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Walmart-owned Sam's Club is trying to nab a share of the home improvement market amid the busiest season for renovations.
It's a market that's currently dominated by other heavy hitters in the industry although the two biggest names, Lowe's and The Home Depot, only account for 30% of it, according to Liz Suzuki, senior hardlines retail analyst at Bank of America Securities.
|LOW||LOWE'S COS. INC.||231.33||+0.26||+0.11%|
|HD||THE HOME DEPOT INC.||330.91||+2.37||+0.72%|
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To try and catch up, the members-only club, in collaboration with Service Finance Company, LLC, a subsidiary of ECN Capital Corp., announced plans to launch Sam’s Club Home Install Experts by Service Finance.
The service is said to connect members with local home improvement contractors who offer a range of services from HVAC, roofing, siding, window and door installation to bathroom and kitchen renovations and flooring products.
To lure in more consumers, Sam’s Club is offering members an additional discount on everyday dealer pricing as well as a financing option through Service Finance Dealers.
Two architects remodeling an apartment. (iStock)
Over the past year, the home improvement business was booming, especially when Americans were waiting out lockdown orders from the confines of their homes.
Suzuki estimated that U.S. home improvement sales and services hit approximately $767 billion throughout 2020, which is "equivalent to about the 20th largest economy in the world."
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Home Depot and Lowe's, two of the largest U.S. retailers in 2020, pulled in $132 billion and $90 billion, respectively, according to Suzuki.
"As a result of a combination of more time at home, favorable household formation trends, and strong household balance sheets, demand for a wide range of home improvement projects has remained at elevated levels over the last year," Suzuki said in a research note.
Sam's Club is now trying to take a bite out of the trend and officials say its "relationship with Service Finance will be a gamechanger."
LOWE'S GROWTH LAGS HOME DEPOT IN HOME IMPROVEMENT BATTLE
"With access to Service Finance’s network of reputable dealers, our members can have confidence knowing they’re not only getting additional value from their membership, but they’re also getting the reassurance of a trusted provider," Kevin O’Connor, Sam’s Club senior vice president and general merchandising manager, said.
Sam’s Club members nationwide will be able to select a product and service and schedule a free consultation with a Service Finance Dealer.