copyright ©2004 global insight, inc. analyzing the home improvement market market sizing and...

Copyright ©2004 Global Insight, Inc.

Analyzing the Home Improvement Market

Market Sizing and Forecasting

Mike Sweet

Senior Consultant, Business Planning Solutions

[email protected]

781-301-9039


Agenda

Capabilities and Approach

Case Studies


Overview

We segment the market across a number of different dimensions:

Products and Services End Purchasers

– DIY, BIY, Contractors and Builders

Structure Types– New Residential, Residential

Remodel, Non-Residential Store Types/Distribution

Channels Geographic markets

– Global, National, Regional, State and County


Premier economic analysis & consulting organization with 3,300 clients, 600 employees and 24 offices worldwide

Most comprehensive coverage of countries, regions and industries available from any single source

Common analytical framework and a consistent set of assumptions applied to diverse capabilities and products

The BEST track record among commercial forecasters. Wall Street Journal, January 2, 2004

Expertise Serving the Home Improvement Industry

Home Improvement Research Institute (HIRI)

Developing an Outlook for the Home Improvement Market for over 10 years

Global Construction Study

Sizing and Forecasting construction activity by structure type in 55 country markets

U.S. Construction Services

Detailed forecasts and analysis on the U.S. construction market by structure type with state-level detail

Home Improvement Retailers and Manufacturers

Product line forecasts and geographic market potential models


Unique Value Proposition

We explain how demographics, income, the macro economy and customer trends influence future demand for your products


Transforming Information into Planning Solutions


Where We Fit Into the Planning Process


Developing Business Planning Solutions – A Proven Process


Agenda

Capabilities and Approach

Case Studies


Average Annual Growth 1997-2003

Ave

rag

e A

nn

ual

Gro

wth

200

3-20

06

Slowing Markets

Recovering Markets High Growth Markets

Lagging Markets

Average US Service XGrowth 1997-2003

Average US Service XGrowth 2003-2006

Los Angeles

New York

Chicago

Boston

Atlanta

Orange County

Denver

Tampa -St. Petersburg

Washington DC

Newark

Pittsburgh

St. LouisCleveland

SeattleDetroit

Philadelphia

Minneapolis St. PaulBaltimore

San Francisco

Oakland

Kansas

HoustonPhoenix

Dallas

San Diego

Case Study #1 – Segmenting a Retailer’s Geographic End Markets


Case Study #2 – Paint Manufacturer

Total Industry Paint Sales by Retail Channel

Paint Stores

Home Centers

Hardware Stores

Department Stores

Other General Merchandise Stores

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

Fcst Cagr 2003 - 2008

His

t C

ag

r 19

97 -

200

3

Accelerating

Decelerating

Bubble Size = Value of industry paint sales in 2003.



Company X's Paint Market Share By Retail Channel


Department Stores

Hardware Stores

Home Centers

Paint Stores

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

% of Company X's Total Paint Sales

Mar

ket

Sh

are

By

Ret

ail

Ch

ann

el

Overall Market Share

Bubble Size = $ Value of Company X's paint sales to store-type in 2003.

Higher Segment Penetration

Lower Segment Penetration

Will over exposure in this channel hurt

performance?

Does lower penetration signal a potential growth

opportunity?



Company X's Historical and Future Market Opportunity


Department Stores

Hardware Stores

Home Centers

Paint Stores

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

0% 1% 2% 3% 4% 5% 6% 7% 8% 9%

Fcst Cagr 2003 - 2008

His

t Cag

r 19

97 -

2003

Future Market Opportunity

Historical performance benchmark based on weighted sales distribution

Bubble Size = $ Value of Company X's paint sales to store-type in 2003.

Lagging Markets Recovering Markets

High Growth MarketsSlowing Markets

S to re T yp e % o f S a le s F C S T C A G R W e ig h t

P a in t S to re s 4 1 % 7 % 2 .8 %

H o m e C e n te rs 1 0 % 5 % 0 .5 %

H a rd w a re S to re s 5 % 2 % 0 .1 %

D e p a rtm e n t S to re s 3 4 % 3 % 1 .0 %

O th e r G e n e ra l M e rc h a n d is e S to re s 1 0 % 2 % 0 .2 %

T o ta l 4 .7 %


Case Study #3 – Analyzing the Demographics of the Home Market

Second home demographic demand is growing nearly twice as fast as repeat demand and four times as fast as first time purchase demand

As the baby boom ages, second home demographic demand growth will remain strong.

First time demographic demand growth edges up as Generation Y starts forming households.

Source: U.S. Census Bureau & Global Insight; agedistribution data from The National Association of Realtors.

Demographic Demand Growth

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

% g

row

th in

dem

og

rap

hic

ind

ex

First Time Purchase Repeat Purchase

Second Home Purchase All Home Buyers

copyright ©2004 global insight, inc. analyzing the home improvement market market sizing and...

Documents

global insight

county slide

planning process slide

paint manufacturer slide

proven process slide

construction market

home improvement retailers

marketshigh growth markets