2020 was a challenging year for builders’ merchants to say the least, yet one that helped merchants to learn so much about their processes, business models and customers. Jon Roberts, Senior Sales Manager at Orderwise, comments on how the drive to online can help merchants keep up with customer habits.
When the first lockdown began in March last year, and the construction and trade industries ground to a halt, it left builders merchants in a very unfamiliar situation. There was no instruction manual to help them navigate through the weeks and months ahead and, like all sectors, they had to quickly adapt practices and processes to get ready for when customer demand returned.
Across the sector we saw widespread adoption of more forward-thinking functions like click and collect services. There was improved communication with suppliers and customers which enabled organisations to come together to support one another. And there was a drive to online as ecommerce became a vital way for people to order safely and still access the products and materials they needed.
Of course, it wasn’t all plain sailing but that reaction is something the industry is rightly proud of. Fast forward to the end of 2020 and its benefits are clear to be seen. It was reported in September that DIY had driven sales recovery in the UK for the fourth month running while the BMBI index showed in September that sales from merchants to builders was up 8.3% on the same period in 2019.
Q3 sales in 2020 were also up on 2019, and Q3 was a lot more fruitful for the merchant sector than Q2. According to John Newcomb at the Builders Merchants Federation, October and November 2020 were likely to show similar figures (data unavailable at the time of writing). Even the most positive people in the industry could not have expected such a strong end to the year for merchants’ bottom line, but it was thanks to the reaction of the industry that merchants were able to meet the online surge in the second half of the year.
Unlocking customer data
Pent up demand from homeowners during lockdown meant that in the second half of the year there was a home improvement surge, which helped to drive sales. Switching focus to online helped merchants to meet this demand. Significantly, with more and more customers ordering online or choosing click and collect, it means merchants suddenly have access to a lot more customer data on an ongoing basis — and the next step for merchants looking forward is to use that data to unlock insights into customer habits to boost revenue.
Consumer habits and spending shifted, peaked and troughed with trends and micro-trends spiking and then being replaced in 2020 — as the British public came to terms with the pandemic and adapted to a new way of living. This drove a change in demand for products from merchants.
With all this going on it’s made it extremely difficult for merchants to keep up — yet with that drive to online ordering, data can tell merchants about the builders, installers and homeowners that shop with their business.
Data can help merchants translate buying habits into action and help them focus on products, services and offers that are going to convert into sales and income, no matter how short lived those trends might be. Doing this can help streamline stock management, maximise marketing spend and ensure policies are in place to help the business capitalise on where customers transactions are going.
Data-driven action
Builders’ merchants need to be able to translate data into action and the best way to do this is through reporting and analysis, if their systems have the capability. Indeed, reporting is a merchant’s best tool to help it understand its customer habits.
By increasing reporting, merchants can break sales data down into not just months, but weeks, days and even hours. It can help business leaders spot customer habits and trends that it can then capitalise on to increase sales. They may only be micro trends that last weeks but if you can take advantage of them, over the course of the year you may see how they add up to healthy sales figures.
Once your business is able to have a better understanding of what customers want, whether that’s a seasonal trend or a new one, you are able to better manage all areas of your operation from supplier ordering, stock management and marketing spend to customer care. Decisions across your business become more strategic.
Changing expectations
Last year advanced many customers’ expectations by two or three years. They embraced online and just as at the trade counter, they expect a personalised online experience, promotions that meet their needs and recommendations that suit their usual projects.
All of this can be achieved if merchants make their data actionable and use analytics that enable them to better understand their customer’s habits. Knowing your customer and their habits goes a long way to being able to maximise revenue, offset losses and grow customer loyalty.
For more information about Orderwise’s merchant software, go to https://orderwise.co.uk/industries/merchant-trade-counter/
