By Tom Chasteen
Can You Embrace a Reduced Role?
As an independent hardware store owner for more than 40 years, I never gave much thought to what it would be like to have a reduced role in our family hardware business. We have all seen professional athletes try to extend their careers beyond their ability to play at their previous high level of performance. And we have all witnessed people who are afraid to retire for a multitude of reasons: money, identity and the biggie— loss of control. I don’t think I’m one of those people, at least I hope not.
Three years ago, when our “adopted” son, Evan, took over the family retail hardware store, I honestly didn’t experience any of those feelings. I was excited to see Evan blossom into a firstrate hardware retailer. I have complete confidence he has the skillset and dedication to extend the hardware business that my grandfather started.
In some ways, I think Evan is a much better retailer than I was. His technology skills are much better than mine ever were. His energy level and enthusiasm are much higher than mine was when he took over. All business owners are relieved and gratified when they
see their succession plan has been successfully carried out, and that was the case for me when I saw how excited Evan was to own his own business.
When Craig Cope (our other “adopted” son) and his wife, Shanti, took over management of The Hardware Conference three years ago it was the same feeling of pride. We knew that The Hardware Conference that Dale and I had started with four other hardware retailers 27 years prior was in good hands and prepared to go on for another 27 years.
It became apparent how dedicated Craig and Shanti were this past year when they had to not just reschedule The Hardware Conference, but they had to relocate it to the Jacksonville area due to the destruction caused by Hurricane Irma. Luckily in 27 years Dale and I never had to deal with that type of issue, but we had other issues. Craig and Shanti handled this major crisis with such dedication and class that Dale and I knew they were the perfect fit to lead The Hardware Conference forward. It has been wonderful to see how the retailers, vendors and wholesalers have all embraced Craig and THE WAY I
THE WAY I SEE IT
Shanti and helped them to continue to grow and improve one of the hardware industry’s premier events.
Now I am implementing the last succession plan with The Hardware Connection magazine with my business partners Chris Jensen and Dan Akers. Like the other two succession plans, this one will last two years. The process started four years ago with the three of us discussing what our long-term goals were and then reviewing them each year to see if we were still on track. We have had to make some minor adjustments along the way, but our original goals have remained the same: to develop and grow a digital platform to share information and ideas, and to connect members of the independent hardware channel through a first-rate digital publication.
This past January we began putting our succession plan in place when I stepped down as publisher and took a new reduced role as founder/principal. Craig Cope was allowed to buy 25 percent of The Hardware Connection and was named the new publisher/principal. The magazine’s other founder, Chris Jensen, remains in place as editor, with his 30 years of industry experience helping steer us down the right path. Our other principal, Dan Akers, remains in place as marketing and creative director. I will remain a principal of The Hardware Connection indefinitely and will remain on staff for the next year to year and a half working with advertising clients and
special projects through the remaining succession process.
As with the two previous successful succession plans, I am excited to stay involved in a reduced role to watch how our plans and goals come together.
Chris Jensen and I started The Hardware Connection nine years ago, and we have succeeded far beyond our original dreams. Our first issue in November 2009 went to about 13,000 people in the industry and we distributed four issues in our first full year of publishing the next year. Now The Hardware Connection goes out to an industry-leading database of over 63,000 people with eight issues each year.
Dan Akers came on board as a principal in 2011, and he has succeeded in taking our marketing and design to another level. Chris and Dan’s talent and dedication were on display this past year, when The Hardware Connection won FOLIO magazine’s coveted Eddie Award for the best standalone digital magazine in the B2B category. We didn’t start the magazine to win awards, but they sure are nice to win.
As for the question I asked at the beginning of this column—can you embrace a reduced role?—I absolutely believe I can, mainly because of the people I am working with. To be able to watch them continue to be successful will be a wonderful experience, and to know I was a part of that success is truly something special for me personally.
THE WAY I SEE IT
However, my biggest joy throughout my career in the hardware industry is the people I have been so fortunate to have met, worked with and, in many cases, become personal friends with. Independent hardware retailers truly embody the values of relationships, community and integrity. Those same values permeate themselves throughout the whole industry to the wholesalers who supply us goods to sell at the most economical price possible and to the manufacturers who are committed to making quality products and continually strive to improve those products. As my role with The Hardware Connection will continue to be reduced over the next 18 months—this will be my
last column of “The Way I See It”—I will continue working with advertising clients, writing the “From Tom’s Shop” column and an occasional editorial article. I will always remain a strong advocate of the independent hardware retailer, because that is what I’ve always considered myself to be first and foremost. It has been my pleasure for the past 40 years to be associated with this unique group of people who put their families and communities ahead of their own personal goals.
It has been a true honor and privilege to share my experiences as a hardware retailer with you over the past decade in this column. Email me your thoughts, from one retailer to another, at tom@thehardwarestore.com.
HARDWARE HUMOR
CUSTOMER SUCCESS STORY
SPANN HARDWARE
RockSolid MAX™Hardware Store Software Saves Time and Money
These are good times for Chuck Spann and his team at Spann’s Hardware in Winfield, Alabama.
Since he and his sister April took over the business six years ago, sales are up an impressive 50%, far ahead of the pace of the local economy overall.
One factor behind that growth is Chuck’s own background. When he returned to the family business his father started in 1966, he brought with him over 30 years of corporate management experience that included 20 years as a CFO and 10 more in a CEO position for major healthcare organizations.
Chuck knows how to run a business and while Spann’s Hardware is far smaller than just about all of the organizations where he worked before he and April took it over, the principals he used in the large corporate world have proved their worth just as well in a small business environment.
But there’s also another key factor behind the store’s growth over the past six years: hard work and plenty of it!
When Chuck and April took over from their dad, Spann’s was still being run by a paper-based system. “Everything revolved around the ticket book and the cash register and even the most important business decisions were being made on the basis of little more than guesswork and gut instinct,” he recalls.
Not only did lack of business management software mean Chuck was flying blind on the business, it also meant he and the rest of the team were putting in incredibly long hours! “I was working seven days a week, 12-14 hours a day and even though I would take one day off from the store each week, I would still be up at 7:00 a.m. that day and working on the business
at the kitchen table until 7:00 p.m. that night,” he remembers painfully.
But while Chuck recognized there was a bpressing need to automate the business, other priorities also required attention. During his first four years at the helm, Chuck reset the store, changing out all of the fixtures and embarking on an ambitious remerchandising program that is still in progress.
IT WAS TIME TO AUTOMATE THE BUSINESS— ENTER ROCKSOLID MAX POS SOFTWARE
It was only after all that was in place that Chuck started to focus in earnest on finding the right computer system to run the business. After doing due diligence on several industry systems, once choice stood out clearly from the rest: RockSolid MAX™ hardware store software from ECi Software Solutions.
“We looked at EPICOR and Paladin and both of them would have required a $10,000–$11,000 upfront investment just for the software license alone,” he recalls. “With RockSolid MAX, there were no upfront software costs and we were able to to sign up with a pay-as-you-go rental type arrangement. From a pure dollars-and-cents point of view, switching to RockSolid MAX was not a hard decision!”
But even savings on that scale—no matter how good they looked—would have been worthless if the program itself failed to meet Chuck’s needs as a manager. Fortunately, that was never a problem with RockSolid MAX.
CONVERSION TO ROCKSOLID MAX HARDWARE STORE SOFTWARE WENT SMOOTHLY
“I had put in a lot of computer systems during my years as a CFO and CEO in healthcare and I had a good idea of what we needed from our software,” Chuck says. RockSolid MAX not only fit the bill for Spann’s
CHUCK SPANN AND TEAM OF SPANN’S HARDWARE
DO MORE WITH LESS!
RockSolid MAX™ cloud-based software for hardware stores and home centers will help your team do more, in less time, with less paper! All documents including transactions, purchase orders, receipts, and statements are automatically linked to the associated records, so you don’t have to dig through files to find what you need—you can even attach hand written notes! Plus, emailing documents to customers, you’ll save a ton on paper and postage. SAVE TIME. SAVE MONEY. SAVE PAPER.
www.ECiSolutions.com/RockSolidMAXRockSolidMAXInfo@ECiSolutions.com800.588.5128
but also, he reports, implementation went remarkably smooth.
