Steve Collinge from the Insight Retail Group looks at how Home Improvement stores have remained virtually unchanged despite dramatic advances in technology.
In the last 40 years, despite dramatic advances in technology and with product, service and point of sale innovation, the layout, look and feel of the ‘Big-Box’ home improvement stores have remained virtually unchanged. Yes, more space has been allocated to growing categories, new product sectors have emerged and brands have come and gone. The retailer service propositions have also improved and adapted, however the fundamental way in which consumers shop and purchase DIY and garden products from a big shed is virtually identical.
But why do we need to change? The leading DIY specialists Woodies, B&Q and Homebase may have posted mixed results in 2019, but surely that’s just the peaks and troughs related to the general property market and the number of housing transactions? If that were the case, I would probably be focusing my time and effort on other subjects, such as predicting where
Screwfix and Toolstation may be ten years from now or how far discounters like The Range will be able to penetrate the Home Improvement and Gardening categories.
We have two fundamental challenges facing our industry, firstly the rapid growth of online sales in the majority of our categories and secondly the need to appeal to and attract younger generations, specifically the Millennials, into our stores.
So, can this relentless growth in online purchasing behaviour be changed, do we actually want it to change? Can we find ways to persuade all generations that visiting a retail store is still a valuable part of the buying process?
In our industry, we have a large number of functional products where a shopping experience is almost irrelevant. I’m talking about the traditional and often more trade-focused categories like hardware, ironmongery, door furniture, basic security etc.
You may need some assistance with these purchases, but you don’t really need an ‘experience’ when buying these types of products.
This is one of the fundamental reasons behind the success of Screwfix and why they have grown so rapidly and will, I am sure, continue to do so. You simply don’t need to touch and feel functional products. An image, description and a price online or in a catalogue is frankly all you need. Screwfix and other players including Toolstation and Ironmongery Direct have successfully hoovered up the functional sales from big-box DIY retailers, some independents, as well as a number of merchants and other retailers along the way. They offer a wider range, good prices, excellent service, more chance of the products being in stock and from the tradesperson’s perspective, there’s no huge car park and the requirement to walk half a mile around a warehouse to pick up the item that’s needed.
But ask Screwfix and Toolstation to sell you coloured paint, a kitchen, live plants or anything where inspiration or an actual product experience is required and they will struggle as it’s not in their DNA.
As a result, there is clearly a place for bricks and mortar Home Improvement retailers to exploit this huge profit opportunity, particularly in those categories that lend themselves to inspiration and a unique experience.
Future Proof Categories
What’s beginning to emerge in recent years are the ‘future-proof’ product categories, the product areas that to date, and despite the best efforts of some leading retailers, have not responded well to being purchased online. It doesn’t mean they won’t respond in the future, but so far, online penetration has remained very low and looks likely to remain the same in the near future.
But what are these categories and why are they so critically important to the retailers who want to not just survive, but thrive in the new decade?
Due to the complexity of the whole purchase process, the financial risk involved and because kitchens are a deeply emotional process, buying online (at this time anyway) just isn’t suitable. Consumers want and need help and support from a designer, someone who knows what they’re doing
and who listens to their needs and requirements. It’s also important to highlight that consumers buying kitchens from a specific retailer also tend to purchase additional products to complete their project from a range of related categories including paint, flooring, hardware, white goods, lighting etc.
Buying paint is and always has been one of the simplest and easiest purchases from a DIY store and from a sales, profit and footfall perspective remains critically important to retailers. Choosing paint colours online does not translate well and often with the need to get the job done within a specific time period such as a weekend, the paint shoppers want their products early on a Saturday morning and they just want to get on with it. Buying paint drives more visits to stores than any other product, as consumers purchase tester pots and look for ideas and help.
Products including live plants and all of their supporting categories including fertilisers and chemicals continue to drive significant store footfall. It’s a bit like online shoppers buying the majority of their grocery products online, but choosing to still go instore for their fresh fruit and veg. We want to choose our own plants, we don’t want someone to choose them for us and whilst we are there, we may as well buy all the other stuff we need.
This category has already taken off in the US and is just about to explode in the UK. Some of the largest businesses in the world, Apple, Amazon and Google are fighting to own our homes and retail will be one of the key battlegrounds. The US Home Improvement retailer’s The Home Depot, Lowes and Bed, Bath & Beyond have already recognised this and are investing heavily in category offers. This is a great way to bring new and younger consumers back into traditional retail stores as customers want to touch and feel these products. They want to see the range of options available; they need advice from knowledgeable staff and in most cases, they need an installation service.
By strategically focusing on the critically important future-proof categories, the Home Improvement retailers will be creating even more reasons for consumers to visit their stores. Consumers who will be spending significant amounts of money on new kitchens, on full decorating projects, on their gardens and increasingly on the rapidly expanding Smart Home Categories. Retailers who effectively combine a major in-store focus on these four key categories, combined with an effective, competitive and seamless on-line offer will have future-proofed their businesses for the next decade and
Steve Collinge is an international speaker, influencer, retail commentator and is Managing Director of Insight Retail Group Ltd and executive editor of Insight DIY. You can follow Steve on LinkedIn and on Twitter and see him in action at this year’s Hardware Conferences.