Home improvement stores: Resilient in the age of unified retail

by | Jun 1, 2017 | Omnichannel, Retailers

Home improvement stores like Lowe’s and Home Depot have been chugging right along, even in the ecommerce-heavy omnichannel digital retail landscape we find ourselves in these days. Their unique niche in the retail industry is a natural fit for the brick and mortar store, but e-commerce is a bit more complicated. Home improvement stores, especially the big box stores, have some particular risks and rewards which have made them resilient, even with fluctuations in the real estate market that can dampen sales to such retailers.

Home improvement stores resilient

First, many of the core products they sell are large size or heavy objects. Think appliances, 2x4s, landscaping timbers, lawn furniture, lawnmowers, stone pavers, roofing supplies bags of soil, toilets, front doors, fencing, and more – all very difficult or expensive to ship, which means it’s very unlikely they’ll be shipped at all. Additionally, many home improvement stores have offered delivery services for years, from local stores to the buyer’s home or place of business. For these reasons, the brick and mortar store model will continue to be successful for home improvement stores for years to come.

Second, many home improvement and gardening supplies have their own special requirements that are well suited to the local brick and mortar store retail model. Fertilizers and herbicides have handling and storage requirements. Fragile seed packets and even more fragile live plants can die in the supply chain without the appropriate precautions and considerations – sending them successfully through the mail would be futile and/or cost prohibitive. These issues mean that home improvement stores have unique challenges in that drop shipping isn’t as viable of an option compared to other types of retail stores.

This means it’s more difficult for home and garden supply stores to pursue the same omnichannel strategies that other retailers use. A retailer like Target or Walmart can easily send a shirt through the mail, but it’s a lot harder to ship patio furniture, pavers and drywall to your customers. And despite the success of some online/catalog plant and flower retailers, it’s still difficult to ship flower and garden items through the mail. Items are either too fragile or too rigid, and frankly, if shipping these items are not your specialty, you may end up replacing more shipping-damaged items than is financially viable.

Modern consumer expectations

That doesn’t mean the customers for home improvement stores won’t have some of the same unified retail expectations as they do for other retailers. You’re still expected to be helpful online and in the store, and your associates should be able to provide the same advice and assistance as your retail counterparts. And your customers will still expect things like accurate inventory online for local stores, as well as the ability to do things like buy online pickup in store (BOPIS).

To see great examples of success in home improvement, we have only to look at the two biggest retailers in that game. When it comes to linking online and offline stores to serve shoppers better, Home Depot and Lowe’s have proven they know what they’re doing. Both are using their bricks-and-mortar locations to encourage shoppers to buy online and pick up in stores. When the items are delivered directly to a consumer, shoppers are welcome to return online orders to stores. Both retailers also equip store associates with mobile devices to allow them to better assist customers on the sales floor.

Inventory visibility for happy customers

Even without the usual omnichannel strategies, home improvement retailers can still make consumers happy. One of the things that will help is a solid relationship between retailers and suppliers that enables a consistent supply chain and the easy sharing of inventory information between the two partners. Online inventory visibility for local stores, and inventory accuracy, are must-haves to ensure consumers know they can depend on you having the item they want when they arrive, or when the place a BOPIS order. Finally, being able to move items purchased at the store to where the consumer wants the items delivered is a must – though stores like Menards and Home Depot have already been doing this for years.

One piece of advice that I would offer to maximize sales to home improvement store locations is to maximize inventory visibility with information “from the store out”. The supply chain networks for these retailers really rely on the stores to be the hub, so that’s where inventory information really needs to be accurate. If a product runs out, that customer is much more likely to go somewhere else that day to get what they want – yard projects wait for no one. That’s why it’s so imperative to have the visibility of the supply chain and have collaborative relationship with trading partners to make sure the items are where the customers are going to be, when they’re in the store.

Most home improvement stores are doing the majority of their business in brick and mortar stores. That doesn’t necessarily mean that they are immune to all the changes brought about by the omnichannel retail era. Consumers’ expectations of the services and inventory information offered by home improvement retailers has been influence by other retailers, like Target, Walmart or Best Buy. Home and garden supply stores should improve inventory visibility, inventory accuracy and delivery services to make sure consumers stay happy as retail continues to evolve.

Being able to share product data and inventory information, and growing an omnichannel strategy, is something SPS Commerce can help both retailers and suppliers in the home and garden supply retail business. To learn more, please visit the SPS website or to talk with a retail and supply chain expert.

Brandon Pierre

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