Amazon is coming for the DIY Industry

Here’s how DIY Stores can survive against the e-Commerce Giant

Over the last years DIY projects have seen a big upward trend: more and more young people seem to take interest in crafting and “doing it yourself”. According to Entrepreneur, young adults under the age of 35 dominate the 29 billion dollar crafting industry. A big misconception of the industry is that most people are DIYers in order to save money. A Google study revealed that 47% of home improvement projects were done because people take pleasure in doing DIY projects. The difference between Millennials and older generations, however, is that young people are bringing crafting and technology together. Thanks to the World Wide Web people are more confident to take on DIY projects, because they feel like they can handle the task. This has also heavily influenced the way people buy their crafting materials. It is no surprise that people are more often turning to e-commerce platforms such as Amazon instead of going to traditional DIY-stores. Here’s how traditional DIY-stores can compete against e-commerce giant Amazon.

The Customer Journey starts online

Hardware stores are often big and not always nearby. Before customers decide to visit the store, they will most likely search for product information online. However, product search doesn’t start on Google either. A survey of 1,000 US consumers conducted by PowerReviews found that Amazon is the preferred starting point for product search. Therefore, chances are higher that consumers end up purchasing the searched product on Amazon. Customers use Amazon prices as a benchmark in order to evaluate competitors’ prices.

Less brand loyalty and dynamic pricing

That’s why physical retailers need to be able to compete with changing online prices. More and more stores are switching out their regular price tags with electronic ones. Dynamic pricing is slowly becoming an alternative for many retailers who want to compete with online prices and define the optimum selling price in real-time. Amazon’s prices are not always the cheapest. However, their product range easily exceeds what physical retailers can offer which can be an important purchasing factor. In fact, 74% of online shoppers rate product selection as important during the online search process. And if the price on Amazon is too expensive for a customer, they might find a cheaper offer at the Marketplace from one of the many small retailers offering their products on the platform. 35% of online shoppers start their searches on a marketplace and 65% of online shoppers chose marketplaces over other retailers because of better prices. This is a huge advantage for Amazon and combined with their fast and reliable delivery service more and more people are choosing to get their hardware supplies online. In order to stay competitive and create customer loyalty DIY-stores have to create a unique and seamless shopping experience through all sales channels.

DIY Store
Image: Hagebau

Cross-Channel Strategy

If physical retailers want to survive in the market they will probably have to build an online store or at least some kind of Internet presence. Online stores are not only sales channels but they are an important source for information and communication for customers. According to Forbes, 88% of shoppers characterize detailed product content as being extremely important and online shops can be an easily accessible tool for customers to find out all the important details about the product. But if they really want to stand out from the competition online and offline they need to have to connect all their channels and create a customer-oriented omnichannel experience. Customers want to have the freedom to decide where and when they want to inform themselves about products and finish the purchasing process. Driving to the DIY-store comes with opportunity costs as well as real costs for the consumer. If they choose to visit your store make sure that the product they are looking for is in stock. A way to do so is to let people check in which stores the wanted product is available. And if it’s not in stock, offer a Click&Collect service: customers can order the product online and pick it up in store. Especially for customizable products such as wall paint this service can save time for customers since they don’t have to visit the store twice. In the store, the customers then can purchase the needed equipment and get some helpful tips and tricks from qualified sales associates. Retailers such as B&Q are already offering Click&Collect services without charge.

Customer-oriented shopping experience

With the help of a well designed cross-channel strategy hardware stores can create a more customer-centered and value-creating shopping experience which will lead to long-lasting customer loyalty. Retailers need to use their channels to make the shopping experience easier. Since hardware stores are often very large, online stores can be used to inform customers in which shelf they can find a product in the store before they even visit the store. This will save a lot of time for customers when they visit the store. With the help of modern Retail Analytics technology you can understand how customers move through the stores. Get insights into important store KPIs such as customer dwell time and use those metrics to retain customers and improve sales.

Offering free in-store Wi-Fi, customers can access the online shop in store and even compare prices online. You can even build a mobile app that is not only a great platform for loyalty programs, but can also be used as an intelligent shopping assistant in store such as for in-store navigation. In fact, 80% of shoppers used a mobile phone inside of a physical store to look up product reviews, compare prices or find alternative store locations.

Craftsman

Smaller stores and showrooms

Since hardware stores are often similar in product range, price and image, consumers choose which store they visit based on proximity. Brands don’t affect the retailer choice that much. Switching from tradition big box retail store to a modern concept of smaller stores that are located centrally can give retailers a big advantage over their competitors. This would also benefit Click&Collect services. The future of the modern DIY-store is showrooms: from product tests to modern VR-technologies that can be used to teach courses and tutorials, the focus of the modern DIY-store shifts towards quality customer consultation and unique shopping experience. Consumers can easily buy products online. The reason to go to a physical store is to get inspired.

Clear market positioning and Content-Marketing

One for reason why hardware stores fail to win over loyal customers is because their brands usually don’t stand out from the competition. Most hardware stores rely on traditional “masculine” brand images while they fail to address more differentiated customer segments. Unique service models fall into the background. By integrating online channels retailers have new possibilities to identify and reach new target groups that are often neglected. Physical retailers need to rethink their selling strategies. Individual products can be easily purchased online. Instead, DIY-stores have to focus on selling projects and inspiring customers to start working on something.

Man chopping wood
Image: Hornbach

A good content marketing strategy is a key factor for a positive brand image. Retailers such as B&Q or Lowe’s offer online video tutorials about several topics such as how to paint a room. With the help of social media you can not only directly communicate with your customers and answer their questions. You can also create a community of people helping each other and sharing their experiences. While this is very helpful to clear up small questions consumers will prefer visiting your store to talk with qualified store associated about more complicated problems. Make sure your store employees are qualified and customer-friendly to ensure a positive customer service. After all, personal customer service is still the biggest advantage physical retailers have over their online competitors.

DIY-stores have to clarify their brand positioning in the market with a unique cross-channel strategy

DIY-stores are generally making good progress the area of digitalization and e-commerce. The next important step is to connect these new channels with the existing ones to create a consistent shopping experience that benefits the customer. Understand who your customer segments are and redefine your brand. Your store is more than just a sales channel. Customers come for inspiration and will stay loyal to your brand for its great customer service and qualified customer consulting. Only when shopping is fund and simple, customers will take their time and visit your stores.