A bathroom wholesaler isn’t really the sort of company you’d expect to take on the challenges of digitalization. But the GC Group is doing just that: with consistent branding, innovative concepts and clever strategies, the company is taking a very traditional sales structure into the future.
The corner bath with whirlpool, a spacious shower unit with rainfall showerhead and massage jets, the elegant fittings and faucets seamlessly mounted on the curved basin: many home owners and tenants dream of having a beautiful bathroom and pay a lot of money to make that dream reality. In some cases, this oasis of well-being can cost as much as a mid-range car.
Many of those looking for their dream bathroom will sooner or later end up in a GC-Group showroom; the company is made up of more than 100 independent wholesalers for building-technology products throughout Germany. It’s here that a complex buying process begins. It’s a process that has evolved tremendously in recent years – and it is still evolving thanks to digital technologies.
To understand this process, we first need to take a moment and look at some background. In 1966, the GC Group, whose 22,000 employees do business at 1,400 sites in 18 countries, announced in writing that it was committed to what is known as a three-tiered sales channel: three partners – the manufacturer, wholesaler, and professional tradesmen – have a binding form of cooperation.
Tradesmen, wholesalers, and manufacturers work closely together
This is how it looks in practice: The sales process begins at one of the company’s bathroom showrooms. Often, the tradesmen who will later install the bathroom are present – the GC Group doesn’t make money without them. These professional fitters buy the products at wholesale price and invoice them to the customer together with the costs for their installation services. There is no price maintenance; the tradesmen decide what to charge. In turn, they benefit from the warehousing and availability of the products, just as the manufacturers benefit from only having to deliver their products to around 50 GC-Group logistics centers rather than tens of thousands of tradesmen.
So far, so good. For decades, the company’s role of providing a link between the different parties was successful. Everybody was happy. That was until the internet got bigger and bigger and, while it wasn’t a threat, at least posed a challenge for many skilled workers along with wholesale and retail companies. “Consumers have more information in their hands from the beginning, they know the prices, can buy parts online, and sometimes even order the installation services at the same time”, says Alexander Gelsdorf, Head of Marketing, who has been at the company for six years. “In order to expand our business model even further, it was necessary for us to find new solutions. We wanted to bring the online and offline worlds together and take a big step into the future.”
Consumers have more information, they know the prices, can buy parts online, and sometimes even order the installation services at the same time.
A strong brand for digitalization
The GC Group developed a strategy to take the entire business process between end customers, tradesmen, and manufacturers into the digital world. A part of this strategy is developing the “Elements
Shower partitions are hidden behind elegant yet simple grey walls; faucets and washbasins are arranged in a line. In five places around the low rise building there are display areas that give potential customers an impression of how their bathroom could look. Two consulting tables grace the entrance area, their tops forming large screens. Here, Alexander Gelsdorf shows how the entire sales and consultation process can start off as a face-to-face meeting and end up being continued online – as well as the other way around.
On the website, for example, customers can determine what kind of bathroom person they are. After a good dozen questions, the self-learning algorithm narrows down their requirements; in addition to suggesting suitable products, the website also provides them with additional information and inspiration. “We provide those who are particularly interested in the environment with facts about energy and water consumption along with videos and articles that talk about the materials, where they come from, and the local working conditions”, Gelsdorf explains. On the other hand, people looking for a luxury bathroom can watch stories about extravagant hotels, while functionalists can immerse themselves in the technology.
Digital link between customer and company
That sounds great, but do these ideas bring business? To marry the online and offline worlds, the GC Group goes one crucial step further. The themed worlds can all be found in the bathroom display areas – and the sales advisers can use their iPads to see what the customers entered online and take this information into the sales discussion. “In this way, we are generating an all-round package that understands what the customer needs and takes them very seriously as a result”, says Alexander Gelsdorf.
Last but not least, consumers often do part of the planning themselves at home by entering the size of their rooms along with the doors and windows into the tool, and trying out particular bathroom elements. This has a considerable impact on the next steps. “A lot of customers are incredibly creative and want to contribute to the process, which, of course, is made easier by this common online tool”, explains Gelsdorf.
In this way, we are generating an all-round package that understands what the customer needs and takes them very seriously as a result.
Shopping cart is filled automatically
Once the customer has chosen a bathroom, the adviser summarizes the information and automatically creates the shopping cart with all the individual parts. This is the point where the tradesmen join the digital process: they are automatically sent the information and use this as a basis for giving the customer a quotation that includes the parts and their services.
If the customer decides to accept the offer, then the order is sent digitally to the nearest GC Group warehouse, where it is put together and delivered to the required location in one of the company’s 1,650 lorries. “We can also reserve any number of products for the customer – after all, when it comes to building and fitting, you never know exactly when the work in other areas is finished”, says Walter Laum, responsible for process organization in IT at the company. For that to work, the logistics must be perfect – and at the GC Group, that is a world for itself. For example, the warehouse in Stuhr, Germany, stretches for more than a kilometer; 200,000 parts are either available on-site or can be ordered and delivered within 24 hours.
