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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