Key word is change

By Roger E. Peterson President and CEO Ace Hardware Cornoration

E'RE in an industry where changing conditions are the norm, rather than the exception, where prediction is very difficult, where we most often cannot assure the success of our plans prior to committing resources.

But while we can't be sure of winning beforehand, we can at least learn to hedge our bets through proper preparation and planning. So, utilizing the best information available, we see: Continued strong sales in the hardware, home center, Iumber and building supplies industry, with less rapid expansion. Many additional retail challenges such as providing good service while increasing productivity and selling to a segmented market. A slowing of d- i-y sales but an overall growth of the home improvement market from its current $100 billion to $200 billion by the end of this decade. Domination of the market by middle aged consumers by the year 2000 with home ownership up and renters down. Women will head 280/o of households. Money will drive the market as family composition and consumers' values change. Consumers will demand quality, service, value and individual choice in a fragmented market.

For retailers, this will mean increasing personal service despite growing labor shortages, increased

Continued strcng sales... less expansion households heac[ ed by women will requirc more personal seMce. shortage of qualified employees, inqeased labor costs.

productivity pressures and specialized consumer demands. It will mean sharper pricing, good inventory management and utilizing logistics and marketing more effectively. Store format, lighting, use of new technology and packaging, graphics and design will be key elements to retail success.

Effective use of the latest retail technology will be imperative for keeping pace with more competition. Retailers must find ways to treat merchandise on the sales floor so that it will sell itself and allow sales people to concentrate on solving problems that customers have.

One of the most troublesome issues will be the recruitment, training and retention of sufficient numbers of quality employees. Related to that are the high costs of health care, pensions, fringe benefits, liability insurance and the issues of employee safety, good health and substance abuse.

The '90s are shaping up to be extremely tough, but the strong, those who have identified customer service and satisfaction as their number one job, will prosper and get even stronger.

Change, flexibility and innovation under a partnership arrangement among retailers, distributors and vendors, will be the key words of the '90s. This will provide retailers with the tools and information they need to compete effectively and be successful.