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Although retail sales throughout Europe indicate a clear downtrend, the DIY sector shows promising growth. The reason for this trend shift is mainly economical: after a long and difficult recession, consumers are once again looking to invest in their home. Disposable income is up, and the housing market shows considerable momentum. At the same time, higher labor costs and a shortage of high-quality home maintenance services have consumers increasingly turning to DIY solutions.
There is a marked rise in the number of views of online step-by-step instructional videos. This dovetails nicely with another important growth driver: making life easier through technology. At Coulisse, we believe retailers should capitalize on both trends by investing in innovative DIY solutions, such as window coverings that can be controlled via a smartphone app. We asked renowned marketeer and retail expert Paul Moers to share his vision on the future of DIY for retail. What recent developments does he think are most important?
Sustainability matters. Growing numbers of consumers are very concerned about climate change, and looking for ethically sourced products with a positive ecological footprint. At the same time, markets are becoming highly transparent: whenever something bad happens in a factory, it’s immediately televised. An example dating a few years back is the collapse of the clothing factory in Bangladesh, where Primark and H&M labels were found. Consumers get upset and frustrated by this kind of news, which can be very damaging to a company’s image and brand position. Does that mean sustainability will give you a competitive advantage? I don’t think so – not anymore. These days, sustainability is a necessity. For a company to be accepted by consumers, it’s a conditio sine qua non. Even large discounters such as Lidl and Aldi are paying a lot of attention to the subject. And if discounters are moving in that direction, you had better start following their example.
Then there’s the position of online shops. Markets are changing rapidly: omnichannel is now of vital importance to survive in the near future. Now more than ever, it’s necessary to know and understand your customers. It’s very difficult to predict how they will behave. Their purchasing behavior is also becoming highly unpredictable: they will visit your shop one day and prefer to buy online the next. In the end it’s always up to the customer to decide which channel to use and when to use it – not the retailer. Younger generations grew up with online businesses, and they feel extremely comfortable using the internet for all sorts of things: dating, travel bookings, shopping, et cetera. If businesses are to survive the current market conditions, reaching these customers is a must. Above all else, big data will be of great help in this process.
Many companies are too busy with daily operations to pay enough attention to the current change drivers, but my advice would be to ensure you make the time for it. The world is changing so rapidly that your business might become obsolete before you even notice it. You might even go out of business! The chance that name brands will start delivering their products to the customer directly is moving towards likelihood, as many companies are becoming much less apprehensive about it. In the past, they were concerned about the loss of business from their retail channels, but that hardly seems to be the case these days. The volume downturn will have a direct impact on retail shop profitability. Furthermore, the growing importance of supply chain portals will play a crucial role in better supply chain management. B2B customers will not only be able to save costs, but also run their operation more efficiently as well as more effectively. These portals will provide real-time information about every possible process step and all available product offerings.
We also have to remember the importance of emotion. DIY shops are very much rationally-oriented: they display an enormous amount of products for their customers, but do so in a very boring way. Sometimes it looks like a competition to see which shop can offer the most products. The question is: what do customers really need? Aren’t we exaggerating? Obviously, the 80/20 rule also applies here: roughly 80 percent of the effects come from 20 percent of the causes. Instead of focusing on the number of items, it may well be better to spend more time on emotion. DIY shops deal with real people who walk in with a dream: to make their house a better place. This is an excellent opportunity for DIY shops to not only provide practical and rational information, but also appeal to customer emotions. My advice to DIY shops would be to take a critical look at their lay-out and to spend more time on the emotional element. By appealing to consumers’ emotions, you create an opportunity to sell more products and increase customer loyalty, which in turn leads to more profit. What’s not to like?
Paul Moers is a strategy, branding and identity consultant with extensive experience in B2B retail and B2C marketing. He is passionate about helping national and international companies innovate by developing a customer-centric approach. As a well-known marketeer and management book author, Moers makes regular media and public speaking appearances to provide his expert opinion on branding and strategy matters.