Moving to some programs from a purely paper-based system can often be a challenging, labor-intensive process, with a massive amount of manual data entry with which to contend. Not so, however, with RockSolid MAX.
“The conversion went very well,” Chuck recalls. “We had more than 20,000 SKUs that needed to go into the system but I was able to pull purchase history from all our vendors and upload it into RockSolid MAX with no major problems or glitches. And once we had tested out the data and done some initial training, going live was easy—we pretty much just flicked a switch and there we were!”
THE
HARDWARE BUSINESS NOW RUNS SMOOTHLY, TOO
Once Spann’s Hardware was in the hands of RockSolid MAX, life for Chuck Spann started to change dramatically and in a very good way!
Instead of needing at least an hour each day to balance sales from the cash register tape, all Chuck
had to do now was just count the cash and the system took care of the rest!
An order for Orgill or True Value® that used to take two hours or more to put together now assembles and transmits in 15 minutes or less with RockSolid MAX.
Statements for charge accounts, which before the switch could take as long as 12 hours each month to assemble and mail, now required little more than an hour!
THE CLOUD-BASED HARDWARE BUSINESS SYSTEM REQUIRES LITTLE MAINTENANCE
Also important from the ease-of-management-andmaintenance perspective was RockSolid’s cloud-based platform.
“I knew from the day we started looking for software that we wanted a cloud-based system,” Chuck recalls. “I really liked the idea that they would be taking care of our data and we would not have to manage a server and deal with software updates and daily back-ups.”
“RockSolid MAX has lived up to expectations and then some,” he says. “For our store and for me personally, it gives us just what we need.”
One Step.
Introducting Krylon® DUAL™ Paint + Primer, the newest innovation from Krylon. This hardworking product makes painting easier because it does two important jobs with every spray. It primes the surface for durability and coverage, and paints the surface with a Krylon-quality finish. All with one can, one step. So customers get the great results they want, without the extra step they don’t.
Performance made easy! Paint and primer in one can — to do DUAL duty.
Superior rust protection on metal. For indoor and outdoor use on any surface. Intoday’s most wanted colors — 32 SKUs in multiple sheens.
Exclusive EZ Touch 360° ® Dial tip.
In With the New
Hyde Group category managers bring the art of innovation to the National Hardware Show
Hyde Group’s Christian Michaud, Paint Applicator Category Manager, with a vast array of the products he oversees.
On the heels of the international hardware show in Cologne, Germany, Hyde Group heads next to Las Vegas, where the group’s Construction Division will showcase hundreds of tools for retailers at the National Hardware Show.
It is here that Hyde Group shows its chops, as it has since the very first show in 1945. This year, once again, promises innovation in virtually every category — with new tools in paint, drywall, surface prep, masonry, tile, wall repair, sanding, and airless spray.
“Our target is 20% new every year, and we put a lot of resources behind that,” confirms Christian Michaud, Category Manager for the group’s broad array of paint applicators sold under the RICHARD brand. RICHARD, the #1 pro tools brand
Visit Hyde Group at the National Hardware Show, Booth #5915
in Canada, is now penetrating the U.S. market with full paint programs and a variety of products unique to American painters.
“Like HYDE®, RICHARD is a pro-oriented brand supported by a strong research and innovation process,” notes Corey Talbot, Vice President of Marketing and Product Development. “Our first-hand knowledge of the pro market definitely informs our new product mix, and many of the new products we offer are significant refinements to painters’ everyday, must-carry items.”
Among products being released in both brands this year is a line of joint knives with a flip-up #2 screw bit — the size used by drywall professionals.
In airless spray, a new dual head tip extension promises twice the productivity and a better finish for paint pros. HYDE® will also preview a new streamlined version of its RVT® Spray System, which is slotted for release this summer.
For DIY markets, two new Better Finish™ wall repair products replace spackle with drywall compound – and in the process eliminate consumers’ top three complaints about drywall repair.
“Retailers looking for profitable new items will find them here,” said Talbot, “but they’ll also find complete and cohesive category programs that have been created by category specialists. Where we once had several safety knives, we now have a full line. Where we once carried a few innovative dust-free sanders, we now own the category, with a complete line of sanders that spans DIY and pro use.
“In short,” says Talbot, “We have a two-brand program that’s ideal for North American selling, plus full programs that incorporate new products to meet consumer and pro demand. I call that a win-win, and look forward to bringing new growth to Hyde’s North American retail customers.”
NEW FROM HYDE GROUP
Better Finish™ Nail Hole
Filler and Wall Repair Kit
3-year shelf life
Promotes a better finish with less flashing Easier than spackle to sand & apply
9" & 18" Flexi-frame
Rollers
Applies uniform pressure
Roller won’t “walk” off frame
Handle rotates from 0° (walls) to 30° (floors)
HYDE ® Dual Head
Tip Extension
Spray twice as fast
Overlaps for better coverage
HYDE ® and RICHARD Drywall Knives with Flip-up Bit
#2 Screw bit preferred by drywall pros
3", 4", 6" and Multi-tool
RICHARD Adjustable Mini Roller Frame
Adjusts for edging angle
Smoothest rolling action
Greater accuracy
Soft-grip handle
HYDE ® Safety Knives
Top-slide and side-slide versions
Complete line now available
From Tom’s Shop
HARDWARE PRODUCTS REVIEW
PRODUCT #2: VERSA CLEANING TOOL DREMEL
The Dremel® Versa is a very unique tool and is unlike most of the other Dremel products. It is a cordless (battery-powered) cleaning tool. At first our testers were a little confused about what to use the Versa tool on, but as they experimented with the Versa it became pretty clear the opportunities were extraordinary.
The Versa is like a miniature batterypowered palm sander that fits in the palm of your hand. All of the accessories screw on to the threaded stud that comes out of the bottom of the Versa. It also has a cup protector that easily snaps on to the Versa tool and can be extended to contain the cleaning area or retracted so you can actually see the job you are working on. Or the cup can be
PRODUCT #3: WORKTUNES™ WIRELESS
HEARING PROTECTOR | 3M
removed completely if you would like. The Versa comes with a scrub brush and three nylon scrub pad accessories that are easily taken on and off.
Once our testers started using the Versa they found all kinds of projects that they could use it on. One tester used it to detail and compound out some scratches on his car, while another used it to repair a scrape on his fiberglass boat hull. One of our other testers used the Versa on household cleaning projects from a stove top to cleaning the tile backsplash behind the sink. All of our testers were impressed with the power of the Versa and everyone liked the cordless feature and the fact the Dremel Versa is a water-resistant tool.
3M is another one of those companies that just makes really good products, because they spend the time and money in the research and development stage before they bring a product to market. 3M has been researching noise and noise abatement for many years. Over 20 years ago when I first visited the 3M headquarters campus in Minneapolis-Saint Paul, Minn., with a group of hardware retailers, I was impressed with both the scope
and size of 3M and the diversification of products they make.
3M has released several hearing protection products. The two we tested were the WorkTunes™ Wireless Hearing Protector and the top-ofthe-line Peltor™ Sport Tactical 500 Electronic Hearing Protector—both rated five stars by our testers.
The WorkTunes headset is a perfect workplace hearing protection headset that has Bluetooth® wireless technology that allows the user to listen to music or answer the phone while wearing the headset.
The ear seals are comfortable and the headset is light. As a result, none of out testers thought wearing the WorkTunes headset for an extended time would be a problem. Our testers used these headsets while working with loud power tools, lawn mowers, heavy equipment and pneumatic nail guns and all rated the WorkTunes headset at five stars.
PRODUCT #4: PELTOR™ SPORT TACTICAL 500 ELECTRONIC HEARING PROTECTOR | 3M
The Peltor™ Sport Tactical 500 headsets are the top of the line when it comes to electronic hearing protection. They are robust in their features, which include Bluetooth® wireless technology, Clear Voice Tracking technology and Dynamic Suppression technology that adapts to firearm and environment for an optimized shooting experience. The Peltor Sport Tactical 500 headsets have external buttons on the headset to increase volume, answer the phone or connect to Bluetooth.
