Scouting Report May/June 2012

An ALLPRO® Publication VOL. 23, ISSUE 2 MAY / JUNE 2012

by:Scott Morath

A Spring to Remember Spring, that time of year when we shake off the cold grasp of winter and emerge to embrace the warmth and energy of a new season, invigorated by the possibilities that lay before us. From a business standpoint the home improvement industry has been waiting for its spring for the past several years. The good news is spring has finally arrived.

While the ALLPRO spring show is always busy with activity this year there was an almost palpable sense of renewal and excitement in the air. The somber faces and expressions of uncertainty prevalent over the past few shows were nowhere to be seen. It was as if the dam that has been holding the flow of commerce at bay finally broke.

I know, some may be reading this and thinking, “The dam finally broke? Really? Being a bit dramatic are we?” Truth be told I might think the same thing had I not been there. And so I asked a handful of our supplier partners for feedback regarding their experience at the show. After all, if there’s a litmus test for how successful a show is, it’s how well the sellers at the show do.

“Warner had an overwhelming show. Orders placed at the show were a 24% increase in dollars over the last year’s total month of March. In addition, we were extremely pleased with the acceptance of the new ALLPRO razor blade program where just one of the items sold 47% more at the show than we had forecasted to do annually. Everyone was very upbeat and positive,” said Bill Laramy.

“We had a great show with opportunities galore.

We shipped 17 new accounts who had never purchased paint from Richard’s before. Where else could a supplier find that many independent dealers in one place and have the opportunity to talk with each one. It is unheard of, we are thankful to be a supplier to this group” were the comments from Eric Richard.

“The ALLPRO Show was a fantastic opportunity for Kovrd Products as a new supplier. The event was an enormous success for our company, highlighted by an extremely welcoming Allpro team and member group, exciting new business partnerships from all over the continent as well as overseas. We could not be more thrilled to be entering the US market in this upcoming spring market with so many incredible stores within the group. Here is to a fantastic 2012 for everyone and looking forward to working with so many of you!” was the response from Ben Leonard of Kovrd Products.

If that’s not enough then flip over to the spring show photo album in this issue and see for yourself. You won’t see a ballroom full of idle exhibitors and devoid of buyers. What you will see is activity, hustle, demonstrations, networking and most important of all, business being conducted.

On the last page of the album you’ll also see attendees having a good time after a week of hard work (but we promised not to tell any of those stories here).

The purpose of this is not to pat ourselves on the back - quite the contrary. We want to say thank you to all those who really helped to make this show a true success. To our board and committee members who work behind the scenes with us, our supplier partners who continually show their support for the group, and our member attendees who came ready to do business - we thank you.

Our sincere hope is this spring show was in fact the spring we have all been waiting for and the beginning of a very productive and profitable year for everyone.

Over the Hump but Not Out of the Woods

Research indicates that your customers, contractors and other trade professionals are relying on mobile technology more than ever before. Smartphones, tablets and laptops, are being used to make more purchase decisions. Studies reflect that almost 50 percent of contractors use a smartphone to help with their decision-making, while 49 percent use a laptop to access the web and another 21 percent use an iPad or other tablet devices while on the job site.

This suggests that more product research is being conducted online from the jobsite rather than behind a desk or in a store.

By: Matt Docherty

Having just completed another successful ALLPRO show, I had the opportunity to visit with most members during the week-long event. I was pleased to hear the majority of comments about the year ahead were very optimistic and a good number of members even reported significant increases for January & February compared to the same period last year.

With so many consumers and/or professional contractors accessing the web from their home or jobsite, retailers need to be sure their websites are mobile-, video- and app-ready. Make sure that your company website is current with this technology.

The positive outlook isn’t limited to the paint store industry either.

Major retailers recently released their fourth quarter results with all signals indicating positive growth. Although still in single digits, comparable stores sales results were up, net sales for the year were up with increased quarterly earnings being posted by almost all.

Stress the Fundamentals In addition to implementing these latest trends, don’t forget the fundamentals that allowed any business to survive in a competitive market. We were all beginners once and can remember how hard it was to get started in business. When the novelty of starting your own business began to wear off, you had to keep at it when business became challenging, uncomfortable and even less profitable.

