Written by Steve Collinge – International speaker, thought leader, retail influencer and commentator, MD Insight Retail Group & Executive Editor Insight DIY.
If there’s a couple of things that the last twelve months has taught us, it’s that firstly the Home Improvement industry is more resilient than we thought and that secondly when times are tough, we all focus and invest in what we feel we can control and where we feel most safe and comfortable, our own homes and gardens.
But there is something else too. The significant un-forecasted growth in sales and profits experienced by Retailers and Merchants over the last 12 months, coupled with the influx of new, younger consumers into the market has given these businesses a renewed bold confidence.
Add to that the likely longer-term benefit from the significant amount of savings that are being accumulated and the limited ways that this money can be spent and you have the perfect ingredients for an explosion of retail ideas, concepts, experiments and trials.
Certainly, the UK retailers seem to have an interest and ambition in trying new things and to experiment with new store formats and new categories that pre-Covid would have probably been filed away as ‘too risky for now’. Their focus is currently on opening new, much smaller format stores than those that we’re become used to.
The thinking behind this is obvious. You no longer need a large big-box store to offer the entire range. A smaller store, coupled with leading edge click’n’collect services and the ability to get any one of 30,000 products to the customer on a next day basis, means the ideal store is now much smaller.
This opens the opportunity to drop new stores into high-streets and other high footfall areas where traditionally only the independent hardware retailers existed. The catchment areas for these inner city or urban stores are also quite different. You tend to have far more consumers renting, fewer properties have gardens and as a result the product mix needs thinking through very carefully.
Across the globe, COVID-19 has had a devastating impact on retailers and other service businesses, many of whom have closed, resulting in a glut of commercial properties becoming available, many of them located on high-streets.
In the UK, currently one in seven retail shops are empty and the British Retail Consortium (BRC) warns of a “tsunami” of further closures. The LDC-BRC vacancy monitor showed that in Q1 2021, vacancy rates had climbed to 14.1%, marking three years of increasing vacancy rates. With the moratorium on retail evictions in the UK now extended until March 2022, the BRC has warned that 65% of retailers could face legal action after this date, which could precipitate a wave of further vacancies from businesses that have to date accrued a total of £2.9 billion in unpaid rents, predominantly during forced closures in lockdown.
The opportunity for retailers who have successfully weathered the storm, such as Home and Garden businesses is now significant. There are some examples of these smaller format stores that have opened in the last 12 months and here’s a few of them.
B&Q Express Stores Wandsworth & Tooting
In May, B&Q opened the doors to two brand new ‘express’ format stores on the same day, located in Wandsworth and Tooting, South London. The new high street location and smaller format stores offer customers all the usual home improvement essentials with over 4,500 stocked products in each location. Both stores offer a range of paint as well as tools, hardware and other DIY essentials across décor, electrical, plumbing and cleaning.
Customers also have the option to access 30,000 additional products via diy.com, where they can place an order for home delivery or Click & Collect.
These two new smaller format stores are part of B&Q’s new store opening strategy, reflecting customer expectations for speed and convenience. The opening of the Tooting and Wandsworth stores bring B&Q’s total number of new stores to 11 since January 2020. The new stores are open seven days a week: Monday-Saturday 7am-8pm, and on Sunday 10am-4pm.
B&Q inside Asda Supermarket – Dagenham & Sheffield
In December 2020, B&Q also began a trial of compact B&Q stores inside four Asda food superstores, the first two inside Asda stores in Dagenham and Sheffield.
The 200-300sqm concessions give customers the chance to shop a broad range of B&Q products in-store or place an order via their website for home delivery or Click & Collect. The B&Q trial concessions in Asda stores offer a range of paint (including paint mixing) as well as tools, hardware and other DIY essentials. Customers are also able to shop B&Q’s full range at diy.com and order selected items online for collection from the B&Q concessions. The trial makes it easier for customers to access a broader range of DIY essentials in more convenient locations and complete many different shopping activities in a single trip. Chris Bargate, Director of Business Development, B&Q, commented: “We believe in testing small formats and are committed to trialling new initiatives. We’re delighted to be trialling with Asda to test a more convenient way for customers to access our range of home improvement products and services. Our customers are continuing to adapt and change to new ways of living and shopping and this is just one way in which we’re responding by getting closer to customers and making it easier for them to improve their homes.
Homebase Decorate – Walton on Thames
Homebase, the third largest Home & Garden retailer in the UK, has ramped up the rollout of its small-format stores with the opening of three new format high street shops in Walton-on-Thames, Surrey. In a show of its belief in the future of the British high street, Homebase has added a Kitchens by Homebase to an existing Bathstore showroom and taken on neighbouring units which include a DECORATE by Homebase paint store and the retailer’s first small-format Homebase store, offering a range of home and garden essentials.
The DECORATE by Homebase store offers everything needed for decorating projects, including paints from brands such as Dulux, Farrow & Ball, Crown, ELLE Decoration and Craig & Rose. It also features areas in-store to allow customers to work with the Homebase team to trial different colours next to one another, as well as map out what their new living room or bedroom might look like with furniture and home accessories from Homebase.
Over the coming months, these spaces will be used for workshops and events with experts to help the local community make light work of their home improvement projects. Also available are all the essentials’ customers need, from lightbulbs and screws to bird care products for their gardens, with more than 2,500 products available in a small-format Homebase next door.
The Homebase mini store next to Decorate
It will also offer ‘Order and Collect’, making it even easier for customers to buy products from Homebase’s full range of over 35,000 products either online for pick up in-store within the hour or order in-store for home delivery.
CEO of Homebase, Damian McGloughlin said: “We understand the importance of customer experience both in-store and online and we’re really excited to be bringing our inspiration, style and advice to the high street. We’re listening to the local community to make sure we can provide them with the products they’re looking for to complete any home or garden improvement project.”
Little Dobbies – Edinburgh
The UK’s leading garden centre retailer, Dobbies, has also been experimenting with smaller formats and has opened its first city centre location named “Little Dobbies”. The new store is based in central Edinburgh and joins the Dobbies’ network of 69 much larger garden centres across the UK. Little Dobbies’ offering is horticulturally focused with what Dobbies describes as convenience gardening products, complemented by houseplants and pots, homewares, gifts and seasonal ranges. There is also a takeaway coffee shop with hot and cold drinks, sweet baked goods and an outdoor seating area.
The new format has clearly been successful as they’ve recently opened a further store in Bristol and committed to opening two more in London. Shortly after the opening Graeme Jenkins, CEO at Dobbies, said: “This is an exciting new venture for our team, as we expand our little dobbies offering into Bristol. The store features gardening essentials for urban residents and showcases some of the extensive ranges available at our larger stores and online at dobbies.com.
Conclusion
With the consistent growth in sales and new customers continuing to pour into the Home and Garden market, it’s a perfect time for retailers to experiment with new formats. In my view, we can no longer rely on customers driving to out of town stores, it’s time for retailers and merchants to move their brands closer to the larger populations.
Giving (often younger) customers in city locations the opportunity to access our brands conveniently through both stocked lines and a much larger range of products through an effective click’n’collect offering is a brilliant way to build brand loyalty. The new formats you’ve seen in this article are innovative examples of retailers taking the very best of what they do and packaging it in small, but perfectly formed, city centre locations.