The Peltor Sport Tactical 500 provides excellent noise and hearing protection
for sports enthusiasts shooting guns at both outdoor and indoor ranges. I found the Clear Voice Tracking technology great for pistol shooting at an indoor range, where the Dynamic Suppression technology really stands out. If you have an indoor shooting range in your store or sell firearms and ammunition, then I would suggest you seriously look at selling the Peltor Sport Tactical 500 headsets—they really are that good.
Contact me at tom@thehardwarestore.com if you have a product you would like us to test in Tom’s Shop.
By Chris Jensen, Editor/Founder/Principal
SPECIAL REPORT: What Does the Future Hold for True Value?
The immediate future of True Value Company seems clear.
The proposed sale of the company to ACON Investments seems a foregone conclusion. Voting will be allowed until April 19, but as of April 13 (with 72 percent of proxies in), the company was reporting 85 percent “yes” votes.
Not so fast. A Facebook group called “Concerned True Value Members” was working feverishly up until the deadline, hoping to convince enough
Richard Reese, owner of Standard True Value Hardware, filed a classaction lawsuit to force more details to be disclosed.
members to either not vote or revoke their proxies. Right now the group is a vocal minority, but who knows where that leads. What is even more interesting is the presence of an outside group called “We Own It” that has been organizing the movement to stop the deal.
A class-action lawsuit that was filed on April 5 by one True Value member,
"MANAGEMENT HAS SPUN THIS A LOT, BUT OBVIOUSLY IT'S BEEN A STRUGGLE AT TRUE VALUE OR WHY WOULD THEY NEED TO DO THIS?"
—DUSTY LEE, STORMER'S TRUE VALUE
Orgill, Do it Best or even HouseHasson than doing something this crazy,” he adds.
Richard Reese, had a request for a preliminary injunction denied on April 13 in Delaware Chancery Court. However, the lawsuit did succeed in getting the voting deadline extended a week and having more financial details disclosed to members. The lawsuit lives on, as it attempts to identify and rectify shareholder losses.
It is hard to find a True Value member who has nothing but praise for the deal. Even those that voted “yes” say there is much that gives them pause.
“Management has spun this a lot, but obviously it’s been a struggle at True Value or why would they need to do this?” asks Dusty Lee of Stormer’s True Value in Knoxville, Tenn., who voted to approve the deal. “I would have rather seen a merger with Ace,
What does seem clear, if the vote passes, is that True Value the co-op will cease to exist. As more than one True Value retailer told us, “I just don’t know what to think about this deal.”
WHAT DOES THE DEAL ENTAIL?
True Value Company, the Chicagobased co-op, announced on March 15 that it has entered into an agreement to sell a controlling interest in the dealerowned co-op to ACON Investments, a private equity investment firm based in Washington, D.C.
True Value’s board of directors— which consists of five outside directors, five True Value members and President/ CEO John Hartmann—unanimously recommended this transaction. The new board of directors would consist of CEO John Hartmann, three spots for ACON representatives and one spot for a True Value retailer.
John Hartmann, president and CEO of True Value, held 15 town hall meetings around the country to convince members of the deal’s benefits.
John Fix III of Cornell’s True Value thinks the deal is a bold move to stay ahead of the curve.
Hartmann traveled around the country, holding 15 town hall meetings with members to outline the deal’s benefits. The company describes the benefits for member-owners as follows:
Current True Value retailers will have 70 percent of their A and B stock ($136 million) and 100 percent of promissory notes ($72 million) repaid along with the 2017 patronage dividend of $20.6 million following the close of the transaction, representing a return of approximately $229 million to invest how they know best.
Current retailers will retain a 30 percent holding in the new True Value Company, allowing them to share in the additional value the company hopes to create in partnership with ACON. ACON would retain 65 percent of the new company, while senior management would
SPECIAL REPORT
pick up a 5 percent ownership stake. That last detail was revealed as a result of the lawsuit. -
A volume and growth rebate program will keep the cost of doing business with True Value substantially similar for retailers.
There will no longer be a requirement to purchase stock to be able to purchase products from True Value, freeing up members’ and customers’ capital.
The previously announced commitment to eliminate the promotional advertising fee will be upheld. True Value will continue to offer retailers à la carte marketing and advertising programs that will be customizable to help promote their businesses locally.
To fly the True Value banner going forward, retailers would have to pay a $150 fee each month, with a minimum annual purchasing requirement of $200,000 in handled product.
Use of the brand will include utilizing the True Value logo on and in their store, in local advertising and marketing materials, and on their individual store website, as well as participating in the TrueValue.com Ship-to-Store program, which will only be available to branded True Value stores.
SPECIAL REPORT
“True Value and our retailers have been on a journey of progress together, as we have implemented our long-term strategic plan and invested in the business. As the retail industry continues to experience unprecedented change, we must ensure that True Value stays ahead of that change, so that we are best placed to support the independent hardware retailer for decades to come,” said Hartmann. “As we have said consistently we must always seek methods to accelerate our strategy and we believe that this partnership offers us a unique opportunity to do just that. As the only branded national wholesaler without a membership requirement, True Value will lead the modernization of the business model in this channel.”
He added that “a model that traps its members’ money as an illiquid asset is an outdated model.”
WHY THE LAWSUIT?
Richard Reese is the second-generation owner of Standard Plumbing Supply, based in Sandy, Utah, which operates over 80 stores in nine western states. Reese operates 21 True Value Hardware stores and holds 50 True Value store numbers, so it would cost him $7,500 each month to use the True Value trademark from TV HOLDCO, the proposed new holding company. Perhaps no member has more at stake with this deal, hence the lawsuit filed on behalf of all shareholders.
Dusty Lee of Stormer’s True Value believes the minimum purchase requirement is a deal-breaker for smaller stores.
Reese’s class-action lawsuit focused on lack of transparency in the proposed deal, primarily with not disclosing the management-prepared financials the board relied on to strike the deal, what employment and bonus agreements were promised to senior officers, and what other bids were received for the company.
“We own 5 sets of ‘A’ shares. We will have paid back HOLDCO everything they paid us in 2-1/2 months,” Reese explains. “TV HOLDCO is buying our co-op and then making us pay for it through fees, minimum store volume requirements and growth requirements. If an 8% return and other criteria are not achieved, TV HOLDCO is not going to pay True Value owners the remaining 30% of the par value of their stock when the company is sold again.”
Reese adds, “The True Value executives are getting millions of dollars in a windfall that should have been the coop owners’ 2017 patronage B stock dividend. Management already took nearly all of our 2016 B stock dividend and spent it on strategic initiatives so they could sell our co-op in 2018.”
Reese has invested a lot over the past few years opening new True Value
If Your Store is too Busy to Deal with Bad POS Support,
SPECIAL REPORT
Hardware stores and adding full hardware to existing plumbing supply stores, and to say he is unhappy with the direction taken by his co-op is a huge understatement.
“Why are we even considering selling to TV HOLDCO so they can sell it off in three to five years?” he asks. “We need to keep the True Value of our True Value investment and not sell out to private equity. Our names, our goodwill and our store signs are not for sale. We will not take them down or be sold out by our company executives in a short-term, get-rich scheme. We will not be nameless and stripped of our True Value.”
It was conceded during the court hearing that many of the projections used by the board were 10 months old and dated. In his ruling, Vice Chancellor Slights stated that unsatisfied shareholders could pursue additional disclosures and a better price through a “quasi-appraisal” claim after the deal closes.
Vice Chancellor Slights also ruled that failure to provide an independent opinion on the deal’s fairness was neither necessary, nor required by Delaware law. “Simply stated, the board cannot disclose what it did not have, cannot describe what did not happen,” he said, as reported in Law360.
WHY ARE OUTSIDERS INVOLVED?
We Own It, founded three years ago and based in Madison, Wis.,
UPDATE ON THE LAWSUIT
Here is a statement from Richard Reese after his lawsuit failed to get an injunction granted:
“The Class Action Lawsuit is not over. The lawsuit lives on! The Judge simply denied another further extension of the vote. Let the shareholders vote!