Around 9,000 fast-moving items – in other words frequently ordered parts – are also available for the tradesmen to collect day and night in what is known as an ABEXe – an express collection depot. There are more than 800 of these depots across Germany – one within six minutes of any location in the country according to the GC Group. Here, the ordering process also takes place online. In just a few clicks, the tradesmen can order the most important products for plumbing, heating, air conditioning and ventilation, electronics, installation, and roofing technology online and collect them shortly afterwards from one of the shelves.
Shop system and logistics depict the complexities of the sector
“We have continued to adjust our ordering system and make it simpler and more intuitive”, says Walter Laum, referring to the particularly complex nature of the sector. “There is a tremendous amount of special, unique cases – not least because the products we offer are so varied and different, from washers to meter-thick pipes that need to be transported by crane.”
This is all covered by a shop system called “GC Online Plus”. Tradesmen, planners, and architects can retrieve information about all the products and their availability, and can view prices, their own shopping trolleys, and invoicing activities. The features are also available in the app, providing the core target group with further added value. “The tradesmen are often on the road or with their customers, so they don’t spend a lot of time in the office at their computers. Having an overview on a mobile device is therefore a tremendous help”, says Laum. “Furthermore, the catalog is also available offline, which is very useful on new housing developments in the countryside or in cellars without cell phone coverage.”
A lot of the tradesmen recognize the value of these new options and use them from the beginning of the process; some, however, need a little convincing. That doesn’t surprise Alexander Gelsdorf. “There are a number of very innovative and future-oriented businesses that understand that now is the period – when things are going well – when they should be preparing for more difficult times in the future. Other businesses see less need for action because their order books are full.” With these companies, Gelsdorf continues, the GC Group needs to make the benefits these changes have for daily business both clear and tangible, and allay any fears and reservations. “That works best when we bring our customers together – after all, the impact is greatest when tradesmen can talk directly among themselves.”
Digitalization with a lot of experience
In any case, the GC Group is following a well thought out plan. For Walter Laum, this is on the one hand due to the GC Group engaging with the internet and digitalization as early as in 1995. Klaus Hollweg, who was in charge at the time, gave his IT specialists free rein to experiment and design their own systems, which led for example to the company developing and programming the first online shop in their line of business.
“On the other hand, we haven’t adopted a disruptive approach, as we are always part of the process and need to be constantly focused on the end customers, the tradesmen, and the manufacturers”, says Walter Laum. “Our approach isn’t purely business-to-business or business-to-customer, but rather a complex mix of both.” The guiding principle has always been to ensure that all partners are considered. Laum is certain that for IT structures to be successful, it’s important that they both differentiate themselves and rely on standards.
They have built the core applications themselves, and the interfaces, for example, to the various manufacturers of bathroom, heating, and air conditioning products have been harmonized with their colleagues in the industry. “To achieve this, we work very closely with software companies and our colleagues from the various trades in the wholesalers association and discuss technical details”, explains Walter Laum. “We’d rather try out ten things and dispose of nine of them than agree on a solution that is less than perfect for our needs.” The fact that the GC Group’s digitalization measures work so well is, Laum believes, also down to the company’s structure.
On the other hand, we haven’t adopted a disruptive approach, as we are always part of the process.
IT pros share experiences
With 75 employees, the Group’s holding company, which links together the partner companies, is the central body responsible for IT across Europe. In addition, there are support departments in the branch offices that had their own systems 20 years ago. “Our partners provide us with important information and tips from everyday experience, which is then incorporated into development. The way we then implement projects is, in the end, up to us”, says Walter Laum, describing the process.
For certain new features, for example integrating smartphones and tablets or innovations in the merchandise management system, there are and already have been a number of pilot projects across Germany. “Our advantage is that while we operate like a large, medium-sized company, we are actually made up of several companies”, says Laum. “This means that many of the new developments come directly from IT professionals on site or from the specialists in the bathroom showrooms and logistics. They know best what the manufacturers, tradesmen, and end customers need, and this helps us to find the best solutions in the Group.”
Walter Laum is certain that the company has put itself in a good position for the future. But there is always work to be done: “We are constantly thinking about where we can automate or even digitalize processes.”The company is also thinking about data lakes, for example, which are set to complement traditional databases. Here, information is stored and analyzed in its natural format. “The benefit here is that we can, for example, collect data from social media, information on the markets, on the weather, or even the sensors in air conditioning and heating systems and afterwards find correlations. By combining and retrieving this data in a clever way, we can create added value for our business.”
“What’s more, we are increasingly looking to digitalize the know-how of our employees”, adds Laum. “For example, it takes years of sales experience for our colleagues to learn which product combinations work and make sense. If we can make that knowledge more quickly available to younger colleagues or new employees, then they can do a better job of responding to customer needs.”
