Three unique challenges faced by local builders’ merchants

Here on the Integrity Trader blog we cover a number of topics of interest to builders’ merchants, hardware stores, timber merchants and other construction industry traders. Back in May we took a look at some of the unique challenges faced by national builders’ merchants – businesses with numerous locations spread across the country, diverse customer bases and stiff competition from rivals both large and small.

12th June 2015

This week it’s time we focused our gaze on local builders’ merchants and some of the unique challenges they face on a day-to-day basis. How can builders’ merchant software help them to overcome such challenges?

#1: Competing with larger rivals

Perhaps the most significant challenge faced by local builders’ merchants is the competition provided by their larger, national rivals. National builders’ merchants tend to be better resourced, larger and more financially robust than local builders’ merchants, and the fact that they can be found in numerous locations throughout the country means that they have a level of brand identity local firms can’t compete with. The trick is to use your status as a smaller local business to enhance brand loyalty and increase repeat trade. Most customers will prefer to invest their money into the local economy rather than prop up a national chain, but only if they’re receiving a comparable level of service. Trader’s stock control function can help you to ensure that you always have your customers’ favourite products in stock, while point-of-sale hardware will make the transaction process swift and error-free, encouraging your customers to return again and again.

#2: Pricing competitively

National builders’ merchants also have an advantage where pricing is concerned. Larger, multi-site firms can afford to buy products from suppliers in bulk, benefitting from the best wholesale prices. These savings can then be passed on to the customer, while retaining a comfortable profit margin for the retailer. Because local builders’ merchants can’t buy in the same quantities, their prices are usually a little higher. How can you price competitively while retaining your profit margins? Sales and promotions will help you to attract customers with more competitive price structures, and Trader software can help you to manage and apply such promotions more effectively. However, most customers will be prepared to pay a little more at a local builders’ merchant provided they receive excellent, friendly customer service and the kind of local knowledge and insight they wouldn’t expect from a national builders’ merchant.

#3: Attracting repeat customers

Repeat customers are the cornerstone of any successful business. Encouraging customers through your doors to take advantage of an attractive offer or promotion is one thing, but transforming that passing trade into a loyal, long-term customer base is another matter entirely. Low prices and a broad range of products means that national builders’ merchants can often rely on repeat custom, but the same can’t be said for local builders’ merchants. One advantage local firms do have, however, is that they can get to know their customers individually. Point-of-sale data is crucial in this regard. Use Trader software to capture detailed point-of-sale data relating to customer purchase histories, credit records and real-time stock levels. You can then use this data to better serve your customers – keeping products you know they’ll need in stock, applying agreed discounts and credit limits at the till and recommending promotions they might like to take advantage of.

There are numerous challenges local builders’ merchants must overcome to achieve success, but they’re by no means insurmountable. We’ve created Trader software to help make the going that little bit easier and to level the playing field between national and local builders’ merchants. Contact us today to find out more about how our builders’ merchant software can benefit you.

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