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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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B&Q upgrades to become a leader

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B&Q upgrades to become a leader
B&Q upgrades to become a leader
B&Q is going through a major transformation which sees systems and operations changing, not just at the DIY company but across the entire Kingfisher group. Emma Herrod speaks to Mike Durbridge Omni Channel Director at B&Q about its plans.

In March 2012, B&Q’s parent company Kingfisher [irdx RKFR set out four concepts for the group to help turn it into a world-class retailer: Easier, Common, Expand and One Team. Within this ‘Creating the Leader’ strategy, the group is following eight specific steps with associated key measures of success and annual milestones. These include making it easier for its customers to improve their home, giving them more ways to shop, building innovative common brands across the group, driving group-wide efficiency and effectiveness, and growing the group in existing markets and expanding in new and developing ones.

Part of this transformation is a group-wide omnichannel platform which draws on the learnings from its B2B business Screwfix [irdx RSCR] and the ATG platform and SAP at the core of its supply chain and store estate.

B&Q is the first of the B2C companies within the Kingfisher Group to launch on the new ATG platform with the initial phase seeing the same platform running its website as well as in-store and contact centre systems. The upgrade to the latest platform has been planned since 2011. As expected, the customer journey and UX have had to be amended since they were first scoped in 2011, in line with changes in technology and customer behaviour. Some 71% of customers now research online before going into a store, explains Mike Durbridge, Omni Channel Director at B&Q.

The new site went live for customers this September with the store and contact centre systems up and running in the summer of 2015.

From a customer perspective, the biggest changes will be in site navigation. They don’t just look for the products they need, explains Durbridge, they browse by room. So, rather than searching for lights, for example, they are more likely to look for lighting via the room they want to put the light in, which means there could be lots of different journeys to get to the same product.

The new site will also be responsive so it works well with mobile devices, something that is now a necessity since the company took down its m.site as it was only showing the full site. More than half of the traffic to B&Q’s diy.com site comes from mobiles; on Christmas Day 2013, 44% of traffic was from mobile devices and from Boxing Day onwards that figure had jumped to 53%, explains Durbridge. Those figures are split 50:50 between phones and tablets but conversion is higher on tablets with customers ‘snacking’ on their mobile phones. Purchases, though, are still made on desktops at lunchtime and between 4pm and 5pm, before transferring to tablets during the second-screening hours of 8pm and 10pm. “The smartphone is the least converting mechanism,” he says.

Durbridge believes that the new site will give B&Q the ability to grow the business from a purely digital perspective. “We have a huge opportunity to take share of market not only from the large multi-category retailers such as Homebase and Wickes, but also from niche pure plays in any of the individual categories we sell into,” he explains.

The website will also work as the new back-end for staff placing orders on behalf of customers, either in-store or in the contact centre. This gives staff and customers access to the same level of information while also giving staff access to a single view of customers’ purchasing information. This, of course, is dependent on the products having been ordered for home delivery or for delivery to store. No one will get a single view since customers can simply walk into a store and walk out with something they’ve purchased, but Durbridge says B&Q will have a single view of “what’s important to the customer”.

The next stage is to integrate the data from the company’s loyalty scheme and Diamond Club membership card.

The single view of orders should also make future purchases easier for customers. Durbridge gives the example of paint sales, where customers want to see the colour of previous paint purchases two years down the line so they can make a repeat purchase when retouching a room.

Making things easier and simpler for colleagues and customers when shopping in store are the key aims of the B&Q roadmap, and they’re being assisted by the introduction of digital in store. Staff are frequently asked the same questions by customers and they are generally: “where is a certain product”, “which product is best for a specific job” and “how do I do x”. Durbridge is aiming to use technology as an enabler to give customers and staff the tools to quickly answer those frequently asked questions. Not only does it relieve staff of having to repeat answers but it can improve service for customers in store and allow staff to spend more time helping them with other things.

“Trying to make things simple is extremely complicated,” says Durbridge. “We want to give customers the confidence and tools to help them make the purchasing decision.” One way to do this is to create an in-store environment which is conducive to customers using their own mobile devices. Via Wi-Fi they can look at ratings and reviews, see further product information or costings.

