With people being confined at home over the last few months with more time on their hands, the pandemic provided fewer ways to spend disposable income. With holidays cancelled and entertainment expenses reined in, a lot of people have turned their attention to home renovations.
According to XPO’s consumer survey, 56% of respondents started DIY home improvement projects during the lockdown. What is perhaps more surprising is that about 75% of Brits polled in industry research say they’re planning further home improvements over the next year, citing decorating, kitchen or bathroom remodelling, or extensions. If you apply that percentage to the entire UK population, the numbers are too significant to be ignored by DIY retailers. It’s fair to say that DIY will come out of the COVID-19 crisis as one of the most resilient sectors.
E-commerce versus brick-and-mortar shops
During the strict lockdown period, consumers had no choice but to shop online. Consequently, we’ve seen a massive upsurge in retailers turning to e-commerce sales where possible. I believe it’s too early to say exactly what will come next for UK retailers, as non-essential stores only reopened in mid-June. Consumer data certainly point towards some degree of permanent change in buying behaviour. And retailers who already had an e-commerce strategy in place, or are accelerating their efforts to become more digitally oriented, are in the best position to take advantage of this shift.
I’ll give you an example. Our customer, B&Q, is a British multinational retailer of home improvement products. They’re leveraging their capabilities to become an even bigger player in the DIY e-commerce space without reducing their store network. In the early days of the lockdown, B&Q shut their stores out of concern for their employees’ safety. When they were comfortable their employees were protected, they staged a phased re-opening of their stores while, at the same time, shifting stock levels to meet online demand. I think we’ll see more retailers invest in omnichannel strategies like this in the future. Where e-commerce ends up relative to physical stores remains an open question, especially as many retailers are still navigating the new landscape created by the pandemic.
A shift towards a purely e-commerce strategy
E-commerce is typically more labour-intensive, more time-consuming and more complex than face-to-face transactions, which is something retailers need to take into consideration when planning their e-commerce strategies Businesses that already have an omnichannel model in place are in a good position to grow online volumes, as they can allocate stock between channels. But for brick-and-mortar stores, it can seem daunting to enter the e-commerce space for the first time. It can be a major undertaking to move to what is essentially a personalised service, where consumers demand total accuracy and service certainty, from order receipt to merchandise returns. The e-commerce channel is continuously evolving in response to the shift in buying habits, requiring technology, mechanisation, and automation to efficiently meet consumer expectations at optimal cost.
Supply chain partners continue to support DIY retailers
Many home improvement stores have been relying on supply chain partners like XPO to keep up with COVID-related spikes in online demand. For new entrants, it’s important to recognize that not every logistics provider makes a good e-commerce partner – it requires specialist knowledge and experience in omnichannel distribution. And it requires agility to adapt operations quickly to meet consumer expectations.
Here in the UK, consumers have become accustomed to receiving online orders the next day. In some circumstances, at the height of the pandemic, this wasn’t possible, as consumer demand multiplied almost overnight, just at a time when social distancing needed to be controlled to protect the safety and welfare of our employees and this will always be our priority.
Fortunately, the majority of consumers have been patient with delayed delivery times. Now that delivery speed is catching back up with demand, consumer expectations are returning to normal as well. XPO is in a strong position to support DIY retailers and other sectors as they move towards omnichannel or purely e-commerce distribution. And, of course, we also support the physical store operations as part of an integrated strategy.