The lawsuit was not about taking away the right of shareholders to vote, it was about exposing the shallow and incomplete reporting of the ACON deal. The shareholders need more time and more information to make an informed decision.
ACON is a bad deal for TV owners and the lawsuit grows when the shareholder losses are incurred. The executives of TV are getting $10 million (disclosed due to the lawsuit) and the other TV salaried employees are getting the other $7 million (disclosed due to the lawsuit).
TV owners are paying their employees’ salaries and a $17 million bonus to convince you to sell out for 70 cents on the dollar.
As for the $4,200 ACON is paying each owner for their A shares (70% of Par), ACON will own 100% of your True Value name and charge you back $150 per month or $1,800 a year, among other growth requirements.
That’s a 42.857% yearly return to ACON on the $4,200 they gave to you. You pay that return forever!
When this ACON thing is voted down, we will get 20% of the shareholders to
claims to be involved in galvanizing citizen action for democracy, participation and excellence in cooperatives, through member education and organizing. Part of that mission is to help cooperative members protect their rights. It is part of the New Economy Coalition (NEC), a network of more than 200 organizations imagining and building a future where people, communities and ecosystems thrive.
We Own It hit the ground running once the True Value-ACON deal was announced, setting up the “Concerned True Value Members” Facebook page, which had 184 members at press time. They also distributed a letter to all True Value members urging them
SPECIAL REPORT
call a special meeting. We will democratically elect a co-op board. We can then determine leadership that will look out for the co-op. If we need to sell more customers, we can change the bylaws and start a wholesale division owned by the co-op owners (Ace has one already). If owners want to cash in some of their B shares, we can create a system of doing that without paying ACON usury interest rates.
True Value succeeds because of you. True Value succeeds ONLY by your purchases. ACON doesn’t have a store to buy merchandise from TV; they are simply a usury bank. Rescind your proxy. I am,” Reese stated.
to either not send in their proxy or to mail in a proxy revocation letter. Among the concerns they wanted True Value members to consider:
What compensation do the CEO and board of directors receive if this deal is completed?
Why was no Fairness Advisor or Opinion contracted to oversee this deal?
Why is management withholding the 2017 4th quarter financials until after the vote?
Why didn’t management disclose the analysis of True Value Company’s worth?
Why did the Board choose not to go with the alternative bid that was offered? How much was the bid for?
While it seems a little odd that an outside party that seemingly doesn’t have a dog in this hunt has gotten involved, their efforts combined with Richard Reese’s lawsuit have led to answers to most of those questions.
A similar group of organizations and individuals including Adam Schwartz, founder of The Cooperative Way, sent an Open Letter to True Value Owners on March 26. Among the questions raised in this letter:
• Why were members given only 30-day notice for such an important vote?
• Was there any attempt to sell, merge or partner with Ace, Do it Best or other co-ops?
• What is ACON’s plan if it controls 70% of the company?
• If the deal is approved, what role would current members have in governance or decision making?
The letter concluded, “Together, we want to ensure that co-op members everywhere are treated fairly.”
WHAT WAS TRUE VALUE’S RESPONSE?
What follows is a statement from True Value with information released to members on April 13, after the initial ruling from the lawsuit:
Dear Members,
We communicated to you on Tuesday that we were supplementing information to the Proxy in response to certain litigation relating to the Transaction. While it is not uncommon for lawsuits to be filed in regard to a shareholder proxy and notwithstanding the fact that we believe the Company had already provided all of the necessary information, in an effort to be ultra conservative, we provided the additional information and extended the proxy period by one week.
STUD FINDERS WORLD’S
SPECIAL REPORT
We understand that these actions have raised questions for you. So here are some important answers:
In a Ruling on the lawsuit today (April 13), the Delaware Court rejected the relief sought in the complaint to stop the transaction.
True Value operated 4,311 stores at the end of 2017.
As of this morning 72% of the proxies have been voted and 85% have voted YES to the proposals.
We would like everyone to vote and every vote counts. So we ask that if you have not yet voted, please do so prior to 11:59 p.m. on April 19th.
Over the last three weeks during my 15 roundtables with hundreds of our members across the country the sentiment has been overwhelmingly positive and the vote clearly supports that.
Friday the 20th at the Special Meeting, the Board will announce the final vote tally and we will immediately share the results with you.
Based on the massive vote support, our plan remains to close the transaction on or around April 20 following the Special Meeting.
We are grateful for the time that you have invested in educating yourselves about the proposals. We are thrilled with the number of you that have made your voice heard and hope the rest will also exercise their right.
We will continue to update you routinely. And most importantly—regardless of how you voted—we look forward to continuing to earn your business every single day.
Sincerely yours,
John Hartmann, President & Chief Executive Officer
WHAT IS THE FINANCIAL PICTURE?
Here are the highlights of True Value’s just released 2017 financials:
Patronage dividend of $23.6 million is a slight increase from the prior year. Gross billings declined 0.9% to $2.055 billion, while revenue decreased 1.7% to $1.487 billion. This was due in part to competitors capitalizing on sale rumors, so the company experienced a lower level of conversions from other buying groups in the second half of 2017.
Completed 69 ground-up stores and 54 remodeled stores, ending the year with 4,311 stores, down from 4,392 at the end of 2016.
Net margin was $24.7 million, up from $23.6 million in 2016.
SPECIAL REPORT
At the end of 2017, True Value had $3.7 million in cash and $153.3 million in available unused borrowing capacity under the revolving credit facility.
At the end of 2017, the co-op had $131.2 million in short- and long-term retailer notes outstanding. These retailer notes made up the majority of long-term debt that as of December 20, 2017 was $137.3 million.
WHY ARE MEMBERS IN FAVOR?
Doug Johnson of Johnson True Value Hardware in Mt. Pulaski, Ill., said, “I look forward to a cash injection into my own store and the freedom to choose where the money is utilized. I want to see more information and discussion, but I am trying to see things in a positive light. Seventy percent of a known quantity now is probably better than 100 percent of some unknown value in the future. If our board and the member directors believe this is our best direction, I will likely follow. I have to think they have more to lose than I do if this all goes south.”
“Not sure how this can be a bad deal, especially for members of the co-op. We get paid our $220 million dollars to control ourselves. No risk of accounting errors. How can that be bad? In addition, the company now will have no debt. The company will also have money to invest in itself,” said Steve Fusek of Fusek’s True Value in Indianapolis.
John Fix III of Cornell’s True Value in Eastchester, N.Y, said, “I’m in favor of
it and voted ‘yes.’ It seems like a bold move and trying to stay ahead of the curve and with what’s going on in the industry and with succession planning.”
Bill Burleson of Burleson’s True Value in Allegany, Pa., commented, “We are getting paid for our ownership at $100/share. John (Hartmann) and the others are getting paid by ACON, not us. We may be lucky just getting our $100 out of this. And, we are getting all of the debt out of the other 30% we will still own.”
OTHER MEMBERS SPEAK OUT
Among the common concerns expressed by members were the lack of full and complete disclosure, a quick turnaround for the vote and losing control over the future direction of the company.
Dusty Lee of Stormer’s True Value said there is no benefit for smaller retailers like him to stay with True Value. “The minimum purchase requirement is more than they are buying now from the co-op, and there’s no chance of a rebate with small volume. I do less than $350,000 a year with a 4,400-square-foot store. I can’t identify with those people (senior management) and they can’t identify with me. I don’t have the greatest faith in management and I’m scared to death, so I want to get what I can before it’s all gone. I think it’s insane to pay $150 a month to fly the True Value banner—I can’t go along with that.”
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SPECIAL REPORT
John Morgin of Roselawn True Value in Roselawn, Ind., said, “The company reinvested our yearly cash and dividend for the past three years back into improvements and now we get no additional monies from the sale. I have a DTV (Destination True Value) loan that would have been nearly paid off with my year-end cash and stock payment over those three years; instead they used the money with no return.”
