Do Builders’ Merchants Need to up their Online Game?

Builders’ merchants must up their online game to attract today’s self-builders or risk being left behind in an adapting market, says build cost expert Steve Whitby

Why the web and online shopping could prove a threat

Is computer science about to be unleashed on an industry which has so far felt untouchable and unaffected by change? With its shopkeeper mentality (open a branch and people will come), is it time for the builders’ merchant industry to get on the same technological page as its customers and suppliers? If they don’t, they should get ready for a tidal wave of technological disruption. They may not be feeling pressure on their margins yet, but the Amazon effect has already begun in the builders’ merchant sector.

This isn’t something they can head off by relying on an outdated mentality, or pass off as fake news (as one builders’ merchant director recently told me). Trade customers and selfbuilders no longer just drive around suppliers negotiating prices. They don’t want to leave their site; they want online access to honest pricing without talking to someone at a branch. The new wave of builders is internet savvy, brought up on social media and expecting to find an app for everything. They are organised. They want instant online access to products at prices that are real. They dislike being categorised and socially profiled to determine which discount band they fall into, especially self-builders, who are frequently told they need an account to get the best prices. That’s just outdated nonsense. Customers are now used to the Amazon style of buying: find your products online, search for the best prices, check stock and ‘ buy it now’ for collection or delivery.

Following a recent survey of a cross section of our 28,000 trade users, we asked small builders questions on how they would improve their supply chain. We weren’t surprised to learn that builders’ merchants didn’t escape criticism. In fact, virtually all said they were not satisfied with their primary source of supply. The number-one criticism was inconsistencies with prices. Number two was a lack of online functionality. Number three was ‘ click and collect’ services that didn’t work. What’s the point of ordering online to save time, only to find when you arrive to collect that a part of your order is out of stock?

We also found most customers want to order products for delivery without speaking to anyone; a seamless online system that frees them up to concentrate on what they do best — building.

Don’t get me wrong, we have some excellent builders’ merchants that are up to date with technology and provide innovative services. To shine the spotlight on one company, EH Smith is a good example of a builders’ merchant that has adapted to the changing marketplace and is thriving (ehsmith.co.uk). However, companies like this are in the minority. Those who have adapted are winning and will be safe when the tech revolution explodes onto the building supply sector. Major technological changes to customer experience must be made, or some will fail.

One solution for forward-thinking builders’ merchants could be to deploy sales staff to hunt for and obtain project information, such as drawings, at the earliest possible stage and price everything the customer requires to complete the job. The next stage would be to track the progress and assign resources to win sales from the tracking data. The majority of builders’ merchants don’t react until the builder orders the foundation materials. That is far too late to expect to win the rest of the products to complete the build. Today’s new wave of builders will have already sourced their products from numerous suppliers and scheduled them, all the way to completion.

Technology has destroyed the high street shopkeeper. Computer science is bringing change to every industry. Builders’ merchants are not immune. They must adapt and embrace self-builders’ analytical approach to sales. H

“Most self-build customers want a seamless online system that frees them up to concentrate on what they do best — building”