How do DIY customers buy online and offline?

How do DIY customers
buy online and offline?
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Contents
Introduction
Background
-
The DIY market
-
Market share
-
Market issues - how small stores
are challenging the big boxes
-
Summary of DIY product range
Challenge
-
The DIY customer buying cycle
-
Case study – what we can learn
from Screwfix
Findings / Solution
-
Relevance of online channels for
DIY customers
-
Opportunities for social media
-
The online and instore touch points
for DIY
-
How a multichannel approach can
benefit business
Summary
-
Multichannel DIY lessons
About Sagittarius
-
The Talent
Why a white paper?
Introduction
Our white paper aims to discover if it is possible to
source everything you might need for any DIY project
all in-store or all online? How DIY customers are
inspired and engaged to purchase products?
We wanted to find out how the DIY industry is serving
its customers and if the industry is keeping up with the
challenges of online channels. And with the ever
growing digital savvy consumers are the online
channels becoming more dominant?
We’ve conducted a review of offline
and online shopping channels and
some of the themes include:
•
•
•
•
•
How do you customers buy DIY products?
What factors influence shopping habits online
and offline?
Who is serving DIY customers best?
Where do buyers get more inspiration to choose
and buy DIY products?
How is the DIY market becoming more
multichannel?
Background
The DIY market
DIY was one of the worst hit sectors in 2012 in the UK. This was largely due to poor weather in
spring and summer, compounded by the sector’s overall underperformance.
However, research conducted by Verdict and SAS found DIY and gardening was retail’s best
performing sector in 2013. Indeed, ‘Think with Google’ noted in the US the number of DIY
shoppers was said to have increased due to the economic downturn. 38% of Americans
completed or considered a DIY project. And these are the digital savvy consumers, 51% of
which are first-time home buyers.
42.5%
39.9%
34.7%
35.5%
34.8%
Source: Verdict
How Britain
2010
2011
2012
2013
2014
Shops 2014: DIY
This chart illustrates the percentage of all UK shoppers aged 16 and
over who regularly shop for DIY. The DIY sector remains weighted
toward older, more affluent shoppers.
Market Share
Kingfisher is the market leader in DIY retailing in Europe, via the dominant brands of B&Q in the
UK and Castorama in France and Poland. It is the third largest DIY group in the world.
Percentage of active DIY shoppers regularly
visiting each retailer (%) 2010 - 2014
•
•
Visitor
2010
2011
2012
2013
2014
B&Q
77.3%
74.5%
75.4%
74.6%
74.9%
Homebase
36.7%
35.2%
34.7%
34.5%
31.8%
Wickes
19.8%
19.3%
21.5%
23.9%
23.9%
Wilkinson
13.3%
14.5%
14.5%
13.3%
11.4%
B&Q (UK market leader) and Homebase
•
B&Q is a relatively mature business
are known as the ‘big boxes’ and expanded
and, with so many big out-of-town
their range to include gardening in
stores, it may have to downsize its
2011/2012, smaller providers are Screwfix
physical footprint as the DIY market
and Toolstation.
becomes more multichannel.
Big box providers find it more difficult to
adapt flexibly to the new online world
because they have higher fixed costs, but
B&Q is the most visited online Homeware
and DIY retailer.
•
Homebase (95%, online 5 %), growing
rapidly, annual increase of 25%.
Market Issues
How small stores are challenging the big boxes
In DIY, specialists are facing more competition, forcing them to diversify into new
categories, exposing them to new rivals, especially in kitchens and bathrooms.
+10%
Independence
+19%
Amazon
B&Q’s profits increased more
Independent DIY stores, mail
Consumers are spending
The biggest threat to the big box
than 10% to £238m for year
order, non-specialist retail
more online in DIY because of
providers is Amazon who is
2011/12 with Kingfisher
(Argos, Amazon, Tesco,
the online vs price difference
wading into the online space, big
claiming the success of its
Wilkinson’s), online (increasing).
+19% in 2012 for a
cross-category retailer, growing
power tool.
fast in DIY small, nimble, low-cost
transformational plan
‘Delivering Value’ making the
business stronger.
pure-play specialist.
Summary of DIY Product Range
DIY products tend to be bulky, low margin, slow-selling
with the need for advice to support the purchase. Before
broadband there was limited technology and limited
home delivery has made DIY a follower not a leader
However, there is an evolving product mix / brand mix in
2013/2014 (mostly for electrical, garden tools and
equipment, paints and garden decor products).
Other products include homeware, plants and home
décor. In 2014 the range of products remains pivotal to
DIY shoppers, closely followed by convenience, price,
service and quality.
