ECI Software Solutions Comment: Q2 2024

Spring has proven better than the previous quarter and less volatile than last year, although it remains challenging. We’re seeing increased activity from our e-commerce customers, with more people researching and shopping online, and particularly strong growth in the number of appointments booked with design consultants for kitchen and bathroom showrooms. We anticipate this trend will continue as people stay home and renovate, while interest rates for new builds remain high.

For merchants, it’s crucial to provide builders with an easy quoting, ordering, and payment experience. We see ECI’s merchant customers in the UK and North America investing in strategic customer rewards programmes. These benefit merchants by encouraging repeat business and builders benefit with lower prices and more flexibility, leading to higher margins. However, loyalty and rewards programmes do not have to be simple discount schemes. When used strategically, they can encourage upselling and larger projects, as builders can pass their savings to clients, enabling them to afford bigger projects. This creates a win-win, as larger projects help merchants move inventory more quickly.

Merchants should consider investing in sophisticated quoting and ordering tools. Quoting software allows builders to log in and factor their custom margins directly in the quote. A seamless tool for ordering from any supplier, including buying groups, enables merchants to offer builders various options and price comparisons for materials. Providing builders with direct visibility into inventory and pricing schemes results in a better customer experience and facilitates a strategic approach during difficult times.

High inventories are a risk to merchant cash flow. Reducing inventory, even incrementally, can benefit profit and loss. Timely payments from builders are crucial, and online tools that allow customers to pay in full or in instalments from anywhere, or provide automatic, consistent payments over time, can help builders and merchants with cash flow management. Regular partial payments are proven to be better than sporadic full payments. And, offering payment options, such as BACS, can reduce fees and interest associated with credit card payments. That’s an easy way to save customers money without impacting your margins. Looking ahead, it’s important to focus on small wins that keep making progress. Strategies that support merchants and builders can help maintain the momentum of the rising index, even if progress is incremental.