Richard Johnson of Bailey’s True Value in Sanibel Island, Fla., commented, “It is extremely unusual for stock to be traded at anything other than the value of the assets of the company, one of those being Goodwill, which our cooperative has significant holdings. I too am deeply concerned that we are being asked to make a decision without complete information. How are we to make an informed decision without complete information? We also belong to a grocery cooperative that was recently sold. That sale was done with full disclosure and was most certainly in the best interests of the membership.”
“As a member since the late ‘60s, I have seen many changes in our coop,” said David Tell of William Tell True Value in Hopewell Junction, N.Y. “If the board and CEO wanted to change from a co-op to something different, I think they owed the members a chance to vote first, to see if that’s what the majority wanted to do. Instead, they made a not so good deal and gave us
30 days to make an informed decision. Why the rush? In listening to other members, many don’t know what to do or how to vote,” added Tell, who intended to vote no.
Randy Malensek with Hardin True Value in Hardin, Mont., said, “I cannot wrap my head around why we need to be losing our co-op. I received the call and was coerced into signing yes. I have a gut feeling that this is not in our best interest.”
WHAT WERE THE ALTERNATIVES?
It was revealed during the court hearing that True Value had one other potential bidder early in the process, but Vice Chancellor Slights ruled it was not legally necessary to disclose that information.
John Scharch, a 47-year member of the co-op from Big Pine True Value in Big Pine Key, Fla., said something just feels off about the deal. “Given an option of being sold to ACON or becoming a subsidiary of Ace, I choose Ace. After all, they said in the Bloomberg report they would double the offer. I think it’s time to rid ourselves of outside board members and only have hardware store owners running the company,” he said.
Early on in the process, True Value officials announced that they would not consider a sale to Ace Hardware Corp., even though Ace was viewed as one of the most logical suitors.
WHAT HAPPENS NEXT?
Jesse Eastman, owner of Fort Collins Nursery in Fort Collins, Colo., was trying to organize a team of True Value members who would work the phones this week to convince members to withhold or revoke their proxies.
With such a high percentage of members already voting “yes,” it may be a case of too little, too late.
True Value retailers we have spoken to say they have been getting tremendous pressure from their True Value field reps to support the deal. As one put it, “I’m not particularly in favor of this deal, but I’m even more afraid of what happens to the company if we vote this down.”
True Value officials remained confident the deal would pass and would close on or around April 20.
WHAT ARE INDUSTRY IMPLICATIONS?
True Value first announced the deal on March 15. Since that time, all True Value retailers have been bombarded by representatives from all the other co-ops and independent wholesalers. Phone calls, faxes, emails, drop-in visits, all pleading with them to cut their losses and switch suppliers.
If the deal passes, no one really knows how ACON intends to run the company. One possibility that would cause concern is if they look to cut costs to maximize profits, with concerns over staffing issues.
The new era of True Value will arrive too late to save members such as Muller True Value in Ferdinand, Ind.; Fairhaven True Value in New Bedford, Mass.; and Welch’s True Value in Woodstock, Vt.— members who all announced that they were closing stores since the deal was announced a month ago.
As for the vendor community, there is a nervous fear of dreaded anticipation. Many vendors recently went through a line review with True Value, and they are smart enough to understand one of the best ways for the new owners to improve profit margins is to extract greater concessions from vendors.
You can be sure other independent retailers, whether they belong to another co-op or buy from an independent wholesaler, are looking on with great interest to see how the True Value deal plays out. They have their own futures to think about, but most of them understand that a strong two-step channel of distribution has been the key to ensuring independent hardware retailers have remained competitive and viable in the face of a never-ending wave of tough competition.
The co-op business model is centered on the fundamental principle that banding together is better for independent retailers than going it alone. True Value retailers are about to find out what it’s like in a brave new frontier.
LNational Hardware Show®
PREVIEW
as Vegas will be hosting the 73rd annual National Hardware Show®, which takes place May 8-10 at the Las Vegas Convention Center. The Hardware Show is the place to see innovative new products from top brands, network with other retail attendees and exhibitors, attend seminars and discover products you cannot find at your wholesaler markets.
A WORLD OF NEW PRODUCTS
National Hardware Show knows many attendees are looking for particular products within targeted product categories, and it has made it easier for retailers to uncover those products, thanks to its recommendation program.
“This year’s Show, our 73rd edition, begins a new edition for the National Hardware Show, says Rich Russo, vice president of NHS. “For years, we have served the industry as a way for hardware and home improvement professionals to connect face-to-face annually. While that won’t change, in addition to an all-new logo and look, we’re enhancing the Show experience with new interactive exhibits, new ways to showcase trends, new participation from retail leaders and so much more.”
If you are a home improvement retailer with your eye on a few particular products at the Hardware Show, then be sure to take advantage of the Show’s personalized exhibitor recommendation program.
More than 2,000 vendors will be exhibiting at the Show, which attracts attendees from all over the world. The
When attendees register for the Show, they are asked to provide information about the product categories they are most interested in shopping at the show. Then they will receive a personalized list of suggested exhibitors they should be sure to check out. Exhibitor and product recommendations can be found at the Show by visiting one of the Match Me booths.
Registration for the show is complimentary until May 8. After that date, there will be a $125 onsite registration fee. To register in advance, visit www.nationalhardwareshow.com.
NEW FOR 2018
Smart Home & Automation products continue to be a trend on the rise. New to this year’s show is the Smart Home Virtual Reality Experience, which is an interactive product display where attendees can experience the latest
EVENT:
National Hardware Show®
SHOW HOURS:
Tuesday, May 8: 9 a.m. – 5 p.m.
Wednesday, May 9: 9 a.m. – 5 p.m.
Thursday, May 10: 9 a.m. – 1 p.m.
LOCATION:
Las Vegas Convention Center
SHOW INFO: www.NationalHardwareShow.com
smart home products through a virtual tour designed to showcase products in their natural environment.
Another growing trend is illustrated in the tiny home movement, which has led to the introduction of products, tools and techniques needed to build these tiny dwellings. The National Hardware Show has partnered with Operation Tiny Home to bring an up-close look at the tiny home building process. Operation Tiny Home will be hosting a Tiny Home Building Workshop with the host of Tiny Home Nation, Zack Giffin.
The Hardware Show serves as a gathering for industry groups, companies and associations. This year’s event will feature a Costco Global Review, Amazon Vendor Summit, Home Depot Pitch Panel in the Inventors Spotlight and HSN American Dreams Academy for emerging entrepreneurs.
REIMAGINE RETAIL
For the second straight year, the National Hardware Show will award one lucky independent retailer $100,000 to
More than 2,000 exhibitors will be showcasing their newest product introductions at the 2018 National Hardware Show in Las Vegas.
help fund an improvement to their business centered on technology.
Five finalists will be provided transportation and hotel accommodations to this year’s Show, and the winner will be announced and awarded the grand prize of $100,000 during the Show on Wednesday, May 9.
“We are thrilled to once again present $100,000 to a small business owner through Reimagine Retail. This program provides a powerful opportunity to independent retailers,” says Russo. “Our goal is to empower retailers to decide the best way forward for their business and to support them every step of the way as they make their retail vision a reality.”
SPECIAL EVENTS
Retailer Happy Hour, Tuesday, May 8, 3:00 - 5:00 p.m.—Kick back and relax in the Tailgate, Backyard & BBQ area. Free drinks for all retailers who attend. Tailgate, Backyard & BBQ Party, Wednesday, May 19, 4:30 – 6:30 p.m.— Join us in the Tailgate, Backyard &
The Tailgate, Backyard & BBQ area in front of the Convention Center is a popular spot for attendees to visit.
BBQ area for live entertainment from Brian Garbe, a Bar Takeover sponsored by Traeger Wood Fired Grills, food and drinks at this annual celebration, which is open to all exhibitors and attendees.
