If it’s one industry that may be immune to the Amazon effect, it’s the tools and home improvement industry, with retail giants like Home Depot and Lowe’s enjoying record sales, right? Wrong. Amazon sales are growing more than 5 times as much as those of bricks-and-mortar.

Once dominated by contractors and sub-contractors, the industry in recent years has experienced a major shift toward DIY. Digital toolkits have inspired do-it-yourselfers, as anyone can now teach themselves the finer points of home renovations and general repairs on YouTube. Not only are consumer behaviors shifting rapidly away from hiring professionals for home improvements, but these consumers are already going online to learn how to do it themselves.

It’s not much of a leap from watching home reno videos on YouTube and following tutorials on the many detailed DIY websites to buying your tools and supplies online. And Amazon is well aware of this burgeoning consumer base. Next time you say Home Depot is Amazon-proof, be prepared to knock on wood.

The NumbersAmazon-ecommerce-tool-sales-data

Amazon.com’s share of the American tools & home improvement market is relatively low, but consistent with the retailer’s performance in the Grocery and Health Care sectors. For our purposes, the most revealing figure is the growth rate: 35% for Amazon.com, much larger than the U.S. domestic market’s total growth of 6%. By maintaining this rate, Amazon is on track to be a significant disruptive force in the tools & home improvement industry.

Top Categories (%Growth)
Ranked in order of Total Sales on Amazon.com
Tools Home Improvement
Handtools: 25% Plumbing Fixtures: 25%
Power Tool Accessories: 25% Electrical & Heating: 45%
Security & Safety: 20% Hardware: 35%
Woodworking: 30% Rough Plumbing: 30%
Construction Power Drills: 25% Lighting & Fans: 25%
Test & Measurement: 15% Appliance Parts & Accessories: 40%
Construction Concrete & Metal Tools: 20% Painting Supplies: 35%
Pneumatics: 25% Light Bulbs: 60%
Tool Organization & Garage Storage: 35% Building Materials & Ladders: 50%
Power Saws: 25%

Top Tools Categories on Amazon.comAmazon-YoY-tool-sales-data-by-category

1.      Handtools: 25% YoY growth 2.      Power Tool Accessories: 25% YoY growth
·        Knives: 15% ·        Drill Bits & Accessories: 20%
·        Wrenches: 25% ·        Battery Packs, Chargers & Radios: 25%
·        Accessories: 30% ·        Power Tool Accessories: 20%
·        Tool Sets: 35% ·        Router Bits & Accessories: 15%
·        Sockets & Socket Sets: 40% ·        Jig Accessories & Attachments: 25%
3.      Security & Safety: 20% YoY growth 4.      Woodworking: 30% YoY growth
·        Personal Protective Equipment: 35% ·        Wet Dry Vacs: 30%
·        Batteries & Flashlights: 10% ·        Portable Table Saws: 25%
·        Fall Protection: 40% ·        Planers Benchtop: 75%
·        Disaster Preparedness: 15% ·        Rotary Tools: 50%
·        Work Uniforms: 5% ·        Router Combo Kits: 25%

In both brick-and-mortar retail and on Amazon, the tools category is dominated by accessories. Small items like hand tools and drill bits that are not expensive but easily lost or broken make up the bulk of purchases – the average hardware store transaction size in the U.S. is only $21 – because larger, more complex tools are typically expensive and built to last.

The possible exception here is in woodworking tools. Woodworking as a hobby – and “carpenter-chic” as a fashion – is becoming extremely popular in the U.S. With many young professionals (aka millennials) new to home ownership and highly-connected (read: ecommerce junkies) putting together their own woodshops from scratch, brand new carpentry tools are in big demand right now. This helps to drive Amazon’s sales in Woodworking (30%), Tool Organization & Garage Storage (35%) and Power Saws (25%).

