Canada’s home renovation market is set to become a tad more snug. North Carolina-based retailer Lowe’s recently broke ground in Hamilton for the first of an expected six to 10 locations to open in 2007. Is Home Depot Canada, perhaps its most direct competitor, batting an eye? Hardly.

Peg Hunter, the chain’s new senior director of marketing, says: ‘Home Depot, more than any other competitor, has had the benefit of competition with them in the States.’

It also has Annette Verschuren as president, a formidable retailer some call one of the smartest in the industry, who over her 12 years at the helm has earned the right to somewhat autonomously run the chain. ‘Annette brings a special perspective to the company,’ says retail analyst Wendy Evans of Toronto-based retail consultancy Evans and Company, crediting her with ensuring women are in top positions and introducing a successful female-friendly home fashion slant to the business.

An example is the DreamBook, a slick catalogue rivaling any décor magazine. Roughly 1.5 million copies are printed and mailed to households and found in-store. It has been clearly positioned to reach out to the female target as the stop for an entire project, not just products. The most recent issue landed on doorsteps in September.

Beyond women, the brand has successfully etched out unique target markets: the professional contractor, the do-it-yourselfer, and most recently the ‘We’ll do it for you’ target. These are people who want, for example, new kitchen cabinetry, but instead of doing it themselves will hire one of the over 3,000 contractors in the Home Depot roster. [Hunter says it’s definitely a growth area for the business.] To help promote it, the brand teamed up with Mike Holmes, star of the popular HGTV show, Holmes on Homes.

The company’s Eco Options is another area where it has managed to distinguish itself, says Evans. ‘It’s a very strong program. They’ve taken a leadership role in that.’ Hunter says Home Depot actually aims to spur a ‘market transformation,’ one that encourages consumers to have a healthier relationship with the environment. And they’re clearly serious about it: about 11,000 products (and growing) are now under the Eco Options banner – and in an interesting shift, more and more suppliers are approaching the company with ideas for new products. It’s a result of the company’s close partnership with Summerhill Group, a Toronto-based environmental consulting company which crafts programs that encourage the average Canadian to make better choices for the environment.

Another element of this program is the splashy magazine, Eco Options (Annette Verschuren is editor-in-chief) launched last month and distributed in stores, offering simple ways to transform one’s home. Features include ‘Squeaky Clean’ a story that encourages the use of lemons and baking soda to clean a kitchen. In terms of its ROI effectiveness, Hunter would only say that there has been a notable increase in the category’s product sales.

But real estate may be the area where the battle unfolds. While most retailers have plans to go big, part of this big box retailer’s strategy is to downsize, searching out smaller locations, for example within malls. ‘[It’s an effort to] capture more of the urban market,’ says Evans.

Evans suggests the big box retailers combined currently own about 50% market share of the home improvement market, which is estimated to be worth $28 billion. The other half is still claimed by smaller shops. ‘Both Home Depot and Rona [say they plan to double their market share in the next five years,’ she says. The competition, in addition to Lowe’s, consists of the likes of Rona, Home Hardware and, in certain categories, Canadian Tire.

So if Evans were a betting woman, which retailer would she put her money on? ‘Who’s going to win?’ she repeats with a laugh. ‘Let’s just say that Home Depot is pretty aggressive.’