Ways to compete with warehouse retailers and big chains

/l S Home Depot and other national &Iumber/home center chains continue to build market share and expand across the country, local and regional redwood retailers are searching for ways to compete effectively. Thriving local merchants from arcund the United Sates say the key to success is to stick to your specialties and what you do best.

"All you have to do is walk into one of those huge stores and it's obvious that you won't be able to natch the sheer size of their selection," says Herb Donaldson, Mead Clark Lumber, SanCa Rosa, Ca. "So small retailers have to emphasize the things that they can do better, like providing personal service and responding quickly to the particular needs of their customers."

Wallace Poole, Poole Lumber, Covington, La., agrees. He notes that the large chains generally don't have the comprehensive selection of lumber that contractors and do-it-yourselfers both want.

"You can go into achain outlet and find a tremendous amount of wood," he says, "but you won't find all the lengths, all the patterns and all the grades that we carry. A knowledgeable customer wants a selection. At a chain, he may have no choice.

"It's almost a contradiction that a big home center would have less to choose from, but they carry so many different kinds of items that they sacrifice depth in some iueas - tit<e lumber. Our size lets us focus on those product areas that we know are important to our customers."

For instance, Donaldson knows that his customers - primarily contractors - are only interested in high quality, high end tools. "Professionals want a choice like anyone else," he explains. "But they don't need to see 30 different circular saws. There are six or seven in the right performance/price range and those are the ones we car4/."

The idea, says Donaldson, is to make smaller size a strength. "Don't try to beat Home Depot at its own game," he warns. "Being small means being flexible. Don't try to offer a bigger product mix; offer a better, more effective selection that reflects what you know about your customefs."

Knowing your customers is clearly rule number one for Donaldson and Poole and it can pay off in better service. Where large chains can seem impersonal, making customers feel like a number, smaller merchants have the opportunity to personalize the sales process.

"Service is the great differentiator for local retailers," says Gene Dolan, P.E. Dolan Lumber, Concord, Ca. "We make a point of keeping all our floor personnel up to date on new products and we specialize in large projects for the do-it-yourself oowd. It's rare to find an employee at a chain outlet who can even help you create a complete nnterials list for a deck addition. We can organize the entire project from start to finish. Customers really value that kind of assistance."

Dolan also offers on-site estimating and has added conveniences to his store, such as a complete door shop. And ever since Home Depot entered his market, he has opened every day at 6 a.m. "If someone needs to start a project eady in the morning," he says, "we want to make sure they have a choice of retailer."

Service is also crucial for contractor customers. Bill Miller, Alpine Lumber, Denver, Co., remembers a

Story at a Glance

Retailers from around the country share techniques for competing with large chains and warehouse stores ... good selections tailored to customer mix and excellent servics make small a strength personaltouch pays off.

longtime contnactor client who decided to try a national chain.

"He ordered 92 ll4-nch studs for delivery on Tuesday morning and he received 96 one-inch studs on Wednesday afternoon," he recalls. "The people in the chain's lumber yard simply didn't realize that the contractor didn't want to cut tro fit at the job site or that deliveries are scheduled very precisely for a reason. It's the kind of experience that really differentiates the value small retailers can provide."

Commitment to customer service is a clear competitive advantage for local merchants, but it isn't easy to use as a selling point

"Anyone can say in an advertisement that they are service oriented, but you really need to experience it to believe it," explains Craig Triebwasser, Valley Redwood, Sacramento, Ca. "That's why we do a lot of interactive marketing - in-store seminars, trade shows, etc. There's no way we can afford to match a big chain's advertising budget" so we do only a modest amount of advertising and focus on face-to-face selling. It's more time consuming, but it really underscores our strengths."

L0NG aisles and gigantic selections of m erchand ise will fruslrate many cuslomsrs. Smaller slores can caler lo lhese shop- p€rs ano wrn their loyalty and business with personal seruice and help in selecting lhe best products for lheir home improvemenl projects and repars.