On a category basis, the sale of PAINT & Paint Sundry items was one of the departments that significantly impacted the domestic sales growth of home centers. While these signs may indicate we’re over the hump it doesn’t mean you’re out of the woods. Why is that?

Competition is still healthy.

The independent retailer has to continually apply practical information and image strategies that that can have a Presenting news and information about your company is essential in today’s business climate. dramatic impact on business However, that doesn’t mean you and help drive bottom line growth. Whether you should be intimidated by competitive retail home need to improve your store’s appearance with new centers, local mass merchants or even the Big Box signage and/or lighting, provide additional training stores. Home Centers have their strengths and for your staff, offer better customer parking, ensure weaknesses, as do you but following some basic shelves are stocked with merchandise or mixing guidelines will allow you to EARN your share of the equipment is functioning properly, your ultimate goal sales that exist in your marketplace and remain is to continually bring customers into your store. competitive.

These image strategies are not new, but are vital toward contributing to the concept of being Keeping up with the latest trends profitable.

Regardless of how long you have been in business or how successful you have been, all retailers have one thing in common - CHANGE: that is the only constant in today’s business environment! In today’s fast-paced, ever-changing world of retail, it’s critical for the independent to stay abreast of the latest trends, technology and strategies that can help increase sales and profits.

Aside from image strategies a retailer should always try to remember the fundamentals of professional selling. My travel allows me the opportunity to visit with many independent retailers throughout the U.S. and Canada and from time to time I come across those who forget the fundamentals. For instance, I (continues on page 11)

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COLOR

HOUSE To do this he had to overcome two things – first was finding a way to manage the stress without allowing it to have a negative impact on his health and the second was his wife, Theresa. It turns out the first condition was not a factor after all. Further visits to the doctor traced John’s health issue to Celiac disease, a condition that was easily treated by avoiding foods that contained wheat protein.

Problem solved.

By: Scott Morath “Let others worry about what you’re doing” By all accounts John Hauser was an unqualified success. He was a 40-something entrepreneur who owned a thriving insurance agency based in Cranston, Rhode Island. He was married, had five kids, and was a hard worker - the kind of guy who put in 80 hours a week to not only provide for his family but ensure his business continued to thrive.

Unfortunately, as Robert Burns once penned, “The best laid plans of mice and men often go awry,” and in John’s case that meant giving up his business.

The second condition, getting Theresa to agree to pony up the funds, was not quite as easily treatable.

You see, John and Theresa had an arrangement – John worked and would give his check to Theresa, who would sock it away. Both were children of the Depression era, so they were very conservative when it came to money. When John approached Theresa about buying the paint store she balked, citing the fact that John didn’t know anything about paint or running a paint store and she simply would not allow him to pull money from their savings to purchase the business. A setback to be sure but John remained undeterred. He just worked harder and somehow managed to scrape together the funds outside of what he normally brought home. In 1976 he had enough set aside, made an offer, and became the owner of Color House.

What went awry was John’s health, as he began to suffer from dramatic weight loss. Visits to the doctor proved inconclusive, so as a general diagnosis his doctor could only attribute the problem to stress.

With that John was left with a choice between letting his business go or live with the problem and risk further complications. The choice was an obvious one; John sold the business and began looking for less demanding work.

As it happened one of John’s friends managed a local Color House paint store, one of a handful of company stores owned by Bisonite Paint, a regional paint manufacturer. His friend was leaving for vacation and asked John to fill in for him while he was away. John obliged and soon found himself behind a paint counter waiting on customers and selling paint. The work apparently appealed to him because when his friend returned John asked to be hired on. He got a job but there just wasn’t enough work at the store to keep him on more than part time. It was a stop gap at best but one John was willing to entertain until he found something a little more permanent.

The transition was easy enough. John knew the ins and outs of running a business – it didn’t matter if it

What John didn’t realize at the time was the store was in dire straits. It had lost money each year over the past seven years and the situation was only getting worse. Being a former business owner it didn’t take him long to figure out where the store was headed. However, rather than look for a job elsewhere, it seems John’s entrepreneurial spirit would not be denied and he began to formulate a plan to buy the ailing store.

