As the world‘s largest home improvement retailer, Home Depot serves a massive and diverse customer base. In 2021 alone, the company recorded over 1.7 billion customer transactions across its 2,300 stores and online channels. But who exactly are these Home Depot shoppers? What are the key characteristics and spending habits of the company‘s target market?
In this comprehensive guide, we‘ll take a deep dive into Home Depot‘s target customers and demographics. We‘ll examine the company‘s overall market positioning and the profile of its average shopper. We‘ll also break down Home Depot‘s customer base into its three main segments and analyze the differences between them. Finally, we‘ll discuss some of the key trends transforming the home improvement market and how Home Depot is adapting its strategy to stay ahead of the curve.
Home Depot‘s Overall Target Market
At the highest level, Home Depot‘s target market consists of basically anyone who owns or rents a home. The company aims to be the go-to destination for both everyday home maintenance and large renovation projects. As Home Depot states in its annual report, its goal is to provide "a one-stop shop for all things home improvement."
Within this broad market, Home Depot primarily focuses on three core customer groups:
1. DIY (Do-It-Yourself) Customers: These are individuals who take on home improvement projects themselves in order to save money or for enjoyment. They purchase the necessary products and complete the work on their own.
2. DIFM (Do-It-For-Me) Customers: These customers hire professional contractors to do home improvement work for them. They may buy some supplies themselves but primarily rely on the pros to get the job done.
3. Professional Contractors: These are the plumbers, electricians, remodelers, and other tradespeople who work on home improvement projects for a living. They are prolific shoppers who tend to buy in bulk.
Home Depot estimates that DIY customers make up around 60% of its sales, while pros account for 40% (despite only being 5% of the customer base). DIFM falls somewhere in between, with these customers buying the products but outsourcing the labor.
Home Depot Customer Demographics
Now let‘s take a closer look at the profile of the typical Home Depot shopper. While there is significant diversity across the customer base, we can identify some general demographic trends:
Age: Home Depot‘s customers skew older, with an estimated median age around 50 years old. Baby Boomers (born 1946-1964) are the largest and most valuable cohort, as they have high homeownership rates and discretionary income for home projects. That said, Millennials (born 1981-1996) are becoming an increasingly important segment as they enter their prime homebuying and renovation years.
Gender: Home improvement has traditionally been a male-dominated sector. Even today, men still make up a slight majority (55%) of Home Depot‘s customer base. However, the gender gap is narrowing as more women take on DIY projects and influence home purchasing decisions. Home Depot has made efforts to become more female-friendly in recent years, such as hosting DIY workshops aimed at women.
Race/Ethnicity: Home Depot‘s racial/ethnic customer mix generally reflects the overall population. According to survey data, around 69% of Home Depot shoppers are White, 15% are Hispanic, 9% are African American, and 6% are Asian. The company has initiatives to attract more diverse customers, such as a dedicated Hispanic marketing team and multicultural product assortments.
Income: Given the high cost of homeownership and renovations, it‘s no surprise that Home Depot shoppers tend to have above-average incomes. The median household income for Home Depot customers is around $80,000, well above the national median of $68,000. However, the company does aim to provide value at all price points to stay accessible to a wider range of consumers.
Key Differences Between Home Depot‘s Customer Segments
While the above data gives a general sense of Home Depot‘s customer base, it‘s important to recognize the significant differences between the company‘s three main segments. Let‘s dive into each one:
DIY Customers
As mentioned, DIYers are Home Depot‘s largest customer segment, making up 60% of sales. These shoppers skew younger and more female compared to the overall customer base. Many are first-time homeowners just learning the ropes of home maintenance and renovation.
Given their relative inexperience, DIYers tend to be more price-sensitive and less brand-loyal than other segments. They often start their shopping journey online, comparing prices and reading reviews before making a purchase. Once in-store, they value clear signage, informative displays, and helpful customer service to guide them to the right products.
On average, DIY customers visit Home Depot 3-4 times per year and spend $50-75 per trip (lower than the overall average of $80). However, their lifetime value can be quite high if they become regular shoppers over many years and multiple homes.
DIFM Customers
DIFM customers are a growing segment as more homeowners opt to hire professionals rather than take on projects themselves. These shoppers are typically older, higher-income, and less price-sensitive than DIYers. They value convenience and service over cost.
Many DIFM customers start their projects by browsing inspirational content online or in-store. They then connect with a professional contractor through Home Depot‘s referral services or pro desk. The contractor takes care of sourcing and purchasing materials, with the costs passed on to the homeowner.
