Grant and Stone Interview

"Hello, my name is Tony Pey. With me today is Darren House, Managing Director at Grant & Stone Electrical. Thank you Darren for joining us. Previously Darren held the role of Managing Director at Trading Depot, a very successful internet business that was built within Grant & Stone. He'll talk about that a little later I'm sure but first of all Darren could I just ask you to give me some background on Grant & Stone."

"Grant & Stone, family business since 1987. In 2019 Cairngorm Capital purchased the business and from then we've now grown to a wider estate of 74 branches and with over a thousand employees making us the largest merchant in Southern England. So yeah, so it's been a rollercoaster last couple years, but essentially a family business, we're still with the family mentality as well."

"And Grant & Stone of course services many lines of trade."

"Well the types of businesses we have are builders merchants, plumbers merchants, electrical wholesalers, timber merchants, bathroom showrooms, kitchen showrooms, and now with the wider estate we've got RTD with timber manufacturing as well and timber fabrication. And also with Trading Depot as our online sort of gateway to B2C and B2B customers."

"So a complete service for the contractor."

"Yep covers everything really, all building materials, everything inside the house really from the ground up."

"So really it's a one-stop shop."

"Yeah one account, one account. And that's what Kerridge also helps us do really is have that one platform, and gives us the ability to service all our customers with the ERP system."

"Interesting. Darren, you've mentioned how K8 has helped to accommodate those different lines of trade within the business. Tell me a bit more about how it works for the business."

"Well K8 sort of works for Grant & Stone really well in as much as it can be adapted for every part of the business. So on timber there's certain areas that we use certain functionality within the business. The warehousing for Kerridge, sorry the warehousing for Trading Depot we use certain parts for the system and integrations. And for me, the journey, when we started we looked at lots of different businesses that were supplying ERP systems, and we needed something scalable and it's obviously been the right choice, especially over the last 18 months of acquisitions."

"Yeah interesting. Darren tell me how important is cloud-based computing to your business?"

"Well the cloud has been great because we can just continuously expand and have no barriers and roadblocks for us. Really we just literally say we need to add an extra five branches on and it's just set up and done, so for scalability point of view it works really well. "

"We talk a lot today about digital technologies and how important they are to a business, but of course it's very important to be able to integrate other technologies into your core business platform. Can you tell us a little bit about the types of things that you've deployed at Grant & Stone?"

"We were one of the first or I think we were the first in NMBS to go EDI, and with the EDI integrations you know it saves a lot of time a lot of manpower and has enabled us to scale without taking on loads of new staff. And I think we do somewhere in the region of about 6,000 purchase orders, you know a month and so there's a lot of, there's lots of lines to each of those as well so manually someone doing that would have been a lot of work."

"Yeah, yeah absolutely."

"And also we've got several other parts of the business of integrations. So we've Magento 2 bringing orders into the system at Trading Depot, that's one area that's been key for us to have the ability to integrate the system and customise the system as we need."

"And of course it moves on to talking more about online trading. How important is online trading to your business?"

"Well it's a big part of the business. I mean it's not the biggest part of the revenue, the builders merchants is, but for us it's an important key part of the business and giving us the expertise going forward within the business to have a good online platform as the businesses and customers adapt and evolve over the years. I mean COVID has been a big part of that. In the last year we've seen a big flux to people using online, and we also during COVID launched WebTrade."

"How popular has it proven to be? Are you seeing a good take-up in terms of web and people accessing systems via the web?"

"Yeah the WebTrade system has been good. When we launched it we had about 60 people in the first week register for it so that was quite a good uptake, and there's a quite a few key customers use it every month to actually look at their invoices, download them and double check them so it's been a reasonable start."

"Cool. One of the things I think people will be interested in is in terms of your experience on WebTrade generally the do's and the don'ts, so any advice that you might offer people in terms of how to adapt to a web trading platform?"

"Yeah don't get involved in it that's the first part, and I did that to you, yeah don't get, I mean the website is difficult, the web trade industry is difficult because there's certain people who don't understand what they're doing with it and with that, most of them just tend to go online and sell a product have no understanding of the costs, the infrastructure behind it. For me if you're going to go online you need to just look at it as a business on its own two feet, have a good P&L for itself, and say you know what, this has got to be a business on its own. If you do that then you'll find that you'll invest a lot more money in the technology, web platform, you'll spend a lot more time and investment into the infrastructure, the staff, the people around it, because what most people do is don't take that factor and those costs involved to the business. That's probably the biggest thing that most people don't do and then they find out after a period of time that actually it's losing money as its own entity, but yeah that's one of the biggest things. And going with a good partner going forward, having a good partner that can adapt and be flexible and have a good support for you because otherwise you get trapped into a, you can't move forward."

