Learn the New Truths About LBM Industry Ecommerce in our FREE Master Class

Since the start of the pandemic, ecommerce management demands for small-to-midsize home and building supply retailers have quickly evolved. Today, every lumber and building material (LBM) dealer needs to quickly adapt to meet the demands of their customer base and out-maneuver Amazon and the big-box retailers. The good news is that by prioritizing the new rules of LBM industry e-commerce, like lumber yard software, presented in Part One of our Ecommerce Master Class, your business can achieve the equivalent of opening a new 24/7 branch—at roughly the price of hiring one new full-time employee.

Here’s a sneak peek at five of the new industry truths you’ll be able to share with your team:

1. Amazon is the LBM industry goliath and is a direct-to-market channel for your vendors

Amazon controls nearly 40% of retail ecommerce LBM companies in the United States. Home Depot accounts for just 2.1% and Lowes accounts for 0.9%. Amazon earned $514 billion in this sector in 2022 and has not seen anything less than 109% growth in the last five years.

Amazon is committed to being a category killer, with 131% spending increases in the sector for the past two years. Evidence shows that many industry vendors are leveraging the Amazon platform as a channel to bypass LBM dealers and go straight to the market, and this can siphon away some of your goods if you do not monitor your vendors and their Amazon activities, and devise ways of competing. Though products are sold directly by the manufacturers on Amazon, the seller attribution is Amazon, which tells you they would like to keep their strategy hidden.

2. Home Depot is investing heavily in creating a seamless store-to-digital experience and BOPIS

One of the strengths of small-to-midsize LBM dealers has always been the expertise of your in-store associates. In 2022, Home Depot put custom digital headphones in every associate’s hands and Q1 of 2023, spent $1 billion in additional annualized compensation to attract and retain the best in-store talent, amounting to about a $10,000 raise per employee. This follows years of heavy investments in their stores, digital experience, ecommerce inventory management, retail/ecommerce integration, and supply chain to maximize online buy and pick-up in-store sales (BOPIS). Home Depot had $22 billion in BOPIS sales in 2022, accounting for 7% of its $157.4 billion overall revenue.

3. Every LBM dealer needs a uniquely branded, fully integrated ecommerce website and a commitment to BOPIS

Your customers are engaging with online ecommerce self-service content, whether your business meets their online needs or not. According to Shopify, “55% of [BOPIS shoppers] are now ordering after hours and the other 45% look to see what you have available and then come in store to pick it up, and “80% of contractors and tradespeople now are using their smartphones to check prices, availability, and product information.” Your customers are engaging online during your working hours and your off-hours – and if your ecommerce platform isn’t able to match your workforce’s effectiveness in providing accurate pricing and availability information and answering questions about products and ordering histories, they will turn to better-enabled competitors. An effective product information management system as part of a lumber yard software package is a necessity for small-to-midsize LBM dealers today.

4. Tradespeople, contractors, and builders now require a constant supply of accurate supply chain information

Since 2019, the supply chain crisis has taught your contractors and trades that supply chain challenges are business killers and can be avoided by working with capable ecommerce LBM dealers. To attract and retain their business, your ecommerce order management software must be equipped to provide accurate information on how many days or weeks out orders must be placed for supplies like windows and cabinets, updates on where their orders are, and assurances that deliveries will be consistently on time. This requires an automated ecommerce solution for representing up-to-the-minute quantity on hand and pricing, without a need for manual intervention. Because Amazon and Home Depot and other national chains are investing so heavily in the supply chain, LBM dealers must have a powerful ecommerce solution that enables them to compete.

5. The ecommerce game has evolved, thanks to influencers and multimedia content

Retail DIY customers engage heavily with online content, whether it’s yours or a competitor’s. While the big brands have content producers, many SMB LBM dealers are working with influencers to develop content or feature their products and stores in videos targeted at the DIY customer audience. Offering online content provides a 24/7/365 opportunity to engage customers and prospects in rich media that offers a branding experience for your business and sets expectations for a superior in-store experience. It also provides a necessary opportunity to capture contact information and data on interests and purchasing intent to conduct effective promotions and gauge marketing impact. In addition, working with influencers and content producers provides an enticement to your vendors, who now expect your business to market their products effectively online.

Are you ready to take the next steps in your LBM ecommerce management digital transformation? Watch our complete eCommerce Master Class Series presented by John Maiuri here, share it with your team, and use it as a launching pad for your 2023 ecommerce strategy sessions.

If you liked this article on lumber yard software, be sure to check out:

• The Growing Importance of Ecommerce: Why It’s Crucial for Digital Growth
• Talking Tech: Q&A With Industry Expert John Maiuri
• How to Make Your Website Better than Your Competitors