Merchandising – Give brands a chance

In this issue of The Hardware Journal, Steve Collinge – Managing Director of Insight Retail Group Ltd and Executive Editor of Insight DIY – discusses the fine balance retailers and merchants must strike when managing brands.

It’s tough being a retailer or merchant selling home improvement and building products in 2018. Trying to meet the ever-changing needs and demands of existing (and hopefully a few new) customers, managing the all important stock levels, ensuring that there’s sufficient cash to pay the bills and make an acceptable profit, all the while keeping a close eye on the competition.

The role that brands play in this challenging equation is often debated, but never really resolved. Some retailers and merchants see them as a necessary evil, believing they charge an unacceptable ‘brand tax’ to fuel their on-going heavy investment in brand building through advertising and other activities. Others see them as valuable and close business partners, without whom store footfall would decline rapidly and they would simply lack the all-important credibility in key categories.

But what do our customers think? Depending on whether you’re a consumer planning to complete a DIY project over the weekend or a builder, plumber, kitchen installer or decorator whose livelihood depends on the work you do, brands can play quite different roles.

From a consumer point of view, they’re often completing tasks on an irregular basis, using products rarely or sometimes for the very first time. Even painting, probably the task completed by most consumers most often, it’s still a project they will tackle on average only once a year. They’re reliant on the retailer, their staff and increasingly YouTube videos and online searches to guide them through this maze. And that’s where brands come into their own. In areas of uncertainty and where consumers are often lacking confidence and/or ability, they need the help and reassurance of a brand who will guide them through the complexities of home improvement.

Let’s remember that a manufacturer lives and breathes their specific product category 24 hours a day, seven days a week, 365 days a year. They spend significant amounts of money on developing products and helping and advising customers to complete successful projects. Social media and modern-day methods of communication have changed brands’ relationships with customers and increasingly, they know their consumers and end users as well – if not better – than their retailer or merchant partners.

For the trade, the role of brands is different. Here, the end users know exactly what they’re doing, they do it day-in, day-out and as a result, the branded manufacturers are relied upon to simply deliver a consistent quality of product that performs to their expectation. They like it when brands launch new products, although it can often take some time for them to change their ways of working, unless the new products are so obviously a huge improvement from what came before. When in store, they need to find the stuff they want, quickly and easily, and there needs to be plenty of it.

And that brings me to what I recently saw in the merchant T.J O’Mahony Ltd in Dublin.

Here, they’ve worked very closely with Bostik, ‘allowing’ them to manage the tiling, sealant and adhesives category, including the installation of a strongly-branded point of sale. It’s a bold move, but when you look at how the majority of retailers and merchants currently manage these categories (see Bunnings below as an example), you can’t help but prefer the simpler, cleaner, less confusing category management from Bostik. However, just because a category looks neat and tidy, does that mean it performs better? I don’t think anyone will challenge the fact that following a range review, most categories seem to perform better. Whether that’s because they’re tidy, easier to shop, or because the right products are now in the right place with plenty of stock is difficult to say, but I know what I think.

Feedback and responses from customers have been positive. Peter Morrissey, Bostik Sales Director told us: “We are excited with the impact the new display has had so far. We believe in system selling by brand, and the feedback from the team in T.J. O’Mahony is that the installation has simplified the purchase process for customers in store.”

Whether a DIY consumer or a tradesperson (who, by the way, all shop in many types of retailers on a weekly basis), they all want the shopping process to be simple, straightforward and easy, with the necessary help if and when required.

These days, branded manufacturers have significant amounts of consumer and end-user data. They are full of knowledge, experience and ideas and often just need the right retailer or merchant partner to bring their categories to life.

In these ever-changing and challenging times, I think that it’s time to give brands a chance.