Roy Wakeman, Chairman of PTP Group, considers whether builders’ merchants are missing out on ‘virtual benefits’ when it comes to joinery and window sales:
The fixed location of the builders’ merchant with its stock and counter personnel remains a vital resource for local builders across the UK. The provision of credit is still a healthy USP as is the valued service the merchant provides, with the 7.30 am reveille as popular as ever, bacon butty in hand and trade counters busy.
Indeed, in the near 50 years that I have been involved in the sale, manufacture and distribution of joinery products — and most of it through merchants — this picture hasn’t really changed. Over the years there have, of course, been challengers to the status quo — for example, the emergence and establishment of the DIY superstores, from the early pioneers like Dodge City to today’s very good professionals in B&Q and Wickes to name just two.
I have both witnessed and taken part in initiatives with builders’ merchants to counter these challengers, which were thought to be very threatening at the time. But like all competition, it served to sharpen up the existing merchant offer and ‘improve it or die’.
This successful defence of the sector has resulted in the creation of strategic alliances and consolidation into big groups with market share and profit defended, although the latter, at less than historic margins.
Today, whilst some commodity products are being sold at cost or less, in the main consumers are demanding better quality products which then creates opportunity for increased margins — certainly in pounds value.
This is good news of course, but the way people are sourcing and buying their products is also changing and if the sector is really going to make the most of these growth opportunities, we believe a change in approach is needed and the industry needs to be open minded to that change.
We have invested heavily in a very simple and easy to use system enabling a customers’ window and door requirements to be configured quickly and simply by the merchant, with instant on line product selection and specification to the desired sizes including glazing options and ironmongery available and an instant price provided.
In the 70s, I was involved in launching ranges of doors and windows through the builders’ merchant sector and bore witness to the issues of the day. In short, too many products listed to enable real, in-depth advice to be provided at the counter right across the range. I wonder if some or all of this still sounds familiar today, and whether there is a better way forward?
We certainly think so at Dale Windows. Only three years after our initial launch, we have become the UK’s leading brand for Timber Fenestration products sold only through merchants. Years ago, my vision was to point the computer screen away from the trade counter and let the customer use a slick system for putting their orders on. That turned out to be farfetched and just not practical.
So as a manufacturer we have invested heavily in a very simple and easy to use system enabling a customers’ window and door requirements to be configured quickly and simply by the merchant, with instant on line product selection and specification to the desired sizes including glazing options and ironmongery available and an instant price provided — all able to be taught in less than a week to someone with basic joinery knowledge.
We have been putting this system into as many outlets that want it over the past three years and where it has been adopted and time invested in it, the results for the merchant has been clear, measurable and positive, with no stock needing to be held and the training providing good product knowledge with a technical support team there to help the counter answer any questions or queries.
The opportunity to provide quick prices and on time delivery for a range of high value, bespoke windows and doors is returning higher margins than what can be achieved using the time honoured methods. Win-win, we believe. We provide the system and the training, the merchant provides a quicker service and higher quality, higher margin products, delivered to a customers’ site fully finished and ready to fit.
We understand that near on 20% of all retail sales are now driven by online services provided by the leading retail businesses. In our industry, this is also happening and the DIY stores and larger merchants and distributors now provide a seamless on line service for standard catalogue items. In Dale we do this for top of the range bespoke timber windows and doors that, from experience, we know once they are received by a new customer at a merchant will keep them coming back for more.
Our time and money has gone into two main areas — first, our partners in the supply chain who make the products to our quality standards and specification and second to the IT development and provision of the online sales platform that drives the business and creates the margin.
Once the merchant has learnt how to price his customer’s enquiry and the order is placed, everything thereafter is dynamic and the products are delivered to the required address on the appropriate day on time and in full, always.
It’s a model that still requires and provides all of the benefits of the trade counter but crucially without the need to use the yard, nor the warehouse by piling up stocks of product that don’t need to be there. This model enables the counter to offer the best of both worlds whilst earning good pounds margin and profit — it’s not rocket science, just good business.
Roy Wakeman, Chairman of PTP Group.