How might COVID-19 impact the home renovation industry, according to social mentions and sentiment?
at home, social distancing and quarantining yourself like a model citizen. After
a few days go by, you realize the dreadful truth: You’re only capable of binge-watching so much
when it hits you. You’re going to have
to do something (gulp) productive.
There’s no denying it any longer. It’s home renovation time. And you’re not alone.
Take a look at Figure 1 below from LikeFolio that tracks the number of people talking about their home renovation ideas on social media.
That’s a doubling of normal levels, in just two weeks.
Let’s take a look at a few of the companies set to benefit from this massive shift in consumer behavior. After all, these “essential businesses” are delivering when many consumers find their regular activities are not an option.
Home Depot (HD) and Lowe’s (LOW) see a surge in consumer demand, as noted in Figure 2 below.
One of the most popular focal points of home renovations is the kitchen. This current trend isn’t surprising considering people are spending so much time eating and snacking that the “Quarantine 15” has already become a threat to waistlines.
Just look at the trajectory in Figure 3 below, demonstrating the number of consumers mentioning (on social media) their plans to do a kitchen renovation.
Kitchen renovations usually entail appliance updates, and quarantine home renovation is no exception.
There are lots of appliance manufacturers showing solid demand gains from consumers. One of the most surprising we've tracked so far is Whirlpool’s Maytag brand appliances. Figure 4 below displays consumer purchase intent mentions by quarter.
FIGURE 4: WHIRLPOOL CONSUMER PURCHASE INTENT MENTIONS PER QUARTER. There is a 68% year-over-year increase in consumer demand for Maytag brand products according to the data provided by LikeFolio. Source: LikeFolio.
Painting the interior of a home is one of the easiest ways to renovate the look of a home, without letting a bunch of strangers inside during a quarantine.
LikeFolio data suggests that people are picking up the brush at an incredible pace while they’re stuck at home.
That’s an unprecedented increase, and as of the publish date of this article, it’s only headed higher.
One company receiving a high number of social mentions coming out of this surge in DIY painting projects is Sherwin Williams,
who has seen LikeFolio purchase intent mentions reach record levels in the
Obviously, a two-week shift in consumer behavior does not necessarily translate into a great investment. Here are three key metrics to keep in mind over the coming weeks and months that can potentially help investors navigate the DIY trend surge during the COVID pandemic:
1. Does DIY home renovation enthusiasm return to normal levels once the quarantines are lifted, or are consumers simply front-loading their renovation budget due to stay at home constraints?
2. Which companies are successful at turning quarantine-inspired rookie renovators into long-term customers? Consumer happiness levels will tell the story here, and LikeFolio will be watching the trends closely.
3. How do these companies match up over time compared to the huge opportunities we are seeing in other quarantine-related consumer shifts like work from home, food delivery, and many others?
The data from the past few weeks indicates that consumers are in fact making the most of a difficult quarantine situation by tackling some needed DIY projects at home, and some companies are doing better than others at taking advantage of this unique opportunity.
Andy Swan is not a representative of TD Ameritrade. TD Ameritrade and LikeFolio are separate and unaffiliated companies. The views and opinions expressed in this article are are solely those of the author.
Research provided by unaffiliated third-party sources. TD Ameritrade and any third parties mentioned are separate and unaffiliated companies and are not responsible for each other’s opinions, services, or policies. TD Ameritrade does not guarantee nor is it responsible for the completeness or accuracy of the data provided by third-party firms and makes no representations or warranties with respect to the accuracy and completeness of the information, opinions, or views provided.
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