the summer and into fall.
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