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SENSOR TOWER · ABRAHAM YOUSEF · MAY 2024
Unlocking Strategies: Home Improvement Advertising in Germany
Germany's home improvement sector has faced challenges, with high mortgage rates and stagnant wage growth impeding housing sales and indirectly impacting the market. Despite this, retailers in this industry saw impressive mobile app performance, likely attributed to strategic advertising efforts. These included seizing Prime Day momentum and engaging with a younger demographic through TikTok advertising.
Key Takeaways:
Amid economic uncertainties in Germany, leading home improvement retailers like OBI, Bauhaus, REWE (Toom & B1), and Hornbach experienced a decline in sales in 2023. Consequently, German advertisers in the home improvement sector reduced ad spending by 36% YoY in 1Q24, with building products & materials experiencing an 81% drop in digital ad spend per ST data
Despite a decline in sales, Toom, Hornbach, and OBI experienced YoY growth in their app downloads, with growth rates of 29%, 11%, and 9% in 2023, respectively. This increase in app downloads could potentially be attributed to their strategic emphasis on promoting their apps through digital advertising
In 2023, OBI allocated 45% of its display and video ad spend, along with 14% of its social ad spend, to promote the heyOBI app. In Mar’23, OBI's giveaways effectively encouraged customers to register for the heyOBI app, resulting in a notable 52% MoM increase in app downloads
Leading up to the Jul’23 Prime Day, OBI and Toom strategically ramped up advertising spending in Germany by 628% and 196%, respectively, compared to the prior two weeks. Leveraging enticing promotions and giveaways aligned with Prime Day, both retailers experienced significant website traffic growth, with a 20% WoW increase in WAU for OBI.de and a 35% rise for Toom.de
Bauhaus took the lead in TikTok advertising as it invested nearly 10% of its social ad spending into TikTok, securing a 92% SOV on the platform among the home improvement retailer cohort in 2023. This reflects Bauhaus's forward-thinking strategy to engage younger demographics and capitalize on TikTok's growing influence
For more information, request the full report from reports@sensortower.com.
