Successfully Selling Hand Tools in a Builders or Plumbers Merchant
Andrew Weiss is an Independent Consultant working with Monument Tools. He is currently Chairman of The British Home Enhancement Trade Association and was previously Managing Director of Isaac Lord Ltd, a multiple award winning Tool Retailer.
This article was first published in Builders Merchants News February 2020 Pages 18-19
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It’s traditionally, at least anecdotally, been a Builders Merchants and Plumbers Merchants headache selling Hand Tools in the UK market and size, is the issue.
Market Size
The market for tools in the UK (both power tools and hand tools) is worth around £1.2 billion at distributors selling prices. It is populated by over 300 brands and suffers from massive over-duplication of product. The sector is broken down into a variety of sub- categories; carpenters, builders, engineering, plumbing, electrical, landscaping all being key to Merchant customers. Hand Tools represent nearly 45% of the sector giving, a market value of £540 million.
No surprise then that many merchants have traditionally ‘gifted’ the merchandising area for these products to wholesale distribution and generally left product selection, maintenance and refreshment of the area to a third party. Difficult to make money via this route! The market has also changed rapidly as the category is a natural for online fulfilment and this in turn has put pressure on margins.
Destination, Convenience or Specialist
Generally, there are three types of major players operating within the sector; destination stores such as Axminster Power Tools, Isaac Lord or D&M , convenience outlets such as Screwfix, Toolstation, Amazon and other online players / pureplay, as well as large DIY Big Box outlets.
So where can Merchants fit within this polarised market ?
Merchants are ideally placed to fill the ‘least not lowest’ cost platform. Most branches have in-depth knowledge as to their customer base, be they carpenters, general builders, plumbers or electricians. They will be able to devise a clear range strategy, presented by use not brand and, crucially, operate in an environment that one size does not fit all, either by company or branch. Key to this is to remember that you don’t have to be big to be a specialist!
There is a market in Chamonix that operates once a week. Every Saturday a man and his wife turn up with a huge display and range of olives. Locals know this and every week turn up and purchase their weekly supplies. Within a few hundred yards of the market- place are Carrefour, Aldi and Spar supermarkets, major retailers with huge buying power. None of them stock more than one or two types of olives. The smaller, more nimbler and customer centric trader has taken the market. The moral of the story is that size doesn’t matter, ensuring that you convince your customer you have what they need does. If your branch is near to a construction site, really understand the phases and what hand tools are required when and change the range as work progresses.
Customer Expectations
Customer expectations should play a big part in any merchant’s range decisions, especially when you move into more niche product sectors. There are three ‘must haves’ end users demand for their loyalty.
Information & Expertise. They will expect merchants to provide an experience which cannot be delivered online. The customer may research online but they expect more than the online information to be available in a merchant.
Range & Selection. They expect and value personalised service and they expect a level of product availability to cope with large product demand.
Fulfilment & Flexibility. They expect high levels of convenience, flexibility and immediacy.
In short, the right product, at the right price, when they want it, where they want it with a full after sales service. In retailing circles, it is described as frictionless purchasing.
Monument Tools in Plumbers Merchants
At Monument Tools sales programmes are based around flexibility under the understanding that where our customers are concerned, one size does not fit all. We offer Merchandised Solutions ranges on plumbing & heating (basic & extended), general builder with plumbing range, roofing accessories and drainage products. We cluster our offers around task – based solutions; in our world this can involve pipe cutting, soldering & brazing, cleaning & deburring, pipe bending, radiator installation and bath & sink work.
This approach enables merchants to get the most out of each sale, trade up where necessary and apply the right variation to suit space layout, brands on offer, merchant knowledge and margin expectations.
Benefits
From a merchant perspective this can produce several benefits. These include lower stockholding via reduced product duplication, improved layouts, a tailored range to suit local needs, improved cash flow, a better return per square metre leading to improved profitability and, finally, greater customer satisfaction.
Summary
In summary the hand tool market is growing and profitable. The old scattergun approach is no longer appropriate. Key to success is an understanding and regular review of customer requirements. Display by task, be selective on brands and don’t duplicate. Get maximum impact from effective merchandising and be strategic on range selection. Make your staff knowledgeable and get brands to provide appropriate training. Remember the olive trader.