Top Home Improvement Categories on Amazon.comAmazon-ecommerce-tool-sales-by-category

1.      Plumbing Fixtures: 25% YoY growth 2.      Electrical & Heating: 45% YoY growth
·        Tub & Shower Faucets and Accessories: 30% ·        Dimmers & Lighting Controls: 85%
·        Kitchen Faucets and Accessories: 30% ·        Thermostats: 40%
·        Bath Hardware: 20% ·        Fire Safety: 25%
·        Bath Faucets and Accessories: 15% ·        Rough Electrical: 45%
·        Sinks and Vessels: 10% ·        Security and Intrusion Monitoring: 65%
3.      Hardware: 35% YoY growth 4.      Rough Plumbing: 30% YoY growth
·        Door Knobs & Lock Sets: 45% ·        Water Purification: 35%
·        Safes: 20% ·        Garbage Disposers: 15%
·        Door, Gate & Window Hardware: 50% ·        Water Heaters: 35%
·        Fasteners & Hooks: 45% ·        Pumps: 15%
·        Garage Door Openers & Accessories: 35% ·        Bath Ventilation Fans: 15%

Because plumbing is considered a relatively simple and quick form of home renovation, it’s no surprise that this category is driving sales of Home Improvement items on Amazon (excluding Tools). Plumbing Fixtures (25%) is the top sales category and Rough Plumbing (30%) – the stuff you don’t see – lands at number 4. Amazon’s ability to offer consumers an “infinite shelf” is a definite force here, allowing people to find the perfect faucets for their homes. Within these categories, both products designed for the kitchen and for the bathroom perform well, with strong sales of faucets (tub & shower, kitchen and bath), bath hardware and sinks and vessels.

International Comparison – Amazon Tools & Home Improvement in 2016International-ecommerce-tool-sales-data-Amazon

  U.S. U.K. Germany
Product Group Value $5 Billion £300 Million €600 Million
YoY Growth 35% 20% 45%
Top Growth Categories:
1.        Handtools Handtools Alarms & Security
2.      Plumbing Fixtures Decorating Hardware
3.      Power Tool Accessories Power Tool Accessories Workwear, Site & Safety Equipment
4.      Electrical & Heating Hardware Power Tool Accessories
5.      Security & Safety Plumbing & Bath Electrical
Top Performing Items:
1.        Nest Thermostat Nest Thermostat Makita Cordless Combi Drill
2.      Work Sharp Knife Sharpener Ring WiFi Doorbell Arlo Smart Home Security Camera Kit
3.      WBM Crystal Lamp Masterplug Socket Ei Electronics Smoke Alarm
4.      Dewalt Battery Hive Active Heating Gardena Robotic Lawnmower
5.      General Electric Filter Mr. Beams Spotlight AVM Fritz!Dect Electrical Timer
6.      Stanley Tool Kit 1byone HDTV Signal Leifheit Window Cleaner
7.      Waste King Garbage Disposal Neatmo Thermostat Kärcher Window Cleaner
8.      Tekton Torque Wrench Status Socket Cassette Grohe Euphoria Shower System
9.      Kiddie Smoke Alarm Silverline Switched Extension Bosch Professional Hammer Drill
10.  Bosch Router Table Airflow Extractor Fan Outlet Honeywell Premium Tower Fan

The Tools & Home Improvement product group is faring just as well on Amazon.co.uk and Amazon.de. In the U.K., the top performing categories and items line up very closely to Amazon.com’s performance, but the growth rate is quite a bit lower at only 20%. This is no cause for concern; instead, it is a side-effect of Amazon’s success in the U.K., where it already claims 3% of the total domestic market share in this product group.

Amazon market share in the U.S. and Germany are both responsible for only about half that, roughly 1.5% of their respective domestic tools & home improvement markets, but are growing more rapidly than the U.K. In Germany, Amazon experience a growth of nearly 50% in this product group driven by security and safety equipment, as opposed to the U.S. and U.K. which were driven primarily by heating and plumbing.

Though often seen as an Amazon-proof industry, the old-fashioned American hardware store is not untouchable. Amazon has all the same advantages in the Tools & Home Improvement sector that it has in Grocery, Beauty Products and Health Care — and we’ve seen plenty of evidence of those industries feeling the Amazon Effect. As more uber-connected millennials enter home ownership, Amazon’s share of this product group, like many others, will continue to grow at a disruptive rate.

“The Amazon Effect” series breaks down specific product groups, compares Amazon’s performance in that category to total retail sales (online and offline) and considers the effect Amazon has on that specific industry as a whole.

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