Of all the industries that were upended by the COVID-19 pandemic, the home renovation and design business was radically transformed. Commuters who previously spent the majority of their days at an office suddenly found themselves locked down in houses and apartments that weren’t necessarily outfitted for work—which prompted an influx of new business and new demands for home remodeling professionals.
“I think people loved their homes before, but they didn’t spend much time there. The needs [for the house] came together with it during COVID,” said Adi Tatarko, co-founder and CEO of Houzz, an online community for interior design and home improvement, at Fortune’s Brainstorm Tech conference in Half Moon Bay, Calif., on Wednesday.
Functionality was of the utmost importance. Backyards became gyms; closets and kitchen tables turned into offices. “People had high expectations of how you’re going to leverage every single inch of your home in order to accommodate all these new needs,” Tatarko said. “That created lots of anxiety, and with that, lots of expectations [for the design industry] as to how we’re going to handle it.”
The impact on contractors and professionals was immediate, she added. “At the beginning of the pandemic, professionals were like ‘whoa.’ How can we even get into people’s homes when everyone is sheltering in place around the world? They became busier than ever because they were trying to help as many people as possible.”
Houzz was well-positioned to fill in the gaps. Shortly before the pandemic, the network consisted of 65 million homeowners and 2.7 million professionals. According to Tatarko, there was already a noticeable shift in users’ needs that was underway. “We already saw some changes moving everyone to the digital universe—higher expectations from homeowners to get different services from professionals, to do it more online and provide them with software, tools, visibility, and transparency.”
Simultaneously, baby boomers were renovating their homes in large numbers, and there was already a shortage of houses on the market. Then came the pandemic, which Tatarko credits as the driving force behind the industry’s definitive pivot toward embracing tech.
“[The pandemic] completely changed how people wanted things now. Immediately, despite the shortage in supplies,” she said. “I think the adoption of all these tools and technology became even more critical for both homeowners and professionals.” Technology was crucial because it provided more transparency and control over the process, even in spite of the high volume.
“Homeowners want to know how long it’s going to take, how much it’s going to cost me, who’s going to come to my house, what’s coming next, what it’s going to look like, and how it’s all going to work together. People always wanted that,” Tatarko noted. “But now they needed it urgently, because they needed to change their house in order to accommodate all these new needs.”
Prior to COVID, design professionals were more reluctant to adopt digital tools. Much of their business was conducted offline through organic network referrals, pen and paper, Excel spreadsheets, and invoices coming via physical mail. But with the onset of the virus, they were forced to get everything together faster in order to please clients. “Now, we’re seeing high adoption of [tech tools] because homeowners are demanding it that way. ‘If you come to my house, I want to get that proposal with 3D images now,’ with a full guarantee of what it’s going to look like and how it’s going to work together.”
Tatarko believes the home improvement industry’s newfound reliance on tech is here to stay. Increased access to technology (which wasn’t the case 10 or 20 years ago, she notes), combined with the sudden high demand due to COVID, meant that professionals got busier. “Their universe of potential, relevant, high-intent clients completely changed beyond their original network,” Tatarko said. “Who they can build their brands in front of changed, and also, how they can serve these clients is different. I think when you give people the right tools and the right technology, the appetite and the high demand come with it.”
