Home & Garden Trends - Microsoft Advertising

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Home & Garden Trends
May 2011
Adam Goodman
Vertical Insight Manager
Contents
Home & Garden Market Sizes
Estimating a total size for the market DIY retailers compete in is difficult because of the
sheer breadth of their range
•
Mintel estimate that the main markets
they compete in were worth some £39
billion, including VAT in 2010.
•
Sales by DIY retailers in 2010 were
£10.9 billion, down 2% on 2009
•
Sales fell sharply in the final quarter
because comparison was with the preVAT boom period of 2009. There
seems to have been a minimal surge
ahead of the VAT increase in January
2011
“DIY retailers are faced with the prospect that not only are consumers suffering from an
income squeeze but they are likely to want to increase their savings as well. However there is
the argument that because people are spending more time at home and unable to take so
many holidays, they will therefore do more DIY”
Mintel, DIY Retailing Executive Summary February 2011
Home & Garden / DIY Issues
Over the last five years there has been a fall of 4 percentage points to about 56% of the
adult population, that's 2 million fewer people undertaking DIY projects.
Those who have done
DIY in last 12 months
•
There are some anecdotal signs that the recession has encouraged more people to do jobs
themselves.
•
The economic outlook for consumers is the worst since the recession started. Mintel expects
spending on DIY to be very weak in 2011.
•
The ageing population is bad news for DIY retailers, but over the next five years the numbers in
the key 25-55 age bracket actually increases.
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
4
Forecast: 2011 will be poor growth - less than
all retail sales
15,000
Best case (£m),
13,669
Market value (£m)
13,000
Mintel forecast (£m)
11,360
11,000
(£m)
10,948
Worst case (£m)
9,051
9,000
Confidence intervals
7,000
95%
0
5,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
90%
70%
50%
Actual
Forecast
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Royal wedding bank holiday will boost
entertaining in the garden
•
The Easter period and Royal Wedding of 2011
presents people with a longer than usual holiday
season during which they can relax, entertain and
enjoy family life together.
•
The garden will play a major role in this as family
parties take place or friends and neighbours are
invited round around to celebrate. As long as the
weather holds the garden will become a party
space over two long weekends, so garden
products should benefit from this trend.
•
Younger consumers could be encouraged to get
ready to party in their gardens, not only buying
barbeques, but also shaping up the planting and
ambience with some fast, low maintenance
planting. They would respond to quick gardening
solutions that need little research and make the
place look welcoming with minimum effort.
Source: Mintel article, Feb 2011
Retail & Online Retailers Spend
• For the most part, Retail advertisers tend to spend the most on
advertising in the Press and on TV
• On average the industry currently spends around 5% on Internet
advertising (not including search). 2010 expenditure has increased
+1% from that of 2009
Source: NNR adDynanix : Jan – Nov 2010
7
Display Advertisement Publisher Location: Reach
and Frequency (Retail – Home Furnishings)
• Microsoft sites delivered both the highest number of impressions and the highest number
of unique visitors for Home Furnishing retailers in Dec 2010.
Source: ComScore adMetrix ‘Home Furnishing’ : December 2010
Display Advertisement Publisher Location: Reach
and Frequency (Retail – Home Furnishings)
• Microsoft sites also have the highest share of Home Furnishing retailers’ ad impressions.
• Average frequency is very competitive and far less than Glam Media and equal to eBay.
Source: ComScore adMetrix : December 2010
Display Advertisement Publisher Location: Reach
and Frequency (Retail – Home Furnishings)
• Microsoft sites delivered the second highest number of impressions and the second
highest number of unique visitors for Home Furnishing retailers in March 2011
Source: ComScore adMetrix ‘Home Furnishing’ : December 2010
Display Advertisement Publisher Location: Reach
and Frequency (Retail – Home Furnishings)
• Microsoft sites also have the second highest share of Home Furnishing retailers’ ad impressions.
• Average frequency is very competitive and less than eBay and Yahoo!’s.
Source: ComScore adMetrix :March 2011
Top Advertiser by Impression and UU by ComScore
AdMetrix
Source: ComScore AdMetrix – March 2011
Home & Garden Search Traffic KPIs
Traffic
• Searches for home & garden generics
increased by +37% between 2009 and 2010
• Searches for home & garden generic
increased by +15% Oct to Dec 2010 v Oct to
Dec 2009.