John Hauser in the early days of the Color House

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market were doing. In fact, his mantra was to never worry about what others were doing – let them worry about what you are doing.

was insurance or paint, business was business. He approached running Color House with the same zeal and fervor that made his insurance business a success. Not surprisingly, it had the same results.

In John’s first year as owner/operator of Color House he was able to turn the failing store around and even make a profit.

From the moment John purchased the business it was a family endeavor. At one time or another each of John and Theresa’s five kids worked at the store.

However, it was Doug Hauser, the youngest of the kids, who would ultimately pursue the family business and become the second generation owner.

Doug got his start at Color House at the age of ten helping out wherever he could. He would sweep floors, stock shelves, make sure product was facing properly, and pitch in when truckload orders arrived and the basement stocked. When he wasn’t busy around the store he would do what many of the regular customers would and simply hang around and watch his dad.

That’s not to say making the business a profitable one was an easy task. Any business that suffers losses year after year for seven years develops a certain stigma to it. To combat that image John’s first task was to get the word out that Color House was under new ownership and things at the store were different. He accomplished his task by doing what no one else in town was doing at the time – he bought in bulk, discounted the inventory, and advertised those discounts in local newspapers and in the storefront windows.

By the age of 18 Doug had worked his way up to doing some of the buying where he spent a lot of time comparing show books looking for the best deals and working those shows with his dad, as well as managing store inventory. It was around this time when John decided to open a second, larger store in neighboring North Kingston, RI. The store opened in 1988 and was run by Doug’s sister until 1992 when he returned from college. It was at this time when things accelerated very quickly for Doug.

Within 6 months a number of changes occurred and Doug found himself running the Kingston store, as well as doing most of the buying for the Cranston store. Within two years Doug was running the entire company…not to mention had married and begun a family of his own. The personal and professional demands placed on the young 24 year old were significant to say the least but he was able to rise to the challenge and keep the company on track.

While most businesses shy away from maintaining large inventories John felt it was essential for the store to look viable and ensure it presented well.

He felt stores with sparse inventory on the shelves looked emaciated and this reflected poorly on how customers perceived the store. So he always made sure the shelves were full of product and stock-outs were nonexistent.

However, when it came to inventory it wasn’t just about having it. In fact, John’s philosophy was if he couldn’t pay for it out of his pocket, he wouldn’t buy it. He never borrowed money, which meant to have money the inventory had to move. To ensure that happened he maintained a very strong focus on sales. And to make a sale one had to have customers in the store, which is where the advertising came into play.

His approach was to use a loss-leader tactic with the newspaper and storefront ads to get customers into the store. Once customers were in the store, he always made sure to capture additional sales whether it was from sundries, wallcovering or some other project related product. It wasn’t a high pressure or strong arm approach, he was simply a good salesman using sound sales techniques and doing something he loved. And it apparently showed through to his customers, as they would often congregate around the store just to see John in action.

Over the years Doug has kept many of the lessons he learned from his father. He is a stickler for maintaining a financially sound business and his golden rule is to never go into debt. A rule that hearkens back to his dad’s “if you can’t pay for it out of your pocket, don’t buy it” philosophy. That rule has served Doug well over the years but when it came to not concerning himself with what other dealers may be doing Doug took a slightly different path. In 2000 Doug joined ALLPRO after a supplier recommended the group to him and he started to network with other dealers.

His only shortcoming was his lack of product knowledge and experience in the industry, so he had to become a self-taught expert. His product knowledge came mostly from reading the back of the paint can labels but also listening very closely to the feedback from his customers. As far as experience in the industry was concerned, John never paid much attention to what others in his

According to Doug, he began to get a lot of good ideas; ideas that have helped him develop his business. As he puts it, “There were a lot of little things that helped, like developing procedures and employee handbooks to make sure everyone was on the same sheet. Additionally, I always had a plan in (continues on page 6)

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ALLPRO® Company Profiles

By Angel Chovanec ALLPRO has had the good fortune to add the highest quality companies in the industry to the group. We are pleased to profile some of our newest member partners

• In the fall of 1988 I approached my wife about starting our own paint store. The process began, and we opened in June of 1989. It was a struggle for the first 3 years, but we continued to work hard at it and the results of that work began to show. After the fourth year, we decided to buy our own building and established our current location in August of 1994. We have been here since, and continued to grow and expand the business.

