The home improvement industry is a multi-billion dollar business in Australia that earned revenues in billions of dollars since 2018 and is expected to generate exponential sales revenue upwards of more than a couple hundred billion dollars in 2023.
The industry holds a lot of promise with the rising popularity of “do-it-yourself” (DIY) options, as technology has provided a lot of avenues to promote the practice of home improvement, including self-equipping DIY videos, easy-to-use tools, equipment, and pre-fabricated construction materials that can be found on the hardware store and retail shelves.
However, the rising demand for more and enhanced home improvement capabilities can be a challenge for the retail business, as it also gives rise to challenges in managing and monitoring inventory, prices, and database management.
A notable decline in skilled labour
While a lot of home improvement companies have been flourishing in the last five years, the industry saw the number of skilled labourers and craftsmen dwindle.
The growing demand for home improvement services allowed companies to experience a backlog in uncompleted or uninitiated home improvement and renovation projects, presumably due to DIY innovations that made work much simple and convenient for the average homeowner.
Just before the COVID-19 pandemic, the home improvement industry faced the greatest shortage of highly skilled labour in history. For some companies, the situation limited their business growth, profits and cash flow.
The pandemic lockdowns also added more strain as activities were restricted and home repairs and improvement services took a backseat.
Failure to plan for an increase in retail sales
With new DIY home improvement tools and equipment rolling out in the market, retail stores have not intently planned on accommodating the influx of new stocks and increase in inventory. Thus, businesses are getting overwhelmed in inventory segregation, management, and sales monitoring.
In 2017, the total sales revenue of home improvement centres in Australia amounted to around $32 billion and the amount has been increasing year after year since then.
Manual labelling and traditional inventory practices have not been very efficient in addressing this shift in market behaviour. Thus, solutions to speed up and automate labelling, stock-keeping practices, and inventory database management are urgently needed to step up in order to address the issue.
Increase in the number of Australians choosing to DIY than hire professional help
According to a recent study, 55 per cent of homeowners in Australia have decided to take on home improvement and repair jobs rather than seek professional help.
This has taken away the demand for skilled workers and labourers in the home improvement market.
A study had also found that for those who took the DIY path, there’s an average of nine improvement jobs that require action or need to be done. This is also a major factor in the increase in retail sales of home improvement/DIY stores across Australia and New Zealand.
A market study also showed the increasing number of DIY-capable projects that have shelf-ready materials and tools available to grab and go.
- Painting: 55 %
- Bathroom remodel: 30 %
- New carpet: 28 %
- Landscaping: 27 %
- Kitchen remodel: 27 %
- Drywall repair: 25 %
- Fix/replace door(s): 23 %
- Fix/replace window(s): 22 %
- Flooring repair: 21 %
- Roof repair: 20 %
- Deck/patio repair/installation: 20 %
- Re-caulking: 20 %
- Fix/replace faucet(s): 16 %
- Lighting installation: 15 %
- New tiling: 15 %
- Fix leak: 14 %
- Fix/replace tub/shower: 14 %
- Fix/replace toilet(s): 14 %
- Fix/replace plumbing: 12 %
- Siding repair: 12 %
The cost of hiring, training, and maintaining personnel for small retail businesses is increasing.
It follows that when the stock-keeping capability and capacity increase, so does the need for more personnel to manage these. However, the cost of hiring additional staff for the workforce can cause a big dent in the cash flow of a business, especially a small one.
While a good business activity is indicative of a great economy, it also primes up the rates for personnel service due to higher costs and standards of living.