Retail skills are engine of success

Retailers’ customer-focus and skillset make them perfectly placed to diversify, says David Wild.

Retailers specialise in selling the products that customers want and need to live their lives.

The list of goods and services that we offer is widening all the time as we branch into adjacent sectors like phone packages, insurance and even banking. Our industry is diversifying successfully because our skills can add value in these markets and they therefore provide a natural route for growth.

Car maintenance and repairs are essential services that motorists have to purchase but so far the car-servicing sector has not benefited from a full retail makeover.

Halfords has been involved with cars for years. We have historically specialised in parts and accessories for customers who want to repair and service their own cars. More recently the trend has been towards ‘Do It For Me’ because cars are more complicated and drivers have less time and inclination to DIY.

We have successfully responded by offering fitting in many product categories. Now around a third of the bulbs, blades and batteries we sell we fit. So our move into garage servicing was a natural progression.

Two years ago Halfords moved into this sector through the acquisition of Nationwide Autocentres. We felt the time was right for our brand to enter this market and that motorists would welcome a retail approach. The research also supported this view, with consumers saying they wanted transparency, trust worthy service, value and the reassurance of a familiar brand.

The UK market for vehicle servicing, MOTs and repairs is large. It’s also highly fragmented, with franchise dealers at the top end and a huge number of small independent garages at the other.

The sector also suffers from a high degree of customer dissatisfaction because it’s often difficult for them to judge the advice they receive, the quality of workmanship and the prices they are charged. Our research showed that many of these issues could be addressed through the application of retail skills.

So the focus of our Autocentres is to offer good value and trustworthy service to car owners. We set competitive prices and we display these prominently in each centre so customers know what to expect. We explain estimates and bills clearly in plain English and work to high standards.

We have rebranded the centres as Halfords Autocentres, relaunched the website, diversified into new product areas and marketed the chain using both conventional and digital media. We have also opened 24 new centres with a forward plan of an additional 30 per annum.

To check on our progress, customers from all centres are surveyed quarterly and feedback is measured using a net promoter score. This assesses what percentage of customers would recommend us. Any centres falling below a certain level are put on a management plan to improve their score.

The response has been very good, with strong growth in sales from both new and existing customers. It’s an encouraging result especially considering how they have been affected by the rising costs of fuel and insurance and are looking to save money wherever they can by deferring repairs where possible and reducing their mileage.

Business isn’t easy in the current economic climate but there are opportunities. Our experience in the garage sector demonstrates that often it’s our skills as retailers that are the key to unlocking value for customers in new sectors. 

• David Wild is chief executive of Halfords