• Company Slogan: We’re a paint store, not a paint department

CINCINNATI COLOR CO • • • • • • • • • • •

Founded: 1929 Location: Cincinnati, OH Telephone: (513) 241-1090 Web site address: www.cincinnaticolor.com Founder: Carl Deifel Current President: Doug Deifel ALLPRO Contacts: Doug Deifel and Greg Deifel 2 Stores # Full-Time Employees: 14 Wholesale/Commercial/Contractor: 85%, Retail/DIY: 15% Carl J. Deifel established Cincinnati Color Company in 1929. The company has evolved into a retail/wholesale distributor of architectural and industrial coatings, as well as paint sundries and equipment. Our customer base includes commercial/industrial contractors, property owners/managers, and do-it-yourself. We deliver superior products at a competitive price – sold by a very knowledgeable and experienced staff. Some of the brands we sell include Glidden Professional, Devoe, Devoe Coatings, RustOleum Industrial, and our own Town & Country brand.

• Company Slogan: The Right Paint At The Right Price

TANNER PAINT COMPANY • • • • • • • • • • •

Founded: 1933 Location: Tampa, FL Telephone: (813) 876-0467 Web site address: www.tannerpaint.com Founder: Henry D Tanner Current President: Steven Tanner ALLPRO Contacts: Jett Tanner and Walker Tanner 1 Store # Full-Time Employees: 8 Wholesale/Commercial/Contractor: 60%, Retail/DIY: 40% Tanner Paint Company, Florida’s oldest independent paint store, where you’ll find excellent products, service & advice from a staff with over 200 years of combined experience! We provide top quality coatings from Ben Moore, California Paints, Specialty and Decorative Paints and Tanner Brand manufactured for our Florida climate.

You will find professional tools at great contractor pricing, in fact our pricing is consistently lower that the “Big Boxes”. Color matching and expert advice is our trademark.

• Florida’s oldest family owned paint store began as a temporary venture; The Great Depression forced H.D. Tanner to leave Pennsylvania and head to Florida for the ‘short term’ job of selling bankrupt paint stock. H.D. was such a success that he opened Tanner Paint in Tampa in 1933. As son Jack describes it “It was a failed short term project; we are still here 79 years later!” What H.D. started as a temporary business developed into family passion as four generations, son jack, grandson Steven and now great grandson Walker, assisted by talented teams of long term employees continue to serve the Tampa Bay community.

• Company Slogan: Florida’s Oldest Independent Paint Store – Since 1933

LEWISTON PAINT & WALLPAPER • • • • • • • • • • •

Founded: 1989 Location: Lewiston, ME Telephone: (207) 784-1993 Web site address: www.lewistonpaint.com Founders: Michael & Rachel St. Pierre Current President: Michael St. Pierre ALLPRO Contact: Michael St. Pierre 1 Store # Full-Time Employees: 3 Wholesale/Commercial/Contractor: 70%, Retail/DIY: 30% We carry a wide range of products including: Muralo, Benjamin Moore, Pittsburgh, Cabot, Sikkens, M L Campbell, Absolute Coatings, UGL, etc… 70% of our business is with the professional contractor and commercial buildings. We have a very dedicated staff with over 85 years of combined experience in the coatings industry. The key to our success is service, service, and service.

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mind for the next two to three weeks but nothing long term, so we began setting goals for two or three years down the road.” Doug adds, “Networking with other members has helped us shorten the learning curve significantly.”

In 2005 Doug was able to open a third store, this one in Wakefield, one of the outlying communities of Providence. Together with his wife Jean, a formally trained Interior Designer, the two are now focused on better positioning the business by building a stronger focus on all things decorating. As Doug puts it, “People know what color they like but they don’t always know how to use color – how to bring it all together, and that’s where we come in. Color help is our focus and we feel that approach will help us present a more well-rounded paint store.” This shift in focus is less about what competitors are doing than simply meeting the needs of his customers. As he puts it, “To this day I still don’t worry about what the competition is doing - let them worry about what we’re doing.”

in the gray sub bar in the Scouting Report Archive selection (see photo).

