Blog: Tuesday, 2 July 2024
In recent years, the Do-It-Yourself (DYI) industry sector has witnessed significant changes in consumer behaviour and preferences. A whopping 73 per cent of homeowners report that their DIY projects have not only improved their living spaces but also enhanced their personal comfort at home, signalling a deeper connection between self-effort and satisfaction.
This article was inspired by the Moonshot Thinking event with Jurre Mulder, chief digital and technology officer at Intergamma. It was part of the series of events organised by the Business Information Management (BIM) Group at RSM that brings industry and research a step closer to each other.
Chief digital and technology officer at Intergamma
Interestingly, while only 13 per cent of DIY revenue is generated online, there's a substantial 'research online, purchase offline' component of offline sales, with estimates indicating that between 50–75 per cent of consumers adopt this approach. This omnichannel customer engagement underscores the importance of a robust online presence, even when transactions are concluded in bricks and mortar stores.
Trust remains a cornerstone of consumer decision making, with 82 per cent of homeowners relying on positive reviews. However, personal endorsements haven't lost their charm, as many still turn to friends and family for reassurance before making a purchase. This dual reliance on digital and personal validation exemplifies the rich and diverse customer journeys in the domain of home improvements.
Looking at the bigger picture, customer journeys in DIY retail can be segmented into three primary archetypes, explained Jurre Mulder, Chief Digital and Technology Officer at Intergamma: there’s the DIY approach, the collaborative 'Do It With Me' (DIWM) experience, and the 'Do It For Me' (DIFM) service. Retailers aiming to become one-stop-shops must cater to each of these paths, ensuring that customers feel supported regardless of their preferred mode of engagement.
Solo
Collaborate
Service
Home improvement retailers such as Karwei and Gamma, the two store chains operating under the Intergamma umbrella, must navigate a landscape where customers – unlike their DIY-savvy predecessors – may lack the requisite skills or enthusiasm for home improvement tasks. This shift demands a customer experience that's both educational and reassuring, helping consumers to bridge the gap between aspiration and capability.
Through an online market slowdown in 2023 and a subsequent pick-up still tempered by market maturity and economic factors such as interest rates in 2024, Intergamma is also betting on its stores. Core to its investments in the physical domain is its 'smart store' concept that uses technology and analytics to remove friction from both customer and employee journeys.
During the Moonshot Thinking event, Jurre shared some lessons on how becoming smarter, both offline and online, has helped Intergamma grow its business.
In the marketing realm, automation tools enable retailers to personalise customer interactions at precisely the right moment. For instance, customers who have recently purchased curtains can be excluded from certain promotions, while insights on who these customers are may help target comparable demographics more effectively.
Pricing strategies are now more dynamic than ever, influenced by sustainability concerns and the need to maintain a competitive edge against other DIY retailers. Artificial intelligence applications are being explored in partnership with tech giants like Microsoft, for instance using security camera footage (in a privacy compliant manner) to enhance customer service and prevent theft.
The transition from a consumer base that in the past was more experienced at home improvement to one now that is less skilled – and possibly less interested – poses another challenge. While this represents an opportunity for retailers to step in as educators and facilitators, it also places a considerable onus on them to deliver value beyond mere supplies to also provide guidance and assurance.
Customers’ increasing reliance on the combination of online research and offline purchasing suggests that despite the convenience of e-commerce, there is a tangible value in the in-store experience that online platforms have yet to replicate fully. This omnichannel consumer behaviour could indicate a deeper need for physical interaction with products or a desire for in-person advice and assurance that complex web interfaces and chatbots can't satisfy. Retailers must ask themselves if their online experiences are truly meeting customer needs, or if they merely serve as a preliminary step before the customer’s final in-store engagement.
Furthermore, retailers with a strong store network will reap the benefits of inventory that’s located close to their customers. This can be unlocked through Ship-From-Store and Click-From-Store options – as Intergamma does – resulting in a larger available online assortment, faster delivery to the customer, as well as cost and sustainability benefits.
