Homebase implementing strategic shift in face of changing retail landscape
Homebase is implementing a more attentive supply chain strategy and in particular a rigorous stock transformation programme, in order to thrive as a multichannel retailer.
The company, which is part of the wider Home Retail Group alongside other famous British brands such as Argos and Habitat, has admittedly reduced the number of its physical stores. But the company stressed this is not due to poor performance. In fact, Homebase has seen the percentage of online sales grow and they are building an infrastructure to support a sizeable increase in its total participation.
This has necessitated a change in the current operation and as a result customers can order a product online which then gets directly delivered from the distribution centre without the need for a retail store involvement at any point in the journey.
Chris Warn, Head of Supply Chain at Homebase, said: “It’s a rapidly changing retail landscape in terms of customers’ behaviours and expectations. I think they’re very much in a space of wanting to buy what they want, when they want it, from wherever they want it, expecting to have it delivered to wherever they want it. This is obviously changing significantly from the traditional bricks and mortar type model that stood unchanged for so long in the past.
“Stores are still very important to us, but they’re increasingly becoming a place to create inspiration and desire for our customers.”
The convenience factor of browsing and ordering anywhere at any time means the desire from customers to shop online is greater than ever and is only going to grow.
Aside from its online ambitions, the company is also asking itself what else it can do in its remaining stores to remain attractive to the modern day customer. So far, there are 80 Argos and 50 Habitat concessions inserted into existing Homebase stores. Warn said: “It’s all about making the space more appealing for the customer. There’s even been an introduction of coffee shops inside Homebase as well, so the overall customer experience is changing all the time.
“The stores still play a massive part. People like to come in to sample and test paint, get some doors cut, find the right nails, bolts and screws for a DIY job and so on. But people’s habits are changing all the time; it’s a much different landscape than it was a decade ago.”
Benefits of the new supply chain initiative and subsequent stock transformation program includes the fact it allows reinvestment, as better inventory planning means increased optimisation of stock. This then frees up capital as opposed to having a push methodology which can mean stock lying on shelves.
Warn said: “Here at Homebase our supply chain operations are a critical function to improve the overall business performance and customer satisfaction, not just a question of how many lorries you have! It’s allowing us to do things very differently – such as a ‘little and often’ mentality on store replenishment.
“The majority of our stock transformation program is driven from the store closures, but the rest is coming from being leaner, more agile in our supply chain and adopting alternative ways or working, such as being even more focused on efficient stock management whilst increasing the availability for the customer in all channels of fulfilment.
“We’ll also be selling more from the DC as opposed to from the store so there’ll be more direct deliveries and more click-and-collect in store.”
Alongside the focus on increasing online participation, in the next three years the company wants customers to be highly satisfied with stock availability across all channels. A new Homebase app has also been launched for tablets and mobile devices, and this has been downloaded by millions of customers already.
Warn concluded: “Essentially it’s about how we can leverage our existing infrastructure better to develop new strategies and be more reactive and driven as we go into an ever-changing digital landscape.”