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FISHMAN

Bill Fishman & Afliliates

11650 lberia Place San Diego, Ca.92128

lN evenV major merropoliran newsIpaper, from two to six multi-page lumber and hardware advertising inserts fall out of the Sunday newspaper. Some are tabloid size, some standard newspaper size, some quarterfolded. All are colorful.

The format for each of the retailer's ad sections has a subtle difference. The merchandising is not! The presentation ofthe advertised item u different in each ad section dependent upon the creativity of their ad man. These differences are reflected in the art style of the overall layout, the product illustrations, and the cleverness of the copy.

As a critic, and as a consumer, I find the sameness of the merchandising often boring. Much is dictated by available coop funds from the vendor. I assume that's the reason that on any given day during the past Christmas buying season most home center and hardware store ads featured the same hand vacuum cleaner or the knock-off of it.

Store sizes are being trimmed and our financial and management advisors are showing us how to better our ROI by increasing turns and reducing our inventory. We've trimmed back on the number of SKU's we merchandise and we promote the items that attract the most customers. And, the sameness is becoming apparent to the shopper.

The proliferation of "item and price" advertising in our market is affecting more than just the retailers in the major cities. The ROP advertisers and the Sunday inserts find their way into the rural areas because ofthe statewide Sundaycirculaton of the metropolitan papers. While these retail chain advertisers do not have branches in all the markets, the local retailers are obliged to shave normal margins on heavily promoted timely mer- chandise to avoid appearing price gouging to their customers.

Maybe our industry can take a lesson from the way the marketing of business computers has emerged. That industry speaks in terms of the VARs "value added retailers"-(sometimes erroneously referred to as OEM's). The term for their customer is "the end user."

That end user is less concerned about the nuts and bolts that make the wheels spin or the operating system that translates his input to the proper electronic impulses. He's interested in the output of intelligent information.

It's the computer industry's VARs that package the hardware, the operating system, and the software and market it to the business world. The initial cost of manufacturing and selling of the hardware has very little bearing on the price of the system sold by the VARs. They market the package for big bucks and we never ask how much they paid for hardware or how many hours they spent in R & D developing the system.

In the shelter industry we too have a form of VARs. They're the remodeler who buys the material from us and with their craft adds value for the homeowner. But I've recently wondered whether, we, as retailers of materials could not also add value to some of the materials and the manufactured products in our inventory.

Many years ago, AM table radios retailed for $10-$ 12 and came in a choice of two colors, white or black. A hobbyist showed our merchandise manager an Emerson radio he had purchased in our store and decoupaged with sea shells. We commissioned him to add this decoupage to as many as he could, at $4 each, and we sold every one he delivered for $22.

Adding value can take on many aspects in home centers. They're the "free" services such as cutting plywood, how-to-do information, delivery and of course the typical mill at some lumberyards adds value in the manufacturing of doors, windows, and trusses.

But it's also time for the creative merchandise minds in our industry to reevaluate "packaging."

Offering RTA (ready-to-assemble) merchandise already assembled and/or installed at an add-on price is one consideration. Furniture specialties, lawn mowers, garden furniture, fencing, decks, gazebos, sheds, fireplace screens and doors, barbecue grills, K-D kitchen cabinets and vanities and all those other items that come with instructions that read "put rod A through hole B and secure with washer and lock nut" fit into this category. So does ready-to-paint stuff if it is merchandised as "painted to your specifications-choose from our color matching selection of paint finishes. "

Take the added value concept all the way and the home center could be offering almost everything they sell assembled, finished and installed because there is a market out there that does nol want to do it themselves and will be happy to pay for the added value if they know where to find it.