Home improvement retail has built a solid infrastructure over the last decade, embracing omnichannel best practices to go with an already strong foundation. But home improvement channels took a step backward in 2018. So, what’s next? For more, we caught up with the experts at Kantar. Here are four key takeaways.

1. Macro challenges linger, but they’re manageable.

Storm clouds are brewing. Housing indicators have been volatile throughout the first half of 2019 after multiple home improvement channels slowed in 2018, from home improvement centers and specialty building materials to paint and wallpaper stores, hardware stores and lawn and farm supply stores (U.S. Department of Commerce). Furthermore, heavy spring rains in 2019 affected spring sales in much of the country, while tax laws on the West Coast and elsewhere hampered growth.

“In 2019, the economy will most likely grow, but a cooler housing market will contribute less to the overall economy.” ~Wall Street Journal

Rain, rain, go away

Heavy rains hurt home improvement especially hard in these regions, setting the stage for tightening markets through the remainder of the year:

• Great Lakes region
• Tennessee
• Arkansas
• Western United States

Like housing, lawn and farm saw a huge drop-off, signaling a slowdown for the rural economy and farm-related investments. After a one-year growth rate of 14.2%, this channel saw a nearly 5% dip in 2018 (U.S. Department of Commerce).

Tariffs are affecting home improvement, too, especially in about a dozen categories including major appliances and carpets and flooring. Industrywide, smart suppliers and retailers are using a mix of strategies to absorb tariff impact, from sourcing and inventory management to portfolio management.

“A prolonged trade war with China is unlikely to help. Consumer confidence appears to be weaker than recognized, particularly with respect to large ticket purchases like housing or remodeling. Clearly, a trade war increases this uncertainty. We estimate that the 25% rate on the existing set of tariffs represent a $2.5 billion annual tax increase for the housing sector in terms of materials used for construction.” ~Rob Dietz, Chief Economist, National Association of Home Builders, via MarketWatch

All of these waves signal the monetary impact of global unrest, setting the stage for tightening tension in the year to come. Tensions, of course, impact not only the tangible elements of housing but also general shopper mindsets, as people become increasingly anxious and concerned about things like prices and job security.

Now, for the good news: Indicators suggest that today, the housing market is less vulnerable to a recession versus the 2008 crash. Positives like high job security (U.S. Bureau of Statistics), strides in digital technology, and heavy investment in remodeling can help steady the ship on an otherwise stormy sea — and maturing millennials may represent the brightest beam of light for home improvement.

2. New millennial homeowners = opportunity in an uncertain 2019.

Millennials are aging and maturing into the homeownership space. After all, most will be in their 30s or early 40s by 2024 (U.S. Census data). Soon, this age group will be the housing segment’s largest. According to the Harvard University Joint Center for Housing Studies’ State of the Nation’s Housing report (2019), the U.S. homeownership rate edged up in both 2017 and 2018. The largest increase came from the 25-39 age group, accounting for 1.1 million owners in 2016-18.

These young homeowners are not only signing on the dotted line, they’re staying busy after move-in day: 60% plan to start a home improvement project in the next six months. What’s more, millennials have a more optimistic near-term outlook than boomers.

How can retailers and brands capitalize on millennials’ big home market splash? If you can position your company as an advocate for convenience, experience and education for these younger homebuyers, you’ll ease entry, turning these eager customers into powerful brand champions.

Don’t forget some of the nuances of this growing audience:

Millennials:

• Tend to spend less on average but take on more projects than boomers
• Value convenience and experience (versus price and quality for boomers)
• Are more likely to shop on Amazon for home improvement products (21%)
• Care about brand more than other generations — 60% actively interact with brands they like on social media (Forbes)

Still not sold on millennials? Consider that this group is taking on more advanced projects and spending more money on things like exterior painting, window treatments, room additions and bathroom and kitchen renovations. At the same time, their boomer parents are beginning to shift to more maintenance initiatives.