Back in the day when Sears Roebuck was the biggest retailer in the world, they would sell you everything, from underwear and lawn mowers to entire automobiles and the house you lived in. And they would fix it too, operating the largest retail-based home repair service in the country at the time.
Now, with Sears long gone and the big DIY twins Home Depot and Lowe’s having taken over the home repair mantle, other national retailers like Walmart, Ikea and Ace Hardware stores are looking to get into the space. To go for the obvious, they are fixin’ to take some market share.
As spending on home repairs, remodeling and redecorating continues at historically high levels, these big box stores are coming to the conclusion that their potential for revenue doesn’t end when a shopper walks out the front door (or hits the buy button).
As spending on home repairs, remodeling and redecorating continues at historically high levels, these big box stores are concluding that their potential for revenue doesn’t end when a shopper walks out the front door (or hits the buy button). Now they want to connect you with third-party services that will install those products, do some household repairs and even undertake some serious home remodeling projects.
The DIY Twins
Home repair is a business that Home Depot and Lowe’s have largely had to themselves pretty much since the Sears slide began at least a decade ago. While that Sears home repair unit is still in business – and still owned by real estate savant Eddie Lampert – without the gateway the physical stores provided, the business must be just a shadow of its former self. And of course, there are thousands of local, and more than a few national operators, offering home repairs. But the lack of a connection to a home products retailer robs them of a natural point of entry. It’s why these new home repair services are so intriguing.
A few retailers have tiptoed around the service business. Best Buy’s Geek Squad is more about hooking up consumer electronics products, but they also do a brisk business in mounting those massive flat-panel TVs on living room and home theater walls.
Several home furnishings brands from what the industry calls the “lifestyle” side of the business have also ventured into this territory including retailers like RH, Crate & Barrel and the Williams Sonoma nameplates (Pottery Barn, West Elm, et. Al.) offering design services with furniture purchases. Traditional furniture retailers like Ethan Allen and regional chains have also been doing this for years. But a new generation of repair programs takes these efforts to a whole new level. And they are coming from multiple directions, industry channels and tiers.
Walmart Meets Angi
As the biggest retailer on the planet, when Walmart sneezes it’s a sound heard around the world. So, when the Boys from Bentonville announced earlier this year that they were hooking up with Angi, the independent home repair service that used to be known as Angie’s List, it got everyone’s attention. Walmart doesn’t provide the home repair service directly, they make the introduction to Angi’s independent contractors, presumably taking a nice little slice of the action. Services range from furniture assembly and TV wall-mounting all the way to flooring and painting — and are available from any of Walmart’s 4,000 stores. The new program is an expansion of a previous program the retailer had with a company called Handy, which Angi bought several years ago.
What’s the going rate on some of these repairs? Here are some initial quotes from Angi: TV wall mounting, $79; TV stand assembly, $79; bed frame assembly, $59; and for you home workout freaks, treadmill assembly, $89.
When announcing the program, Walmart had no estimates on its potential size since pricing depends on the individual project. Nevertheless, with Walmart’s scale this is likely to be a big entry into the home repair sphere. And it should be noted that across the highway Target also offers some home services, like “large furniture assembly” through its tie-in with the third party Handy, although it’s not believed that program extends to household repairs such as Walmart is now offering.
Ace Ups the Ante
Ace Hardware, the independent retailer-owned franchiser hardware co-op, has taken the home repair business to an even higher level. In 2019 it bought Handyman Matters, a home repair, maintenance and improvement services franchiser. It subsequently renamed it Ace Handyman Services and began offering these services out of many of its more than 5,700 stores.
Ace owns the referral service, and it works with local, independent contractors to handle the multitude of home projects like plumbing, electrical, carpentry, flooring and painting for both residential and commercial locations. This model is similar to the Walmart program.
Ikea Puts It Together
Perhaps one of the more unlikely retailers to get into the home services sector is Ikea, long known for its bargain-priced (and oddly named) furniture that sometimes seems to require the skills of an MIT engineering graduate to assemble. The Swedish chain addressed this issue in 2017 when it bought third-party assembly service provider Task Rabbit, which it now operates as an independent service. Many customers probably don’t realize it is owned by Ikea.
Ikea has long been in the business of offering design and installation services to go along with its products, particularly in kitchen and bathroom design and even custom cabinetry done through third parties. If the retailer is still not offering hardcore home repairs like electrical and plumbing, it’s conceivable that they could do so down the road given Ikea’s continuing evolution into being more than just that big box out on the highway. Ikea’s moves into smaller urban and specialized locations, like its new Livat localized concept that just opened in London, clearly show that the company is expanding off its original base so expanding services is a logical next step.
A Good Fix
Estimates on the size of the total U.S. home repair market are all over the place, generally falling in a range from $235 billion a year all the way up to $317 billion. One industry estimate is that it will reach more than $585 billion by the end of the decade, and that seems quite plausible given all the attention Americans are giving to their homes these days, a trend that shows no signs of letting up so far.
The home maintenance space is a lucrative one and could be a substantial growth area for these retailers. American Home Insurance tells homeowners they should budget about $1 for every square foot of livable space, every year, for annual home maintenance costs. That means a typical 2,500-square-foot home would require a $2,500 budget annually, or about $209 per month. With more than 110 million households in America, you do the math…though it’s likely retailers such as Walmart, Ace and Ikea have already done so.
And if you’re saying to yourselves how in the world did Sears ever lose this business…well, you’ll have to stand in line with all the people asking that question these days. At last count, there were just 22 Sears full-line stores left in the country.
Talk about a place that could have used some major repairs.