Home improvement and hardware retail has been one of the retail success stories of the pandemic. Deemed essential businesses in many countries, they were allowed to stay open when other retailers had to shut their doors.
With home being the centre of most people’s world for the last eighteen months, it’s not surprising that their thoughts turned to how to improve their living space. People had more time on their hands and weren’t spending money on holidays, entertainment, and restaurants. They were happy to splash that cash on DIY – from paint to plumbing, decking to doors and shelves to showers.
The Farnsworth Group, in conjunction with the Home Improvement Research Institute, conducts the COVID-19 Home Improvement Tracker, which shows that 60%+ of DIYers are actively working on projects, because they are ‘home more often’ and have ‘more spare time’
This newly reinvigorated passion for hardware retail has translated into increased sales across the sector – a report by The Hardware Connection, quotes one US hardware retailer as saying ‘We finished April up 52% percent and three days May was up over 200% percent, including our largest day since the store opened.’
Retail Customer Experience tells us that the top three home improvement chains in the US sold goods worth $54.67 B in Q4 2020, up from $41.88 B for the same period the previous year.
McKinsey has identified a group of 25 companies who account for 91% of market capitalisation in the retail sector – and two of the top seven are home improvement and hardware retailers.
Shopping behaviours changed, with brick and mortar shopping declining, and a big increase in online purchases. The local independent sector did well too, in line with the overall shift towards local shopping and a greater environmental awareness.
What does this mean for home improvement and hardware retail stores?
The hardware and home improvement retailers who have had the greatest share of this rising market are those who were best placed to take advantage – the most efficient operators, those who were agile enough to adapt rapidly to changing situations. As McKinsey puts it: ‘The retailers who succeeded are those that catered to changing market demands and those with strong digital footprints’.
Hardware retail stores can no longer rely on brick and mortar shopping. But neither is it is a segment of the retail market that has gone (or is likely to go) completely online. So the message for those who want to continue to succeed in this market, or join the leaders on the crest of the wave, is that there is no substitute for omnichannel retailing excellence.
Harvard Business Review puts it this way: ‘ Retailers need to offer a simple and seamless e-commerce customer experience — from browsing to researching, selecting, purchasing, and returning/exchanging.’ They explain that anything less than a great customer experience won’t be accepted and that retailers have to offer integrated services such as BOPIS, and deliver a consistent, reliable experience in retail.
How do home improvement and hardware stores create omnichannel retailing excellence?
There are many factors that contribute to omnichannel retailing excellence, but three of the most important are:
Integrated transactions – as we’ve seen, many customers don’t want to transact fully online or fully via brick and mortar. They want, and expect, online/offline integration, meaning that they have a wide range of choices as to how they browse, purchase and receive their paint and nails. That means implementing BOPIS/Click and Collect, the option for Curbside pickup, and the ability to buy online for home delivery. It’s all about having the flexibility that allows the customer to choose.
Single view of inventory – in order to achieve full online/offline integration, and have fulfilment from retail stores as well as distribution centres, retailers must flawless inventory management. That means inventory visibility, with an accurate, timely single picture of their stock.
Agile solutions – a key lesson from the pandemic has been ‘survival of the most agile’. The retailers who have thrived are those who could adapt rapidly – those with agile technology platforms, that enabled, rather than disabled them. Cloud retail solutions, such as retail cloud POS are one of the best ways that retailers can achieve that ability to move fast.
The home improvement and hardware retail sector has been a beneficiary of the pandemic. And for those who embrace omnichannel retailing excellence, the ride is set to continue.