Some smaller retailers, however, believe even limited advertising can have a substantial impact. Gene Dolan confronted a national competitor head-on with an advertisement showing a cartoon figure struggling to push a small shopping cart loaded with spilling lumber and other items. "Home Depot probably didn't even notice it," he says with a grin, "but I've had new customers come in and tell me I hit the nail on the head." o Safe Crystal Clear is V0C com0liant, nonjlammable and cleans up easily with water. r Durable Crystal Clear is chemical, moisture resistant and very resilient.

Such confidence is apparently well founded. Dolan and his fellow mercbants have discovered that there is a profitable market niche for local refailers.

"The secret is to think small," says Herb Donaldson. "The personal touch pays off. It's how most of us built our businesses, and it's how most of us will continue to succeed, even against these large competitors."

Wood-Tex.

Home Depot opened its first washington state location, a 130,000 sq. ft. store in Tacoma; planned a Seattle opening this summer; signed a one year option for 4.5 acres owned and occupied by Gallery Racquet Club in North Seattle and projected l0 to lZ more stores in the area by 1995

In California, Home Depot got approval for an Encinitas location after battling with residents and the city council, scheduled an April groundbreaking in Santa Clarita; acquired land for a Nov. opening in Alhambra; announced El Cenito and Pittsburg openings this spring and showed interest in finding a location in southern Marin County ...

HomeBase purchased an 11 acre site for a second Bakersfield, Ca., store and selected a designer for a fifth San Diego County, Ca., store in Kearny Mesa ... Ernst Hame & Nwsery, which reopened its newly remodeled Bellevue, Wa., store, featuring a new kitchen & bath design center, faced a National Labor Relations Board complaint alleging violation of federal labor laws while negotiating with its employee union ...

Hoff Building Centers, Meridian, Id., and Ontario, Or., acquired by Lanoga Corp.'s Lumbermen's have reopened under the Lumbermen's banner Lurnbermen's, Newberg, Or., moved to new, larger quarters; Forest Grove, Or., Lumbermen's received zoning approval to relocate on Pacific Ave.

Orchard Supply Hardware Stores Corp., San Jose, Ca., plans tc go public with the sale of 4 milIion common shares -.. Ziegler Lumber Ca. has a 90,000 sq. ft. Spokane, Wa., Ziggy's under con- struction, anticipating a mid-June opening ...Tualatin Valley Builde.rs' Supply remodeled and reopened recently acquired Ferrell Lumber Inc., Scappoose, Or. ...

Builders Discount, North Hollywood, Ca., under Chapter ll bankruptcy protection, will sell its headquarters unit, keeping only a Los Angeles store

The Homesaver {ftc., Cathedral City, Ca., is liquidating building supplies while owner Mel Jaffee makes a deeision to close or refocus the operation

Yaeger & Kirk, Santa Rosa, Ca., sold its Ukiah store to Ukiah Vailey Lumber Co. in a cost cutting move, but has no plans to sell Santa Rosa or Sonoma locations ... Young's True Value, Huntington Beach, Ca., has liquidated after declaring bankruptcy in Nov. Nickerson Lumber Co., North Hollywood, Ca., was named Supplier of the Year by lnminating Co. of America

Ward's Lumber Co., Orland, Ca., which lost the main office and rotail inYentory to arson during a mid-January break-in, is still open but plans for the operation are uncertain...

