With Home Depot and Lowe’s beating earnings expectations this week, we’re seeing clear enthusiasm for the home improvement sector. Home improvement, after all, has performed well even as other retail categories falter. Last week, Macy’s CEO Terry Lundgren discussed the fact that the retail giant is losing ground because consumers are spending in other areas, such as home improvement.
 
The segment of the home improvement market that is about to really take off is online sales. Delivery of home improvement materials-- which are mostly heavyweight goods-- is poised for rapid growth at a time when ¾ of American households are embarking on some sort of project. The market for delivery of large-format products is currently estimated at only $8-10B in the United States. This is a sliver of the total U.S. home improvement sales -- a $500B market—which makes this a significant opportunity.
 
As you saw with Home Depot’s earnings statements, more and more home improvement companies are starting to look to online sales as an area of focus. Thanks to the innovation of Amazon and other online retailers today’s consumers expect fast, economical and reliable home delivery and home improvement materials are no exception.
 
For home improvement or building supplies the barrier to entry has been in cracking the heavyweight supply chain because it is fragmented and heavily complex. Solving the extremely expensive and unwieldy problem of shipping heavy goods is difficult and one we’ve cracked. Developing a sophisticated, cost-effective and efficient system for shipping is key to ensuring that getting the tile for your bathroom is as easy and reliable as ordering a new book.
 
As online shopping continues to win over traditional retail, consumers’ expectations for home delivery of their goods (no matter the size and weight) will continue to rise and companies must prepare for that. For suppliers this shift means leveraging an efficient supply chain for heavy goods, and making real-time, data-driven decisions using predictive analytics and forecasting insights to optimize business operations and connect directly with customers, which ultimately means increased sales.
 


Jeff Booth is  Co-Founder, President and CEO of BuildDirect.com Based in Vancouver, British Columbia, BuildDirect is the world’s largest online marketplace for home improvement products. We connect homeowners directly to the suppliers of home improvement products, which eliminates heavy retail markups and makes for a much simpler and trusted shopping experience.

 

 

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