As distribution channels blur, builders’ merchants face increasing pressure from big box players.
Builders' merchants focus mainly on professional clients such as craftsmen and contractors. The lines of distribution that bring building materials to market have blurred in recent years, adding complexity to the task of identifying the best route for a particular product. DIY stores such as Home Depot and Lowes Home Improvement have added professional contractors to their target list, making them more of a threat to merchant players.
While these big-box DIY stores have some advantages, such as greater familiarity with digital channels and potential brand recognition, traditional merchants have built a business model around intimate customer engagement that includes variable pricing and long-term relationship management. The key will be to manage the best elements of both business models to be able to succeed in an increasingly competitive space.
A sales message for builders’ merchants should take into account the roles and requirements of four decision makers.