Interview: Screwfix placing stores at heart of its digital model
It might have started out as a catalogue- based retailer that moved online but for home improvement retailer Screwfix most of its revenues today are generated through its stores that have just hit the milestone of 600 outlets.
When Kingfisher bought the company in 2005 Scott Parsons, operations director at Screwfix, says it had no stores and derived 50% of its sales from its website and the other 50% through its call centre. But the company recognised that a multichannel approach was the way to go as its customers were demanding new ways to shop.
Listening to customers
“The important bit in retail is that you cannot tell customers how to shop. You need to adapt your business to what they want,” he says, adding that two particular trends occurred that led to the creation of its stores business.
“Firstly, we had a distribution centre in Yeovil and people kept turning up to buy things and secondly, we had a lot of feedback that told us the service was fantastic but that ‘next day delivery’ was needed. The only way to go was the open stores,” he explains.
Five units were opened in 2005 and this has ultimately led to store number 600 opening recently in Hoddesdon, Hertfordshire. Despite the closures of numerous stores across the UK by many retailers Screwfix has arguably accelerated its store expansion recently with 100 new outlets having opened over the last 18 months. Fifty more are planned during 2018 and the 700 milestone is clearly on the horizon, according to Parsons.
“Part of our success is down to us being a true omnichannel business. We understand how stores and digital work together. We spend a lot of time understanding this offer to our customers,” he says.
The power of Click & Collect
This multichannel strategy is reflected in the fact that 90% of sales involve its stores and that a major feature of this is the Screwfix Click & Collect capability, which is up 21%. A growing chunk of these orders are made on mobile phones, which is up 43%. The bulk of the rest of the company’s turnover is for home delivery as walk-in sales at its stores are limited.
What Screwfix customers – and most of them are trade buyers – require is convenience and certainly of availability: “They need this certainly because they need to finish the job on the day. This requires very high availability and we have 99.9% accuracy of goods being available. They also want speed and to know how much their goods are when they make their order.”
Tech-savvy trade customers
This development of a multichannel approach by Screwfix very much reflects the adoption of technology by its core trade customers who Parsons says are “extremely advanced in digital and very keen adopters of technology”.
This extends to their use of social media, with Screwfix having a particularly engaged community. Many answer other trades people’s questions without the need for the company to intervene: “We leave it to them. We have no interaction as we think it is right that the customers have this platform. The core customers like to answer questions.”