A mobile environment will also help colleagues answer customers’ questions, show them how digital tools – such as the new mobile app launching in 2015 – work and enable customers to do things for themselves the next time they visit a store. To this end, store staff have been issued tablets so they don’t have to use fixed kiosks or other areas when helping customers. “The bigger stores have between 10 and 12 tablets,” Durbridge says.

He is very much in favour of democratic content. Apart from workflow and scheduling information, “why do store colleagues need different information to customers?” he asks.

He is not keen on kiosks, seeing them as expensive in terms of maintenance and having to build content for them. “In two or three years’ time our customers will have greater capability in their hands than our store technology,” he says. This is why it’s important to have Wi-Fi in stores, something that he believes is a “fundamental enabler”. B&Q will have Wi-Fi in all of its 360 shops by the end of January 2015.

The full vision of what a B&Q store could be like when the physical and digital capabilities are combined will be launched later in 2015. The concept store will encompass all of the things B&Q is learning on the omnichannel journey that staff and customers are taking, such as overall store size requirements, the best-selling ranges and digital capabilities as well as having a different look and feel to the existing vast warehouses.

It has already achieved a significant improvement in sales density by halving the size of one of its stores and selling the non-operational space to a supermarket in February 2014. An additional store has received planning permission and the company is seeking the go-ahead for another sixteen.

B&Q SPACES

Building on the aim of improving the in-store service to customers is the B&Q Spaces kitchen, bedroom and bathroom design tool. This PC-based software enables any member of staff to quickly create a room design for a customer by dragging and dropping computer-generated 3D models of B&Q products onto a pre-loaded room template. Alternatively, staff can work from room dimensions and enter the position of doors and windows and other fixed items, before starting the new design.

The entire B&Q product catalogue – including cupboards, fridges, flooring, tiles, taps, lighting and furnishings – has been recreated using CGI, so these items will scale automatically to the room layout and viewing angle. A running total of the overall cost is displayed so customers know the cost of their room, either as product-only or fitted and installed by B&Q’s Home Fit service.

B&Q Spaces has been in development for the past two years and staff at the Hedge End store in Southampton have been trialling a scaled-down version since the end of 2013. They are very impressed with it as a tool since it also means they can help more customers, especially those who are still in the research stage and “just want to get a rough idea” of cost and what a finished kitchen could look like. According to the retailer, customers feel more connected with B&Q because staff have spent time with them and they haven’t had to spend a few hours with a design consultant, a process which once involved home visits to measure and finalise designs, before costing and placing the order for the customer.

The tool will be installed in all stores by Christmas 2014 in a project that also sees in-store computers being upgraded. In 2015, customers will be given access to the tool online so they can do it for themselves or share a consultant’s final design with their architect or tradesperson. “It may not necessarily be the full end-to-end solution,” explains Durbridge.

The key aims of the B&Q transformation

1) Make it easier for colleagues and customers to shop in store by bringing digital into stores;

2) Pure growth from a digital perspective. “We have a huge opportunity to take share of market not only from the large multi-category retailers such as Homebase and Wickes, but also from niche players in any of the individual categories we sell into,” says Durbridge;

3) Improve service to customers in store so store colleagues are able to spend time with customers and help them.


LOGISTICS

The store and customer-facing systems are not being developed in isolation. Durbridge has a plan of simultaneously running and overlapping projects all meant to enhance B&Q’s omnichannel future. “Anything omnichannel is not a straight line. It’s more like a jigsaw,” he comments.

A major overhaul of the logistics operation is being led by parent company Kingfisher. This will see all of its operating companies rolling out SAP for stock, pricing and EPOS management. The four-year project will also see in-store hardware upgraded. This is due to go live in stores in 2016.

B&Q will be the first of the Kingfisher companies to run the new group omnichannel platform incorporating both ATG and SAP. It’s expected that this will be the template for all of Kingfisher’s companies, which include Screwfix in the UK, Castorama and Brico Dépôt in France and Koçtaş in Turkey.

The plan is for Kingfisher to have re-usable assets across every country, explains Durbridge.

In another cross-group upheaval, the existing Screwfix distribution centre at Trentham, Stafford, is being doubled in size and will become a joint NDC for Screwfix and B&Q from mid-2015. A new warehouse management system is also in the planning stages and Durbridge is keen for this to be live later in 2015.

