INDUSTRY REPORT
Tools & Home Improvement industry Cyber 5 2025 insights
Tools & Home Improvement: A massive pivot to retargeting failed to stop margin bleeding.
Tools & Home Improvement struggled to maintain momentum this year. While ordered revenue grew, this represents a -13% deceleration compared to last year’s growth rate.
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- The category faced a significant traffic headwind, which brands attempted to counter with a radical shift in ad strategy
- Brands slashed top-of-funnel spend and poured budget into Sponsored Display, creating an aggressive retargeting funnel
- Gross margins plummeted, suggesting that even high-ticket sales (+18% ASP) couldn't offset the rising operational costs
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Key Takeaways
- Ordered revenue growth decelerated significantly despite strong absolute performance
- Traffic collapsed as shopper interest in home improvement projects waned
- Brands executed a radical advertising strategy shift toward aggressive retargeting
- Revenue was driven by high-ticket durable goods rather than smaller accessories
- Improved inventory management offset lower traffic but couldn't save profitability
- Advertising efficiency stabilized but remained unprofitable
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