"Just how important is that integration in your view?"

"The integration of the web has been excellent for us because we're doing sort of like five and a half thousand orders a month and there's no manual re-keying of the orders. So if you think there's five and a half thousand orders just how many people that would take to recur re-key multi-line orders that'll be a lot of work. So yeah it's, we couldn't run it without it."

"Excellent. People sometimes overlook the importance of marketing with regard to internet trading. What advice would you give people in respect of marketing their internet presence?"

"It's really important, it's key. I mean there's different areas of it, you've got your paid sponsorship, you've got your, just your brand awareness. I think having a mix and a blend of the both is important, but having a key strategy to make sure you're looking at return on investment all of the time, they call it ROAS and that's a, that's a big thing. To make sure you're actually tracking the costs goes back to having its own P&L again, tracking the cost to make sure you're getting an effective return on that investment, because most people don't. They pay a pound a click, and making 50p on the product, it just doesn't add up."

"So really Darren, I think your message is, really consider your investment strategy. Have a strategy but keep an eye on the money."

"Yeah it is, it is what we are, we've actually looked at two businesses and both businesses that we looked at as, from an acquisition opportunity had web businesses, and when you look at the actual, the P&L of the web business, it doesn't make any money. So you've got to make sure there's always kind of a strategy behind you to say, you know over the next three years we're gonna get to a certain point and this is what we're gonna do to make money. But a lot of people do it, seem to do it for love, it's not the money. It's true."

"An expensive business for love."

"It's expensive and it's for love. Yeah definitely, definitely."

"We've talked a little about digital technologies and the importance of those. I believe you've implemented a digital solution already within the business, electronic point of delivery solution, ePOD, can you tell us a little bit more about that and perhaps the other apps that you're going to look at?"

"Well we've, the apps deployment we've used with K8 is that the main one we've really gone for has been excellent for us is the ePOD. ePOD for us has been revolutionary in as much as that there's no filing back at the branch, so it's saving a huge amount of time, and back in the day that used to be like the Saturday morning job, file the paperwork, it was normally the junior in the branch's job to file it on a Saturday morning, and that's all, that's all gone with ePOD. I mean we use the signature captures on the counter, we've used that for a long time, and now ePOD has just given us a full circle of just paperless within the business. Not quite paperless, there's still too much paper, but it's certainly, from the customer signature point of view it's really good.

And an added value without something we didn't actually think of during the process of deployment was that when the customer does have an issue or that something goes, say a customer goes bad and then you need to collect debts off the back of it, when you try and get the signatures, you've got all the signatures, so you can get that straight when it does unfortunately, you have to go to court you've got all the signatures straight away. It's not something you have to wait for, someone's not filing around boxes trying to find copies of PODs, and then find out it was never filed in the first place. So for now it's just, it's just there. So that is a little fall out of the back of it that makes it so much easier to do."

"And Darren, what other technologies are you thinking about deploying in the future?"

"ePick for Trading Depot I think would be, would be really useful with efficiencies of picking. And then going forward we're looking also at eReceipt as a way of receiving and deliveries in."

"Cool. One other question in terms of catalogues and data, Darren, and the importance of that. How do you see the future of ETIM for a business such as Grant & Stone?"

"ETIM's an interesting one. I think ETIM's going to take a long way for the industry to get there. I think that's the biggest problem with ETIM. I think it's going to be very useful, and I think certain parts of the industry and certain businesses will find it very, very useful, but when you get into more data driven sales things, like you know DeWalt power tools for instance, that would be something which is great where ETIM will help the guys on the counter have all the data they need. So yeah I think, and also on the electrical side actually we find that there's a lot of data behind the lamps and the color temperatures and the fittings and what it's made with, and again with fire on certain products I think it's going to be key. So there's certain areas I think ETIM will assist with."

"Excellent, yeah very incisive. Darren that's been fascinating, I could talk to you all day on these topics, and thank you for taking the time to be with us. I certainly hope you found that short conversation with Darren of interest. If you'd like any more information on anything that Darren's had to talk about or any of the products involved, please don't hesitate to speak with your account manager or just contact us and we'll gladly help provide that. Thank you for joining us."