On The Record

On thE rEcOrd

H&H: Hi Damian and thanks for taking part in ‘On the Record’. When it comes to retail, the homestores and DIY outlets have really been in demand over the past year. What is your take on the new landscape? Damian O’Reilly: Right now the home is a centre of activities. People work there, relax there, and for a period anyhow, home-school there too.

The likelihood is that, in the medium- to long-term, people will be at home more. It’s having interesting effects.

The neighbours across the road from us have sold their home as they have been told they’ll be working from home 70 per cent of the time.

It drove their move. They got a bigger house with extra room with homeworking specifically in mind. They have been incentivized to do it.

People will be looking at modernizing their homes to adapt to the new ‘normal’ lifestyle.

Can you give us examples of what you mean?

People will come to stores looking for materials to facilitate home improvements with emphasis on working spaces, gym space and children’s play areas.

Like a convenience store the same space may have multiple uses during any day.

I believe that DIY / hardware stores need to develop specializations in these areas; not only providing materials but being able to assist with design of these areas within different size houses.

And not just improvements within the house but also creating an ‘outdoor room’ or garden improvements.

When I walk in as an average DIY punter – as opposed to tradesperson – I might want to introduce a home office or indeed, to put in a gym area – I’m now happy enough with online classes and want to exercise at home.

So, what sort of flooring do I need? Will I damage my flooring, my tiles etc.? I need advice. I’m not just looking for rubber mats. I need more help than that.

I want them to guide me and show me. I want to walk in and say, ‘I’m going to be doing this at home for the next few years and I want my hardware store to give me the information about what I need and assistance on design.

I want to find that degree of specialization – to find that they can guide me through it all – it is all about adding value.

When you do that, then you have a customer that comes back regularly for bits and pieces and extra materials that you make your margin on.

It’s about being ready and prepared to respond to what are the changes and the new needs.

To me experience is the key to being relevant. I’m also thinking about stores that do events, and events around occasions.

Maybe they also do deals and have a sales representative on site.

At home, we are always talking about getting a barbecue and that would be an incentive for me – to meet a rep in an eventtype setting.

The landscape after Covid…how do you think it will change? I think things will return to a ‘new normal’. How we buy things, changing consumer behaviour.

Things like sanitization will probably last into the future. While installing covid prevention screens and sanitization stations costs money these costs can be recouped.

These costs should not be make-or-break expenses.

As to the numbers of people in stores the buzz around having a sale, I think, will return when restrictions are significantly eased.

The move to online has accelerated with the Covid impact and DIY/Hardware stores need to be aware that the customer’s shopper journey begins with sitting at home looking at online options.

Then, they go to the store to visualize the products. Once in the store this is an opportunity to engage with the customer.

Retailers need to know their produce, their ranges, availability, and encourage the customer to consider you as the provider of good information and after sales service.

This is becoming increasingly important to the customer and – as I said earlier – many purchases are not down to price but Value; and retailers (DIY stores) need to adopt Value-Based pricing..

DIY and hardware stores need to recognize

On thE rEcOrd

that many shopping trips are now part of a day out, so the stores need to be inspirational areas where customers enjoy their time.

Stores need to be designed to be experiential and they should activate the senses when you walk into the store.

Covid has afforded time to reflect on how businesses are operated and the best retailers are raising the bar and delivering aspirational stores with a focus on service and, of course, experience.

Owners need to look at the disruptors in the DIY sector and see how they are engaging with the customer.

For example, Leroy Merlin, a DIY giant, is looking at new innovations based on changing consumers.

They are now holding DIY workshops to educate and empower the customer in DIY and creating a community of like-minded individuals.

They have also partnered with local businesses to rent out large power tools, which may only be required by the customer once for a particular job.

These types of initiatives add value and make the customer loyal to your store.

We will also see an increase in AI (Artificial intelligence) and machine learning (ML).

That means that when you go onto a website they will begin to know what you are looking for. (An example in online grocery shopping is Walmart who have developed AI-based technology to help personal shoppers to make smarter substitutions for out-of-stock products.)

So, you get that ‘personalization’ element that people talk about.

That comes partly through AI and partly though Machine Learning and using virtual reality.

We can all put paint on a wall but how to do it the best way? Doing corners and avoiding drips on the skirtings etc. – that sort of thing? I can see Virtual Reality (VR) sets coming in.

When you put on the VR set it could have little guides and tutorials on it.

‘How to’ is huge in the hardware business of course. It is one of the most important things that customers need to know.

It’s about retaining customers. To me it’s never about obtaining customers.

It is easy to get someone to come in and buy something. It’s about getting them to keep coming back.

What about customer service going forward; what are your thoughts? I think retailers all think their customer service is very good. The truth is standards have really gone up significantly over the years.

‘It’s about retaining customers. To me it’s never about obtaining customers’

Now, the higher standard of customer service has become the norm.

Retailers / DIY stores who we might have said were doing excellent customer service a while back – that level of customer service has now become the expected level of service.

Retailers are not always changing quickly enough to respond to what consumers want. those new materials for a home gym.

If I buy this equipment and train on it what about the tiles underneath or the wooden floor? They are the big picture things they might not understand.

Look at the specifics that they require. And make suggestions. Now you are engaging the customer.

Any final observations about the future of DIY retailing? There’s a new DIY generation out there. People need to take advantage of it now while it is there!

There was a survey done in the UK a few months ago. It revealed that eighty percent of consumers were seeking to redesign or improve their properties including their gardens.

Seventy per cent want to do some sort of interior decoration. Fifty-eight percent intended to do as much or more DIY in 2021 as they did last year.

You have to take advantage of that!

On that note, people come into physical stores with huge amounts of knowledge already because of online research. What are the dynamics of this as you see it? That would suggest they will then go to the place that they can buy it cheapest. Or check it out in the store and buy it then online and buy it cheaper.

But this is where the experience is key to being relevant. And why I am happy enough to buy it from the physical store.

The thing is that people do come in with knowledge but it can be a subset of knowledge.

What they need is the bigger picture. It comes back again to the example of buying

In general, I’d say...

•Know your customer. It’s about understanding the shopper journey. For DIY it often starts online • We need to plan for the medium-term not just about getting customers in now. Look to seeing where you’ll be in two or three years’ time, post Covid. Take the big retailers: we do corporate education here and I’ve spoken to store managers who tell me they are planning to try to keep as much as they have got now and looking at how can they do that. • You should also look at inventory turnover. You have to turn over that stock as fast as possible. Buy ten of this product, sell one and I’ve got my money back, is often the mindset I see. You have to turn it over very quickly. It’s a false illusion to say that: I’ve made my money back so the rest is just profit. The other 9 items (SKUs) may be there for a year or longer. They are paid for and costing you money. • Social media! Get a digital profile! Social media is important but we see retailers who still don’t do it. I have placed ten Digital Marketing students recently into ten small retailers (including dry cleaners and fishmongers) that didn’t have an online presence – and they are making a huge contribution! • Shops need to be inspirational. I want something that makes me engage with the product and retailer. You have to become the store of choice by giving the experience. • Price is not the important variable…you want to adopt value-based pricing…what is the value to the customer? If I am charged two euro more then what am I getting for it? Excellent service; nicer environment; better product knowledge; all these add to the Value the customer gets from the shopping experience. • And last but certainly not least is the Gen Z and increased awareness on sustainability issues.