Cut to the Chase
That’s because of its Managing Director, Steven Chaur, whose career sheet includes management stints at Findus Frozen Foods, the Tip Top Bakeries division of George Weston Foods and the Pura Milk business at National Foods. Get the link? If you haven’t, they’re all food-related, which sounds like an odd background for someone who’s now leading one of the biggest global suppliers to the hardware industry. “What I’ve tried to bring to the organisation over the past 12 months is a very clear plan for growth, more classical sales and marketing experience and a customer-oriented culture from FMCG (fast moving consumer goods). In groceries, if you don’t work hand in hand with your customers, you’re dead in the water so I’ve tried to focus on better service, a lower operational cost base and speed to market in new products. Vital to success in any strategy, I’ve recruited a couple of senior sales and marketers who have good experience in that regard, mainly to bring a more channel-focused sales strategy rather than just treating a customer as Industrial or DIY.
“Our business now runs on five specific sales channel that we didn’t have 12 months ago – hardware, automotive, industrial, retail and paint. All require a different approach to be successful. And we have national business managers dedicated to each one of those to ensure we get close to each customer’s needs and strategies. “Before I accepted my role, I was told that Saint-Gobain was 70% Industrial and 30% Retail business in the Pacific. That’s certainly the case overseas but when we put a blowtorch to that theory and looked at every single one of our 3,500 customers in the region, we actually found that around 70% of our business is what I’d call Retail. That is, it incorporates a packaged goods sale, a shop front, a counter, promotional requirement, a sales call element, no big warehouse at the back, etc. That was a key point in our go-to-market strategy.
“I suspect there’s at least 20% growth [in the current business] by simply managing our existing customer base smarter – through better store call frequencies, improved promotional support, shared business plans, sales and operational forecasting, marketing our brands, and a focus on customer and internal product training strategies.” All are disciplines that Chaur learned in selling high-volume branded groceries.
According to Chaur, for many years Saint-Gobain products were predominantly being manufactured for the industrial markets and if the products sold in hardware stores, it was considered a bonus. But the distinction between trade and retail has blurred over the past 10 years, he said, citing Bunnings, Masters, Mitre 10 Mega and Supercheap Auto as examples of how ‘big box’ formats have taken a larger share of both the consumer and trade markets. Industrial trade customers, too, are targeting DIY consumers. Chaur recognised that this changing landscape meant Saint-Gobain also needed to build its internal skills to deal with the changing demands and needs of the customer base. Importantly, the company needed to re-engage with its key customers’ strategies to align its business model across production, supply chain and marketing in order to strengthen its retail offerings.
“You can’t sell boxes of 100 cutting wheels to a DIY customer who wants to sell them as ones through a register,” he explains. “A good example is that our Norton brand is the market leader in masking tape, but we don’t sell any tape in Coles or K-Mart or Officeworks. My question to the business was, ‘Why not?’ Coles, Woolies, Costco, Aldi… all our products can be sold in all those channels if we format them the right way.
“With a company that operates in 60 countries with 300,000 employees, we manufacture and source a lot of innovative and diverse products. And we can tap that pool to suit the needs of a big box hardware, automotive or supermarket customer.” So the obvious question is: how? “Asking the right questions, having an open mind and making the right appointments. Over the past 14 months, we have introduced many new tools and ideas to help our people make this mindset transition. We have also recruited some top talent who have brought the experience and know-how to do business with these five channels. So now there’s an expert who can pick up the phone and feel pretty confident that we can at least get a foot in the door to start a conversation around unique channel opportunities.
“It’s been a busy year and we’re starting to get a lot more traction now that the team is harmonised and the business plan understood – both internally and by our customers. We’ve got a formal new product development process that’s filling up with a raft of fresh ideas across all sales channels that we didn’t have 12 months ago. We’re now sifting through those ideas to find the most strategic launches that positions Saint-Gobain strongly in each channel. We’re developing products specific to the market, whereas in the past we developed products for the entire market.
“Whilst Saint-Gobain is very strong across many segments, we do have what we call a Habitat strategy globally. Saint-Gobain wants to develop products in its portfolio that are about the future of building – everything from energy efficiency in lighting to insulation to lightweight, low-cost construction materials and photovoltaic solar cells. “One of the things we’re trying to do is grow our Habitat position in the Pacific region through a range of Saint-Gobain products that are suited to the DIY style of distribution. This could include insulation, plasterboard, flat glass, grouts and tile adhesives. That’s certainly Saint-Gobain’s push globally – to lead this market space. We want to be seen as a leading building products company.” Therein lies a small dilemma. Saint-Gobain is best known in this region through its Norton and Flexovit brands. Norton was founded in 1885 in Massachusetts, and Flexovit began its life in Melbourne in 1972. The two have become so entrenched in the Australian abrasives landscape that they’re both household names. Yet Saint-Gobain is not.
“No one really knows our corporate entity, even though we’re a 400-year-old company. Over the next 12 months, you’ll start to see Saint-Gobain appearing more in the public domain.
“As category captain, Saint-Gobain is dominant in its categories. Norton has around 50% market share and is seen as the trade expert in abrasives and tapes, but we need to invest more in consumer education. We’re starting to roll out mechanisms to educate consumers how to use sandpaper in the decorative process because they’ll get all this advice when buying paint and spend a lot of money, then look at the cheapest possible sandpaper to do the job and end up being disappointed with the overall result.
“We’re also taking lessons from our trade paint experience and bringing them into the consumer decision-making process for DIY sandpaper to get people engaged in the fact that perfect preparation makes for a perfect finish. Through things like point of sale, informative packaging, YouTube and iPhone Apps, Norton will teach consumers to become competent in completing these jobs.
“This year, we’re launching our Abrasives Academy, which is aimed at teaching customer store personnel abrasives basics through a simple online class or two-day Master Classes with our technical experts in one of our three Australian or New Zealand production facilities.
“In the past, we’ve myopically looked at our core business as just being in the abrasives game. We are actually in the cutting, polishing and grinding business, which is a different business mindset in knowing how to innovate and deal with customers. For example, consumers see Flexovit as being really good at cutting bricks, masonry and steel, so why can’t it be good at cutting wood, lawns and paper too? “In Norton we’re great at polishing and grinding metal and wood, but we have never considered elements of polishing beyond our current market, such as in automotive care or even domestic polishing.
“The focus today, though, is to simply build on what we are good at and ensure we service each customer completely so we can build our platform for innovation. We are one year into our five-year plan and things look good.”
A clear strategy, an energised new team, a different business mindset, expanded ranges and products, not to mention greater brand recognition – it’s an ambitious undertaking for a man who’s only just warmed his seat. But with a stated goal of growing Saint-Gobain by 50-60% over the next five years, there’s little time to waste. And with Steven Chaur at the helm, Saint-Gobain is moving forward as fast as the daily staple grocery items he’s used to selling.