Home renovation sector eyes 5-yr growth spurt

As soon as the civil work on their independent house in Krishnagiri was over, Shakthi and Surya (names changed) came down from Singapore, their work destination and started designing the interiors. But between the ideation of a good, sensible design, finding the right vendors and/or contractors, and coordinating the logistics between the vendors involved in the project, it was a daunting process. Exhausted, they started looking out for a professional interior decorator to design their home. Soon, their research online landed them with mamama, a full-service design studio in Bengaluru.

“There is a general perception about interior designers/architects being expensive, inaccessible, etc. But we are inclined towards true collaboration and to us, homes reflect the ideals and lifestyles of the clients. Each brief, hence, is unique and as a result each design is highly specific and personalised,” says Anna Rose, co-founder and one of the chief architects at mamama.

Following the pandemic, the home renovation industry is seeing an unimaginable surge in demand, especially after companies switched to work from home (WFH) and the need for upgraded personal and work spaces emerged as a follow-up trend. Consumers’ journey starts with detailed online research and moves to in-store experience. From independent designers and architect firms like mamama to platforms like Livspace to home lovers’ communities such as HomeBliss, customers can choose a service provider based on their requirement. After the initial discussion, and the design short-list, the providers take care of manufacturing the components and installing them to the customers’ satisfaction.

Personalisation is at the heart of the brand deliveries. “There is no room for templates or run-of-the-mill elements,” points out Amit Syngle, CEO and managing director, Asian Paints. The paints major started beautifulhomes.com, a content and design editorial website, five years ago, and owns physical stores across more than 15 cities in the country to support as experience centres.

Post the pandemic, both the business and macro projections for the market appear positive. The $30-billion home renovation industry, influenced by a spurt in the real estate market, is expected to remain on the growth curve for the next five years. Keeping up with the consumer shift to digital, brands have transitioned to digital first and opted for omnichannel reach — through OTT platforms, traditional advertising, social media marketing and OOH advertising. “Being a one-stop service provider is the need of the hour,” points out Anna.

“The growth in the last two years is a true reflection of art or capabilities but it is also a reflection of the fact that capability is now meeting an extremely bullish real estate and home interiors market aligned with strong emotional consumer trends,” says Ramakant Sharma, co-founder and COO, Livspace, a unicorn brand that has put together an integrated platform with designers, brands, manufacturers and contractors, enabling an e-commerce-like trusted and predictable experience for the customers.

Sharma explains the working of the Livspace ecosystem thus. “Machine learning is used to match homeowners to appropriate designers on the platform and for tailoring product recommendations in our design tools. After all, home renovation is a high-involvement, high-value yet infrequent purchase.”

Technology that is cutting-edge is helping the brands deliver a wholesome customer experience. Virtual decorating replete with visualisation tools has immensely helped the customers move from stereotypes to experimental choices. “The 3D visualizer indeed adds wings to the ideas and brings dreams to reality,” says Syngle.

Of course the sudden interest is greatly fuelled by social media. Thanks to the internet penetration, interest for home renovation and interior decoration is rising in tier-2 and tier-3 cities too. Digital engagement is boosting brand presence, latest offerings and direct communication between brands and its customers.

“It is important since home interiors and remodeling is a big-ticket expense. Our 2021 IPL campaign was based purely on consumer insights. Taking content live from connected television to YouTube too gave us an edge in the market,” says Sharma.

Beautiful Homes tailors each piece of content to educate the customers or solve a home renovation problem. Their latest wall textures collection, which was a digital-only launch, was promoted with a platform-specific content strategy and a podcast launch that promoted the collection.

“We had two times higher reach, engagement, and video views and with over 1 lakh catalogue downloads. This also accelerates the consumers’ journey from discovery to paying customers,” Syngle tells us.

But, because of the fragmented nature of the industry, the consumers are still at a disadvantage. Specifically, there is no way for them to know about product quality or price parity. With repeated lockdowns and supply chain disruption in the last two years, the construction costs have also shot up by 15%. Anna Rose concedes that customer expectations and final estimates never match. “Our initial discussions are always eye-openers.” Nevertheless, she adds, “The approach, the process, material, methodology and practice preferred by each design professional in the country are extremely varied. This diversity allows each of us a certain freedom.”

This challenge has been solved largely by standardising the market space, says Sharma. At a time when the market for horizontal e-commerce is booming, Livspace has been working on bringing a specialised vertical marketplace. Sharma highlights two important aspects that have influenced their fast and efficient growth in different markets. “The playbook with the digitisation of large and complex home improvement industry verticals and integration of thousands of contractors, designers, and home improvement professionals as well as the largest brands and OEMs in this space - both will continue to be an important element in Livspace’s business model.”

Anna highlights that, with the building blocks and right approach, this would be the right time to build the journey towards sustainability. “The vast majority of us are looking for ‘our money's worth’ and at the same time, chasing longevity, durability, reusability and low-maintenance. We simply can’t afford to be unsustainable.” Her words ring true.