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Love or loathe it, the term ‘omnichannel’ represents a force for major technology-driven change within ‘big box’ retailers like UK DIY giant B&Q, writes Miya Knights

An invited audience gathered recently to hear how UK home improvement giant B&Q is among a growing number of retailers using technology to pursue an ‘omnichannel’ business strategy.

Retailers and technology suppliers at the exclusive breakfast briefing hosted by Wincor Nixdorf heard how B&Q is working with the IT company to revamp its store systems.

Now primed for further roll out across the DIY retail estate, owned by parent company Kingfisher Group, head of business solutions, Tom Scott told attendees of the Retail Big Show 2014 held in New York by the US National Retail Federation (NRF) that the ongoing investment aims to put the customer at the heart of operations.

“We’re aiming for a totally consistent offer to the customer with the same information so they have the same experience whether they place an order instore, on the website, via one of the kiosks we’ve trialled, or if they call the contact centre,” said Scott. “We want to get to get to a place – and it won’t be in the distant future – when, if you’re purchasing an item in the store, we’ll know everything you’ve purchased.”

This knowledge could flag outstanding deliveries, or that the last order was only fulfilled in part and the store now has those items for the customer to collect that day. “We’re going to join the customer experience up that closely,” he added.

Consistent customer experience 

Scott even referred to the fact that omnichannel is a new term in retail. “There’s a sort of irony as ‘omni’ means all in Latin,” he stated, “but actually the IT implication for ‘omni’ is one. One record of transactions, one product database, one way of taking cash and one way of identifying the customer.”

The B&Q strategy may have coalesced around providing a consistent customer experience, but Scott also highlighted the work already undertaken by the DIY retailer to ready its back-office systems and processes. He described a three-year programme divided into three areas of focus on the supply chain, omnichannel operations and its store formats respectively.

The implementation of SAP forecasting and replenishment capabilities enabled B&Q to improve stock visibility. This helped to increase on-shelf availability and had a positive knock-on effect on inventory costs as well as sales. “More reliable planning allowed us to give manufacturers the information they needed to reduce their costs to us,” Scott said.

The retailer also overhauled manual processes by implementing RedPrairie warehouse management software (WMS) and radio frequency (RF) based scanning pick systems, which Scott reported had improved efficiency a great deal. 

“It has also given us an absolutely standard way of receiving stock at locations, whatever the source of supply; whether that’s direct to store, via a consolidation centre or pick by line for instance, it makes no difference. It [product] is received in the store and to any other location identically, which has vastly improved our stock file accuracy,” he explained.

Designing value-added offer

He also described how the company is working with Canadian interior design software company, 20-20 Technologies, to roll out new design software that will allow customers to customise their own kitchen order online, at home or with the help of staff instore. Scott told how B&Q currently uses an older version of the 20-20 software, but is working with the provider to roll out a new version for online that better maps out the customer journey.

Having delivered the first couple of phases of its omnichannel journey, the DIY firm has also been working with Wincor Nixdorf to test out improvements to its store formats and systems across its 350-store UK estate. “We have three store formats,” continued Scott, joking, “I would describe them as ‘large,’ ‘big’ and ‘far too big’.”

He also admitted that some of the store estate was ageing, in need of repair and difficult to navigate, with cold and dark areas that are uninviting. “So there’s a question we asked ourselves: ‘why should the customer choose B&Q?’ We are the market leader in the UK by quite a long way, but we needed to find a way to make our customers choose B&Q,” he said.

During manifesto store trials last year in Poole, Bognor Regis and Banbury, representing its three different store sizes respectively, the customer proposition that B&Q wanted to offer was that “the customer would be able to source everything they needed for a small or large project from the one store, sometimes through orders for collection or delivery.” Scott added: “The difference with the larger stores being that we can spend more time and effort inspiring the customer.”

Updating instore technology

In efforts to de-clutter the store, improve visibility, availability and move more stock into the back room, kiosks were introduced to showcase the entire B&Q range and allow customers to find and order products more easily. Managers have been equipped with tablets using the same kiosk software so they can spend more time on the shopfloor helping customers and ageing PC hardware is being updated with lower cost thin client computers. 

“What next?” asked Scott. “The first thing we’ve got to do is finish the roll out of our omnichannel offer, which includes the full introduction of our kitchen design tool by the end of this year. We then have another couple of big things to do to prepare for these new ways of trading. We’ll be replacing our entire LAN and WAN [large and wide area network] infrastructure and rolling out customer Wi-Fi in the stores.

“Like a lot of retailers in the UK, in response to changing trends and demographics, we’ll be ‘rightsizing’ our stores over the next few years. But as we do that, we’ll be putting in the learnings from our manifesto stores.”

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