This also means that even though the store is the dominant channel for transactions, retailers should also invest in their digital channels. A great example is Gamma’s Verf (paint) app with its user-friendly interface to guide the customer towards the best choice of paint for the job through a series of intuitive steps (select colour, determine quantity, get materials). Catering to omnichannel customers also means that physical and digital channels should be harmonised to remove friction along the customer journey. An example of this is the retailer offering home measurement advice for window treatments when it becomes apparent that an online customer is not yet ready to move from the orientation to the purchase stage.
Increased digitalisation and guidance is certainly an added value for consumers, but not all ‘digital’ is good. Take the example of DIY retailers using electronic shelf pricing to make more frequent price adjustments. While not as frequent as online dynamic pricing, the increased ability to change prices can lead to a perception of price instability among consumers. Customers might hesitate to make purchases if they believe waiting could result in a better deal, potentially affecting immediate sales. This also points to the importance of retailers adopting a strong transparency and ethical framework and evaluating consequences for consumers.
On the positive side, electronic shelf pricing can lead to several benefits such as responsiveness, efficiency, and accuracy. Retailers can respond quickly to changes in the market, such as price drops from competitors or changes in supply and demand, which can be crucial in maintaining competitiveness. It also reduces the labour and material costs of manually updating prices – a cost-effective move that’s also environmentally friendly.
Finally, electronic shelf pricing can reduce pricing errors, ensuring that the price on the shelf always matches the price at the checkout, which is critical for customer trust.
While there are a number of benefits, with any introduction of new technology it is essential to pause and contemplate the potential downsides and make an effort to curb those.
Frequent price changes could lead to customer uncertainty. If customers perceive that prices are constantly in flux, they may feel uncertain and less likely to make a purchase decision, fearing a lower price could be just moments away. If prices are changing often, it could lead to a complex and confusing shopping experience, with customers struggling to keep track of the current prices.
For some consumers, constant price changes might undermine the perceived value of products. It can create a perception that the products are worth less than their stated price if they see that a retailer is willing to frequently lower the price.
There could be ethical concerns if the pricing strategy is not transparent or if it discriminates between consumers, such as offering different prices based on the time of day or the likelihood of a particular consumer to pay more.
Implementing such a system may involve collecting customer data to inform pricing strategies (e.g., using self-scan data to get an idea of what type of customers are in the store at any given moment). This could raise data privacy concerns among customers, especially if they feel their movements or purchasing habits are being monitored without their explicit consent.
While electronic shelf pricing offers DIY retailers a way to easily adapt prices and give a competitive edge, it should be approached with a strategy that considers long-term brand value, customer trust, and ethical implications. Furthermore, retailers must harness technology to not only meet expectations but to create a shopping experience that feels both personal and empowering.
In summary, the evolution of DIY retail towards an omnichannel business model, as observed in Intergamma's approach, has several positive takeaways. The rollout of a 'smart store' concept, leveraging technology for enhanced customer and employee experiences, will foster customer satisfaction and employee productivity. The strategic use of digital tools in various business functions, and a willingness to experiment with new technologies such as generative AI like chatbots demonstrates a commitment to continuous innovation. But following this path can only lead to sustained success when retailers are mindful of ethical considerations and customer perceptions.
Doing good for customers and employees should be the core principle, and if that’s the case then an omnichannel transformation indicates a brighter future for the industry, where digital and physical retail complement each other and create a more holistic and satisfying customer journey. By embracing these changes, DIY retailers like Intergamma are not just adapting to the new market realities but are also shaping a more efficient, responsive, and customer-centric retail environment.
Science Communication and Media Officer
Corporate Communications & PR Manager
Rotterdam School of Management, Erasmus University (RSM) is one of Europe’s top-ranked business schools. RSM provides ground-breaking research and education furthering excellence in all aspects of management and is based in the international port city of Rotterdam – a vital nexus of business, logistics and trade. RSM’s primary focus is on developing business leaders with international careers who can become a force for positive change by carrying their innovative mindset into a sustainable future. Our first-class range of bachelor, master, MBA, PhD and executive programmes encourage them to become to become critical, creative, caring and collaborative thinkers and doers.
