Technology’s role within the retail sector is getting bigger. Hundreds of thousands of retailers globally are ramping up technology in the wake of geo-political, economic and supply chain tensions which threaten the way business is conducted.
International home improvement company, Kingfisher – home to B&Q and Screwfix, among others – is no different.
Its large network of stores have transformed the home improvement sector in the UK since the group’s launch in the 1980s. The UK’s largest DIY retailer B&Q opened its doors in 1969; since then it has opened over 300 stores and become the leading brand in the sector.
A number of individuals have been instrumental in turning Kingfisher’s retail subsidiaries into leading players, by leveraging the latest in retail technology. Chief digital officer JJ Van Oosten is one of those.
“I go into relatively large and established retailers and then I bring them into the modern age,” Van Oosten tells Charged.
That is exactly what he has done at Kingfisher, transforming B&Q’s famous ‘diy.com’ URL from a traditional online retail platform into one of the biggest marketplaces in the UK, attracting over 3.5 million customers weekly and stocking over 40,000 home improvement products.
The Kingfisher marketplace model
The move towards a marketplace model makes sense. Almost 900,000 UK businesses are currently selling on online marketplaces, generating an estimated £282 billion worth of sales every year, according digital payment firm Shieldpay.
“In DIY across the world there are around 20 million SKUs and approximately 179,000 merchants across the world. When you look at what they should they search for, it’s clear our customers are expecting to have a much broader range,” JJ says.
“Sometimes we don’t have certain ranges – that might be special lights for exterior or interior projects, wallpapers, specialist tools that we don’t have. It makes a lot of sense for us to set up a marketplace.”
Listening to customer feedback, Van Oosten believes it was a good decision.
“We launched it in March and it is going pretty damn good to be honest. And that’s not me marking my own homework here. Customers are trusting what they’re finding, and they’re expecting us to provide them with trusted merchants and products as well.”
Van Oosten points out that the element of trust was particularly important to Kingfisher, given the lack of vetting process from some marketplaces – such as Amazon – when a seller wishes to sell via the platform.
“Customers also like the fact that they can return some of the products easily, although we don’t have a high level of returns,” Van Oosten adds.
Van Oosten’s comparisons with Amazon’s marketplace don’t stop there.
“When you think about it strategically, our business has always been very linear. We’ve always bought from a specific and curated range of suppliers. We put the product into our supply chain and then it goes on the shelves, eventually you make a good margin on that.
“With what we’re doing here – and we’re not the only ones [to have launched a marketplace] – we now have more traffic in all DIY categories than Amazon.”
The importance of omnichannel
While Van Oosten’s role is focused more on the digital side, he doesn’t downplay the importance of an omnichannel model.
“Stores are pretty important for various reasons. One of them is that they enable you to be local. Another is that you are able to use them as micro-fulfilment bases, which enables you to reach customers much faster.”
Scaling up Kingfisher’s technology and ensuring it offers an omnichannel experience has also helped the merchants selling on diy.com.
By automating a huge number of processes, merchants can sign contracts automatically, upload SKUs automatically and manage customer orders automatically. But becoming a ” technology-enabled business” with “millions of SKUs” is not enough, according to Van Oosten.
“You also think about you can also use the stores most efficiently – not just to do click and collect or returns, but also to actually provide speed, convenience and a real benefit to customers,” he says.
The data detail
Another point of importance for Van Oosten is how Kingfisher uses its data, which is vital for the business, right across everything from forecasting and purchasing to product visibility.
Forecasting particularly relies heavily on having up-to-date technology and data – and Kingfisher’s investment in both of these allows the retailer to maximise its customer offer.
“We are able to keep our short-term forecasting really accurate because I know exactly what my customers are buying and looking out for tonight at each store level,” Van Oosten explains.
“And then we can start to adapt the replenishment algorithm that we have at store level, which in turn means we can make better decisions in terms of purchasing.”
The company also sources product from countries right across Europe and the Far East – so there’s a lot of goods moving around, making it crucial to know where things are and where they are heading.
“Data helps a lot in terms of those efficiencies,” says Van Oosten, pointing out that visibility of inventory is crucial to the success of any omnichannel business.
Growing Kingfisher’s digital offer
Now the foundations have been laid successfully, Van Oosten wants to focus on scaling diy.com to new heights. Business developers are currently onboarding merchants at “a rate of knots”, with all of them focusing on the DIY market
“We got to over 100,000 SKUs pretty damn quick, so we needed to scale it up,” he says.
The importance of a high number of SKUs is instrumental in helping to gain more business, according to Van Oosten.
“The more SKUs we have, the better my position our position on Google is for our category. The higher SEO ranking we have, the more our first party products will be able to benefit.”
Speed is an important component in almost any modern business and Kingfisher has changed the game by entering into the quick commerce sector by way of Screwfix Sprint, which is essentially a rapid DIY delivery service.
“If you order something on your app, you will get it picked and ready in Screwfix in under one minute. That’s our promise. That is pretty damn fast and the customers absolutely love it”, Van Oosten enthuses.
“The beauty of Screwfix is that we know every single inventory in real time, so basically each trade counter is part of a big virtual warehouse.”
It’s clear that investing in digital and prioritising consumer needs has been crucial to Kingfisher’s success as the home and DIY retail giant continues to scale at speed. With ongoing tech investments, a data-driven omnichannel offer and one of the biggest marketplaces in the UK under its belt, it’s fair to say Kingfisher is now well and truly leading the field in Van Oosten’s ‘modern age’.
