The Soul of Our Spaces: How Home Depot and Lowe's Built the Microwave Economy

In pursuit of convenience and affordability, we've traded architectural charm for cookie-cutter conformity, and Wall Street has rewarded us for it.

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When I first got on Twitter, one of the accounts that stood out to me was David Perell. Perell is a writer, teacher, and podcaster. He has traveled around the world and is known for his unique ideas. The big theme with Perell’s Twitter page was the idea that one should learn to write and to write online.

I love reading Perell’s essays. There are long-form essays and there are short-form essays. Each essay has its unique theme and structure. Some connect to other essays, and other essays are completely different from the things he has written about. Overall, each essay gives you a perspective that you either haven’t thought about or inspires you to do something new.

One essay that gave me a unique insight onto the growth and success of Home Depot $HD ( ▲ 0.75% ) and Lowe’s $LOW ( ▲ 0.86% ) is his essay called The Microwave Economy. Perell starts off the essay strongly in his introductory paragraph when he says:

“And yet, America has become a Microwave Economy. We’ve overwhelmingly used our wealth to make the world cheaper instead of more beautiful, more functional instead of more meaningful. We don’t value what we can’t quantify, so our intuitions are given short shrift. In the name of progress, we belittle the things we know but can’t articulate.”

David Perell, The Microwave Economy

How does the Microwave Economy relate to Home Depot and Lowe’s? Because those home improvement stores have helped contribute to increasing the abundance of building materials to make homes more functional and cheaper.

Before these home improvement retailers existed, it was harder to build a home. To get the supplies you needed, you needed to have a network of suppliers that could get you everything you needed. Each supplier specialized on one aspect of the home and it was harder to negotiate on price. Delays on supplies were common as different suppliers managed their inventory differently and were located in different parts of the region or country. Overall, materials were more expensive and harder to source for homebuilders.

But at the same time, the homes from that era were known for being unique, to have more meaning to the family members that built those homes, and people had more joy in repairing the things in their home instead of feeling it’s easy to replace that thing. One could feel there’s a soul in the home.

We appreciate how unique the architecture in Europe, Japan, and other places around the world are. But we build the same cookie cutter homes and skyscrapers that can be found in any metropolis across the globe. The wealthy admire the castles that aristocrats from back in the day had, but lived in McMansions. Yes, McMansions were a cheaper way of living in a nice, big home but they are considered an eyesore to many.

Seeing all these pictures of buildings built in the past, some ancient, can you feel the soul of the place? Can you see how these buildings are beautiful? Have you ever dreamt of living in a home that looked beautiful as those buildings? Would you agree those buildings look better than those white box mansions that developers are building in Los Angeles?

If you’re able to say “yes” to these questions I just described, then you understand how the world has become more of a microwave economy.

One may think that if you’re wealthy, you can escape the Microwave Economy. But instead, the wealthy are at the center of the Microwave Economy. Perell says, “It’s not the garish materials that surprise me. It’s that not even the rich and famous can transcend the Microwave Economy. Developing taste has nothing to do with the fatness of your bank account or your proximity to a Restoration Hardware gallery. Just think about it: if wealth could buy charm, the world’s wealthiest country wouldn’t be the center of the Microwave Economy.” When you see the McMansions that the wealthy live in, you find that the pride they have for their home comes from the money they’ve made to acquire the home, not from the sweat and hard work to make the home meaningful. The faucets, the light fixtures, the door knobs, are all the same things you can find in any other home or apartment.

Within the essay, Perell discusses a newsletter post that Simon Harris made that mentions this:

“As the availability of stores like Home Depot (founded 1978) and Lowes (21 stores in the 1960’s) spread — both have over 2000 stores each today — the commodification of house hardware intensified. Today it is easier to find the things you are looking for quickly, for example if you need a replacement doorknob. This also means that everyone’s doorknobs look exactly the same. As manufacturers and distributors consolidate while carrying only a few brands, the details of houses homogenize. As they converge in style, people stop considering the hardware as a choice at all, and so everything becomes even more of the same. Through this sameness the hardware became a cost that could now be cut.”

Designing a New Old Home: Beginnings by Simon Harris

It’s no coincidence that as homes start having similar styles, that at the same time, we’ve seen Home Depot $HD ( ▲ 0.75% ) and Lowe’s $LOW ( ▲ 0.86% ) grow simultaneously and essentially source their success from this. Sure, these companies make billions of dollars in sales annually, and while their website may show they have many different selections for door knobs, faucets, light fixtures, etc., remember that there are probably tens of thousands of people, or even millions of people, who have the same door knob, faucet, or light fixture as your home has. All while it’s never been easier to find a replacement door knob for your home.

Home Depot’s stock chart

Lowe’s stock chart

Are many people going to change their habits and start shopping at furniture or home improvement places known for having artistic or unique brands? Probably not because owning or renting a home is expensive and functionality and affordability are more important than trying to add your own personal touch to a property’s structure.

One way that the wealthy are able to get away from the Microwave Economy is in the exotic car world, where each Ferrari is customized to the owner’s liking. While I doubt there will be more companies that will adopt the Ferrari mindset and model in other industries like home improvement, Ferrari shows us that with each car, you can tell the owner has put his soul into the amenities and designs that he wants in his car. Same thing with a Rolls Royce and why those vehicles are some of the most sought after vehicles in the world. Like how Japanese pagodas or Victorian homes in San Francisco are homes many would like to live in.

For investors, we like to read the financials and see growth. But rarely do we think about the broader societal effects of the success of the companies we invest in. For Home Depot $HD ( ▲ 0.75% ) and Lowe’s $LOW ( ▲ 0.86% ) , their success brought the commoditization of home hardware. It will be interesting to see how these companies plan to adapt to the future if ever the trend reverses and many start looking into adding their unique touches to their homes.

Disclosure

About Me
I am an independent personal finance writer and blogger. I do not have any formal training or certifications in finance, but I have a deep passion for the subject and have been researching and writing about personal finance topics for several years.
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I/We own HD and LOW.