The home and DIY sector has been under pressure as consumers tighten their belts amid economic uncertainty and the housing market continues to soften.

Some value retailers have benefited from shoppers trading-down big-ticket items, such as ScS and The Range, which have clear brand propositions. But a wider issue is at play.

The demand for DIY products has fallen in the UK. Homeownership has been in decline and most renters do not generally have the impetus or money to spend a lot on large home improvement projects.

made.com paris fascia

Made.com was originally a pureplay, but now has physical space

Large stores – which were a typical format for traditional retailers in the sector – have fallen out of fashion as the digital age has enabled customers to be served through fewer and smaller stores.

Store closures have taken place at retailers such as Carpetright and the troubles of Homebase show the challenge of understanding these changing consumer trends. Homebase is now tasked with a huge turnaround under new owners Hilco, after ineffectual sweeping changes were made by former owner Wesfarmers.

But some home and DIY retailers are successfully driving sales in these difficult times by investing in the customer experience across channels.

The trend of online retailers opening stores, such as Loaf and Made.com, continues as pureplays see the benefits of having a physical space where shoppers can touch and feel the high-value products.

With the help of technology, shopping experiences can be streamlined across channels and enable new ways to drive inspiration in rarely-shopped categories through strong imagery and augmented reality (AR), while driving convenience for tradespeople.

Cross-channel

Stores in the sector increasingly act as showrooms and this makes sense. The often bulky product range lends itself well to home deliveries, but the touch-and-feel aspect remains important for big-ticket items.

The recent profit warning from mattress specialist Eve Sleep demonstrates the pitfalls of operating online only in the sector. In a bid to bolster sales, it has since partnered with Dreams to offer a physical distribution channel, as it is believed that a high proportion of mattress purchases still rely on stores at some point in the customer journey.

This sentiment has also seen online designer furniture specialists like Made.com open shops in affluent towns and cities across the UK.

It is not just emerging brands that have been using city stores to link their online and physical channels. Homewares giant Ikea has developed a small-format store to target city dwellers, the first of which opened in Norwich in 2015, followed by three others. The store, in part, acts as a click-and-collect point – something half of retailers in the sector provide. The concept is being extended in central London from autumn 2018 to focus more heavily on customer service, with an advice centre for kitchen projects and wardrobes.

Ikea Order and Collection Westfield Stratford City

Ikea sits among other furniture retailers in Westfield, including a new small-format DFS

DFS has also been able expand in under-represented areas through its small-format stores. At less than 4,000 sq ft, the format has been made possible by the retailer’s innovative ‘Swoosh’ furniture visualisation technology. The virtual reality technology enables the retailer to project the full range of models, colours and materials on a video wall in-store. While this allows customers to envisage how their chosen product will look, it also minimises stock levels required in-store where just one unit from each range is displayed.

Similarly, Screwfix has been able to target trade professionals on the move in city locations with its high street stores, using tablets to show its entire product range in stores as small as 3,600 sq ft.

However, just a quarter of retailers in the sector use interactive touchscreens in-store, while only 28% of retailers offer Wi-Fi, meaning researching additional product information is a challenge for shoppers.

The use of AR is rare, with only 9% using it in-store. By partnering with software designers Articad, Bathstore.com has implemented an in-store AR tablet – called the Bathroom viewAR – which allows shoppers to virtually enter, walk around and explore designs.

cross-channel-capabiliti

Ecommerce

Online brings a variety of challenges for the sector. Value-led retailers struggle to keep fulfilment costs low, while shoppers can be anxious about purchasing unfamiliar big-ticket items online.

But there is opportunity across the sector to use ecommerce capabilities to inspire home and DIY projects.

Customer ratings and reviews are being used to drive reassurance with 59% of retailers in the sector using both.

But images are a key source of inspiration. Home and DIY retailers offer an average of five product images per item and 81% have implemented image zoom.

Loaf has been able to operate just a handful of stores while experiencing rapid growth by leveraging product imagery with an average of eight photos per product.

Videos in particular are now being used to bring big ticket items to life, with 44% of home and DIY retailers using them.

Visualising the placement of homewares can be challenging for shoppers though, and flooring and wallpaper can be equally hard to picture. This is where AR can truly drive consideration, by being able to virtually place items in your home.

But only a handful of retailers use AR. Topps Tiles is one of the exceptions. It has gone some way by introducing a tile visualiser on its website, which allows browsers to choose a room layout and select tile options from its product line-up to create a room design.

Logistics and customer service

The complexities of home and DIY products are frequently a barrier to purchase.

Just over half – 56% – of retailers have live chat on their websites, which is helpful in a sector where research plays an important part in the customer journey.

Made.com has gone a step further by incorporating video streaming into their live chats. By trialling Hero’s conversational commerce platform, the technology enables store staff to effectively walk online customers around products in the retailer’s showrooms to answer queries.

Such measures to reassure shoppers have fuelled online growth in the sector, while the often heavy and awkward items lend themselves to home delivery.

Although delivery times of hard furnishings such as sofas are often constrained by manufacturers, more broadly a time slot can help consumers and tradesmen alike plan delivery around installation. However, just 16% of retailers in the sector offer time-slot delivery.

Wickes, by partnering with On the Dot, has been able to roll out hourly time-slot delivery for 7,000 products. The courier collects orders from stores and delivers them to customers, enabled by real-time, accurate store stock availability data.

With retailers such as B&Q looking to bolster their home delivery proposition – B&Q claims 90% of its customers choose their own fitters for kitchen and bathrooms installations, requiring delivery rather than its installation services – evening and weekend delivery is set to rise to fit around working hours. Half of retailers in the sector offer evening delivery and 63% offer Saturday delivery.

Dunelm’s acquisition of Worldstores group – comprising the Worldstores and Kiddicare etail brands – highlights the importance of providing timely logistics to drive growth in the sector. Worldstores has enabled Dunelm to more than double the size of its online business and enhance its fulfilment capabilities, offering next day delivery from around 6,000 suppliers. Worldstores’ proprietary platform enables rapid cross-docking of stock directly from suppliers to customers, without the retailer holding any stock.

Marketing

Less than 10% of home and DIY retailers have a loyalty scheme. But in the DIY sector in particular they are a useful way of targeting lucrative trade professionals, a growing segment of the home improvement customer base.

toppstilesrewards

Topps Tiles’ reward scheme

Topps Tiles incentivises a minimum spend with its loyalty scheme. Aimed at trade customers, its Rewards Club Card allows members to enter a draw for prizes such as vans, entertainment systems and vouchers if they spend a certain amount.

Online research plays a vital role in the discovery of home and DIY products so appearing at the top of search engine results is critical for new customer acquisition.

Topps Tiles has worked with digital agency Croud on paid and organic search activity. Croud works to drive traffic both to the website and to stores through search optimisation. Coupled with pay per click, the retailer claimed to have gained a 50% increase in total site traffic in 2016/17 with the help of these investments.

Search engine optimisation is particularly important in pushing product categories that are less frequently shopped, which is why 80% of retailers pay for their products to appear on Google Shopping.

Retail Week Indicator 2018 rankings