Candles, clocks and throw pillows: 3 charts show how Home Depot and Lowe’s pivoted to ‘soft-DIY’

Home Depot and Lowe’s are known for being a one-stop destination for do-it-yourself projects. But in recent years, they’ve both expanded into a different kind of home improvement: “soft DIY.”

Experts say the expansion into this category — from vases and decorative pillows to artificial flowers and candles — shows a shift in how people are managing their homes, where they are freshening up the house instead of renovating or rebuilding.

Even as the latest quarterly earnings reports indicate overall home improvement sales have slowed down, “decor” has been one of the fastest growing categories at both companies since 2017, according to a CNN analysis of SEC data.

Decor sales were steadily growing at Home Depot and Lowe’s prior to the Covid-19 pandemic, but experts say the lockdown months spurred a surge in interest both in redoing kitchens and throwing in additional decor items, such as a fruit basket or throw blankets.

“Traditionally [decor] is where they underperformed somewhat. People would go there for hard products,” according to retail expert Neil Saunders, the managing director at Global Data, referring to items such as building materials.

“But for the softer side of decoration, they would probably go to a general homewares retailer,” he said.

Home fashion doesn’t seem like the bread and butter of companies like Home Depot and Lowe’s, unlike items like tools and drywall, but it’s been making significant gains over the last six years. The SEC data analyzed by CNN shows that home decor sales have doubled at both Home Depot and Lowe’s in that time period.

While the “decor and storage” category remains the smallest percent share of Home Depot’s sales overall, it’s gained the most share since 2017, behind appliances.

Decor has grown as a category even more extensively at Lowe’s. In 2018, decor at both retailers consisted of 3.3% of net sales. By 2022, decor products accounted for 5.4% of Lowe’s sales – more than the tools, building materials, flooring or hardware categories.

“Our private brand product assortment has elevated our performance with the DIY customer, especially in Home Décor,” Lowe’s said in their 2022 SEC filing. The latest filing states that the company includes a complete line of decorating products in order to meet customers’ varying needs.

In their most recent annual SEC filing, Home Depot states: “Our industry is highly competitive, highly fragmented, and evolving.” As a result, the company says it faces competition from a variety of businesses, including home decor retailers.

Pandemic sales boost

The lockdown caused by Covid-19, which tanked travel and clothing sales, led to consumers using their spare cash on home improvement instead. In 2019, year-over-year net sales at Home Depot and Lowe’s grew by roughly 2% and 1%, respectively.

In 2020, Home Depot sales grew by nearly 20%, while Lowe’s saw sales jump by roughly 24%.

“During the pandemic, [people] were very focused on investing in their homes, and in their gardens as well,” said Saunders, the retail expert at Global Data. “And that was very beneficial to Home Depot and Lowe’s and some of the categories that they sell.”

In 2020, sales of “hard-DIY” — lumber and garden products — grew the most or among the most of any other category at both companies. But that growth petered out over the following two years, as lockdowns were phased out throughout the country and the big home purchases were made.

That started what Barbara Kahn, a marketing professor at the University of Pennsylvania’s Wharton School, likened to a “second wave” of home projects: decorating.

“[Consumers] did all the basics for new structures for home offices and all this other stuff in Covid. And now post Covid, they’re not spending on that anymore, because they already spent on that,” Khan said. “They’re just spending on freshening up.”

People adapting to new ways of working since the pandemic, such as remote and hybrid arrangements, has also motivated sales in home decor products, experts say.

Stores selling home goods have benefitted from these trends. Retail sales at stores specializing in furniture and home furnishings have grown by roughly 21% over the past six years, according to the Advance Monthly Retail Sales Survey by the US Census Bureau.

Sales at retailers who provide home construction, repair and maintenance products, however, grew by more than twice that, roughly 43%, over that same time period.

While still primarily home improvement retailers, expanding into home decor was simply a logical opportunity for Home Depot and Lowe’s, Saunders said — especially online.

With home improvement sales elevated during the pandemic, experts say there was a clear payoff to focus on becoming more of a destination for decor as well. Home Depot and Lowe’s also remained open as essential businesses in 2020, unlike many dedicated homewares retailers, he said.

Sales have been mixed over the last quarter at both retailers, according to the latest SEC data. That includes the decor category, which only grew by roughly 4% at Home Depot and shrank by nearly 4% at Lowe’s, according to their latest annual reports.

While 2023 was described as a “year of moderation” for the home improvement market by Home Depot CEO Ted Decker in May, the most recent annual data shows shoppers are still interested in home fashion. Decor sales remain considerably higher at both retailers than before the pandemic.

“People won’t buy a new sofa or new outdoor furniture every year,” Saunders said, “But people will buy accent pieces more frequently.”