Competitor Strategies in Home and Garden

October 2021

During the greatest period of social disruption in living memory, some leading players in Home and Garden survived intact, while others thrived and approach the future stronger than they were in Q1 2020. Online infrastructure maturity was one factor, speed of reaction and entrepreneurial thinking with corporate resources was another. The future sees improved demand tempered by concerns over a hot economy, supply bottlenecks and inflation, complicated by a global skilled labour shortage.

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Key Findings

Regulation

Home improvement and garden retail was mainly defined as essential retail meaning many stores remained open. Homewares and home furnishing specialists were more disrupted with prolonged store closers, defined as non-essential.

Supply chain

The dependence on production in China created a large and sharp shock, which has continued to reverberate through logistics, moving into parts, and creating persistent stock-outs and shortage

Route to consumer

The initial maturity of e-commerce capability such as click-and-collect or delivery was the distinction between winners and losers, at both company and region levels - massive investment followed.

Price/ product mix

Spend on home projects and outdoor living increased with a focus on use of space, storage solutions and garden entertainment. Home office furniture boomed, far into the year.

Innovation

The innovation focus was on commercial survival, helping staff with physical and mental wellbeing, coping with major disruptions to retail and supply chain structures and cashflow, all at the same time.

Introduction

Scope
Company exposure by category or region strongly impacted 2020 results
Coronavirus impact summary
The 4-step consumer progression of COVID-19

Competitive Environment Overview

Companies at a glance
Company strategies across emerging and developed markets

Responses to Many Forms of Disruption

Disruption across the PESTLE framework forms a commercial crucible
A pandemic period of extremes (emotions as well as commercial metrics)
Stay@home hit both supply and demand with delayed cyclic impacts
Transitioning into H2 2020, Home and Garden demand hit all-time peaks
The new issue is shortages - parts, staff, energy and value chain capacity
Some key takeaways from Home and Garden corporate policy responses
Enterprise-wide emergency response teams proved themselves essential
Defensive investments making supply chain processes more resilient
Furniture companies are not taking a “non-essential retail” tag lying down
Furniture shopping registers fastest growing use of AR/VR in 2021
Appeal profile for using AR/VR in furniture shopping holds surprises
Visible expansion in livestreaming with DIY and cooking sales content
This touches homewares and furnishings around design and style choices
Cookware and food topics appear more often than DIY for livestreaming (1)
Cookware and food topics appear more often than DIY for livestreaming (2)

Demand Optimism in Home and Garden

Expect more mergers and acquisitions activity from the newly cash rich
Home Improvement shows signs of 5-20% growth in 2021 by product
Do-It-For-Me data indicates higher DIY/garden demand carries into 2022
Millennials may be late arriving to the DIY party, but they brought bubbly
For some homeowners, spending growth is no longer about guests
Cocooning versus peacocking still defines furniture’s key buying factors
Flexible furniture: a clear design trend driving new product development
Mobility data indicate work-from-home is proving sticky through 2021
Lifestyle data also show WFH hybrid solutions increasing in 2021
Generic demand is up but home office furniture remains a visible focus

Ethics, Climate Change and Sustainability

Some companies reached peak emotional intelligence in their reactions
Attracting and retaining good people is rising as a strategic priority
COVID-19 adds new metrics for job searchers judging ethical employers
Differentiated sustainability now needs impacts across the value chain
Examining baseline claims, they now gravitate around the same themes
Home improvement companies on the front line fighting climate change

Conclusion

Key takeaways
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