Welcome to Thomas Insights — every day, we publish the latest news and analysis to keep our readers up to date on what’s happening in industry. Sign up here to get the day’s top stories delivered straight to your inbox.
Not every major company suffered unfortunate fates under the coronavirus. Home Depot is becoming the hot place to be during quarantine.
To accommodate the growing demand in DIY home renovation projects, Home Depot announced the company will add three new distribution centers in the metro-Atlanta area.
Home Depot Designs Warehouses for Distinct Purposes
Home Depot announced the additions on Aug. 4, 2020, stating in a press release the move would “support growing demand for flexible delivery and pick-up options for Pro and DIY customers.” The trio of warehouses are to be located in the Georgia cities of Locust Grove, Stonecrest, and East Point.
According to Supply Chain Dive, each warehouse has been designated for a different purpose. The largest facility will manage Southeastern United States replenishment while the remaining two will handle flatbed delivery of bulky orders as well as maintenance, repair, and operation delivery.
The warehouses, which are expected to open in 2021 over a span of 18 months, are projected to bring more than 1000 jobs to the area.
Stephanie Smith, senior VP of supply chain development and delivery, said this of the decision: “We’re investing to meet the changing delivery needs of our DIY and Pro customers, whether they’re at home, at their job sites or picking up in the store.”
The Georgia-headquartered home-improvement chain reported a 7% year-over-year increase in sales in the first quarter. CEO Craig Menear has acknowledged lockdowns for bringing about a do-it-yourself home improvement project reinvigoration. “When you’re stuck in your home for 11 or 12 weeks, you see all the things that need to be fixed,” he said at Bernstein’s Annual Strategic Decisions Conference in May.
Internet Searches for Home Improvement Soar
Menear was correct in his assumption the surge of business was due in large part to the coronavirus. With a fledgling health crisis, homesteaders dug in their heels and gave their best attempt to make due. All over the internet, which continues to be a microcosm of the world-at-large, websites have turned their attention to the home as the COVID-19 crisis rages on.
With offices and schools closed to mitigate spread and telecommuting orders expanded, most home decor sites have pivoted to make the home office update front and center. They’re also tackling creating a backyard into an outdoor getaway and spaces for children.
In Oprah Magazine, author Gretchen Rubin recommends readers “re-purpose certain spaces for new uses” in anticipation of the predicted fall spike of COVID-19 cases. Domino Magazine has curated a roundup for homeschooling essentials as parents around the country decide if they will send their children back to school. Martha Stewart offers up “fun outdoor alternatives to summer dinner parties” and a slideshow of a kindergarten homeschool. Apartment Therapy reports a survey that shows Americans’ favorite room has changed from the family room to the master bedroom, in an effort to maintain privacy while shut-in.
Social media site Pinterest best illuminates the shifts in shaping the home into a true insulated hub for work, school, and fun for all household members. In March 2020, when lockdowns had just begun, searches like “work from home setup” was up an astounding 1144%.
According to Pinterest’s July Pinsights, searches for at-home escapes like outdoor spaces and stay-at-home getaways, as well as spaces for children, had increased as people looked for a way to create a memorable summer while obeying stay-at-home orders. In May 2020, the inspiration social media site reported searches for backyard improvement ideas had increased: deck renovation ideas were up 97%; backyard renovation ideas up 98%; DIY small patio ideas on a budget up 658%; and budget garden inspirations ideas up 528%.
But the backyard isn’t the only space which needs some work: The most popular home renovation search during quarantine has been the bathroom, up by 84% in search volume, even beating the backyard, Domino reports.
All of these searches indicate that consumers are tackling their home-improvement projects alone, afraid to let in anyone because they might bring with them the invisible invader.
The Effect on Construction
While the renewed interest in do-it-yourself home renovations has spurred sales for the American home improvement giant Home Depot, actual construction has taken a downturn since the beginning of the pandemic. According to Dodge Data and Analytics, total construction starts are down 15% year-over-year.
There are bright spots in the future for construction. The very same report found starts on residential construction projects were up 2% from June to July and commercial projects like hotels, offices, and warehouses — likely buoyed by an increase in e-commerce shopping — had grown 13% in June.
The regions that showed the most increase in activity were concentrated in the West and Northeast. Regions where construction faltered were Southeast and South Central areas where cases of the coronavirus had rebounded.
With America remaining in the thick of the pandemic for the near-future, even those forced to hunker down have considered changing their surroundings. The National Association of Home Builders predicts people will be less inclined to live in high-density populations like large cities with the threat of COVID-19, choosing to relocate to more suburban settings or even rural neighborhoods. This justifies the rise of residential construction in smaller cities.
The reality of this has already been felt with the downturn in renting leases in Manhattan — it faced an unreal plunge of 84% — and even a viral LinkedIn article that declared New York City “dead.” While the construction is not dead, it has displayed signs it will change in response to the coronavirus pandemic. Construction Dive predicts COVID-19 will create several changes for the construction industry including — but not limited to — slower, but cleaner and safer builds, growing union influence, demands for healthcare projects, and more prefabricated, off-site builds.
With the desire to live in cities fading, it’s very possible consumers might find an interest in construction to “build” back up again somewhere new. Where a simple renovation will not do, they may enlist construction help.
Image Credit: Jonathan Weiss / Shutterstock.com