Abstract
From 2007-08, power tool sales have fallen as the housing market has stumbled, home renovations have declined and commodity costs have risen. While cordless tools remain comparatively strong sellers, on a whole, DIY power tool sales fell in 2007 and are likely to continue to decline further in an uncertain economic environment. Insights relate to analysis of the following areas:
- How trends in housing, renovation and home improvement retailing are shaping the market context
- The changing profile of homeownership, including the emergence of younger, multi-ethnic and single female homeowners
- How the aging of the Baby Boomer population will affect the power tool market and the best ways to appeal to Boomers
- The sales, acquisitions and innovations of the largest suppliers
- How brand identities are being developed and promoted
- What product innovations are being used and are on the horizon
- Which consumer groups to target and how to reach them
- What marketing and retail strategies can help target specific consumer groups
Table of Contents
- Scope and Themes
- What you need to know
- Definition
- Consumer survey data sources
- Abbreviations and terms
- Abbreviations
- Terms
- Executive Summary
- Opportunity for growth: developing "green" products
- Expand outreach to Hispanics with bilingual staff, signage, promotions
- Hone in on affluent Baby Boomers and promote upgrades
- Females comprise undeveloped consumer base
- Downturn in housing market negatively impacts power tool market
- Three dominant suppliers show slowing sales
- Black & Decker and Craftsman most popular brands among owners
- Home improvement stores top department stores as source of tool purchases
- Advertising favors males, but should expand its focus
- Cordless tools -- fastest-growing product segment and a key area of
innovation
- Two out of three own at least one power tool
- Research shows three distinct levels of ownership
- Young, multi-ethnic users buy more tools
- Specific projects motivate majority of tool purchases
- Consumers seek balance of product attributes, consult multiple information
sources, value testing
- Market Background
- Key points
- Downturn in housing market suppresses power tool sales
- New and existing home sales dropped sharply in 2006-07
- Figure 1: Sales of new and existing homes, 2002-07
- Housing market will continue to decline through 2009
- Figure 2: Seasonally-adjusted annual rates for sales of new and existing
homes, January-June 2008
- Home repairs and renovations fell in 2007
- Figure 3: Expenditures for residential repairs, maintenance, and
improvements, 2002-07
- Changes in homeownership impact power tool ownership
- Baby Boomers comprise largest home owning population
- Figure 4: Incidence of home ownership, by age, 1997-2007
- Ranks of young homeowners multiply
- Growing numbers of Hispanic and non-white homeowners
- Figure 5: Incidence of home ownership, by race/Hispanic origin, 1997-2007
- Single homeowners and female DIYers
- Major home centers post sales declines
- Sales slump in a challenging macroeconomic environment
- DIY programs and websites build interest and familiarity
- Leading Companies
- Key points
- Three major suppliers for DIY power tool market
- Smaller suppliers cater largely to advanced DIYers
- Black & Decker
- TechTronics Industries
- Bosch
- Manufacturer Activity
- Key points
- Cordless offerings and kits move center stage
- Black & Decker
- Overall cordless offerings
- Black & Decker' s Firestorm System
- Black & Decker' s VPX li Ion cordless system
- DeWalt' s platforms with Nano technology
- Cordless feature integrated into basic hand tools
- Bosch
- Overall Cordless Offerings
- Combination Kits -- 18V and 36V systems with added features
- Dremel Duo: Rotary Tool Set
- Figure 6: Dremel Duo Power tool television ad, 2008
- TTI
- Ryobi' s One+ lithium-ion System
- Makita
- Advertising and Promotion
- Key points
- As consumers purchase tools for specific projects, growth hinges on
outreach
- Companies undertake similar promotional and advertising activities
- DIY advertising typically lacks diversity
- Ryobi One+ highlights size, versatility of system
- Figure 7: Ryobi power tools television ad, 2008
- Bosch showcases new cordless technology
- Figure 8: Skil power tools range television ad, 2008
- Figure 9: Dremel Duo Power tool television ad, 2008
- Black & Decker highlights innovative household products
- Figure 10: Black & Decker Scumbuster television ad, 2008
- "Grab-It" uses telemarketing to promote innovative product
- Figure 11: Grabit home power tool television ad, 2008
- Innovation and Innovators
- Key points
- Technological innovations vital for product differentiation
- Cordless tools have been key area of growth and innovation
- Range of cordless offerings
- Future technologies in cordless batteries
- Laser technology innovation
- Who Owns/Rents Power Tools?
- Key points
- Trends in power tool ownership and rental
- Trended data show overall stability in product ownership
- Figure 12: Trends in types of workshop equipment owned, January
2003-November 2007
- Significant increase in rentals during 2005-07
- Figure 13: Trends in types of workshop equipment rented, January
2003-November 2007
- Black & Decker and Craftsman remain most popular brands for DIYers
- Figure 14: Trends in brands of workshop equipment owned, 2005-07
- Three levels of ownership: low, medium and high
- The majority of respondents are "low" or casual power tool users
- A third of respondents are "medium" or moderate power tool users
- About 10% of consumers are "high" or dedicated, advanced power tool users
- Figure 15: Types of workshop equipment owned, by number of tools owned,
January-November 2007
- Profile of workshop equipment owners: aged 35-64, white, upper income
- Figure 16: Incidence of household ownership of workshop equipment,
January-November 2007
- Affluent couples and Baby Boomers present lucrative target market
- Figure 17: Incidence of household ownership of workshop equipment, by
cohort group, January-November 2007
- Power Tool Ownership by Home Ownership and Remodeling Activity
- Key points
- Homeowners own more power tools, new home buyers rent more tools
- Figure 18: Incidence of household ownership of workshop equipment or
rental, by home ownership status, January-November 2007
- Home ownership is major driver for ownership of all types of power tools
- Figure 19: Incidence of household ownership of workshop equipment for
types of tools, by home ownership status, January-November 2007
- Most home owners will undertake some home improvements
- Figure 20: Incidence of household ownership of workshop equipment or
rental, by value of residence, January-November 2007
- Remodeling drives power tool ownership
- Figure 21: Household incidence of ownership/rental of workshop
equipment, by whether home improvement or remodeling was done in last 12
months, January-November 2007
- Who Buys DIY Power Tools?
