Those who have been predicting the demise of the traditional merchant are being proven wrong.
Yes, there are fewer of us and there is more rationalisation to come.
Yes, we are no longer the dominant stockists of timber.
However we still handle significant volumes and the marketplace will continue to provide opportunities for the focused, progressive merchant.
Let’s look at some gloomy stuff first.
Warehouses will continue to capture more of the DIY market at the expense of merchants.
Hardware stores eager to replace turnover lost to the warehouses will increasingly turn their attention to larger DIY orders and smaller builder accounts traditionally serviced by merchants.
By relying on wholesaler stockists, they avoid the cost of carrying stock and can sell at a lower margin than that required by merchants. Some wholesalers may choose to bypass merchants to secure large sales.
It could be said, to paraphrase Gilbert & Sullivan, “The merchant’s lot is not a happy one”.
So what will we poor embattled merchants be doing over the next few years?
Hopefully we won’t be ignoring the changes taking place in our market. Merchants have long been regarded as timber specialists and will need to capitalise on this image as our point of difference to warehouses and hardware stores.
They will never be “timber specialists” and are unable to provide the services we offer.
Merchants will continue to compliment warehouses by providing services such as timber milled to sample, or cut and dressed to a specific size.
The use of modern milling equipment that allows quick set up times makes this quite profitable.
Merchants will continue to carry a broad range of timber stock, and source unusual specifications, reinforcing the specialist image.
The use of modern materials, handling equipment and racking systems will assist rapid customer turnaround and enable merchants to operate from smaller sites with all stock under cover.
Expect to see some merchants moving closer to warehouses.
Hardware stores need the specialist services that merchants offer. Merchants may well be building relationships with the very stores that captured some of their small builder accounts.
Many more merchants will embrace Information Technology that enables their customers to place orders at any time, day or night.
This will lead to night shifts for pulling orders and restocking. Delivery hours will be extended to accommodate a more demanding “just in time” customer.
Some merchants will develop a segment of their business to the point of becoming specialists in that particular field.
It could be, for example, engineered wood products, supplying and laying flooring, or the renovation and restoration markets.
Merchants are well equipped to participate in “do it for me”, and many will look to this market for growth.
Expect to see more loyalty programmes introduced as merchants strive to build long term relationships with their customers.
The opportunities are considerable for the merchant who continues to respond positively to the ongoing changes occurring in our industry, and is prepared to think outside the square.