eCommonSense Comment: Q2 2020

Andy Scothern, Managing Director eCommonSense is BMBI’s Expert for                Website & Product Data Management Solutions.

News that the economy plunged 20% between April and June was met with dismay in the building supplies sector. But recessions can bring opportunities and builders’ merchants showing the ability to re-engineer their business models are reasons to be hopeful.

Online sales during lockdown went through the roof as branches were forced to close. Merchants with advanced eCommerce systems benefited from a much-needed cash injection during a difficult period. This trend continues as branches re-open.

From our own aggregated client data, we see that 90% of transactions were from new retail customers buying products at non-discounted prices. More than 40% of those transactions were outside branch opening times.

Merchants now need to find a new balance between bricks-and-mortar and eCommerce with a new business model that integrates the two to ensure consistency, integrating brand, service levels and back-office operations.

The figures suggest that many will stick with the new habit of buying online, and merchants will need to invest in an eCommerce service if they’re not to miss out. eCommerce is not just a new website, it’s a new service, so bolting it on to the traditional model doesn’t deliver optimum results.

The bigger picture is the building materials supply chain. An industry report (The Farmer Review) says construction must ‘modernise or die’ and the acceleration of digital is critical to survival. With the ending of the furlough scheme the building supplies sector will look for efficiencies in the way merchants market, sell and buy products.

Digital innovation and the exchange of high quality, consistent data between suppliers and merchants promises to be a game-changer that makes stock levels and delivery times visible and provides easy access to commercial deal trade prices.

The world will not go back to the way it was. Industries will need to ‘modernise or die’ and the building supplies sector needs to be at the forefront of the revolution if it is to lead the country out of recession.

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Launched in 2015, the award winning monthly Builders Merchant Building Index (BMBI) report is the only reliable measure of repair, maintenance & improvement (RMI) activity in the UK. Filling an important gap, it can be widely used in construction, and by economists, Government, national media, commentators and influencers outside the industry.

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