Where home improvement is going

TI HE market for lumber and wood products used in'home improvement and maintenance work will grow by 56% over the next l0 years while the market for hardware, plumbing, paint, electrical and other non-wood supplies will grow by 66%, according to a new study by market research specialists Frost & Sullivan Inc.. New York.

More important, the study finds that the distribution channels for reaching the home improvement market are complex and in a state of flux. "A new type of high-volume, retailoriented, lumber and building material dealer, the so-called home center store, is (still) emerging.

Another change: old-line distributors of electrical and plumbing supplies are being supplanted in the do-ityourself market by a new breed of wholesaler which merchandises a prepackaged line of goods distributed directly to consumers. '"These newcomers are four years ahead of the rest of the industry," the study says.

The accompanying table extracted from the two-volume, 370-page study depicts the rise and fall of the various retail outlets that sell home improvement and maintenance products.

An important milestone occurred in the do-it-yourself market within the last year or two. For the first time, more than half of all building materials for home maintenance and improvements were purchased directly by homeowners rather than by contractors. The trend will continue and Frost & Sullivan projects the yearly

Story at a Glance

Distribution channels tor reaching the still growing home improvement market are in a state of flux, survey finds. .new milestones in distribution are described.

growth of the d-iy market for building materials from 1977-1984 to be 4.9%.

A so-called home center is distinguished from a traditional lumber and building material dealer by the product lines that it carries.

Rickel Bros., an Eastem firm, serves as an illustration. The chain is cutting back on toys and sporting goods to intensify its coverage in the do-it-yourself departments, the study notes. And, it adds, "this is the direction in which home centers will move." The study also points to new opportunities in sales of insulation and adhesives. decorative brick and fireplaces. "Which type of retail outlet makes the most of this consumer interest is still up for grabs," it says.

A survery of home improvement merchants conducted by Frost & Sullivan reveals that retailers want wholesalers to provide many services; to help with inventory checking and ordering and to provide fast delivery and advertising assistance. Retailers also want manufacturers to improve consumer information on product packaging, beef-up advertising support, and provide store displays.

In a companion survey, wholesalers turn out to have an entirely different perception oftheir roles. They consider their most valued function as being ,.a bank on wheels," says the study. The retailer is assumed to merely want credit. This is wrong, the study emphasizes, and tremendous opportunities exist for those suppliers who can give the retailer some "hand-holding" as well.

Such support, indeed, is what accounts for the success of "a new breed" of packager/distributor in electrical and plumbing wholesaling. hading firms now prepackage a line of goods which they merchandise through retail outlets. Such distributors offer a full mix of services. They help the retailer with the design of a home maintenance department, provide a wide product mix, and guarantee that slow inoving merchandise may be returned for credit. They preticket merchandise, supply a preprinted ordering schedule, provide in-store salesman services, and offer inventory control.

"Such dealers have combined all of the merchandising roles of both the manufacturing and distributing functions to form an entirely new dynamic entity," the study says. But despite their current success, a Damocles sword looms over their existence: "The large companies that manufacture the basic items may themselves eventually go more and more into direct sales," the study concludes.

REDW00D L0GS on the way to the mill in the late 1800s, Humboldt County, Ca. This old photo is from the A. W. Erickson c0llection, California State University, Humboldt.