FEATURED PRODUCT AREAS
The 2018 Hardware Show will feature 11 main product categories: Building Products; Farm & Ranch; Hardware & Tools; Homewares; International Sourcing; Lawn, Garden & Outdoor Living; Paint &
Accessories; Pet Products; Plumbing & Electrical; Storage & Organization; and Tailgate, Backyard & BBQ. It will also include eight Featured Areas:
New Product World—Level 2, Room N245
New Product Launch—Central Lobby Made in USA—Central Lobby
Inventors Spotlight—Level 1, Room N109
Homewares Awards Product Display—Featured Product Gallery, Level 2, N245
Lawn, Garden & Outdoor Living Awards Display—Featured Product Gallery, Level 2, N245
Ultimate Backyard—Silver lot, in front of Convention Center
Smart Home Virtual Reality Experience—Central Lobby
NHS PRODUCT SPOTLIGHT
QSP® QUIET DELUXE® VAC
• For smaller workshops, the 12-Gallon QSP® Quiet Deluxe® vac is perfect. It’s small but powerful and includes everything the big-gallon QSP Quiet Deluxe vacs offer, like a 2.5” diameter hose that allows larger debris to be picked up without the hose clogging.
• It also comes with a disposable filter bag that collects debris and makes it easier to empty the tank.
• The 12 gallon QSP Quiet Deluxe vac comes with a 14” floor nozzle that can be used with or without the brush (dry pickup) or squeegee
• It also comes with a crevice tool to get those hard-to-reach spots on the woodworking machines.
Corp.
DAN BERRY
PARADISE DO IT BEST HOME CENTER UNION, S.C.
By Chris Jensen
PAdapting to a Changing Industry
aradise Home Center has roots that date back to the 1940s, when five Berry brothers all returned to their hometown of Union, S.C., after three had served in the service during World War II. They started Berry Homes building modular homes and that turned into Berry Buildermart. The business operated as Berry Lumber Company in the 1950s and ‘60s. They were ahead of their
time when they opened a showroom and started buying from BMA in 1965. As third-generation owner, Dan Berry has followed in the footsteps of his father, Pete, and grandfather, James Berry Sr. Dan graduated from the United States Military Academy in West Point and served five years in the Army (light infantry) with the 10th Mountain Division out of Fort Drum, N.Y. He returned to help run the family business in 1995.
Dan Berry is the thirdgeneration owner of Paradise Do it Best Home Center in Union, S.C.
A dominant selection of hand and power tools is displayed near the front.
Wholesaler: Do it Best Corp.
Sales floor: 45,000 sq. ft.
# Employees: 21
Sales: 60% DIY, 40% Pro
Top categories: Framing lumber, roofing and plumbing. When these three departments are doing well, then the business is doing well.
Top niches: Appliances, flooring, yard art, patio furniture, rocking chairs, wild bird.
Competition: We have 3 Walmart Supercenters, 3 Lowe’s, 2 Home Depot and several independent hardware stores all within 45 minutes.
Recent initiatives: We’re in the process of relamping to LED. We had 110 old bulbs that just sucked energy. We’re only half done with relamping and we’ve already seen a 90% drop in our lighting bill and the store is a lot brighter. We expect payback to be three years. Our next initiative is converting to Do it Best’s new Color Bar format for the paint department.
How did you evolve into a home center? We had a truss shop, specialty
Upper right: Warehouse racking is used to take full advantage of the 45,000-square-foot sales floor.
Middle Right: With appliance chains like HH Gregg going out of business, Paradise Home Center is seen as a destination for appliances.
Bottom right: Finding a reliable, local supplier of rocking chairs has turned that into a top-selling line.
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lumber and some millwork and were a typical yard until about 25 years ago. My father wanted to get into the home center business, so he bought land from my aunt and sister and moved to our current location in 1992. He completely changed to go with a home center format, which was the new trend in the industry.
How did a remodel save the business? We used Do it Best’s Signature Store program to completely remodel the store and held a grand opening for the new store in 2008, right before the housing market collapsed. The next two years turned out to be great years for us despite being in a recession, because consumers really liked the fresh look.
How have you been able to apply the lessons learned at West Point and in the Army to running a retail home center business? The biggest lesson, and this is a life lesson in general, is perseverance. Surviving and succeeding at both West Point and in serving in the infantry develops one’s character, especially with regards to perseverance and commitment. In the retail business, much of what we do is very systematic and procedural: from the ordering and merchandising of goods to the servicing of our day-to-day customers to general housekeeping. You have to be committed to that process and endure what others might consider too routine. I tell both my employees and
Upper: The home center captures about 40 percent of sales from pro customers.
Lower: Paradise Home Center strives to promote major brands throughout the store.
my children that in our business and in life, oftentimes the one who succeeds is the one who perseveres to the end, the one who is committed to the vision of success, who pays attention to details, who has a positive attitude about completing those repetitive, dayto-day tasks.
What’s the key to competing with Amazon? It’s a challenge and an opportunity. Amazon has a DC up the road in Spartanburg County. Our industry is still reliant on touching product. Many people come into a brick-and-mortar store after doing product research online. Customers
Go Tankless.
still don’t know what things cost, although you do have some savvy customers even in a rural area. We have to be smarter with everything we do. You may not be the cheapest, but if you are priced competitively and in stock you will still get the sale. If you’re 30 percent higher, that’s the tipping point. You have to evaluate how you expose products you stock to customers. Amazon does suggestive selling and cross-merchandising online, so we have to do more of that in the store. We do UPS shipments and accept electric co-op payments to help build traffic.
How do you ensure customer service stands out? Our average employee has been here 10 to 15 years. It’s still a challenge to educate them on how to give good advice, but independent hardware retailers need to have someone who can sell your products. We have monthly training meetings where we go over how to answer common questions. You have to adapt to the industry and the needs of your customers. n
OUTDOOR POWER EQUIPMENT AND GRILLING TRENDS
The Hearth, Patio & Barbecue Association (HBPA) shares five top trends expected for 2018:
1. Retro Colors: Retro is the new neutral. This year, brightly colored grills are replacing the typical black and stainless steel grills. Colors are also a big trend when it comes to the patio. Overall, outdoor spaces are becoming more vibrant and colorful in 2018.
2. Digital Monitoring: Technological advances continue to surge. Grills have had smart capabilities for the past few years, but most controllers have only worked locally while the user remains in range. This year, new technologies allow monitoring grill and hearth temperatures from farther distances.
3. Outdoor Fireplaces: One in 10 consumers are planning to add fireplaces and heaters to outdoor kitchens.
4. Pellet Grills: Wood pellet grills are among the fastest-rising grill types.
Pellet grills are versatile and will grill, roast and smoke. Because of their small size, wood pellets burn cleanly and quickly to a fine ash to create the ultimate wood-burning fire.
5. Year-Round Grilling: Summer holidays continue to be the biggest grilling days of the year, but grilling is starting to become a year-round pastime. Many consumers are braving the chilly temperatures to grill
CATEGORY REPORT
Upper: Ace Handiman North in Titusville, Fla., showcases a dominant selection of grills near the front entrance, along with a display of STIHL outdoor power equipment.
Lower: Montana Ace Power Pros in Missoula, Mont., is a destination for STIHL outdoor power equipment.
for the Super Bowl (23 percent), Thanksgiving (14 percent), Christmas or Chanukah (10 percent), and New Year’s Eve/Day (9 percent).
According to HPBA’s 2017 consumer survey, 29% consumers plan to use their grill or smoker more often this year. Beyond holidays, 49% barbecued for birthday parties, 24% on a camping trip, 21% at a vacation home party and 11% during tailgating activities for sporting events.
INTRODUCING
SPIRIT ® II GAS GRILLS
Other highlights from the HPBA study on ownership and purchase trends include:
Seven in 10 U.S. adults own a grill or smoker, and in Canada, ownership is 8 in 10.
Gas is the most popular grill type (64%), followed by charcoal (44%) and electric (9%).
Wood pellet grill ownership is currently 3%, but 11% of the prospective buyers plan to purchase one in the coming year.
56% of grills were purchased as replacements, while 29% were firsttime purchases.
The global market for outdoor power equipment is estimated to reach 133 million units by 2022, according to Global Industry Analysts Inc., driven by recovering construction activity and the increasing trend of outdoor living and the resulting focus on creating artistic outdoor spaces.
