Financial journalist and TV broadcaster, Steph McGovern.

Industry Forum: Opportunity

Published:  25 June, 2017

Financial journalist and TV broadcaster, Steph McGovern, kick-started the Industry Forum on day two of this year’s BMF All-Industry Conference, and talked to delegates about the skills gap issues in the industry, and the importance of recruiting a younger generation into the merchanting sector.

“We don’t value vocational qualifications or trade skills enough in the UK,” she told the audience. “Instead, there is a preference for school leavers to go to university, rather than carry out vocational training.”

Steph continued: “Young people are an invaluable resource in the construction industry, and more should be done to encourage the development of young talent in the industry and help them get on the employment ladder, rather than they be judged on their exams.”

While job related expertise is essential in any profession, possessing ‘soft skills’, which include intangible attributes such as punctuality, flexibility, good communication and co-operativeness, are increasingly just as important and are becoming more valuable than exam results, according to Steph.

She said: “Soft skills are often undervalued, and there is far less training provided for them than hard skills. While your technical skills may get your foot in the door, your people skills are what open most of the doors to come.”

Identifying the fact that some businesses are working hard to promote employment opportunities to the younger generation, Steph believes that social media platforms, such as Facebook, Twitter, Instagram and YouTube, are a great platform to get in front of people and communicate to them.

The age of the distruptor

Andrew Harrison, Group Commercial and Business Development Director at Travis Perkins Group, followed hot on the heels of Steph’s presentation and spoke about how while traditional values in merchanting still stand, we are now living in an age of disruptors where forward thinking companies pumped with smart technology are making buying easier, simpler and more convenient for customers.

“Customers needs are changing and they are becoming less loyal because they can browse products online and instantly compare prices to ensure they get the best deal for them,” he said.

According to Andrew another driver of change includes disintermediation, where the middleman is cut out and companies deal directly with customers. To prevent this from happening, Andrew believes that merchants must create value for their customers in order for them to stay ahead of the competition.

Referring to a number of well-known brands such as Uber and Airbnb who have successfully embraced change and disrupted the industries they operate in, Andrew referred to organisations within the merchaning sector who are also offering their customers something different.

“Toolstation and Screwfix are a disruptor in our industry because both companies have a consistent omnichannel offering, whereby customers can shop the same way through in-store, website, mobile app and telephone, regardless of their location and time,” he said.

“We also have our own industry examples of organisations who have embraced change. Selco, Huws Gray and MKM Building Supplies, are all prime examples,” Andrew acknowledged. “Selco, with its fixed price offering, is taking market share and is consistent across all channels - both in-store and online; while Huws Gray employs local people who understand the needs of local tradepeople; and MKM Building Supplies provides its branch managers with a stake in the business.”

Concluding Andrew’s presentation, he told the audience: “We all work in an amazing industry that has a great future, but it is changing. There’s no denying that we’re in the age of the disruptor, and while transparency is the battle ground here, I still believe in the core values in which a builders’ merchant can offer customers.”

A merchant’s story

Shanker Patel, chief executive officer of the Lords Group, was next up to the stage and drew on his involvement with the family-run builders’ merchant.

He discussed how the success of the Lords Group is centred on the company’s strategy, which is focused around people, plant and premises, rather than price. Shanker said: “Great people make great business. We have created a unique customer and team focused culture where people matter more than profits. Our team-focused culture is pivotal in what we do and what we have achieved to date.”

Identifying that the builders’ merchant is entering into “exciting but challenging times this year and beyond,” especially with the continuing rise of e-commerce, Shanker believes that big doesn’t mean better and ultimately the company is “in it to win it.” He told the audience: “Through hard work, great attention to detail, high levels of customer service, and strict financial management, we’re taking risks and seizing opportunities.”

Highlighting the company’s journey of ‘change, challenge and learning’, Shanker then went on to explain how it’s important for businesses to identify opportunities and act on them. “Change happens every 24 months, so it’s important to innovate and challenge fixed ways of thinking, and identify that without risk, there’s no reward,” he concluded. “Observing and reacting to a changing landscape is key. Businesses must focus on the importance and not on the immediate.”

A manufacturer’s perspective

Finally, Glen Sabin, Managing Director of Polypipe’s plumbing and heating division, gave a supplier’s view of the sector as part of the Industry Forum.

“Manufacturers must innovate to satisfy customer needs, which in turn, will drive value for the builders’ merchant sector,” he said.

One of the biggest challenges facing the construction industry, according to Glen, is the fact that it is traditional and slow moving. To tackle this issue, he believes that manufacturers and merchants need to collaborate with one another about modern ways of thinking.

“For those manufacturers who are trying to innovate and understand what customers want, they are the ones who are taking a long-term view,” he told the audience.

Despite the slow pace, one area that is picking up is off-site construction, according to Glen, who said: “There is more demand for off-site construction, and while the industry is struggling to make it at the moment, they will crack it. It will definitely change how products are delivered to the market in the future.”

In a world where technology has changed peoples spending habits, for merchants to create a competitive advantage they have to offer something different. “Merchants have to provide customers with instant information to enable them to make their purchasing decisions, because if they don’t they will find alternative ways to purchase their products,” Glen said.

Another area whereby merchants can build better business is through delivering genuine value to customers. Glen explained: “Selling new products can be difficult, so it’s vital that merchants invest in people so that they have the knowledge and skills available to offer their customers a fantastic trade counter experience.”

In conclusion to Glen’s presentation, he said: “Change is constant, due to new technology. We just all need to move faster to keep up with the pace.”

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