In the final part of her series of reports from the 4th Global DIY Summit, HAI CEO Annemarie Harte focuses on the speakers who featured in the final morning of the conference. The organisers kept their biggest digital disrupters for the start of the second day, with Google proclaiming its next technology wave in 3D and eBay outlining how it is continuing to implement its retail strategy. There was also a breakdown of the latest trends emerging from both the European and US home improvement markets.
The summit, held on the 8th and 9th June in Stockholm, is the largest conference of DIY retailers and suppliers from over 45 countries with a speaker line-up that included top industry leaders, innovators, researchers and professors. It was jointly hosted by leading European DIY professional organisations, the European DIY-Retail Association (EDRA) and European Federation of DIY Manufacturers (fediyma), as well as the Global Home Improvement Network (GHIN). The theme for the summit was ‘A Disruptive World – New Trends in Home Improvement’. On the second day of the conference, we were treated to a vision of the home improvement market of the future. First up was the Retail Director of Google Germany, John Gerosa.
Full tilt into the future
Google’s Tilt Brush lets you paint in 3D space with virtual reality – just put on the goggles, arm yourself with an interactive brush and go. You can unleash your creativity with three-dimensional brush strokes, stars, light, and even fire. Your room is your canvas and your palette is your imagination. according to Google. While sitting in the conference theatre, the possibilities of applying this technology to the home improvement market became clear – the user can re-decorate a room, build custom designed furniture or add stylish accessories. She or he can paint in three-dimensional space.
The emphasis is on ease of use: simply select your colours and brushes and get going with a wave of your hand. Your room is a blank slate. You can step around, in and through your drawings as you go. To get inspired, check out #TiltBrush on Twitter or to experience the capabilities and features of Tilt Brush visit www.tiltbrush.com
When John was finished wowing the audience with Tilt Brush, he presented some key statistics including:
• 64% of all in-store sales are influenced by digital;
• 90% of adults use mobile phones in-store; and,
• 34% of DIYers researched online before buying offline in 2015.
He also posed a couple of questions:
• are you a digital brand?
• are you set up for digital?
He reminded us that “all things are connected” and video is evolving to 360 degrees –we only need to look at our Facebook accounts to see how quickly this facility has emerged and developed in the last six months. It’s virtual reality for everyone and machine learning enables smarter replies, smarter translation and personal assistance. He gave the example of Houzz, visit houzz.ie, as an excellent example of leveraging images, contents and suppliers. He emphasised taking advantage of technology and letting that create an advantage for you in DIY or DIFM (Do It For Me) market segments. He commented: “Know your customer micro-moments and focus on transformational thinking.” To complete the masterclass on digital disruption in the marketplace, John gave a stark picture of the comparative rates of evolution of adoption of new technology up to the billion-user level (see Figure 1).
eBay accounts for its success
eBay’s focus was on how we can work together in its community system based on enabling users to be accountable to each other. Last year, 18 million DIY products were sold in Europe amounting to €500 million in value terms and eBay says it wants you to have a slice of that pie. For instance, it suggests you might consider setting up an eBay Shop and using PayPal for transactions before you consider going head-first into developing your own bespoke e-commerce site. Visit ebay.ie and search on eBay shops for all you need to know about getting started; however, you should note that you will have stiff competition if you’re thinking of competing on the European online sales market as none other than Amazon are the market leader by far.
It’s a different story in the USA where online sales are growing, up 10.5% at non-store retailers by June this year (much of this coming from Amazon), but the e-commerce giant doesn’t have a toehold in large parts of the home improvement space, such as timber, paint and gardening supplies. Home Depot says only 25% of its business – smaller, easy-to-ship items like power drills and small hand tools – faces tough online competition.
That doesn’t mean the chain is immune to Amazon. A survey by UBS, the global financial services company, in June found that 11% of consumers planning a home improvement project themselves planned to buy something from Amazon. That is far behind the 36% who said they planned to shop at Home Depot or the 21% opting for Lowe’s, but is still up from just 7% a few months back.
To close the Summit, the audience were given some key insights into trends emerging in both the European and US markets. In the US, growth in the home improvement market has been on an upward trend since 2011 even with housing in the US still 30% below normalised levels and entry-level buyers not participating. In 2015, $40 billion of US retail sales moved online and e-commerce continues to be the retail growth driver. Amazon has made it clear it wants to be a disruptor. This is evident in the statement of its core principles outlined below: • customer obsession rather than competitor obsession;
• eagerness to invent and pioneer;
• willingness to fail;
• patience to think long-term; and,
• professional pride in operational excellence.
A key point to keep in mind in the short to medium term is that, while Amazon is achieving its goal of being a disruptor and its growth is actually accelerating in the near-term (27% in Q1 2016 vs 24% in Q4 2015), 40-60% of online home improvement purchases continue to be picked up in store, and 25-35% of customers add one more item to each instore pickup.
The Summit speakers underlined the importance of perfecting your buy online, pick up in store (BOPIS) strategy. The key factors affecting this strategy are:
• an emphasis on sales, marketing and logistics;
• the retention of stores’ competitive advantage over e-tailers;
• the growth in customer store loyalty; and,
• the trades’ preference for the convenience of the big box location.
In conclusion, it’s clear there is a huge opportunity to increase merchandising efforts within BOPIS. Key points to keep in mind in this regard include:
• the importance of making planned hires in e-commerce much faster (and the importance of hiring the best);
• marketing, sales, and logistics staff additions should be the highest initial priority for companies; and,
• remembering that content management and data analytics can be outsourced.
The winning formula, it is suggested, is as follows: hire an experienced e-commerce leader; ensure that this leader is empowered by senior management; add sales, marketing and logistics support; and increase investment to drive growth.
Outstanding Category Performers 2015 in Europe
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Next year’s 5th Global DIY Summit will take place in Berlin on the 8th and 9th June 2017. Visit www.diysummit.org for more information.