Member Happenings Congratulations to Ring’s End who recently opened a store in Westport, CT. This makes a total number of 16 locations for Ring’s End. Also congrats to The Painter’s Store USA who recently opened a store in Miami, FL. This makes a total number of 4 locations for Painter’s Store USA.

FYI

Hats off Adler’s Hardware who was recently featured in the At Home At Providence blog by Victoria Rogers. Rogers, a Realtor new to the Providence area paid a visit to Adler’s Hardware and was surprised to find a local 3rd generation business.

Rogers goes on to talk about the great experiences she’s had every time she stops in to visit Adler’s.

According to Rogers, “Adler’s is a great place for advice, recommendations and a taste of shopping like it was in the good old days”. To read more about this blog go to www.athomeinprovidence.com.

We are pleased to introduce the newest feature to the ALLPRO website – the Scouting Report Archive.

The Scouting Report Archive allows users to view or download the current and previous issues of the Scouting Report. You can search by keywords or by publication date to find articles that you would like to take another look at. Also in addition to mailing out our annual Media Kit suppliers interested in reserving ad space can now print off the Rate Card and Ad Reservation Form. You can find this new feature under the Resources and Documents section

IMPORTANT DATES TO REMEMBER …

ALLPRO 2012 Fall Stockholder’s Meeting Westin Kierland Resort & Spa Scottsdale, AZ, Oct 25 – Oct 28, 2012

ALLPRO 2014 Spring Show & Sales Meeting JW Marriott Desert Ridge Phoenix, AZ, Mar 19 – 24, 2014

ALLPRO 2013 Spring Show & Sales Meeting JW Marriott Starr Pass Resort & Spa Tucson, AZ, Mar 20 – 24, 2013

ALLPRO 2014 Fall Stockholder’s Meeting Westin Diplomat Resort & Spa Miami, FL, Oct 16 – 19, 2014

ALLPRO 2013 Fall Stockholder’s Meeting Westin Hilton Head Island Resort & Spa Hilton Head Island, SC, Oct 24 – 27, 2013

ALLPRO 2015 Spring Show & Sales Meeting Rosen Shingle Creek Orlando, FL, Mar 18 – 22, 2015

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2012 Allpro Spring Show in Pictures

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recently visited an independent retailer who commented on how bad his particular business was.

Hosting an open house for the community that spotlights your company.

•

Include a contest identifying the ugliest room in the neighborhood.

• •

Sponsor the local Little League.

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Advertise that you stock Green Products, allowing you to keep up with the growing demand for environmentally and eco-friendly products that today’s consumers are demanding.

•

Be innovative and clever by promoting a ‘Moonlight Madness’ sale on a Friday or Saturday evening when the independent retailer is typically closed. This allows your customer to actually see all the products you offer and be able to touch and feel them plus ask your opinion on a certain color.

He went so far as to say that if things didn’t change he would probably have to downsize by releasing an employee. After listening attentively for about 20 minutes a customer walked into his store and requested one-gallon of a specific color of paint.

I watched as the retailer went through the normal process of custom tinting and mixing. The final color was approved by the customer – who was then directed to pay at the register by the front door.

After observing the transaction, I asked the retailer why he did not ask for the add-on paint sundry sale.

Doing so could have easily turned this $60 sale into a $100+ sale. He could have suggested paint brush, roller & roller cover, spackle, sand paper, masking tape, drop cloth, scraper or knife etc., but the retailer never suggested any of those add-ons.

Another option might have been to offer this customer an incentive for bundling their paint purchase with some sundry items. By offering this bundled option versus a singular purchase you can invite them to view NEW colors and tools for the season and offer an incentive for their comprehensive purchase. He had simply lost sight of one of the basics of selling. One can only wonder how many times that scenario played itself out prior to that moment.

Partner with other local businesses to identify your products, offering some form of membership program.

There’s nothing else like it. One of these ideas may have a dramatic impact on your business, toward creating ‘NEW’ sales. And always remember to say THANK YOU for stopping into your store.

Lastly, don’t forget your employees, making sure they remain motivated – they are your best asset.

Praise and recognize them for a job well done. You may even consider incentivizing them with a program that challenges them to work together as a team aiming for the same target that is always customer service focused. As an independent retailer, it is critical to differentiate yourself from your competition. Retail home centers, local mass merchants and the Big Box stores sell paint – remember YOU SELL COLOR!