Insights:
• Sales by DIY retailers in 2010 were £10.9
billion, down 2% on 2009 (Mintel)
• Over the last five years there has been a fall
of 4 percentage points to about 56% of the
adult population, that's 2 million fewer people
undertaking DIY projects (Mintel)
1. Microsoft Advertising Intelligence Tool
Home & Garden Demographics and Daily Trends
35-49
32% . 25-34
1.Microsoft Advertising Intelligence Tool – December 2010 to Feb 2011 data
Industry Insights
Home & Garden Sector
This chart shows the growth of the Home & Garden sector
between March 2009 and January 2011
The Home & Garden Index, year-on-year - the
values are displayed from April to April
Source: IMRG, Jan 2011
Source: IMRG, Jan 2011
Home & Garden Sector Average
Conversion Rates
This chart shows the average conversion rate for the Home & Garden sector between January 2010
and January 2011
Source: IMRG, Jan 2011
Forecast for DIY Retailers
The following chart the decline is exaggerated by the truncated scale, but on these forecasts over a
period of just ten years the sector will have lost about a fifth of its share of retail sales.
DIY retailers sales as % all retail sales, 2005-15
Sales by DIY retailers, 2005-15
Source: Mintel, DIY Sector Size & Forecast, Feb 2011
Home & Garden – Interest in Gardening
•
•
•
•
People are reluctant to curtail their social lives and this has been positive news for eating and
entertaining at home.
A significant 44% of those cutting back switched to cooking more at home instead of eating out.
• According to Mintel’s Barbecue Foods report this shift has also supported barbecuing at home,
benefiting from its popularity as a way to get together with friends and family.
The trend towards domestic vacations and ‘staycations’ has also encouraged an interest in spending
more time in the garden.
Around 2.5 million adults, or 5% of the population, had stayed home for a holiday in the 12 months
to October 2009, while 7% were planning to do so in the future.
Interest in Gardening, April 2010
Source: Ipsos MORI/Mintel
Home & Garden / DIY Issues
• Incomes will be squeezed this year
• Inflation is running well ahead of wages growth
• The spending cuts are beginning to hurt
• Unemployment is rising
• Confidence is at a low ebb
• House prices are falling meaning this will encourage people
to save more.
• And in the medium term there is the threat of rising interest
rates.
• Weak Housing Market: Housing turnover is at a 30 year low.
• Prices are falling again. All the growth in the first half of 2010
was lost in the second.
• Houses are still less affordable to first time buyers than at
any time between 1991 and 2004.
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
Home & Garden: Strengths and
Weaknesses
• The recession may be encouraging
people to stay at home and do DIY
rather than going away.
• The key population group, 25 – 55, will
grow over the next five years.
• DIY retailers have introduced more
homewares to become ideas centres for
Do it for me customers
• They have introduced installation
services.
• But at the same time they have
strengthened their appeal to trade
customers.
• Spending will remain under pressure
throughout 2011 and perhaps into 2012.
• The housing market will remain very
weak.
• Negative factors will more than outweigh
any positive impact of people spending
more time at home.
• DIY seems to be out of fashion.
• The sector is mature, the expansion of
the market through the opening of larger
stores has come to an end.
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
The superstores dominate the middle
ground
• It is a market for older, affluent people
• The young tend to go for the non-specialists
• Indicating a lack of expertise and confidence
Profile of shoppers for DIY
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
The young have the most ambitious plans
Older people seem more content with minor improvements
Profile of those planning DIY in 2011
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
B&Q dominates the sector
• B&Q bigger than the next three
put together
• Straddles sector with strength
across the board
40%
• Homebase – successfully
positioned at the softer end of
the market
5%
7%
16%
• Wickes – prospering as part of
the Travis Perkins group
• Focus – still struggling for lack
of cash
© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
24
Future Opportunities
Trend: Resilience
Resilience is a consumer trend identified by Mintel’s Inspire that shows how cost cutting has
developed into a desire for self-reliance, a need to learn lost skills and take pride in doing it ourselves.
• With the onset of recession there has been a return to a desire for consumers to do small DIY tasks themselves.
• There is a desire for increased expertise in DIY. Some 16% complained that they could never find staff to give
advice and 12% said that they looked for advice on websites.
• There is definitely an underlying desire for greater expertise in DIY, a natural result from the failure, so often, for DIY
skills to be passed on from generation to generation.
• This presents an opportunity for the retailers. At a time when retailers are having to fight ever harder for
market share, this would be a good way to associate the brand with good advice and being trustworthy.
Trend: Green Technology
Green Technology is a consumer trend identified by Mintel’s Inspire that shows how the personal
benefits of going green are proving as or more important than the planetary.
• Consumer enthusiasm for eco-friendly products is low. Just 8% of consumers said they wanted to see wider ranges
of eco-friendly or energy saving products.
• Left to consumers the development of more ecologically aware attitudes would take a long time. Much of the
pressure is coming from governments because of the commitments they have signed up to.
• At present eco-friendly items tend to be merchandised along with comparable but less eco-friendly goods. There
should be scope to bring many of them together so that they could be displayed or promoted with the potential
benefit from buying them.
• The potential saving against a more traditional product could then be spelt out. It should be marketed around the
theme of common sense and saving cash rather than saving the environment.
Source: Mintel, DIY Retailing February 2011
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