Given their reliance on contractors, DIFM customers tend to be less frequent visitors to Home Depot stores. However, their average project spend is quite high, often in the thousands of dollars. Home Depot has been investing in omnichannel capabilities like online scheduling and in-store pickup to make the DIFM process more seamless.
Professional Contractors
As mentioned, pros make up just 5% of Home Depot‘s customer base but drive a massive 40% of sales. These customers are the true power users, visiting stores multiple times per week and spending hundreds or even thousands of dollars per trip. They are highly knowledgeable, brand-loyal, and time-sensitive.
To serve the unique needs of pros, Home Depot offers a range of specialized services. These include dedicated pro desks and parking spaces, bulk pricing and inventory, credit programs, and digital tools for things like project management and invoice tracking. The company even has a loyalty program called Pro Xtra that offers perks like purchase tracking, exclusive offers, and business tools.
By catering to pros, Home Depot not only captures their direct spending but also influences the purchasing decisions of their DIFM clients. Pros often steer homeowners towards specific brands or bring them in-store to pick out products. In this way, building relationships with contractors can have a multiplier effect on sales.
Evolving Trends in Home Depot‘s Target Market
The home improvement market is constantly evolving, and Home Depot must adapt its strategy to stay relevant to changing customer needs and behaviors. Here are a few key trends shaping the industry:
The Rise of Millennials: As mentioned earlier, Millennials are the fastest-growing segment of home improvement shoppers. As this generation ages into their 30s and 40s, they are buying homes, starting families, and taking on renovation projects. However, they shop differently than their parents, relying more on mobile and social channels for inspiration and purchases. Home Depot has been investing heavily in its digital capabilities to court these digital natives.
Urbanization: More Americans are living in cities, which means smaller homes, more renters, and different product needs. Urban dwellers tend to focus more on projects like small-space storage, patio decor, and smart home technology. Home Depot has been tailoring its assortment and store formats to better serve these customers, such as opening smaller-format stores in high-density areas.
Sustainability: Environmentally-conscious consumerism is on the rise, and home improvement is no exception. Shoppers are increasingly looking for products like LED lighting, energy-efficient appliances, low-VOC paint, and sustainable building materials. Home Depot has set ambitious sustainability goals and is working with suppliers to expand its eco-friendly offering.
Omnichannel Integration: Today‘s shoppers expect a seamless experience across online and offline channels. They may start a project by browsing ideas on Pinterest, compare products on HomeDepot.com, visit a store to see items in person, then order online for in-store pickup. Home Depot has been heavily investing in its integrated retail strategy, with features like real-time inventory visibility, one-click ordering, and digital project assistance.
Competitor Comparison
Of course, Home Depot doesn‘t operate in a vacuum. It faces stiff competition from other home improvement retailers, especially its chief rival Lowe‘s. While the two companies have similar overall strategies, there are some key differences in their customer bases:
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Demographics: Lowe‘s shoppers skew slightly older and more female than Home Depot‘s. The average age of a Lowe‘s shopper is 55 vs. 50 for Home Depot, and women make up around 50% of Lowe‘s base vs. 45% for Home Depot.
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Income: Home Depot shoppers have a higher average household income of around $80,000 compared to $75,000 for Lowe‘s customers.
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Spending: The average ticket at Lowe‘s is around $85, slightly higher than Home Depot‘s $80 average.
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Pros: Home Depot has historically been the leader in serving professional contractors, with a dedicated Pro division and loyalty program. Lowe‘s has been working to catch up in recent years by expanding its pro offerings and launching its own loyalty program called MVP Pro Rewards.
Beyond Lowe‘s, Home Depot also competes with a range of other players, from specialty retailers like Menards and Harbor Freight to mass merchants like Walmart and Amazon. While these companies may not have the same depth of assortment as Home Depot, they do compete on factors like price, convenience, and digital experience.
The Bottom Line
As you can see, Home Depot‘s target market is not a monolith. While the company serves anyone who owns or rents a home, its customer base is quite diverse in terms of age, gender, income, and shopping habits. By segmenting its customers into DIYers, DIFM shoppers, and Pro contractors, Home Depot is able to tailor its marketing, merchandising, and service strategies to meet the unique needs of each group.
Looking ahead, Home Depot will need to continue evolving to stay ahead of changing market trends and customer expectations. This means investing in digital capabilities to court younger shoppers, expanding eco-friendly product assortments, and enhancing omnichannel services for a seamless customer experience. It also means finding new ways to serve its core Pro customers, who drive an outsized share of sales.
At the end of the day, Home Depot‘s goal is to be the one-stop shop for all things home improvement. By understanding and catering to the needs of its diverse customer base, the company can continue to build loyalty, drive sales, and maintain its position as the market leader for years to come.
