How merchants can take advantage of the digital economy: the BMF Digital & Technology Forum
Digital is an essential part of the modern marketplace and has become a basic customer expectation – merchants must take advantage of the digital economy or risk losing out. This message came through loud and clear from the November forum organised by the BMF.
The construction industry faces a range of significant challenges at the moment. While climate change is widely considered to be the greatest challenge of the modern age, it’s far from the only issue on the agenda. Covid continues to disrupt the global market from logistics to shopping habits, Brexit intensifies pressures on workforces and supply chains as well as the economy, and there is an ongoing and growing threat to merchanting from the retail sector, as giants like Amazon continue to make inroads into market share.
On top of that, there is another looming issue in the shape of a shortage of builders in the UK, compounded by an aging population, Brexit, Covid and skills-shortages. The construction industry needs more efficiency from top to bottom and digitalisation has a big part to play in that changing landscape.
Digital technology is about everyone, everywhere
80%+ of tradespeople use their phones daily as part of their sourcing and procurement process. It’s a huge figure and underlines the importance of digital accessibility for merchants. It also presents a massive opportunity for local outlets, as the section below on sales discusses in more detail. The pandemic has been an eye-opening experience for everyone, and tradespeople aren’t likely to return to pre-pandemic practices which take more time and effort.
Digital isn’t a replacement for brick and mortar merchanting. It can actually drive more customers in-store, forge deeper loyalty and improve communication, as well as drive efficiency and profitability. If, as a merchant, you are yet to jump on the digital transformation train, we’d urge you to hop aboard as soon as possible, as the risks of being left behind are becoming greater by the day.
Here are four key areas covered in the forum which demonstrate just a few of the ways in which technology can help merchants to take advantage of the digital economy and remain relevant and successful in today’s challenging environment.
1: Technology and stock management
How do you offer a wider range of stock without incurring additional financial risk?
Technology has an answer, according to Ed Bradley of Virtualstock. They’ve been working with huge brands in the retail space for a long time, including John Lewis, Argos and B&Q, connecting networks of suppliers online to offer a far wider range of stock via each stockist’s individual website. Offering an “endless aisle” approach, Virtualstock essentially links together the inventory from multiple suppliers enabling customers to browse and select products not necessarily held by the merchant whose website it is.
Their software solution, “The Edge,” offers merchants the opportunity to vastly widen their online product portfolio, in turn driving additional website traffic and widening the customer base, by allowing customers to order products in effect directly from the third party supplier, with the merchant acting as a kind of facilitator, as opposed to running a marketplace offering.
The system is highly interoperable, meaning it can integrate simply with other digital systems such as your ERP system (depending of course on which system you currently operate.)
The advantages are significant, with Virtualstock offering a very secure, GDPR-compliant solution for merchants seeking to broaden their product offering online without necessarily having to take on more physical stock themselves. Using analytics (such as stock turn), merchants should be able to identify the best performing product lines in their inventory, keeping core products in their own inventory while de-risking the stock profile by outsourcing slower turning or higher cost items which could be incurring more cost than they’re worth sitting in a merchant’s stock yard.
2: Technology and sales – driving in-store sales from online shopping and making the most of local
The power of local is huge when it comes to sales, and NearSt (Near Street) have developed a fantastic technological solution to use online traffic to drive in-branch shopping.
Local search is a huge driver of footfall; “near me” searches on Google have trebled since 2017 and searches for “who has XYZ in stock near me” rose over 8000% in 2020 alone. There is a huge market opportunity for businesses able to provide the right data to take advantage of this rapidly growing trend.
One of the biggest objections to eCommerce is the idea that it will cannibalise in-store or in-branch sales. The statistics, however, paint a different picture, and prove that the knock-on effect of broadened customer bases, great product information and convenient service can actually drive incremental sales on the shop floor as well.
NearSt integrates a customer’s live product inventory with Google and Facebook to allow customers to see instantly exactly what products are available in-branch near them. It’s such a simple idea but is providing incredibly successful for customers who can’t wait for an online delivery and don’t have time to visit six places to find the right products.
Search works from both angles: a customer searching a local merchant online can see what products it offers, or, if searching for a particular product, will be able to see which local stockists have it available then and there.
Naturally this requires a digital stock management system to be able to integrate information accurately in real-time with the search engines or online platform such as Facebook. Thereafter however, it doesn’t require paid advertising or vast expense, and because Google actively wants businesses to provide great data, your organic search results are very likely to improve as well; 100% uplift is not uncommon.
To find out more, visit Near.St
3: Technology and customer experience: “Using digital technology to enhance customer experience”
Customer experience is vital for driving loyalty, repeat business and satisfaction, and Bradford’s are investing heavily in making sure their digital customer experience is adding value and usefulness at every step.
Fergus Bell, Head of eCommerce at Bradford’s, gave a fascinating run-down of existing and pipeline plans for how the company is improving the experience of working with them for customers. Their approach includes, among many other things, a website overhaul, complete with trade customer portal with quick purchase options, built-in discounts and project lists. It will allow 24/7 access for customers to manage orders, accounts and returns, as well as increased personalisation for greater relevance and quality of experience.
As outlined up front, mobile access is king when it comes to trade use of merchant sites, so Bradford’s recommend a “mobile-first” approach to web or app building, really putting the customers’ needs and wants first and building the solutions that they are asking for.
Analytics and insights were highlighted as being key for excellent customer experience, and is something which the digital landscape lends itself to perfectly; online, customers’ movements, behaviours and preferences can easily be observed and monitored to help businesses respond quickly to what customers are doing. Fergus Bell recommends making the study of website analytics a “daily tool for decision-making” and talked enthusiastically about the wealth of information available through various sources online.
Bradford’s is quick to say they have a long way to go and a lot to learn but their open and transparent attitude is refreshing to see, and they are happy to answer questions or advise any other merchants going down the digital marketplace route.
4: Technology and product data
We’ve talked a lot about product data in the past (try this blog, for example) so we won’t say too much here. But the need for consistent terminology in product data is intensifying rapidly, driven by the increasingly digital platforms on which modern business runs. The scales of efficiency, inter-platform communication and customer experience involved are immense, and we would strongly advise merchants and their suppliers to embrace standard classification systems such as ETIM, to avoid the risks of being left behind.
Product data is complex and not necessarily for the faint-hearted, but it’s also incredibly important, especially with an increasing range of safety standards and sustainability certifications coming into force in the coming years. So while it may not be a particularly appealing nettle to grasp, it’s vital that you grasp it nonetheless. As Paul Surin from IBM phrased it, “You need a data strategy. It’s vital to see data as an asset.” Modern business success is built on successful data management, and we really cannot overstate its importance.
We would like to thank the BMF for another informative and entertaining forum. If you have any queries or would like to discuss any of the subjects raised, please get in touch – we would love to hear from you.