Battery-powered tools for lawn and garden work are gaining popularity as a hassle-free alternative to gas-powered models. The rise in lithium-ion battery technology has been extended to larger cordless tools like lawn mowers and blowers. Besides noise and air pollution benefits, batterypowered OPE also bypasses the maintenance hassles that make small gas engine equipment troublesome for many users.
OUTDOOR POWER EQUIPMENT AND GRILLING PRODUCTS
SPIRIT II GAS GRILL SERIES
With the Infinity™ Ignition, 2 or 3 burners, Flavorizer® Bars and Grease Management System, the GS4 Grilling System is the strongest grilling engine within the Spirit II grills—powerful and reliable.
The Spirit II series of gas grills is available in two models and four bold colors.
Compact to fit on a small patio, yet big enough to grill a full meal. The sleek open cart and folding side table provides additional room for your grilling tools, creating a relaxing and hasslefree grilling experience.
Features porcelain-enameled, castiron cooking grates and is iGrill 3 compatible.
Weber-Stephen Products www.weber.com 847-934-5700
TIMBERLINE 850 PELLET GRILL
Starting at the core with a pill-shaped barrel, double-wall stainless steel interior and airtight lid gasket, the Timberline 850 is built with the structural integrity of Fort Knox.
Grill more with the three-tier stainless steel grates, and cook it all 20% faster than non-convection indirect flame cooking thanks to the new TRU Convection® system.
Adjust the grill from the couch, or across town, with the Timberline’s WiFIRE® controller. It lets you adjust the smoke, set timers and change or hold set temperatures from 165°F to 500°F within +/- 5°F, all from your phone via the Traeger app.
Exhaust channels allow blue smoke to rise and circulate through the chamber fully before exiting, ensuring your food only receives the freshest smoke.
Grills
OUTDOOR
MSA 140 C-BQ
CHAIN SAW
The battery-powered STIHL MSA 140 C-BQ chain saw is the most powerful in the STIHL Lightning Battery System® AK Series when paired with the STIHL AK 30 battery. It delivers excellent cutting performance for up to 45 minutes of actual cutting time on a single charge and is ideal for limb removal and storm cleanup. This chain saw is a good option for suburban homeowners. It is compact and lightweight at 8.6 pounds with the AK 30 battery,
making this chain saw easy to use and maneuver.
Features the exclusive 1/4” STIHL PICCO™ saw chain, assuring clean, smooth cuts, and has a high-torque brushless motor delivering ideal speed and durability for a virtually maintenance-free service life.
STIHL USA www.STIHLusa.com
By Sam Kirkland
6 Ways to Become a Connected Retailer
Today’s consumers really are different. First, they choose to be connected—90 percent use some kind of online device. Second, they like to research purchases online, even when they buy at stores. Third, they are impatient—they want immediate information, and they expect to receive their purchases quickly.
To compete, your business will need to connect with consumers in more ways, too. Here are six strategies to help you choose your communication channels and make those connections—so your business can provide the omni-channel, connected experience your customers want.
1. Choose Your Channels
To create a seamless experience for your customers, note which communication channels you already use, then identify two or three you can add quickly and easily. Next, take this expanded list and check for brand consistency. Finally, look for possible handoffs among channels. Are existing hand-offs clean? Can you add some? Channels you can consider include:
2. Step Back and Think Strategy
value proposition, market definition, and approach for customer acquisition and retention. Are you a price
offer a unique specialization that sets you apart?
Now, review each piece of your strategy and find a way to turn it into customer engagement across channels. For example, a retailer that sells hobby supplies might want to create and share—on its website, in an app, in a blog and elsewhere—project-focused shopping lists.
For those aiming to increase traffic to your brick-and-mortar store, you might use online channels to mention you offer gift registries and drive visits by offering in-store discounts for comyou use, plan on revisiting it every few months, because both goals and markets evolve rapidly.
TECHNOLOGY UPDATE
3. Make Things Easier for Your Customers
communication channel—or changing the
this channel to make things easier for my customers?” Anything you can do to make it easier for customers to find and use information, to put a shopping list together, to locate your store, to share their views, to ask questions or to make purchases will help them be more engaged with your business—and that’s what you want. Consider each interaction your customer has or could have with you, and look for opportunities to drive out complexity and speed up the process. Any improvement you can make—even something as basic as accepting easierto-use payment methods—will earn customer gratitude and loyalty. One noteworthy improvement could be around
sure they understand the vision for the company’s focus on customers and avenues to promote that vision.
4. Empower Customers
communication channel—you must be accomplish their current objective, at that time and place?
Depending on your business model, that may mean providing detailed product search capabilities on a website or in an app, or it can be something as simple as
delivering clear directions to your store location with a link to a good mapping tool. Other strategies to empower and engage with your customers include joining social media groups that are relevant to your market or publishing an email newsletter filled with customer-requestedtent in a blog, newsletter or webpage. Consider creating branded apps people can even create specialized apps that your in-store staff can use to assist customers. have answers—or can easily get them— from your business. Too much information is just noise, while too little won’t draw cusask for feedback and find the right balance.
5. Tap the Engagement Power of Social Media
media presence that is consistent with your brand and engaging. Provide content on products, your team, your community outreach—anything that adds to the conversation and encourages consumers to engage with you. Use this channel to provide tips and recommendations, announce flash sales and even share news about your social media repost others’ content where helpful.
other content at least weekly, but don’t
engagement data to find what works they comment on your posts, especially when you have an opportunity to take a negative remark and turn them into a happy customer.
6. Surprise and Delight Customers
Another way to identify and optimize communication channels is to think of ways to surprise your customers. response? To get ideas, go back to your business model and market strategy. Are you a price leader? Stun store visitors with a bargain-loaded endcap.tor? Create your own unique, red-carpet
treatment and train your staff to master it. Set up a special play area for children in the store. Create eye-popping seasonal decorations. Host holiday parties or seasonal special events.
Use technology to delight customers. Arm your staff with eye-catching apps that help them look up prices, retrieve fast answers, locate a product on the shelves or demonstrate products in action.
Finally, whatever delight mechanisms you set up, don’t be shy about them. Share stories about them on social media, in newsletters and blogs, or via whatever channels you have cho-
seamless customer experience you are working to create.
Sam Kirkland is strategic relationship manager for Epicor Software Corp.
Meet Your Customers Where They Shop
Epicor software solutions—deployed in the cloud or on premises—help retailers serve customers wherever and however they prefer to shop. With the right tools, connected retailers can grow profits, margins, and loyalty.
BEACON AWARDS
Recognizing the Industry’s Best New Stores
If you have recently opened a new store, then take advantage of the chance to be recognized. The Beacon Awards, which are co-sponsored by The Hardware Connection and The Hardware Conference, honor the Best New Stores in two categories: under 20,000 square feet and over 20,000 square feet, plus the Retail Beacon Award winners for each of the participating wholesalers.
Premier Beacon Award sponsors include Apex Tool Group, Epicor Software Corp., Sunnyside Corporation, RustOleum Corp. and Sashco Inc. Additional wholesaler sponsorship support comes from Ace Hardware Corp., Do it Best Corp., Orgill Inc. and True Value Company.
Get your nominations in now for the Best New Store award by the May 10 deadline. Any dealer can nominate his store and nominations are also accepted from wholesalers.
Judging will be based on any or all of the following criteria: financial performance (sales, profits, margins, etc.); community involvement; store design; merchandising displays; promotion activities; specialized product areas/niches; employee training/recognition programs; and innovative retailing concepts.
Sponsors:
Co-Sponsors:
BEST NEW STORE QUALIFICATIONS:
Store must have been open at least one year, to a maximum of 4 years. Should be a new ground-up store or it can be an existing store that has been significantly expanded or remodeled. Can be a store built to replace one destroyed by natural disaster. Store must feature all the core departments: electrical, plumbing, lawn and garden, tools, hardware and paint. Can be a branch store.
