Innovative Retailer – BUILT
The Place: Oh it’s terribly new. Only a baby in fact. Just one store in the Birmingham area. Plus it only opened in September 2017 so we are all over it really quickly.
The Story: Builders – a breed unto themselves aren’t they?
They certainly are: We’ve all heard the stereotypical stories of them turning up, eating a bacon sandwich, and then immediately driving off again to get ‘parts’ from mysterious suppliers located miles away. Not to be seen again for three hours.
They certainly do: And when they do return all they have to show for it is a door handle and a small bag of screws.
OMG, it’s literally like we have the same builders: Trust me, we don’t. But our builders do have the same problem – and Retail Insider can exclusively reveal what they are getting up to when they seem to disappear for hours.
No way! What? Exactly what they say they do – it’s just that they have to go to five different retailers/merchants before they find one that has the screws they need.
Well, that’s really dull: It’s bad for everyone and Nick Thomas, CEO of BUILT is out to make it a thing of the past.
All on his ownsome? Not exactly, he has the heft of Travis Perkins behind him. He developed the concept around a year ago of a trade warehouse selling a core range of building essentials when Travis Perkins came to realise the serious threat from online models to their very traditional building company. Its choice was either to buy an existing business or create a new one and so BUILT was born.
Right, so what’s the gist? Imagine if you will the smaller range of choices available in Aldi crossed with the functionality, online-ordering facility and non-display nature of an Argos store.
So, that totally hasn’t sold it to me: It should have – chances are your builder has a smart phone and is not just using it to get his apprentice to order another bacon sandwich. They are absolutely using them to check stocks but the information they are receiving is often duff hence turning up at the retailer/merchant to find that what they asked about is in fact not there at all.
Time consuming? Yes.
Expensive? Yes, yes, yes. BUILT takes it to a new level, all the stock information is hosted in the cloud by NetSuite and if it is not in stock it will not even show up so there are no broken promises made to the builders. What the trade customer sees on their phone is the same as the warehouse manager sees. And it’s all in real-time.
Well, this is all very good but what’s this about limited choice? I’m just getting to that bit. For instance, the other DIY retailers/merchants like Screwfix will have 20,000 SKU whereas BUILT has a much more modest 5,000.
Doesn’t sound great: Okay, try this: 80% of these rivals’ sales will be from 20% of their range. It stocks a wide range but the absolute core stuff is only a tiny part of its total inventory. So BUILT simply identified the core range and bingo!
And the Aldi bit? As Thomas says, if you shop in Aldi then you can make an entire meal but you will only have a choice of one ketchup (that is “cheaper than Waitrose”), one kind of chips, and one kind of juice etc…etc…It’s like that but for nails.
Can something be revolutionary and commonsense at the same time? Next you’ll be saying that the old ‘mates’ discount is on its way out: Well, funny you should mention that.
What!!! The move towards transparent pricing is going to come to the building trade sooner or later and BUILT wants it to be sooner. No discounts for preferred customers. The price you see is the one everyone sees and it doesn’t change.
Crikey. I hear the sound of Styrofoam cups of tea dropping to the ground all over Britain: It’s inevitable with the advent of smart phones where everyone can see the price and more and more ordering is done via phone. Any other pricing model is unsustainable.
Dare I ask where the Argos allegory comes in? Indeedy. According to Thomas the layout and format is just like a drive thru for builders. They don’t need to waste time browsing through aisles of wall plugs, they don’t need to look at shelves of stock at all, damn it. The BUILT store is 60,000 sq ft of which half is the warehouse. Kiosks are available to enable customers to order at the store but most people are click & collecting or ordering online and having it all delivered to the job.
It all sounds deceptively simple. I feel sure there must be a catch: If there is, I haven’t worked it out. It’s all about certainty of supply in those most needed items and all the tech architecture is geared up to achieving that. It’s not pretty – looks more like a dark store than anything else – with virtually no front of house staff required.
It works, I get it. How are the sales breaking down? 30% are phone orders for click & collect, 50% are online smart phone orders to be delivered, and 20% are walk-ins who browse and buy via the kiosk.
And what of the future? Thomas sees expansion in terms of clusters; he’d like to get another three units close to the one he already has because that makes deliveries more cost efficient. The minimum order discounts can be achieved by making a single order for the group of stores. In contrast, other retailers/merchants in this space set up costly central distribution centres.
Do we know if the builders of Britain like this new way of shopping? They seem to – before Christmas BUILT did a NPS survey to benchmark against its larger players and it compared very favourably. Homebase for instance came in with -10 whereas BUILT scored a very credible 47.
The old guard better watch out: Absolutely, now who fancies a bacon sandwich.
PCMS is a global provider of IT software and services for the retail industry. PCMS offers a full-range of integrated commerce solutions across selling touch points and also provides turnkey managed services and cloud hosting. Its client list includes John Lewis, Marks & Spencer, Waitrose, Whole Foods, as well as Walgreens in the US and fashion brands including Prada and Ferragamo across Europe