INDUSTRY REPORT
Tools & Home Improvement market resilience in Q2 2025
The Tools & Home Improvement category in Q2 2025 tells a story of resilience amid shifting market dynamics. Despite economic and tariff challenges, brands in this sector have found ways to adapt and grow through smarter operational execution and strategic cost management.
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Key takeaways
- Inventory levels continue to climb: Q2 saw on-hand inventory increase 24.7% year-over-year, reflecting brands' focus on product availability.
- Customer price sensitivity remains high: Average selling prices declined three percent year-over-year as customers continued to seek value.
- Traffic declined but conversion improved: Despite a three percent drop in glance views, ordered product sales grew slightly (0.98%).
- Advertising costs significantly outpaced sales growth: Ad spend increased 10.5% while ROAS plummeted 42.5%, creating margin pressure.
- Revenue losses from out-of-stock issues increased: Revenue loss due to OOS rose 16.2%, highlighting ongoing supply chain challenges.
- Unit margins approached 14-month highs:Despite price pressures, improved efficiency drove strong unit margin performance.
