It was one thing when Amazon was selling physical things, but the game changed the moment it started offering services, too. Ripples were promptly sent flying into all corners of the retail universe with the launch of Amazon Home Services in March 2015, and now that both mom-and-pop hardware shops, as well as national brick-and-mortar chains have had more than a calendar year to react to the changes, a definite trend has emerged.
Almost too predictably, that trend hasn’t seen Amazon move an inch from its position, while just about every other retailer scrambles to make up ground they never knew they had lost.
The latest and perhaps biggest domino in home improvement retail to fall to Amazon’s have-it-your-way style of concierge services is Lowe’s and its subsidiary furniture and lighting specialty brand, ATG Stores. Lowe’s announced that it had officially partnered with Porch to provide on-demand installation and assembly to customers who shop at ATG locations. While it might seem like a small move, Jay Rebello, vice president of emerging business at Lowe’s, explained that it’s a necessary step forward for hardware retailers that recognize the changing tides around them.
“Our partnership with Porch is a valuable asset and another way we provide personalized care and solutions to both our DIY and professional customers,” Rebello said in a statement. ”By offering the Porch Retail Solution on ATGStores.com, we believe customers will find the additional support they need to complete all of their home improvement projects.”
Make no mistake about it — the kind of service that Lowe’s, ATG and Porch are looking to offer is being seen less and less as a fringe offering among the consumers they serve. According to a study conducted by The Farnsworth Group, more than a third of millennial homeowners had consulted a home services website, like Angie’s List or HomeAdvisor, within the last 12 months, and that number dips to just 31 percent among 35-to-49-year-olds. In fact, 29 percent of 21-to-34-year-olds indicated that they were “extremely willing” to go to a digital provider for their home services, and a collective 76 percent were at least “somewhat willing.”
As usual, Amazon gets high marks for setting a trend that others follow, but the home improvement industry has certainly chosen a good time to collect itself to capture more of the market. Harvard University’s Joint Center for Housing Studies (JCHS) found last year that spending on home remodeling projects would increase 4 percent by Q1 2016, with sales of new homes, more often than not bought by young consumers buying their first houses, driving much of the surge.
“Recent homebuyers typically spend about a third more on home improvements than non-movers, even after controlling for any age or income differences, so increasing sales this year should translate to stronger improvement spending gains next year,” Chris Herbert, managing director of JCHS, said in a statement.
The bottom line? The sprawling brick-and-mortar store fronts of traditional hardware retail aren’t the place that young or even middle-age landowners first look to for installation or assembly help.
And it’s a mad dash for those business to get themselves up to speed. Wayfair, one of the most visible online home goods retailers, was quick to sign its own deal with Porch in April, and even Yelp got into the game with an update that lets users see price quotes for services from local handymen and women. To clear up any confusion over why so many brands are throwing resources at home services, Porch CEO Matt Ehrlichman didn’t shy away from naming the elephant in the room.
“If anyone tells you when Amazon enters their space that they were happy, they’re not telling the truth,” Ehrlichman told The Seattle Times. “But it’s been interesting because it’s actually galvanized everyone.”
Amazon’s rush toward home services has clearly steeled the legacy players in the home improvement space. It’s how their reactions will measure up to the online giant that could be harder to nail down.
PenneyVanderbilt 