By: Peter Wright, Client Marketing Director, Valassis
Published Monday, Jun 26, 2017
It is widely recognized that the millennial generation is a force that can have a major impact on everything that goes on in the United States economy. According to the U.S. Census, in 2015, millennials outnumbered baby boomers by nearly 10 percent and surpassed them as the largest living generation. With its size and age, this generation is predicted to have an impact on the housing market and all business that support it -- good news for the home improvement and hardware industry.
Recently, it was noted by Home Depot CEO, Craig Menear, that millennials “appear to be on a six year delayed cycle in terms of household formation.”1 It appears, though, that they are starting to come out of that cycle. According to the same August category update, pent-up demand from millennials entering their prime home buying years combined with an aging U.S. housing stock should revive home ownership rates from historic lows and drive traffic to home centers and hardware stores. To further support the idea that there is a thaw in millennial home buying, recent data from the U.S. Census shows that a large portion of movers comes from the millennial age bracket. In fact, a 2016 U.S. Census study released in May 2017, 43.1 percent of movers were 20 to 34 years old.
This movement towards home ownership should further stimulate home improvement sales. But a couple of questions exist: First, what will these millennials spend their money on, and how can brands get them to spend money in their stores?
According to Scarborough, there is a definite set of projects consumers typically spend money on, and kitchen remodeling, wall treatments, and flooring are top of the list:
Source: Scarborough Multi-Media Study, 2016 Release 1
As we can see, while there are a wide range of categories within home improvement where consumers are spending their money, it would be wise for home improvement brand marketers to look at the data and concentrate their advertising initiatives on the areas where consumers are most focused.
The second big question is: How can brands reach these consumers with advertising? Again, it is important to let the data show us the way. Prosper Insights tells us that print and digital media are two key advertising platforms that influence consumer purchases in the home improvement category:
For both the core shopper (age 25-54) and the millennial shopper, print and digital advertising has a near 60 percent influence on home improvement purchases. It’s important for marketers to consider these key vehicles when compiling a media plan if they want to influence home improvement consumers to purchase their products.
With strong growth for the home improvement category on the horizon, a couple of key go-forward actions stand out for home improvement and hardware brands:
Executing against these key learnings will be beneficial to any business in the home improvement and hardware category.
1. Hoovers Home Centers and Hardware Update, August 15, 2016
2. U.S. Census Bureau and Impact Consulting Services, May 2017