In contrast, after leaving this store I stopped at a nearby Big Box retailer to visit their paint department. In the area adjacent to where customers wait for their paint was a hand-made display with a header that read “DID YOU FORGET”. Attached to the display were a paint brush, roller, tape, scraper and drop cloth - complete with pricing, and a bin below each stocked with product. This display made a powerful statement by suggesting other items that may be needed to complete the job. This was an easy way to drive incremental sales and ultimately greater profit – just by following the fundamentals.

When you focus on the complete color delivery process, the area most often overlooked is the final step - mixing. Take a moment to inspect your mixing equipment before the spring season begins to ensure that it is operating in the most efficient manner, allowing for the correct color to be delivered every single time. Red Devil Equipment Company is the industry leader in providing the most durable and reliable mixers / shakers.

Challenge yourself to be different, don’t try to reinvent the wheel, simply re-package and deliver your message consistently.

Develop a strategy Develop a strategy by setting goals & objectives that measure progress regularly, and if you experience a shortfall a counter measure to offset.

The easiest thing to do is not challenge yourself to understand the relationship between the ‘fit’ your company & products offer, and what the customer really wants.

Create a plan to educate your customers on the value that your business can offer them. Some ideas include:

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,A “Spring” in the Housing Market “The spring home-selling market could be the strongest in years” reported the April 2rd issue of USA Today. The article indicated existing home sales in February were up 9% over the previous February, as was the Pending Home Sales Index, which reflects signed contracts leading to sales. Much of the spark in home sales is being attributed to an early spring season, which typically runs from March through June. Other causal factors include the diminishing supply of homes, locally strong economies, and stabilized housing prices. However, it’s these variables that will determine which markets move forward and which continue to decline. Economists predict overall housing prices will drop another .85% over the next 11 months but that 40% of 321 metro areas will see prices rise.

Get Your Employees Emotionally Invested At one time or another every business owner has come to the realization that no one cares about your business as much as you do. That goes for even your most loyal employees. So how do you get your employees emotionally invested and foster a sense of ownership in them? According to an April 3rd WSJ article, you just need a good company story that has two components – history and hardship. The history part includes what inspired you to start your business, your grand vision, and things like, when did you first open shop or earn your first dollar. The hardship is the tale of woe or wonder – a good nickof-time, wing-and-a-prayer, or underdog story that’s also inclusive of your employees. Use “we” instead of “I” when telling it. Having such a story, even if it’s embellished a bit, makes employees feel like their part of something interesting and powerful, which produces a sense of pride in belonging to the company. They tend to go the extra mile, look for solutions when problems arise, and in short, give their best. For a link to the article, visit our Facebook page at www.facebook.com/allprocorp or at www.twitter.com/allprocorp.

Do’s and Don’ts of Succession Planning Arguably the biggest milestone of any family business is transitioning that business from one generation to the next. Transitioning the company successfully can be the difference between the company’s prosperous future and tailspin into failure. The March 4th edition of the WSJ offers some sage advice on making it a successful event. Top of the list is to make sure the heir apparent has or is developing the skills the company needs before assuming a leadership position. Formal education and rotating the successor through core areas of the business are the best ways to ensure those skills are developed.

Additionally, it can help to require them to work outside the business in a related industry for several years, demonstrate progress in their career field then have them return. And if your company is big enough, it may help to bring on an executive coach to refine management skills. Lastly, develop a formal transition plan that outlines both the successor’s and successee’s temporary and long-term roles. For a link to the article, visit our Facebook page at www.facebook.com/allprocorp or at www.twitter.com/allprocorp.

Editor/Production Scott Morath

Proofers Ann Spire Julia Thomas Angel Chovanec Chris Gingell Pat Brulfer Matt Spire

Contributing Writers Scott Morath - ALLPRO Matt Docherty - Red Devil

ALLPRO® President Travis Detter

Exec. Vice President Joe Poliseo

SUGGESTIONS WELCOME Your suggestions, ideas, articles and comments are encouraged.

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Tampa, FL 33619 • (813) 628-4800 Website: www.allprocorp.com The Scouting Report is a bimonthly publication of the ALLPRO® Corporation.

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