The Beacon Awards Banquet will be held during The Hardware Conference on Friday night, September 7, at the JW Marriott in Marco Island, Fla. Honorees will receive: all-expenses paid trip for two to the 2018 Hardware Conference in Marco Island including conference registration, airfare, hotel and meals; Beacon Award plaque and feature article in The Hardware Connection.
Please include detailed information for each of the judging criteria, attach any relevant pictures, list the date of new store opening and also provide retailer contact information. Email nominations by the May 10 deadline to Chris Jensen at chris@thehardwareconnection.com.
“Where Relationships Are Formed”
SEPTEMBER 7-9
3 Days of Networking, Relaxing and Learning
Meet colleagues and new friends at the industry’s largest conference for independent hardware retailers. Share ideas with top retailers on how to grow your business, interact with key vendors on how to increase sales in your store and attend educational seminars, all-industry cocktail receptions and dinners in an exclusive 5-star resort setting.
Learn More About Your POS System at the Hardware Technology Forum
Epicor, ECi Advantage/ECi RockSolid and J-3 POS will offer full-day, hands-on training sessions for their retailers. Bring your tablet or laptop so you can log right into your store as you learn new “tips and tricks” to make your POS software more productive in your store.
Sponsors:
Honor the Industry’s Best Retailers at the 2018 Beacon Awards
The Beacon Awards are an important recognition program that honors the best of the best dealers who represent the future of the industry.
Co-Sponsors: FOR MORE INFORMATION ABOUT ATTENDING THE BEACON AWARDS ALONG WITH ALL OTHER EDUCATIONAL SEMINARS, OPEN FLOOR DISCUSSIONS AND SOCIAL ACTIVITIES AT THE HARDWARE CONFERENCE, VISIT WWW.THEHARDWARECONFERENCE.COM
IN THE NEWS
NEW STORES:
Phil Watkins Ponder Do it Best Hardware
Ace Hardware
Ag Supply Ace Hardware
Danelle Nelson Master’s True Value Hardware
Jared and Cora Sawyer Sawyer’s Ace Hardware and Rental
John Finch Meuser Lumber Company Kuempel Hardware
Senneth Berrier Leigh Zancewicz Ace Hardware MacKay True Value Hardware
KUDOS TO:
Martin’s Do it Best Hardware Donna, Bill and Bob Martin
West Jefferson Do it Best Hardware Carol Beachy
PEOPLE ON THE MOVE:
Do it Best Corp.
Roy’s General Store and Hentschel Hardware
Rob, Ted, Bob and Ben Hentschel
Tony Corsberg, Friedman’s Home Improvement
Westlake Ace Hardware Joe Jeffries
Mike Altendorf
Tony Corsberg
Tom Knox
Joe Jeffries
Andy Schmitt
UPCOMING EVENTS
MAY
Do it Best Corp. Spring Market
Bostwick-Braun Fall Dealer Market HDW Fall Market
National Hardware Show
Home Hardware Fall Market
JUNE
House-Hasson Hardware Summer Dealer Market
JULY
United Hardware Fall & Winter Buying Market
Monroe Hardware Fall Market
The Hardware Conference True Value Fall Reunion
AUGUST
Ace Hardware Corp. Fall Convention
Florida Hardware Fall Market
Orgill Fall Market
SEPTEMBER
Blish-Mize Fall Market
OCTOBER
House-Hasson Hardware Fall Dealer Market Do it Best Corp. Fall Market Taiwan Hardware Show
AN INSPIRING WAY TO GIVE BACK TO THE COMMUNITY
The statement greeting visitors to the Farm & Home Hardware website doesn’t discuss products, services or sales. It simply says, “Helping to Build Our Community Since 1960.” The Wellington, Ohio, Do it Best member keeps finding new ways to give back to the community. For the past six years Farm & Home Hardware has offered an in-store work program to provide on-site job training for special education students in partnership with area schools.
Dozens of special needs students have benefited from the program, which helps them envision an independent and self-supporting future. “It’s great to see how happy these kids are when they’re in the store,” says Owner Scott Jerousek.
The students have a set schedule, coming in every Tuesday for 90 minutes from November to May. Eight arrive each time, with four assigned to the back workshop and four to the sales floor working on social skills and tasks such as dusting shelves.
“We give them name badges and cards to swipe so they feel a part of the store,” says Jerousek. “Each is on a different level of skill—some kids are autistic
Upper: Back row l to r: Austin Adkins, Candice Collins and Darion Smith. Front row l to r: Ashleigh Martin, Sara Patterson, Evelyn Dodson, Devin Bryner and Marla Stinson, the Farm & Home Hardware employee who leads the special needs students when they are in the store.
Upper Middle: Devin Bryner loves greeting customers as they enter the store.
Middle Lower and Bottom: The special needs students participating in Farm & Home Hardware’s in-store work program complete tasks like dusting shelves.
RETAIL IDEAS
or have Down syndrome. Devin has cerebral palsy and has been in a wheelchair his whole life. He loves greeting customers at the front door,” he points out.
Jerousek adds that his staff has embraced the opportunity to engage with the special needs students, and that customers have expressed appreciation for what they are doing.
LADIES NIGHT EVENT HAS CARNIVAL THEME
For its second annual Ladies Night event this past November, the team at Petersburg Do it Best Hardware in Petersburg, Ind., wanted to give attendees a fun evening to forget their worries. Mission accomplished.
Petersburg Do it Best Hardware in Petersburg, Ind., attracted about 200 women to its 2nd annual Ladies Night event this past November, which featured a carnival theme.
“It turned out great,” says Robin Smith, who runs the family business with her parents Dennis and Sherry Bishop and husband Eric. “The first year we kept it simple, but this past year we wanted to make it more of an experience for those attending and decided to organize around a carnival theme. We had a lifesize Plinko board like on The Price is Right.”
The Ladies Night event, which attracted about 200 people, included the following
activities, which were all sourced using products found in the store.
Scavenger hunt: 10 items were selected throughout the store and had different shaped hole punches on them. Each person had to find the items, punch them and turn them in. Once you completed all 10 you were eligible for giveaways provided by vendors.
Whack a nail: This was a huge hit the first year and built on a very simple idea—who can drive a nail the fastest? A work bench was lined with 2x4s, with up to six women competing in each round. Winners from each round earned $5 gift cards and small hand tools. “One lady drove it in three whacks. Throughout the store you could hear women pounding nails and getting their frustrations out,” says Smith.
Ring toss: Pool dive rings were tossed onto wine bottles that were painted to
show the different types of spray paint finishes.
Toilet plunger toss: Ladies tried to toss a toilet plunger into a tote and got a prize for landing in the tote or hitting it.
Toilet paper toss: Ladies tried to toss toilet paper through a toilet seat that was fastened to an end cap.
Small food stations were placed throughout the store to keep traffic moving and make it easier for attendees to grab and go. Although a 10 percent discount was offered on everything, the goal was for customers to have a good time and feel more comfortable in the store, not sell products, Smith points out. “We’ve had quite a few people asking when the next one will be held.”
She adds, “We made sure everyone was participating and left with a smile. Our employees all enjoyed it—the male staff who worked the event had to wear pink bow ties.”
Smith suggests, “If you’re not doing a Ladies Night event you should. You can’t be focused on making the sale. It’s hard to put a value on the word-of-mouth advertising you get.”
All the carnival games were sourced using products found in the store.
The ring toss was a popular game with attendees.
BEHIND THE NUMBERS
34%
Percentage of people who often shop at dollar stores, according to Reuters, along with 39% who sometimes shop at dollar stores.
63%
Percentage of shoppers who like low prices the most about dollar stores, according to Reuters. Simple pricing schemes at dollar stores were also favored by 63% of shoppers.
40%
Percentage of shoppers who found store cleanliness to be what they liked least about dollar stores. Also, 26% disliked the clientele and 25% disliked the store atmosphere.
34,261
Number of dollar stores forecast for the U.S. in 2020, up from 29,189 in 2015, according to Statista.
1,315
Number of new stores opened in 2017 by Dollar General, the largest dollar store chain in the U.S.
$23.5 billion Net sales
Dollar General reported for fiscal 2017 year ended Feb. 2, 2018, up 6.8% from prior year.
