PBM Editor Paul Davies takes on the topic of ‘online merchants’ in his column in PBM’s March edition.
We’ve received a couple of press releases this month which broach the thorny topic of ‘online merchants’. Firstly, IronmongeryDirect (which started out as a ‘traditional bricks and mortar’ store) and its sister company ElectricalDirect have completed a major expansion project with a new 100,000sq ft warehouse set to stock over 30,000 products for next day delivery.
Secondly, Construction Materials Online has announced a new brand identity under the cmostores.com moniker, including a new look for its four specialist websites which cover roofing, drainage, insulation and doors. As reported in PBM last month, the business announced sales growth of 46% in 2018 with a reported turnover of £38.6m and now offers over 70,000 products through its online platforms.
Along with many other market disruptors, the businesses we refer to above are unequivocal about their desire to attract trade customers, with CMO specifically describing itself as an “online builders’ merchant”. ‘Unbeatable’ pricing, credit account facilities, rapid deliveries and even “well-trained advisors” (albeit, at the end of the phone) are all part of their armoury.
Whilst the online challenge is perhaps growing stronger, the merchant sector’s response is becoming increasingly robust. For example, as reported in our news pages this month, a £30m investment programme at Selco includes measures that will see “significant funds ploughed into” its online activities, including the launch of a new click and deliver initiative to offer free delivery on all orders.
Similarly, this month’s column from NBG concerns itself with the tools and workwear product sectors — an area of trade that is particularly vulnerable to the rise of digital retailers. It is a point referenced in the article by the NBG’s Category Chair and MD of GPH Builders Merchants, Grant Shewan. He says: “Tools and Workwear is a category where it is easy for the customer to shop for products online. For this reason, we see ourselves as the CMT that needs to secure the best deals in order to stay competitive with online stores.”
Significantly, Grant continued: “It’s so important that we don’t lose sight of what we do and what we can offer our customers: convenience, excellent customer service and expert knowledge of our products. It’s also much easier to work with a local merchant if there is a problem, such as bringing a product back into store than have to send it back to an online retailer and wait for a replacement.”
Related points are also picked up in a commentary later in the issue from Deborah Hunt, Marketing Manager at Van Vault. Deborah asserts that the company’s research has illustrated the continued desire of tradespeople to support their ‘traditional’ merchants, recognising that they can get a literal ‘feel’ for the products they are interested in purchasing, welcoming the advice and expertise they receive from branch staff.
As the expansion of IronmongeryDirect and cmostores.com shows, the market is shifting but it is far from one-way traffic. Crucially, merchants have the trusted knowledge and expertise their customers expressly still want, whilst there are a growing number of solutions becoming available to boost their own online offering (see the example here from Epicor). Moreover, as our NMBS article suggests, there is still huge success to be found through supposedly old fashioned strategies as posted direct marketing campaigns and leaflets.
With the clamour for ‘everything online’ becoming so great, it is crucial not to panic and throw the baby out with the bathwater. A balanced strategy, reflecting the sector’s core strengths and the evolving needs of its customers, will surely be the path to success.
“Whilst the online challenge is perhaps growing stronger, the merchant sector’s response is becoming increasingly robust.”