Saint Gobain seems to have solved the conundrum of customisation in home improvement. The glass and gypsum major is employing technology, and a unique direct-to-customer (D2C) approach, to customise solutions for customers across the country. With its recently launched My Home retail format, the company is offering an attractive model to serve customers who are undertaking home construction and renovation. Home and hospitality business head Srihari K explains that Saint Gobain’s D2C shift is premised on customisation and technology.
Window systems, modular kitchens, shower cubicles, false ceilings and roofing are among the home improvement projects that command significant budgets from the customer. Saint Gobain has ventured into all these challenging categories through My Home, a phygital (physical plus digital) business that positions it right in front of the customer.
“Customisation has traditionally been the bane of businesses involved in the Indian home improvement space,” says Srihari. “Great products have failed because they could not be rightly installed at non-standardised sites, leading to their suboptimal performance. We have cracked this challenge by creating a phygital infrastructure that allows us to handhold our channel partners as they serve their customers.”
My Home is a retail concept for showcasing products where Saint Gobain can add significant value. The initial categories include UPVC windows, glass shutters for kitchens and wardrobes, shower cubicles, mirrors, and glass-fibre-based wall coverings, where glass is the core material. Gypsum-related categories are ceiling and drywall solutions, shingles for roofs, and waterproofing, where too Saint Gobain has core competency and market leadership.
But My Home is not a regular retail operation; it is replete with technology. The customers’ journey of discovery and consideration starts online through an interactive website, where they can select variations and visualise the entire project. The website leads them to the closest My Home outlet where they get to touch and feel. Saint Gobain’s service team then takes over to ensure fulfilment, including onsite measurement, delivery, and certified installation.
“We have used a physical plus digital approach, which allows us to integrate our channel partners and their customers into a single relationship. Through the physical My Home outlets, customers get a uniform experience that is curated by us, while our digital infrastructure allows us to monitor their entire journey.”
In July 2021, Saint Gobain’s executive director Hemant Khurana spoke to me when the My Home national roll out started. Since then, the business has evolved into a 70-strong network, with 22 of the outlets located in the six large cities and the remaining in tier 2 and 3 cities. According to Srihari, “The channel partners are very happy with our approach. We are confident that we will double the network in 2023. Most of the outlets are coming up in smaller towns, which are the next big markets for home improvement.”
The My Home model, says Srihari, is a good proposition for partners since it does not involve any inventory. “We want partners who share our values of customer focus and transparent business. They are a representative of Saint Gobain in their area and can also resell several of the products to display partners.”
My Home outlets typically take up 800-1,000 sft of space and call for an investment of Rs 25-30 lakhs in interiors and displays. Saint Gobain provides the master layout, and shares in the cost of the display. It trains the partners’ sales and installation teams, undertakes awareness campaigns on media when a new outlet is launched, and periodically organises influencer connect programs. The My Home is an exclusive brand outlet, with no competing or complimenting brand present in the earmarked space.
Srihari says that one year since the launch, the first My Home which came up in Chennai has already broken even for operating expenses. “Their average ticket size is Rs 3-4 lakh per order. Our installations are very well managed, and we are getting a high net promoter score. We have already increased our window capacity by 3x. All these factors make us extremely optimistic about future growth.”
Saint Gobain’s assessment of the home improvement market is based on trends in residential real estate. Home sales are back in volume terms this year, having grown 40 per cent year on year. Besides, homes have emerged as a preferred investment vehicle despite inflation and rising interest rates, particularly in the 2-3BHK segment.
Between April and September 2022, approximately 1,73,155 homes were sold across the top 7 cities; approximately 87,375 units were sold in the same period a year ago, says Santhosh Kumar, vice chairman of property consulting firm Anarock in his recent article Homes Worth Rs 1.56 Lakh Cr Sold in Top 7 Cities in H1 FY23.
Interestingly, organised builders have remained averse to investing in most of the improvements required in a dwelling. Except for windows and doors where penetration is 100 per cent, in other areas including cubicles, kitchens and ceilings it is 7-8 per cent or lower, indicating a huge market opportunity.
The fact that 75 per cent of the residential infrastructure that would be required in India by 2050 is yet to be built provides clear headroom for growth for companies engaged in the home improvement industry. Besides, the quality of products and services that customers now demand has gone up significantly. This is due to their ability to obtain knowledge through the internet, make informed decisions, and experiment in their quest for value. All this augurs well for tech-driven players like Saint Gobain.
Before the launch of My Home, Saint Gobain put in an investment of over Rs 100 crore for setting up fully integrated facilities for windows and shower cubicles at Chennai, and glass shutters at Bhiwadi. It also built a team of professionals for undertaking measurement, installation, and post-sales services, that would support the My Home stores as well as installation partners. A digital backbone – website, CRM, partner mobile app – connects each stakeholder in the buying process, tracks and traces orders, and garners feedback in a seamless process.
“We are using a patented measurement tool that eliminates human errors, which commonly occur while sharing data with sales and manufacturing teams. The measurement to BOM and estimation process is completely digitised. The system suggests the most appropriate sizes by factoring in span and load, and auto-generates detailed installation drawings. Thereafter, every piece of glass is etched with a code that carries data of the order and the exact location of installation, right down to the floor and room. Through technology we aim to simplify customisation, which otherwise is the biggest challenge in this industry. We are bringing uniformity to the service levels across our outlets.”
D2C as a business approach has caught the fancy of many an organisation. But it’s easier said than done in the home improvement industry, given the diverse priorities of intermediaries, influencers, and the smart customer family. Saint Gobain’s mission to add value to the industry, and its global multi-decadal experience in building materials, could bring a decisive change to the way the business of home improvement is done in India.