home improvement

Housing demand has been heightened this past year as evidenced by prices increasing roughly 18% across the board. And according to Statista, the homeownership rate in the U.S. last year reached 65.8%, the highest it's been since 2010 when it was 66.5%.recommended you read

To the benefit of home improvement retailers, buying a home oftentimes comes with additional related costs. "Whether it's buying a new washer and dryer. Or a previous homeowner never did anything with their yard, but I'm going to buy a handheld trimmer. I'm going to buy a power washer. I'm going to buy a lot more," Horak said.

Despite the rapid rise in do-it-yourself customers this past year, the pro segment also experienced growth and "is going to continue to be an important facet of the market," Derr said.

While there was a slight pause in professional activity at the start of the pandemic as consumers were initially wary of having individuals enter their households, demand has ticked back up.

Among home improvement retailers, Home Depot has historically been the preferred destination for pro customers. But Lowe's has been taking steps more recently to capture share among this cohort.

In June, the retailer rolled out "Lowe's for Pros JobSIGHT," which is an augmented video chat tool. It allows professionals to virtually connect with clients and businesses. Lowe's said the technology was the first initiative it rolled out to help its pro customer base connect with consumers, and it promised to invest more into this segment of its business. This past April the retailer went deeper to capture what it estimates is a nearly $400 billion pro product market by introducing a tailored shopping experience designed specifically for this audience. New in-store features include The Pro Zone, a front-of-store area for grab-and-go style items; trailer parking; phone charging stations; and a dedicated checkout area.

The goal, Derr said, is to become a one-stop shop for professionals, which will lead to enhanced loyalty and repeat purchases in the future.

In its latest quarter, Lowe's reported over 30% comps growth from its pro customers, outpacing DIY comps, according to CEO Marvin Ellison. Home Depot, likewise, reported double-digit growth from both pro and DIY customers, with pro slightly outpacing DIY, the retailer's Chief Operating Officer Ted Decker said in a call with analysts last week.

"The professional constituency should not be underestimated as elevated demand in this part of the market is likely to continue longer than in the consumer segment," GlobalData Managing Director Neil Saunders said in emailed comments. "This means courting and keeping these customers by adding new services and features — as Lowe's has been doing — is vitally important."