31.7%
21.3%
8.1%
3.8%
3.1%
very good choice with lots
of ranges and product lines
Always able to provide
what I want
The products suit my
own tastes
Has interesting and
exciting products
Good choice of own
label products
Market Share
Realise Problem or Need
•
Use Keywords that describe problem
•
Don’t yet understand solutions
•
Looking to be educated
•
Commitment is low
Perform Research
•
Learn about how to solve problem
•
Under what’s available
•
More educated questions
•
Commitment is low to medium
Establish Buying Criteria
•
Establish ‘must haves’
•
Under what’s available
•
Don’t want to be missing anything
•
Commitment is medium high
Evaluate Vendors
•
Narrow down vendors
•
Compare vendors
•
Looking for trials / demos
•
Commitment is high
Customer Buying Cycle
Awareness
Inspire customers to recognise the need to purchase
Whether they are a first time buyer or have a specific home improvements
project, evidence suggests the internet plays a significant role in initiating and
inspiring that need to purchase. Buyers will always do their homework about a
provider before engaging in a purchase.
Search for
problem or need
Educational
Research purchase options, evaluate alternatives
The consumer will then search further to identify alterative solutions to satisfy their
need. Search and online video play a major role in in DIY shoppers purchase
journey. A Google Survey revealed 1 in 4 researched a specific DIY brand.
Begin to
understand
solutions
Validation
There is a trend for DIY consumers to complete research instore then order
online. Stores are judged by their product quality, layout, facilities and ambience. The Danish 10-4 DIY chain reports that consumers expect them to
deliver building materials, even in very small quantities.
Prioritize what’s
most important
in a solution
Sales
Post-purchase evaluation/ bought the product
There is a growing trend to use social media to enjoy the purchase and seek out
affirmation that they have made the right purchase choice.
Evaluate Vendors
based on buying
criteria
Screwfix multichannel DIY delivery
•
and it has a live stock-check system.
B&Q has a good opportunity to grow the group’s share
of the ‘trade’ market, mainly via the fast-growing
Screwfix chain in the UK.
•
kitchens. With over 30 years’ experience in the industry,
best mCommerce site in 2013.
•
for next day and weekend delivery to tradesmen,
community forum; they have 21,500 followers on Twitter.
•
Kingfisher’s trade brand Screwfix has a strong
reputation and benefited from investment in
multichannel, including catalogues and online ordering.
focus on who its customer is. Revenues increased 40%
in five years (2007 to 2011).
Click and collect – allows shoppers to order and collect just
five minutes later.
•
Online order – next day delivery with tailored delivery
services and prices depending on location.
It has expanded from one to 300 stores in eight years
and as it has grown, it has managed to keep a clear
Social - 65,000 fans in two years, 40% Facebook growth in
2011; in 2014 they have 108,000 likes and Screwfix
they despatch tens of thousands of parcels every week
handymen and serious DIY enthusiasts all over the UK.
Mobile - its app has proven popular and mobile traffic is
growing significantly year on year, it was shortlisted for the
Screwfix is the UK's largest multi-channel supplier of
trade tools, plumbing, electrical, bathrooms and
Website - has well over a million unique visitors each week;
•
Video – Screwfix has an official YouTube channel where
there are 724 videos uploaded with over 1,600 subscribers ,
there are product how to demos, installation, buyer, product
Screwfix has two-thirds static
business and one-third online.
feature videos and new content is added regularly.
Findings/Solution
•
eMarketer recognised digital channels
•
Digital buyers will use generic DIY
stimulates research for DIY customers,
words or familiar brands to discover
inspiring them what to do and it could take
content to fulfil their needs.
be up to 6 to 18 months.
•
•
Interactions based around social
Customers should be able to have online
networks or content have become
access to stock availability to click
major touch points; Pinterest is a
and collect.
perfect plan for home improvement
and design, playing heavily to
•
Most website users prefer to use the
push out to commerce.
‘search function’ to look for products,
followed by ‘browsing products’ and using
the ‘main navigation’.
•
Within the online purchase journey, it is a
financial reward which exerts the biggest
influence over the likelihood of someone
committing to buy. Globally, over two fifths
(43%) say that this has a positive impact.
However, online penetration for home or DIY retailers remains low compared to
other sectors. Sometimes, the hazardous nature of many products makes
home delivery too expensive. Only 2.25% of DIY sales were via online in 2011.
DIY retailers are traditionally behind the curve when it comes to ecommerce.
Online sales account for 5% of total sales at Homebase and represent an even
smaller proportion of B&Q’s sales (2013).