- Key points
- Overall purchasing levels have fallen since 2006
- Figure 22: Incidence of purchasing power tools in past two years, May
2006 and June 2008
- 25-34s and Hispanics are buying more tools
- Figure 23: Number of power tools purchased in past two years, June 2008
- 18-24s more likely to receive power tools as gifts
- Figure 24: Incidence of acquiring power tools, bought for self or
received as a gift, by age, June 2008
- Where Tools are Purchased
- Key points
- Home improvement stores widely frequented
- Figure 25: Incidence of shopping a home improvement store in last 3
months, January-November 2007
- Home Depot and Lowe' s dominate home improvement market
- Figure 26: Home improvement stores shopped in last three months,
January-November 2007
- Home centers are primary destination for power tools
- Figure 27: Where tools were bought in last two years, by gender, June
2008
- Younger consumers turn to greatest variety of non-specialist retailers
- Figure 28: Where tools were bought in last two years, by age, June 2008
- Use of range of retailers peaks at $75K-99.9K household income level
- Figure 29: Where tools were bought in last two years, by household
income, June 2008
- Reasons for Buying New Tools
- Key points
- Most purchases are for specific projects, not general future use
- Figure 30: Whether tools are bought for specific projects or just in
case, by age, June 2008
- 18-34s are more likely first-time buyers -- older buyers seek replacements
- Figure 31: Why last power tool was bought, by age, June 2008
- Considerations When Buying Power Tools
- Key points
- Durability, price, and product attributes -- prime factors
- Figure 32: Considerations when buying power tools, by age, June 2008
- Young buyers rely most heavily on salespeople for advice
- Figure 33: Incidence of relying on salespeople for product information,
by age, June 2008
- Level of Experience with Power Tools
- Key points
- Gender roles persist, but may be more aggressively addressed
- Figure 34: Degree of experience with power tools, by gender, June 2008
- Experience is fairly high for $50K+ earners
- Figure 35: Degree of experience with power tools, by household income,
June 2008
- Opinions and Behaviors
- Key points
- No surprise -- men enjoy tool shopping, and women do not
- Figure 36: Attitudes and behaviors regarding power tools, by gender,
June 2008
- Aptitude and interest in DIY declines with age
- Figure 37: Attitudes and behaviors regarding power tools, by age, June
2008
- Race/Hispanic Origin
- Key points
- Whites most likely, and blacks least likely, to own power tools
- Figure 38: Household ownership of workshop equipment, by race/Hispanic
origin, January-November 2008
- Incidence of recent purchase of power tools is highest among Hispanics
- Figure 39: Incidence of purchasing power tools in past two years, by
race/Hispanic origin, June 2008
- Whites most likely to shop at home improvement stores
- Figure 40: Incidence of shopping a home improvement store in last three
months, by race/Hispanic origin, January-November 2007
- Hispanics most likely to shop at a variety of retailers for power tools
- Figure 41: Where tools were bought in last two years, by race/Hispanic
origin, June 2008
- Blacks and Hispanics more likely to buy tools for specific purpose
- Figure 42: Why tools are bought, by race/Hispanic origin, June 2008
- Whites more likely than blacks and Hispanics to be replacing old tools
- Figure 43: Why last power tool was bought, by race/Hispanic origin, June
2008
- Blacks and Hispanics consider a greater range of factors before buying
- Figure 44: Considerations when buying power tools, by race/Hispanic
origin, June 2008
- Hispanic consumers rely heavily on salespeople for advice
- Figure 45: Incidence of relying on salespeople for product information,
by race/Hispanic origin, June 2008
- Blacks show lowest level of experience with power tools
- Figure 46: Degree of experience with power tools, by race/Hispanic
origin, June 2008
- Hispanics show a range of positive attitudes to DIY and tools
- Figure 47: Attitudes and behaviors regarding power tools, by
race/Hispanic origin, June 2008
- Appendix: Other Useful Consumer Tables
- Types of workshop equipment owned
- Figure 62: Types of workshop equipment owned, by age of head of
household, January-November 2007
- Figure 63: Types of workshop equipment owned, by household income,
January-November 2007
- Figure 64: Types of workshop equipment owned, by race/Hispanic origin,
January-November 2007
- Degree of experience with power tools
- Figure 65: Degree of experience with power tools, by age, June 2008
- Considerations when buying power tools
- Figure 66: Considerations when buying power tools, by gender, June 2008
- Figure 67: Considerations when buying power tools, by household income,
June 2008
- Appendix: Simmons Cohorts
- Figure 68: Married couples cohorts
- Figure 69: Single women cohorts
- Figure 70: Single men cohorts
- Appendix: Trade Associations
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