Internet in the Hardware Industry

Recently it has been published a European survey, in which I could see that in Spain, 30% of consumers considered the Internet as an option when buying tools. The thing it is that I was surprised because it is not as far from others European markets as I thought.

Encuesta: Which of the following products would you consider buying online when you need to purchase them?

We all know, that the web is changing the commerce and we also know that such global trend is now coming to the hardware and DIY sector, so I don´t want to spend time writing about whether online sales will have, or not important role in the future. I prefer discussing what new opportunities the digital world offers now! to the industry and what type of digital strategies are better for DIY and hardware industry. I think that the web allows us, today, to address two of the oldest problems in this industry, which are first, the difficult communication of the products with all its features and characteristics; and then the problem of the high number of references that a point of sale needs to handle in order to have a full offer.

Addressing global problems of the sector in a digital world

Regarding the first problem, most of the items sold in an industrial supply, hardware store or DIY centre have a practical purpose that can go from hanging a curtain to install a pneumatic screwdriver, let´s call that a Project, and such projects require of a certain knowledge of both the products to be used, and the project itself. However, too often the end users in store don’t know what tool or material to choose and once in the workplace they may have doubts on how to use it. This lack of information constrains the introduction of new or technically improved products for the simple reason that they are not understood by the users and it also forces manufacturers to invest in point of sale materials, which often do not reach the stores; and at the same time retailers are investing in staff time to explain the news to users who might end up buying the cheapest option. The web can make available to everyone, a lot of information in different formats, but perhaps because its dynamic content, I think the video is the most appropriate format for our sector.

I would like to mention, as an interesting example the Leroy Merlin Spain channel on YouTube, which has more than 35 million views, and as you can see is dedicated to explain projects.There are also very good YouTube channels focused in products, for example, the cannel of Sthil, a manufacturer that has nearly 3 million views and just 200,000 only in his video on sharpening a chain for a chainsaw. Estos son solo dos ejemplos reales que sirven para valorar el potencial para comunicar que la red nos pone en las manos . These are only two examples which serve to highlight the possibilities that the web offers today in order to communicate.

 Image: Stihl Youtube channel

The other of the old problems of our sector is the limited space, in the brick and mortar stores, that makes difficult sometimes to exhibit complete ranges, which prevents end user buying the most specialized products, usually with lower rotation, forcing the user to choose from a representation of the most sold. Today the Internet offers the possibility of selling products without a physical exhibition, and even without inventory, so that if the point of sale wants to expand the range of products can do so by adding to the physical store an On-line shop. There are many examples of hardware retailers already expanding their range using the web, perhaps one of the first to do so was Home Depot, entering www.homedepot.com and typing “drill” page offers 1512 items which only 177 are in stores. Obviously, behind this, there is a sophisticated logistic model, but the example serves to show that it is an existing option.

 Wide product range using e-commerce

In short, thanks to the Internet, the hardware industry, as a whole, can generate value by helping the user to choose better the products and also use them better and can also generate value making possible a profitable model for the large number of specialized products which due to their low rotation would not be profitable otherwise. They are two clear and also existing possibilities, but there are many other that will come and certainly should be explored.