WARC article. From DIY to DIFM: How Australia’s retail brands can serve opposing preferences as consumer demand shifts.

To DIY or to get someone in to DIFM? The $65Billion* question facing Australian retail.

Photo by Roselyn Tirado on Unsplash

Introduction

Retail is more challenging than ever, it’s rapidly changing and consumer demands are evolving at pace. None more so than in the category of home improvement. The last year saw a spike in DIY projects of all shapes and sizes, transforming homes inside and out through decorating and landscaping to fitting out the all-too-familiar home office, as Australians sought relief from lock down induced tedium.

As uncertainty continues and lockdowns remain an unpredictable part of life making planning hard, the attraction of undertaking DIY projects is waning. But when lockdowns prevent home visits by tradespeople, the alternative DIFM (Do-It-For-Me) option of getting someone in to do the job becomes restricted.

Consumers are frustrated and are seeking solutions which presents an opportunity for retailers and brands that can solve the consumer’s problem. What do retailers need to do to meet these shifting demands and balance the competing demands for both value and convenience shopping options?

Appetite for Construction: DIY surge sparked by COVID

Home renovation and ‘plating up’ gourmet cooking were already popular in Australia off the back of a succession of reality TV shows; such as The Block / My House Rules / MasterChef / My Kitchen Rules.

Driven by having time on their hands and to act as a diversion, COVID lockdowns initially prompted people to undertake a variety of projects; cooking & baking, homewares & craft, home improvement projects, self-education & e-learning a new skill or language.

Interest in Bunnings’ DIY online content grew by 63% year-on-year over 2020. Views of the ‘How To’ advice section on their website were also up by over 40%, suggesting customers have been using the extra time in the days to learn a new skill or update an old one.

After their initial pandemic concerns, many retailers in the home improvements category saw strong sales in the second half of 2020 and early 2021 as they invested in omni-channel services and ramped up ecommerce and click & collect to replace in-store purchases. Wesfarmers, with Bunnings, Officeworks and Kmart in the group, grew revenue by 16.6% in the second half and IKEA saw revenues up 11.4%.

The key consumer driver at this point was filling time, with lockdown restrictions keeping people at home looking for something to do. Despite the benefit of government HomeBuilder construction stimulus, JobKeeper employment stimulus, or taking early cash out from their Super funds, consumer confidence and willingness to spend (as measured by Roy Morgan) dropped to historic lows in April 2020 before recovering back into positive territory in November.

People in this mode, with more time on their hands than money, were primarily seeking value. Their motivating algorithm could be written as; Time > Money = Value.

But DIY’s now on the nose

While housebound people undertook various DIY projects during the initial lockdowns, the attraction is waning. The appeal of DIY is dimming as the locked down novelty fades in Lockdown 6.0 for Victorians who have endured 200+ days in lockdown and the NSW Delta wave reaches new daily highs in case numbers.

But unlike previous lockdowns, whilst people still have time on their hands, they now have more money to spend. In particular, businesses in many categories have noted consumers are spending their saved or unspent overseas travel budget (an estimated holiday spend of $65Billion).

The growth in popularity for DIY has also coincided with the property boom which benefited those on the property ladder; aka Baby Boomers. But this generation is getting older and are less willing or no longer capable of doing many DIY jobs themselves. Meanwhile, amongst the younger ‘Generation Rent’, the skills to undertake DIY are largely undiscovered as they don’t own their home and therefore do not have the responsibility of house maintenance.

Instead of DIY they are turning to the full service DIFM (Do-It-For-Me) On Demand Economy and getting tradespeople in to do their projects for them. In the first instance, as restrictions eased, consumers turned to Hipages or Airtasker to find the tradespeople to carry out the specialised tasks and the harder projects that they could not, such as installing lighting and repairing plumbing fixtures or larger renovation and home extension projects.

But there are challenges with finding tradesmen to do the work, as well as shortages of materials, with the home building and renovation boom impacting the industry with major delays and soaring costs.

More homes than ever before are being built in Australia, spurred on by the government's HomeBuilder program. Across the country, figures from the ABS show that total new dwelling approvals in the 2020-21 financial year were 27.3% higher than in FY 2019-20. This growth was driven by private sector house approvals which were 42.8% higher in FY 2020-21 than FY 2019-20. This jump in approvals has flowed through into new home starts which reached a record high in April.