Opportunities for Social Media
In the retail sector 4 in 10 social media users have
purchased an item online or in-store after sharing or
favoriting it on Twitter, Facebook or Pinterest (2013).
Social media has a strong potential to drive purchasing
patterns both instore and online.
For DIY retailers to make effective use of social media as a
market channel it is critical to understand firstly the buyer
demographics and secondly which social media network
attracts those customer segments. In 2014 the DIY sector
remains weighted toward older, more affluent shoppers 59.4% DIY shoppers are male, 40.6% female.
2/5
consumers share
like or favourite
Opportunities for Social Media
From the Verdict data, 89.5% are aged 35-54 and 43% of
Twitter users are between 35-54 years old. Pinterest has a
How to maximise DIY presense on social networks
strong female bias (83%) and 61% follow DIY and crafts.
There’s an opportunity to visually inspire the segment through
social media to buy a range of DIY products. However, be
mindful of the importance of customer segmentation as 61% of
UK social media users never visit Pinterest, so it has a niche
interest, but if you target those with a focused interest they are
more likely to purchase.
In 2014, 63% of people turn to Pinterest for DIY and Crafts,
34% go to Twitter and 29% go to Facebook. People who get
Content
Culture
Speak to the
hottest topics
Match the
community’s
tone
Your Brand
Presense
excited by DIY projects have their own network culture; to
engage them appropriately it is critical to offer the right content
that presents the hottest DIY topics and trends. If you
understand the content, culture and product categories that
Category
you maximise your customers’ engagement and potential to
Sell in relevant
categories
make up your customers’ experience on each social platform,
purchase.
Profile of DIY Shoppers 2014
Male
This chart illustrates the percentage of all UK shoppers in each
demographic group who regularly shop for DIY
49.1%
40.4%
42.2%
48.1%
42.9%
36.2%
32.5%
27.8
%
FeMale
29.2%
35.3%
22.8%
14.1%
16-24
25-34
35-44
44-54
55-64
65+
However, research shows social media usage varies dramatically across different retail
product categories and different demographics. So by studying DIY customers’ usage
patterns it's possible to set a DIY social strategy. There are opportunities to identify
certain overarching patterns to give a picture of which DIY customers can be found
where online.
AB
C1
C2
Source: Verdict How
Britain Shops 2014: DIY
DE
The Online and Instore
Touch Points for DIY
to purchase products more easily on their terms, online or instore.
mobile payment
Click and
Price Comparisons collect
Social media ads
ppc
Email
Online ads
awareness
offline
Instore
rewards
How to
guides
pr
How to videos
blog
online only items
social updates
Click to call
planning
Follow up
emails
webinars
click to chat
FAQ
consideration
Purchase
Word of Mouth
fax
learn about
instore
events/demos
contact call
centre
Retention
next day delivery
Contact call
centre
extended
packaging
Social sharing
Forum
Ecommerce
Stock Check
m-commerce
Magazine
coupons
embrace a multichannel offering. This can only enhance and inspire buyers
reviews
Online
radio, tv
& print
Aim to establish a fully interactive, cohesive customer experience to fully
Sales assisted
services
Shopping lists
In-store
navigation/alerts
Payment
Demo Vids
Blog
Advocacy
Newsletters
Loyalty
Programs
Catalogues
Discounts &
Incentives
Promotions
Social sharing
Mobile Surveys
How a Multichannel Approach
can Benefit Business
•
De-clutter the stores to improve visibility and availability.
“Retailers such as B&Q and Homebase are
•
Move more stock into back rooms.
established authorities in DIY – and they need to
•
Introduce kiosks to showcase the entire range.
•
Allow customers to find and order products more easily.
•
Equip managers with tablets using the same kiosk software so
capitalise on this to deliver online advice, knowhow
and service that pureplays such as Amazon cannot.”
John Mercer, European Retail Analyst, MINTEL
Until recently, it was fairly easy to separate online activity from other
they can spend more time on the shop floor helping customers.
•
client computers.
•
activities. There was a clear pattern to how people used the internet.
Planning involves a more integrated business. A website should not be
separate to instore; many DIY providers have made that mistake.
For the DIY sector specifically, show rooming comes in to play, but
mobile plays a big role in this too. Right sizing stores - adapting store
formats (B&Q has large, big and far too big), this could be inspired by
responsive website design
B&Qs strategy is about providing a consistent customer experience
through omnichannel marketing. There are opportunities to update
instore technology, by gaining inspiration from the online experience.
Update ageing PC hardware with lower cost thin
Roll out software that allows customers to customise their own
kitchen order online, at home or with the help of staff in store.
