Citizens Enhances The Home Improvement Financing Experience

While many sectors of the American economy shrank during the pandemic, home renovations, improvements and repairs grew in market share. We’re spending more time at home and, as we do, our appreciation for our homes has grown. To show that appreciation, many of us are opting to make our living spaces more… well… livable. And we’re not hesitating to open our wallets to do so.

Estimates put expenditures for 2020 at nearly $420 billion. Houzz.com states in a 2022 report that home renovation activity is at its highest rate since 2018. Of the 67,554 homeowners who responded, 55% indicated they had begun a project in 2021. And more than half of the survey participants indicated they had a new renovation project in the planning stage.

According to Houzz, the median cost per project came in at around $18,000. In comparison, in 2020, the median spend rate per project was $15,000. It was $13,000 in 2019. 

The average outlay to upgrade a kitchen was about $15,000 in 2021. That’s a 25% increase from the previous year. Kitchen spaces were the number one target for upgrades, according to the Houzz survey. But that wasn’t where homeowners expanded their budgets the most. Bathroom renovations increased by 38% from 2020 to 2021. This was followed by laundry rooms (33%), living rooms (33%) and guest bedrooms (28%).

Outdoor spaces also rose in priority to update and overhaul. Forbes magazine declared 2021 “The Year of the Yard,” citing a January study conducted for the International Casual Furnishings Association (ICFA). The article revealed that approximately 88% of Americans found their outdoor spaces lacking and 58% of those surveyed were thinking of yard upgrades. This was more than double the 23% who came to a similar conclusion in 2020. What kind of purchases were being considered? Big-ticket buys included fire pits (35%), grills (35%), lounges and chaises (34%), lighting (34%), dining tables and chairs (28%), umbrellas (25%) and sofas/sectionals (19%).

Houzz.com predicts the pace of home improvements to remain steady throughout 2022 and beyond. Forecasters agree, anticipating a compound annual growth rate of 4.47% between 2022 and 2026. This should come as welcome news to retailers in the business of providing homeowners with the products, tools and materials to meet renovation and improvement goals. 

Recognizing this emerging trend, Citizens Pay is seizing the opportunity by creating financing solutions to provide home improvement retailers, home service professionals and their customers more flexible and innovative payment options.

Increasingly, homeowners are seeking more choice when it comes to paying for improvements. In a 2021 survey of 1,000 consumers, TD Retail Experience Index found that 78% responded that financing considerations were a major factor in determining how much to spend. Nearly half (46%) of the participants indicated they are more likely to purchase from retailers who offer a variety of financing options such as installment loans, buy-now-pay-later solutions (BNPL) and store-branded credit cards. 

It's no surprise that the home improvement arena is sparking a lot of interest. According to a 2021 C+R Research Survey of 2,005 self-reporting online consumers, 32% have used alternative financing solutions to buy furniture, 29% to buy appliances and 23% to buy housewares.  

And that is why Citizens Pay developed a unique financial solution for the home renovation sector. It features flexible payment options, revolving lines of credit, greater borrowing limits and a simplified application process.

“We're helping contractors and other home service providers win more business by making projects more affordable for their customers while also increasing the average project size,” says Adam Goodman, Vice President, Business Development at Citizens Pay. “Because they're able to offer financing, homeowners are opting for larger projects that result in higher sales for the home service professionals.”
 
Why is this important? Many taking on home renovation projects were surprised to find the final cost was much higher than originally estimated. Sticker shock could have an impact when it comes time to proceed with the next home improvement challenge. Rising concern about inflation is another factor.

“What’s our reason for existing? We help people make expensive purchases — whether an aspirational purchase or purchases they wish they didn’t have to make,” says Tom Carter, Chief Growth Officer at Citizens Pay. “And we help them make these big purchases more palatable.”

In a 2020 study of 1,271 homeowners, Bankrate reported that 57% paid using a credit card. 11% covered renovation costs with either a personal loan or home equity loan.

Paying in cash is always preferable, but it is often not feasible when it comes to larger ticket purchases. While seemingly convenient, credit cards typically come with high interest rates. Tapping a Home Equity Line of Credit (HELOC) can impact home equity value.

That’s where Citizens Pay comes in. By offering an alternative to traditional payment methods, it gives merchants and their customers a more flexible choice when it comes to renovation needs and wants. 

A recent merchant in the home improvement sector to partner with Citizens is Bedrosians Tile and Stone. The California-based company with 700+ employees and 40 locations in 13 states, features Citizens Pay on its home page (www.bedrosians.com). Customers can take advantage of no money down, no hidden fees and 0% APR for qualified applicants when they pay with Citizens Pay at check out. Its trendsetting tile and stone products fit nicely with Citizens’ innovative end-to-end shopping experience.

Simplifying the purchasing process is a top priority. These days, customers want the flexibility of buying when they want, where they want. As soon as the decision is made, they expect a quick and smooth checkout process. Citizens Pay delivers this with a seamless navigation designed to minimize missed conversions and abandoned carts. 

“One thing that's distinct about Citizens Pay in general is that, unlike most of the other options across vertical retail, our solution is equally good in all channels,” says Fry. “So you can take a Citizens Pay application and make a purchase easily in-store, online, on your phone, through a call center or even with somebody inside your home.”

Merchants also appreciate the ease of use. Some home improvement financing vehicles come with a complicated application process and are cumbersome to use. Citizens Pay knows home renovation specialists have better things to do with their time than paperwork.

“The frictionless nature of our process is really important. Home service professionals are great at what they do, but they may not always have the time to dig deep into all the financial aspects of the business,” says Goodman. “The ability to provide a super easy process for them, where they don't have to do a lot of paperwork or a lot of follow-up, is really important. These days, most home service professionals have a full plate of projects and a pipeline of future jobs and just the fact that we can make this easy for them and help them run their businesses more efficiently resonates with them.”

But this isn’t the only reason Citizens Pay is winning over home renovation enthusiasts. Affordable payment plans, presented simply and in clear terms, makes bigger purchases more attractive. Higher spending limits give customers the power to buy what they need when they need it. And most importantly, they have the peace of mind knowing their transactions are being handled by a leading national lender. With $192 billion in assets as of June 2022, Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions. **

Merchants like the fact that Citizens Pay offers a unique way to attract new customers, increase conversion rates and facilitate big-ticket projects. It also gives them another way to encourage customer loyalty and ongoing business.

Designed for the continuing needs of homeowners, this unique program features a revolving line of credit that allows them to keep using Citizens Pay without having to reapply for future purchases from that specific retailer. This flexibility encourages repeat business over multiple projects. 

Drawing upon its years of consumer financing experience, Citizens Pay is ready to help expand home improvement retailers’ financing solutions to provide a better customer experience that builds brand loyalty over time. 

If you’re interested in learning how a custom financing solution could take your business to the next level, click below to get in touch with a Citizens Pay expert.