When in-restaurant dining came off the menu, and people lost the motivation to cook or bake another sourdough, spending on food delivery services quickly took its place as Australians stuck at home turned to Uber Eats and Menulog. Data from Accenture shows that Australians are spending three times more on food delivery today than before COVID. And this is being maintained as dining in restaurants begins to return, suggesting that the food delivery habit is here to stay.

Australians, now with more money on their hands, were primarily seeking to save time and effort. Their motivating algorithm could be written as; Money > Time = Convenience.

Is there a third way? Bring on DIWM

But as lockdowns continue and with ongoing difficulties in finding tradespeople, stores still closed and facing restricted access to homes, consumers are looking to an alternative solution – DIWM (Do-It-With-Me). With this model, retailers and restaurants are pivoting to providing a service that brings their skills to consumers when you can’t do it in person.

At the simplest level this goes beyond ‘how to’ videos into creating online tutorials and webinars or offering livestream DIY classes that people sign up to in order to learn new skills. In this space we see the online delivery of what used to be done in person; for example learning advanced make-up skills with Napoleon Perdis Academy tutorials or online group personal training sessions for members with PT trainers such as Miss Spartan and team netball coaching from Nardelli Netball coaching delivered on Zoom.

On the food front, this means going beyond the delivery of cooked take away meals from fast food outlets. Consumers are ordering dinner kits to cook at home from higher quality restaurants such as Lucas Group offering Chin Chin’s Make Me, Feed Me menu and Providoor delivering ‘finish at home’ menus from 35 leading restaurants in Melbourne.

Australians now with money as well as time on their hands are primarily seeking an experience. Their motivating algorithm could be written as; Money + Time = Empowerment.

Implications for retailers and brands

For retailers, this starts with redefining the key needs and pain points of the customer experience when consumers are making the DIY or DIFM decision. Those that build a deep understanding not just of the purchase journey, but reimagine the researching and shopping experience will benefit the most. This means working with media and CX teams to find new ways of connecting with consumers to capture short-term online and ecommerce sales and develop the long-term opportunity to build the brand.

Leverage social content to establish trust, as well as increase sales and drive brand awareness. Instagram and Pinterest feeds are sources for home decor and improvement inspiration. And YouTube is the top platform (for all generations) to educate themselves on DIY.

Ratings and reviews are an effective tool. When selecting a DIY service, people want to find reviews from multiple sources, not just the brand website. Make it easy to find reviews for home and DIY products when browsing online and include educational materials, such as video tutorials, reviews, or expert help.

Influencers play a huge part in inspiring DIY projects. Many DIYers buy a DIY product or start a project because they saw it in a blog or were inspired by an influencer doing some DIY.

Invest in user-generated content (UGC). UGC is what it says it is on the can; any content – images, reviews, videos – that is created by a user rather than by a brand. UGC doesn’t just show how a product looks or works, it also establishes trust in the brand.

Mobile apps drive consumer empowerment. Home services brands need to have the right app technology and capabilities. Add social media to the mix, and that empowers people to make recommendations and share reviews about their favourite products, services and more.

Consumers expect the experience to be seamless and positive. Customers hate it when a service has friction of any type; the more work they have to do to use your product, the less likely they are to become repeat customers. Products are commodities; the real prize is the recurring revenue and deeper relationships that come with providing an extraordinary customer experience.

Give shoppers reasons to visit stores (when they can) rather than just buying online. As stores re-open, retail brands will need to create a reason to visit. Whether it’s through a signature brand experience (who’s missing the Bunnings sausage sizzle?) or partnering with other brands to deliver products and provide services. This highlights the need to rethink customer journeys to meet changing consumer behaviour.

Consumers want to support local retailers. Even as the country begins to open up, localism has not declined as CBD workers continue to work from home and are spending more time in their local areas. ‘Near me’ (shopping) searches remained strong throughout the last year —prompted by convenience, but also by a drive to support businesses that have been hardest hit by the pandemic.

Sustainability shift. Consumers are choosing to purchase from purpose-driven brands and the DIY and home improvement industry is no exception. Consumers review the materials used in products to ensure that they’re ethically-sourced, sustainable, or upcycled before purchasing. DIY businesses need to ensure that their mission and vision align with their actions and marketing.

Conclusion. What’s In It For Me?

Value. Convenience. Empowerment. The decision to DIY, DIFM or DIWM is driven by attitudes to an underlying value equation based on whether the consumer has more time or more money on their hands. Research will enable understanding of this attitudinal segmentation and will inform the strategy to target communications to best effect. The key to unlocking the opportunity for brands and retailers is to determine the motivation and develop the service offer that best meets the needs of their potential customers.

jeremy@distillastrategy.com