Anniversaries: Snavely Forest Products, Pittsburghn Pa., Hq., Phoenix, Az., Denver, Co., Dallas, Tx., San Francisco, Ca, Medford, Or., Baltimore, Md., and Freehold, N.J., branches, 9lst; Mead Clark Lumber, Santa Rosa, Ca., 80th; Deschutes Pine Sales, Inc., Rend Or., 20th; Highland Lumber Sales, Santa Fe Springs, Ca.,Znd

Libertv Hardwood has moved to Santa Fe Springs, Ca. Crane Mills, Corning, Ca., has a new wholesale office opened by Joe

Derrah in Redding, Ca, ... Hess Forest Products, Pittsburg, Ca., is in the final stages of liquidation with Ron Hess moving the Trim Center, which he manages, to Sunnyvale and former partner Rick Callahan opening Callahan Millwork in Sacramento

DAW Forest Products Co.'s Bend and Redmond, Or., Superior, Mt., and Coeur d'Alene and AlbeniFalls, Id., mills and 175,000 acres of Idaho and Montana timber are on the market ... sister co. W-I Forest Products lrd., including 88,000 acres of No. Id. and Mt. timber and mills in Colburn and Bonners Ferry, ld., Wa., and Mt., also is for sale, as is the W-I subsidiary Yellowstone Truckirtg...

Hoff Cos. Inc. of ldaho is opening a new distribution plant in Denver, Co. ... Bud Bruner, former owner of Tali-Pak Milling, has started Tali-Tech to manufacture a hand-held computer tallying system for lumber ...

SDS Lumher Co., Bingen, Wa., has sued the state demanding compensation under the State C0nstitution and the 5th Amendment for 230 acres of land which the company alleges the statc took ...

Georgia-Pacific closed its Forest Hill mill near Auburno Ca., on Feb. 15 citing a lack of logs for the sugar pine, Doug fir and white fir operation which had produced 35 million bf a year and was nperating on a one shift basis; dismantling is expected ...

Simpson Door Co. was selected to provide doors for lhe Home of rhe Year, Port Orchard, Wa-, which will be featured in the Aug. '93 issue of Better Homes and Curdens...

Housing starts in Jan. (latest figs.) fell 7.2Vo to a 1.19 million seasonally adjusted annual rate .,. single family construction was off 5.6Vo wit};:. multifamily down l9.7Vo and apts. of 5 or more units down 2I.77o ... building permits slid 4.8Va for single family hontes, but climbed 18Vo for multifamily cCInstructi0n.

l'm Going To Lumberlandl

A longtine North Coast California logger and developer is gradually gaining support to build a theme park recreating the glory days of logging.

Powered by steam equipment, Rogan Coombs'proposed $10 million family park would feature working displays to show logging practices dating back to the mid-l9th century woven into more traditional ilmusements, such as a runaway rain and log flume thrill rides, steam locomotive, steam-operated carousel and Ferris wheel, and shops and eateries in a recreation of a company town.

Hoping for a mid- to late-1990s opening, Coombs' is negotiating with the Pacific Lumber Co. over possible acquisition of up to 300 acres of company land near Jordan Creek, Ca., south of Scotia. The property abuts Palco's small demonstration forest and is straddled by two Avenue of the Giants interchanges with US Highway 101.

The attraction would commemorate and preserve the region's rich logging heritage and forestlands - without taxpayer expense.

Russian Wood At N.M. Mill

New Mexico mills are having a tough time finding local timber, so it's no wonder Bates Lumber Co., Albuquerque, N.M., recently turned to imported wood. From Russia.

An unnamed West Coast importer hired Bates to custom mill 200,000 ft. of 5/4 rough Russian red pine lumber as part of a marketing experiment to see how well it sells. Though the late January shipment was only enough for three days'work, Bates was happy to have it. Due to the lack of available timber from national forests in the state, the 37-year-old company and its subcontractors have laid off 150 workers since November.

In all, the red pine, or Scotch pine, traveled more than 14,200 miles. Logs were sawed at a mill in Irkutsk, a city in south central Russia, hauled 3,500 miles northwest by rail to St. Petersburg, sent by ship for 9,500 overseas miles to New Odeans, La., and then 1,200 miles by truck to Albuquerque.

Priced comparably to ponderosa pine and suitable for door and window mouldings, the wood was planed into samples for moulding and millwork plants.