News I published 03 March 2021
The rise or fall of DIFM in home improvement?
The drivers behind more DIFM
During the last couple of years, or until 2019, to be more precise, there was a slow but gradual shift towards more DIFM in the total number of home improvement jobs done in Europe. In 4 years, the share of DIFM jobs increased from 33.5% to 37.5%. The key drivers behind this mainly revolve around age.
On the one hand, the population in Europe is ageing. There are significant differences between the countries, but an overall conclusion can be drawn. The baby boom generation is increasingly faced with home improvement jobs that need to be done, but they are no longer willing or capable of doing these jobs themselves. As this age group represents both a large group within the demographic build-up of European society and a group that used to be avid and experienced DIYers, they are contributing to the shift towards more DIFM.
On the other hand, we have a younger generation (millennials) who are traditionally less DIY-savvy (both in terms of DIY experience and confidence) and are more often renting their house instead of owning it (thus doing less in terms of home improvement). Furthermore, they tend to value and invest their time in a wide variety of activities, but not so much in DIY jobs. This age group is also contributing to the shift to more DIFM jobs instead of DIY jobs.
The drivers towards more DIY
Up until 2018, our data coming from the European home improvement monitor (a survey among 26,400 European consumers in 11 countries) supported both the story above and the trend towards more DIFM. However, in 2019, we see that the shift towards more DIFM has halted, and in fact, the share of DIFM has decreased. Is this just an anomaly? A year in which, for some reason, fewer jobs were outsourced? I do not think so, as there are also drivers towards more DIY.
First and foremost, it is all about the costs. In this case, labour costs. In the years before 2019, we have seen the wages for labour in the construction and installation market steadily increase. It is basic economics. On the one hand, we see a higher demand for professionals working in the construction and installation market (serving both the B2B and B2C markets). On the other hand, the availability of labour did not increase, and in many (mainly Northern European) countries, it decreased due to severe shortages of labour in the construction and installation markets.
So the cost of labour increased, which had a dampening effect on the share of DIFM and a positive effect on the share of DIY in the total. There is another aspect that encouraged more DIY jobs related to higher costs and lower availability of professionals. This is the time consumers sometimes had/have to wait for the professional to start working on their job.
The impact of corona
So we can discuss the drivers and barriers towards more or less DIFM. I believe that in 2019, the pivotal moment was reached where demand and supply were no longer in balance. This could have more or less sorted itself out. We see that many companies want to jump into this market segment. From DIY retail chains offering installation services to more Eastern European workers and local semi-professionals (white van guys) offering their services,. But we saw the share of DIFM drop even further in 2020 (and this is also expected for H1 2021).
Despite a booming home improvement market in many European countries, driven by the fact that consumers had more time, budget, and the need to improve their homes, the coronavirus outbreak had a further negative impact on the share of DIFM. One of the key drivers for this further drop was the outbreak of the coronavirus crisis and, consequently, the hesitance of consumers to have professionals conducting home improvement jobs in their houses. In January, 50% of European consumers still stated that they would rather postpone DIFM jobs if possible due to the corona crisis. Now obviously, this is their sentiment. If they want the job to be done badly enough, they will still hire professionals. Also, not all jobs are suitable for DIY, so in some cases they cannot avoid hiring professionals (think of plumbing, tiling etc).
So now for the key question: what will happen in the future? Well, this is very much dependent on the same drivers we discussed earlier. It is mostly a question of which side the pendulum will swing. Will the construction and installation industry be able to solve (or partially solve) the labour shortage? Or will the growing interest of DIY chains and semi-pros in DIFM jobs turn out to be a success? Then the labour cost would decrease and the availability would increase, leading to the continuation of more DIFM.
If the industry is not able to solve this issue, we will not see a rise in DIFM, or we could see the increase in DIY jobs continuing. Especially as a broader audience than normal experienced doing DIY jobs, and in many cases, both improved their DIY skills and enjoyed doing the jobs much more than in the pre-corona situation.
I expect that the share of DIFM will remain under pressure, as I do not see the labour issues being sorted out any time soon. The construction industry is going through the coronavirus crisis relatively well, and the demand for professionals will remain high. That being said, I do not think the share of DIFM will drop very significantly either, as more and more parties are seeing the potential for the DIFM market and are coming up with interesting initiatives. The age pyramid of European society will also not forever lean more heavily towards the older generation, thus creating more balance in the demand and supply for DIFM.
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