While the pandemic-enforced reliance on online sales channels may have endured in many industries, the independent builders’ merchant sector seems to have bucked the trend, with tradespeople quickly returning to brick-and-mortar premises. Nick Oates, Managing Director at National Buying Group, explores the reasons for this whilst also considering the role digital channels are playing alongside the traditional trade counter.
When we reflect upon the pandemic’s impact on buying habits, many sectors’ soaring ecommerce sales continue to remain strong even today. Very few sectors were unchanged by this disruption, including builders’ merchants. In fact, according to the tradespeople NBG surveyed for its latest report Valuing Local Independent Trade Merchants in a Digital World, 61.5% said they had bought more products online during the pandemic.
And this was further reflected by the NBG Partners we’ve spoken to about the topic, with one of our surveyed Partners noting that their online sales went from £4,000 in online sales per month in March 2020, to £100,000 in April.
Back to branches
For many industries, this shift to online has seen digital sales become a permanent and prominent revenue stream. Yet in the builders’ merchant sector, it has been estimated that only 8% of trade sales in 2022 were online — the lowest rate for any ‘retail’ sector. This then begs the question — having sampled a digital-first buying journey, why are 92% of trade sales still occurring via traditional ordering routes?
Socialisation
As the tradespeople we surveyed for our report said, many opted to collect materials in-person during the pandemic even when delivery was available. The reason for this was simple — they just wanted to interact with a person.
Whether for advice or recommendations, or simply having a chat to interrupt working alone, a physical branch can be the equivalent of the office watercooler. Being able to discuss work with knowledgeable, sympathetic people, or talk through a problem that might have arisen on a particular project, continued to be valued greatly.
“Digital has a very big role to play in our industry provided its purpose isn’t consigned to sales alone. As such, the discussion should not be about how can digital replace the trade counter, but how it can support it.”
Convenience
It was made clear throughout our report research that tradespeople regarded buying in person as having different, convenience-based benefits compared to shopping online. Issues such as broken tools, missing parts or last-minute jobs coming in were seen as much quicker to resolve by visiting a store, rather than taking the online route.
The reality is, the independent merchant has long been a reliable and convenient pillar of the local trade community, so the added convenience of an eCommerce option is perhaps not seen as quite as much of a benefit compared to that offered by independent retailers in other consumer sectors. And when the nearest trade counter is generally so close to the tradesperson’s home or the location of an ongoing project, it’s clear to see why visiting the branch will often be the preferred option.
The role of digital
Given the quick recovery of in-person sales, it could be argued that digital is something to be dismissed in the builders’ merchant sector. However, our report would argue that this is not the case — actually, it has a very big role to play in our industry provided its purpose isn’t consigned to sales alone. The discussion here should not be about how can digital replace the trade counter, but how can digital support it.
For instance, implementing tools to check stock levels remotely could help customers overcome a familiar frustration with in-person purchasing — leaving a branch empty-handed after travelling for a specific product or tool.
Similarly, website tools which assist trade customers looking to create quotes and pay off their account can help encourage repeat business, as one NBG Partner describes in our report. In their own words, their trade customers “appreciate the fact they can log into the site at the end of the day, receive personalised pricing and create quotes, as well as being able to use the website to pay off their account.”
This is not to say digital tools cannot be used for promotional purposes, as one social media-savvy NBG Partner interviewed for the report can affirm. They cited word-of-mouth generated through social media and online reviews as key to bringing in new business. Another said regularly posting videos on their channels helped build a community and attract customers.
“For many industries, this shift to online has seen digital sales become a permanent and prominent revenue stream. Yet in the builders’ merchant sector, it has been estimated that only 8% of trade sales in 2022 were online — the lowest rate for any ‘retail’ sector.”
These functions all have one thing in common — enabling better service. As many tradespeople operate as sole traders or small businesses, merchants’ online offerings should therefore be honed to help them manage administration, often done at the end of the day. After all, the trade counter is open at the same time many customers will be out completing jobs, so making information available online outside working hours can be invaluable.
Best of both worlds
In conclusion, it is perhaps easy for independent builders’ merchants with low levels of online sales to read this as a lack of appetite among tradespeople for digital services. It is also true that many of the biggest factors driving trade sales — such as convenience, price, product range and customer service — continue to be met in-person at the trade counter.
But to solely focus on revenue misses the big picture. What digital does is help merchants improve the customer experience by improving access to accurate information and agile communication. Doing so can help enhance customer relationships that independent merchants are already well-placed to cultivate.
Click here to download NBG’s latest report, Valuing Local Independent Trade Merchants in a Digital World.