•
The B&Q superstores are using online not just as a sales
channel, but as a means to drive footfall into stores, especially
through reserve and collect facilities.
Summary - Multichannel DIY Lessons
This white paper has found that consumers do not fully rely on sourcing everything
they might need for a DIY project all in-store or all online. DIY providers need to bridge
the digital technology gap by providing a consistent offer to the customer with the
same information, same experience whether they place an order in store, online, via a
kiosk or if they call the contact centre.
•
The DIY online shop window must
•
Keep a clear focus on the DIY customer,
•
support what there is in-store and the
know their preferred channels in the
shopping experience it will provide the
right products are recommended, this
buying process to get personal.
customers with a sense of trust and
credibility, this represents a huge
needs to support the phenomenon of
‘reverse showrooming’ for customers
who browse online and shop offline.
•
If DIY retailers improve the online
•
Some retail brands report 30 to 40% of
opportunity to reduce shopping cart
traffic to their website comes
abandonment and retain
from mobile devices, but Sitecore
loyal customers.
Instore and online need to work in
research found 46% of Business
harmony - consider what’s the benefit of
to Business marketers rate their website
a virtual product when they can
experience on mobile devices as ‘poor’
demographics; older shoppers will
experience the real thing - online and
or ‘very poor’.
increasingly become an important
instore must be aligned.
•
Adapt to changing trends and
demographic to DIY retailers,
particularly online.
Summary - Continued
improve the mobile experience
offer advice and knowhow
•
The ‘Do It For Me’ trend marks a shift in
•
Do more to provide staff with technology
behaviour patterns; for example a
that could make a significant contribution
growing proportion, particularly women
to not only sales and customer service,
will continue to select and buy products
but also to staff motivation
such as paints but will employ a
and confidence.
handyman to do the hard work.
•
•
Stores can become convenient collection
Businesses should segment their
points or as a showroom where they can
prospects and customers by profitable
gather information before
size and location and this data needs to
ordering online.
be leveraged effectively.
•
Capitalise to deliver online advice,
knowhow and service that
Amazon cannot.
•
Lack of traction of video content can be
the result of poor or absent functionality,
rather than a lack of buyer interest to
engage with this medium.
•
Today’s DIY retailers need to
understand how both video and social
media drives purchasing among their
customers and of their products; focus
on customers whose sharing indicates
they are actively researching high-value
or recurring DIY purchases.
Summary - Continued
lifetime
customers
engage
Until recently, it was fairly easy to separate online
activity from other activities. There was a clear
nurture
pattern to how people used the internet.
optimise
Planning involves a more integrated business.
A website should not be separate to instore;
align
many DIY providers have made that mistake.
For the DIY sector specifically, show
stores - adapting store formats (B&Q
has large, big and far too big), this
could be inspired by responsive
Connect
radiate
Focus
online and
Use search
on the
offline data
Align with
analytics to
customer
for real-time
multichannel
execute
online and
1:1 dialogue
objectives
optimisation
instore
across
Initiate
rooming comes in to play, but mobile
plays a big role in this too. Right sizing
Use market
Basic site
in harmony
with instore
experience
Mobile site
Share on
channels
social
intelligence
and
predictions
to anticipate
the needs of
the DIY
customer
networks
website design
B&Qs strategy is about providing a
consistent customer experience
through omnichannel marketing.
There are opportunities to update
instore technology, by gaining
inspiration from the online experience.
awareness
DIY multichannel customer expectation model
consideration
Purchase
About Sagittarius
The Talent
Our experienced team
includes digital and
marketing strategists,
creatives (offline and
online), web developers,
producers, account
managers, project
managers, marketers and
we have over 280 years
Paul Stephen
Nick Towers
Josh Whiten
CEO
Managing Director
Digital Marketing Director
combined experience.
Richard Brisley
George Clark
Sarah Dennis
Lead Server Side Developer
Lead Client Side Developer
Marketing Manager
Why a Whitepaper?
Sagittarius has launched a series of white papers to help create
awareness of new market trends and reveal our best kept
secret insights.
We identify and define emerging demands in the market and
share our thoughts to help decision-makers select the right
solution for their ever-changing needs.
Our white papers aim to unpack complex problems making
them simple all supported by trustworthy evidence-based
research.
We're keen to share from the lessons we have learnt in
business for over the past 30 years and feedback continues to
be invaluable to help shape and define future white papers.
Get in Touch
If you would like to find out more about the DIY sector then
please contact Sagittarius on:
Sagittarius
36 High Street, Ashford, Kent,
TN24 8TE, UK
01233 467800
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The facts of this report are believed to be correct at the time of publication but cannot be
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