The COVID-19 pandemic has driven an uptick in DIY home renovation activity, with major home improvement retailers like Lowe’s seeing surging sales due to ongoing restrictions on entertainment, retail, and travel/tourism in much of the country. Stuck at home, consumers are shifting their spending behavior, and some of the disposable income homeowners would otherwise be spending on dining out or going on vacation is now going toward home upgrades, both inside and out.
This elevated DIY activity will benefit a range of related markets, including power tools, demand for which is projected to rise 2.9% per year through 2024 to $9.4 billion, according to a new Freedonia Group report.
- The professional market is expected to continue to outpace consumer demand due to underlying conditions that in the long run support gains despite near term challenges in key professional market sectors, such as construction and manufacturing.
- Despite a near-term sales slump due to elevated unemployment, squeezed personal incomes, and a potentially impending global recession as a result of the COVID crisis, opportunities exist targeting homeowner DIY activity and upgrade sales through product development.
Targeting the DIY Market
Though about half the size of the professional market, consumers remain a very important outlet for power tool manufacturers. Consumers are often inspired to purchase tools for projects around the house by browsing websites like Pinterest and watching DIY home improvement shows. While some consumers buy power tools aspirationally wanting to be handier, many purchase them out of necessity for a particular project. Key opportunities for further sales among consumers will arise from:
- millennials, who are increasingly buying their first homes and need power tools for projects around the house
- women, as single women are increasingly purchasing homes and performing DIY projects themselves
- a strong e-commerce presence, which can educate consumers and entice them to purchase higher value models of a particular tool
Continued interest in DIY activities – which include home repairs, woodworking, and various other hobbies – and interest in more sophisticated power tools will promote growth. However, the DIFM (“Do It For Me”) movement will limit some of the gains for consumer sales and promote additional professional power tool opportunities.
Innovation Promotes Upgrade Sales in Both Consumer & Professional Markets
Both consumer and professional end users of power tools demand increasingly sophisticated power tools. Unlike professionals, however – who are generally more willing to pay a premium for better performing and longer lasting power tools – most consumers are very price sensitive when it comes to these products, often opting for less costly imports over expensive professional-grade models.
Hence, innovative features and product improvements are often first introduced in professional tools before later being integrated into lower cost consumer-grade products. Areas of recent development activity include:
- creating lighter weight, easier-to-use products
- reducing tool vibration
- increasing tool power and battery life
- simplifying or streamlining the use of accessories
These innovations are designed to improve product performance, convenience, and safety. For instance:
- Bosch touts the soft grip of its SDS-plus Bulldog rotary hammer.
- Festool’s Airstream battery system, a combination lithium-ion battery pack and charger, reduces the cooling time of the battery and overall recharging time by 60%.
- Miniature motor producer Portescap added the 35ECS model to its Ultra EC line of brushless DC motors, offering ultra-high speed and power in power tool applications.
Looking for More?
Power Tools is now available from the Freedonia Group. For more pandemic coverage, check out Freedonia’s COVID-19 Economic Impact Tracker.
About the Author:
Peter Kusnic is a Content Writer with The Freedonia Group, where he researches and writes studies focused on an array of industries.