This article is provided by BRC Associate Member, Quadient.
__________________________
Given the “essential” classification in the pandemic, DIY retail and related sectors have experienced their very own renovation over the last 15 months. But how do they build on that momentum and what can “non-essential” retailers learn?
The DIY sector could never have imagined the pandemic-induced turbocharge.
Online retail trade body IMRG reported online garden retail sales growth of 226% in 2020. For home & garden online sales combined, online sales jumped by 74%. [i]
As consumers were confined to their homes for much of last year, many took advantage of DIY retail’s government-mandated “essential” status to spend their money on home improvement, to make their homes remote-working friendly, and enhance outside space.
An annual sales rise of 7.2% prompted Thierry Garnier, CEO of Screwfix, and B&Q owner Kingfisher Group, to say his company was “coming out of the Covid crisis as a stronger business” and talked up “an improved competitive position in all key markets, strong new customer growth and a step-change in digital adoption”. [ii]
Wickes' like-for-like core DIY revenues grew by 19.3% year on year in 2020, [iii] Homebase is opening stores again after pandemic-fuelled sales and new ownership continues the business’s turnaround, [iv]
Toolstation’s full-year sales of £633m were 42.1% higher than the previous year, growing by 22.2% LFL. Sales in the UK alone were 20.9% up on last time, despite lockdowns in late March and April. [v]
B&Q and Dobbie’s have both opened smaller format high street stores, with a digital edge to them. They provide convenient click & collect sites, and this model encourages more ad hoc to spend on big-ticket items from passers-by. Toolstation just opened its landmark 500th store as part of its accelerated expansion programme putting them on track to open over 60 new branches by the end of 2021.
Consumers directing more of their spending locally has been a feature of the pandemic, and this trend should stick due to greater levels of homeworking as the major players in this sector are also looking to get closer to where their customers live and are collaborating to find smarter ways to fulfil this volume.
What can “non-essential” retailers learn?
Evolving consumer behaviour calls for faster and smarter ways to serve shoppers. Impressively, Toolstation rebuilt its website within days at the beginning of the Covid-19 lockdown, so that its branches could adapt to operate as click and collect fulfilment centres.
In the US Lowe’s has seen the benefits of installing Quadient Smart lockers in 1,700 of its home improvement stores. Allowing customers to seamlessly – and, crucially in a pandemic, safely – pick up digital orders at their chosen store.
The key lesson here is that investment in staff and systems is as important as physical infrastructure. Today's digitally savvy consumers demand real-time stock visibility to help them control when, where and how they collect and return products as well as benefiting from expert technical support if required in-store.
Smart lockers can provide a rich tapestry of experiences to attract a wider range of customers to high street stores whilst improving staff efficiencies and lowering overhead, final mile delivery costs which in turn reduces the carbon footprint. With this in mind, here are 3 ways technology can strengthen the customer experience;
- Optimise staff productivity > Online orders can be collected or returned in less than 10 seconds from a smart locker vs an average of 6 mins at the sales counter. This means that the time saved on tasked based functions by staff can be spent on sales and technical support to deepen the customer experience, something online shopping cannot easily replicate. To put this into context – on average it takes 6.02 mins to fulfil a click and collect order, 15 daily click and collect orders equals 1.5 hours per day, which is 45 hours per month wasted managing pick-ups or returns.
- Smart Concessions > The retail experience can be dialled up with strategic partnerships of complementary brand concessions. Interestingly, during a recent BRC webinar, we learned from B&Q’s Director of Business Development, Chris Bargate, that the DIY giant is in experimental mode – trialling and planning smart collaborations that support the new marketplace. An example being their partnership with the UK’s leading tool hire company, Speedy Services to provide customers greater choice and convenience whilst both companies benefit from shared efficiencies of client base cross-pollination. With floor space at a premium, smart lockers can be an efficient way to enable concessions effectively.
- DIY and Trade lead the way in understanding the importance of opening hours. Retail Insight Networks recent survey highlighted that 52.4% of shoppers would buy from a competitor if the store they normally shopped at was closed. For many retailers, the cost of opening early or staying open late is not viable when staffing and overhead is factored in. This is where implementing outdoor smart lockers to enable your click and collect 24/7 is a cost-effective way to give your customers the convenience they need instead of losing them to your competition.
The most valuable retail brands of the coming decade will be built by businesses who invest in technology and seek to empower people rather than make them obsolete, as technology improves it should not be a substitute for people, they must complement each other.
Our building project today is to find innovative ways to create new customer experiences, not just different, but better.
For more information visit quadient.co.uk.
i http://gdretail.net/wp-content/uploads/2020/09/GlobalData-multichannel-retail-September152020-.pdf
ii Kingfisher final results of the year ended 31 January 2021
iii https://www.travisperkinsplc.co.uk/sites/travis-perkins/files/2021-03/2020-results-presentation.pdf
iv https://www.retailgazette.co.uk/blog/2021/05/homebase-reveals-first-new-store-in-6-years/
v https://www.insightdiy.co.uk/news/toolstation-2020-performance-exceptional/9569.htm