The new systems will enable B&Q to offer a guaranteed service to customers with click and collect orders fulfilled from Trentham. Customers will be able to pick up their order the following day. This will replace the current service offering reserve online with collection the next day from store stock. Currently, stock is updated each evening so anything offering real-time availability is not possible, explains Durbridge. “Customers want immediacy so we need to improve our speed,” he adds.

The new system will give an update from stores every 15 minutes, so the aim is to move to a service which allows customers to collect products from store stock within an hour of clicking and paying online.

Creating the leader

Launched in March 2012, ‘Creating the Leader’ is the current phase of Kingfisher’s growth plan and follows the successful conclusion of its ‘Delivering Value’ project.

The four-year programme will see Kingfisher emerge as a world-class retailer, helping customers enjoy better, more sustainable homes.

Set out as four concept areas – Easier, Common, Expand and One Team – eight specific steps make up Creating the Leader with associated key success measures and short-term annual milestones.

1. Making it easier for our customers to improve their home (Measure: LFL sales growth)

2. Giving our customers more ways to shop (Measure: Unique web users)

3. Building innovative common brands (Measure: 35% of group sales direct sourced, 50% of all product sales to be common)

4. Driving efficiency and effectiveness everywhere (Measure: Retail profit margin)

5. Growing our presence in existing markets (Kingfisher Economic Profit (KEP))

6. Expanding in new and developing markets (KEP)

7. Developing leaders and connecting people (Group employee engagement scores)

8. Sustainability: becoming Net Positive (Net Positive dashboard)


During the 2013/14 financial year, Kingfisher extended it omnichannel presence by upgrading B&Q’s online offer, including 20,000 extra products for home delivery (using Screwfix omnichannel infrastructure) and extended the B2B TradePoint website. Upgraded sites were also launched in Turkey, China, France and Spain. The group also trialled click and collect in France and Turkey.

During 2014, the aim is to extend the omnichannel capabilities across the group by having a 50% core common range across all businesses and the start of the four-year group-wide IT programme. Expansion will come from the international expansion of Screwfix to a country-wide online presence, and 4 stores in Germany and 2-store entry into Portugal with Brico Dépôt while looking for a strategic partner for B&Q China

GROWING PAINS

So, what have been the main problem areas in this process of transformation? “Culture,” comments Durbridge. “You can create enablers and empower customers to use those devices, but you have to have colleagues on your side,” he explains. You can articulate omnichannel, what it means to the different parts of the businesses, but at the end of the day, he believes that he should be the one left to worry about omnichannel, the bigger picture and what it means to the business, while colleagues concentrate on delivering their part of it.

One of the first changes that Durbridge implemented when he joined B&Q in March 2013 was the attribution and reward models for sales across website and stores. Sales which were still attributed by channel are now credited to stores with attribution based on the customers’ postcode and the store local to them.

Durbridge is keen to point out the importance of front-line colleagues in the ongoing development of the business. “There’s a lot of knowledge in store teams,” he says. Spending time in its stores shows where solutions are needed, so he encourages his head office teams to spend one day a quarter working in them to get a different perspective of the business.

When asked what advice he would give to others going through a similar transformation, he talks about aiming for a level of continuous improvement that doesn’t alter the core technology too far. He advises that systems such as SAP shouldn’t be customised to a point that upgrading becomes a big issue. In the way that Jenga blocks are balanced, so too are systems; change one element and the whole system can all fall down, he warns.

Projects such as Kingfisher’s SAP scheme can force the issue of how group companies can work together in the future. Durbridge believes they enable a company to ask: “What kind of business do you want rather than what’s the business you had in the past.”

With the omnichannel foundations in place, Durbridge is working to a 3-year roadmap, which he says gives a clear destination and vision but is flexible enough for “meanderings” as customer and technology needs change. While he compares omnichannel with a jigsaw, he says the current B&Q jigsaw ends with the Creating the Leader project, through which they’ll be making it easier for customers to improve their home, giving them more ways to shop while bringing the Kingfisher companies even closer together by increasing the amount of common product sold across the group. From the foundations of ‘Project Darwin’ B&Q really does seem to be creating a leader.
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