2 home center latinamerica 2016

 

Home improvement is a growth market in Latin America. Chile has the highest penetration rate of home center in the region.

Major players have investment plans: Sodimac, Home Depot, Leroy Merlin, Easy, Leroy Merlin, Saint Gobain (Telhanorte), Lowe´s.

 

2 home center latinamerica 2016 b

 

Sodimac is N° 1 in home improvement, with u$ 5,331 million in sales in Latin America (2015).

 

Segmentation

Sodimac makes a first big difference between families (Sodimac Homecenter) and professional construction contractors(Sodimac Constructor).  In Chile Sodimac has other segments covered by Imperial and Homy, focus on woods and design respectively.

All companies offer a personalized place and direct telephone for professionals.

Home Depot has a small format (express) with 2000 m2 store (Querétaro, Mx).

Home Depot closed its 34 Expo Design Center stores in USA (2009)

 

2 homecenter segmentation 2

 

Segmentation is a valuable tool to get strategic direction and maneuver power, testing new business models, to get out of market saturation and exploit opportunities.

 

Saint-Gobain

Saint-Gobain Building Distribution is Europe’s leading distributor of building materials, the world’s leading distributor of ceramic and porcelain tiles.

The Building Distribution Sector brands are actively developing and rolling out their online strategy:  POINT.P Matériaux de Construction, Jewson, Raab Karcher, Dahl, Lapeyre, Keramundo, Fliesen Discount, Brødrene Dahl, Telhanorte, La Plataforma de la Construcción, Sanigrif, Vemac, Bergersen Flis, Flisekompaniet, Tegelgroep Nederland BV, CTD, Kakel Specialisten, Konradssons, etc.

 

According to Saint Gobain, the low cost of investment to launch an online commerce platform has reduced barriers to entry.

 

Launched in 2016 by Sain Gobain, Homly-you.com is the new digital intermediation platform connecting individuals to qualified premium professionals to conduct their renovation work (similar to TripAdvisor in hotels business).  They obtain first-hand information from clients and professionals, following where the consumer is going.

 

Home Depot

Sales grew $5.3 billion to $88.5 billion, an increase of 6.4 percent from fiscal 2014,  online sales grew profitably by $1 billion in fiscal 2015 to $4.7 billion in sales, representing growth of 25.4 percent from the prior year.

Online sales (% of Net Sales)

2013   3.5%

2014   4.5%

2015   5.3%

 

Value of creating an entrepreneurial spirit

 “Retail has changed more in the last 3 years than it has in the last 30 years, and that pace of change will continue to accelerate. We have to be prepared for potential disruptors to our business to make sure we are investing in the right places to serve customers. Our leadership team did a ‘war games’ exercise recently with teams pretending to be different companies and technologies. We aggressively designed strategies to go after our own business, and the results were eye-opening and caused us to make some essential changes and investments. It really lit a fire under our value of creating an entrepreneurial spirit throughout our company.”    Craig Menear   (Home Depot  CEO) 

 

 

Ferguson (Wolseley)

It is the world's largest heating and plumbing distributor to the professional market.  Its brands include Ferguson the largest plumbing wholesaler in North America.

The E-commerce accounted for £1.8 billion (19 per cent) of Ferguson’s revenue.

"Build.com, our B2C e-commerce business, continued to grow very strongly throughout the year"  2016 annual report.

In August 2016 the Group acquired Signature Hardware (signaturehardware.com), aTop 250 e-commerce retailer of fine imported kitchen and bath fixtures, plumbing supplies, hardware and home décor.

 

In which sector will the competitors be introduced? (M. Porter)

There are a lot of opportunities to segment at the pure online e-commerce.

 

Julio Sol

porcellanato.com

porcelanato.com