How younger generations are transforming the building materials trade

A new generation of customers is changing the building materials trade. During the Euro-Mat Forum in Split, retail strategist Steve Collinge (Insight Retail Group) showed how buyers are influencing the playing field. His message was clear: customers are taking control, new generations are setting new demands, and digital marketplaces are becoming crucial growth channels. How can retailers keep up with this market?

According to Collinge, the biggest shift is that power no longer lies with the manufacturer or supplier, but with the customer. ‘Brands are increasingly skipping the middleman and focusing directly on the end user.’ Whether they are professionals or DIYers, they expect relevance, convenience and direct access to products and information.

This also puts pressure on the traditional distribution model. Traders must add value more than ever. ‘It’s no longer just about inventory management,’ says Collinge. ‘You have to offer solutions to specific customer problems. Otherwise, they will look elsewhere.’ Partnership is essential in this regard. Mutual trust, transparency and joint innovation determine the success of the collaboration between brands and traders.

Younger generations have grown up in a digital world where speed is taken for granted. They also expect products in the construction sector to be easily, quickly and flexibly available – both online and offline.

Retailers in various European countries are actively responding to this. For example, some chains deliver to construction sites within an hour, even large items. Smart lockers are installed at construction sites so that tradespeople can pick up their orders independently and securely using a code on their phone. These innovative logistics solutions reduce waiting times and increase productivity in the workplace.

‘For these customers, a trip to the shop is not necessarily convenient, but rather a waste of time,’ says Collinge. The lesson is clear: convenience is no longer a bonus, but a basic requirement.

Marketplaces are also rapidly developing into dominant sales channels. ‘Today, 56% of all global online transactions take place via marketplaces,’ says Collinge. Think of universal platforms such as Amazon and eBay, but also specialised construction platforms.

A striking example comes from Toolstation. The chain placed 5,000 products on eBay at identical prices to those in their own webshop. Within three months, it turned out that 97% of customers on eBay were new — often younger and unfamiliar with the brand.

Collinge also spoke with the CEO of Wickes, a British chain with 250 branches: ‘If you reach a customer via a marketplace who would otherwise never visit your website, you gain reach and potential loyalty — especially if that customer comes to pick up the order in the shop.’

Still, it’s not an easy route. ‘Just jumping in can cost money,’ Collinge warns. ‘Marketplaces require a well-thought-out strategy and operational discipline. But if you do it right, you open the door to completely new customer segments.’

Many retailers are looking for a balance between a wide range and fast service. Collinge acknowledges that keeping a limited set of popular products in stock (‘never out of stock’) is a smart basic strategy, but warns against too much restriction. “Retail revolves around three things: price, range and service. Amazon doesn’t dominate because of one of those factors, but by combining all three.”

With dropshipping and direct collaboration with suppliers, retailers can offer a wide range without keeping large stocks. ‘You can make a profit without ever touching a product,’ says Collinge. ‘That’s good for cash flow – provided your delivery reliability is in order.’ Smart inventory management and real-time data exchange with suppliers help orders run smoothly and prevent customer frustration.

The behaviour of young customers is the common thread running through all these developments. They orient themselves online, expect transparency and want frictionless processes. Collinge points to his own children as an illustration: “They don’t know a world without direct ordering. For them, everything has to be fast, digital and mobile.”

Those who focus only on today’s customers will miss out on tomorrow’s customers. That is why, according to Collinge, it is crucial for retailers to invest in knowledge about this new generation: how they think, where they search, what they expect. And above all: how they remain loyal. Innovation in communication, such as the use of social media and interactive platforms, is playing an increasingly important role in this.

Steve Collinge’s presentation emphasised one key message: the rules of the game are changing. Young customers set the pace. Digital marketplaces open new doorways. And only those who collaborate, innovate and truly solve customer problems will remain competitive.

‘It’s no longer about who has the largest market share,’ concludes Collinge. ‘It’s about who best responds to what customers need, now and in the future.’