Industry corner: DIY home products: a global perspective - do-it-yourself

Business Economics, Jan, 1997 by Darrin M. Brogan, Stanton G. Cort

An increased share of the heightened expenditures for home repair and improvement is expected to flow to the DIY market, in part because of rising costs of on-site, contractor labor. This will support the growth in the DIY sector. Another boost will be an increase in the number of homeowners with the knowledge and desire to undertake a wide range of home improvement projects without the aid of professional help. In addition, increased efforts by manufacturers to develop products specifically designed for the do-it-yourself consumer (e.g., simplified installation requirements, lighter weights, preassembled components) will foster gains.

Table 1

DIY Home Product Sales By Type
(in millions of dollars)

                               1985    1989    1995    2000    2005

Res. Repair/Imprvmt. (bil$)    78.6    96.0   118.3   149.2   188.4
%DIY                           88.2    94.7   105.5  109.9    112.8
DIY Home Product Sales         6936    9090   12484  16400    21250
Hardware & Tools               2130    2686    3388   4185     5080
Paints, Coatings & Sealants    1010    1288    1978   2460     2980
Building Materials              616     864    1443   1990     2660
Plumbing & Kit./Bath Prods.     721     997    1299   1750     2340
Windows & Doors                 604     909    1260   1780     2470
RSI Products                    594     741     968   1295     1720
Flooring                        286     338     478    670      930
HVAC Equipment                  212     294     418    620      910
Electrical Devices               72     107     137    190      260
Other                           691     866    1115   1460     1900

While virtually all DIY product segments will benefit from these trends, windows and doors, building materials, flooring, and heating and cooling equipment will exhibit the strongest gains through the remainder of the decade. Newer product designs within these segments generally offer the most dramatic performance improvements over previous types.

INDUSTRY STRUCTURE AND DYNAMICS

Overall participation in the DIY home products industry is vast. Upwards of 9,000 firms compete. The industry's ability to support such broad participation reflects not only the vast range of products and materials, but also the relatively low technological and production-related barriers to entry in most sectors. The substantial opportunities that have traditionally existed to develop profitable niche markets along product, market and geographic bases also have contributed to the large number of participants.

In spite of this considerable diversity among the participants in the overall DIY home products market, two major categories can be identified. The first is manufacturers of building materials (e.g., roofing, siding, windows and doors). The second is producers of durable goods (e. g., plumbing fixtures and fittings, paint, carpeting, heating and cooling equipment). Nevertheless, caution must be used in applying even these terms because of the degree of overlap that exists.