Issuu

Serving Hardware, Home Center & Building Material Retailers

JANUARY 2014

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It’s the

Coolest Hardware Store! Find Out Why P. XX

Counting Questions All the Pieces & Answers How Well Are You Keeping Ace President John Vanhuzien Track of Your Inventory? 42

is in the Hot Seat

Volume 191 • Issue 2

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Serving Hardware, Home Center & Building Material Retailers

JANUARY 2014

hardwareretailing.com

It’s the

Coolest Hardware Store! Find Out Why P. XX

Counting Questions All the Pieces & Answers How Well Are You Keeping Ace President John Vanhuzien Track of Your Inventory? 42

is in the Hot Seat

Volume 191 • Issue 2

VOLUME 204 • ISSUE 3

P. XX

VOLUME 210 • ISSUE 4 • APRIL 2016 • HARDWARERETAILING.COM

Questions to Ask Check Out LBM Investing in Before Trends in TheYour New Business American Home 56

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Using Home Don’t Miss the to Increase Security NRHA All-Industry Transaction Sizes Conference this May 64 P. 52

NEXT MONTH

Learn From the Greats

ardware Retailing’s biggest issue of the year is coming in May, and you won’t want to miss it. You’ll hear from the Industry’s Top Guns, who have been selected as among the industry’s best and most innovative independent retailers. Read up on these Top Guns’ storied careers and come away with fresh ideas from their keen business insight.

You’ll also want to take a 360-degree look at Earth’s biggest retailer: Walmart. The article digs into the past and takes a closer look at the company’s present and future—and also offers a perspective from Walmart expert Charles Fishman. In addition, you will learn about best practices for selling outdoor power equipment from retailers with strong category sales.

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CONTACT CHANNELLOCK ® FOR MORE INFORMATION | SALESSUPPORT@CHANNELLOCK.COM | (800) 724-3018 ext. 341 April 2016 | HARDWARE RETAILING

Headquarters Staff

PUBLISHING

NRHA MISSION

PUBLISHER, VICE PRESIDENT OF PUBLISHING Dan Tratensek

The North American Retail Hardware Association’s (NRHA) mission is to help independent hardware stores, home centers and lumberyards, regardless of wholesale affiliation, become better and more profitable retailers.

COMMUNICATIONS

136 N. Delaware St. #200, Indianapolis, Indiana 46204 Phone: 317-275-9400 Fax: 317-275-9403 Email: nrha@nrha.org Website: www.nrha.org HEADQUARTERS STAFF PRESIDENT AND CEO Bill Lee

DIRECTOR OF COMMUNICATIONS Whitney Daulton ASSOCIATE EDITOR Liz Lichtenberger ASSISTANT EDITOR Renee Changnon

LEAD GRAPHIC DESIGNER Lynnea Verville

CONTROLLER David Gowan

GRAPHIC DESIGNER Graeme Haase

EDUCATION

WEB DEVELOPER Kevin Trehan

DIRECTOR OF MEMBER SERVICES Allison DeWitt, 317-275-9414, adewitt@nrha.org

MARKET RESEARCH ANALYST Sara Logel

TRAINING MANAGER Jesse Carleton, 317-275-9418, jcarleton@nrha.org

PRODUCTION SERVICES

MEMBER SERVICES AND COMMUNICATIONS COORDINATOR Hilary Welter, 317-275-9435, hwelter@nrha.org

PRODUCTION MANAGER Nancy A. Vondersaar

MEMBER SERVICES AND MEETING COORDINATOR Kamille Stokes, 317-275-9435, kstokes@nrha.org

SALES AND PRODUCTION ASSISTANT Freda Creech

RETAIL LEADERSHIP INSTITUTE

CIRCULATION

EXECUTIVE DIRECTOR-RETAIL LEADERSHIP INSTITUTE Scott Wright, 317-275-9430, swright@nrha.org

CIRCULATION DIRECTOR Richard Jarrett

DIRECTOR OF RETAIL OUTREACH Tom Marcum, 317-275-9430, tmarcum@nrha.org

CIRCULATION/SUBSCRIPTION/ LIST RENTAL INQUIRIES PHONE 314-432-7511 FAX 314-432-7665

NRHA VENDOR PARTNER VENDOR INTEGRATION MANAGER Marci Taschler, 317-275-9421, mtaschler@nrha.org

NRHA CANADA NRHA CANADA Michael McLarney, 360 Dupont St., Toronto, Ontario, Canada M5R 1V9; 416-489-3396, mike@hardlines.ca

STATE AND REGIONAL ASSOCIATIONS MICHIGAN RETAIL HARDWARE ASSOCIATION Patrick Harrington, 4414 S. Pennsylvania Ave., Lansing, MI 48910; 517-394-1710; FAX 517-394-6754 MIDWEST HARDWARE ASSOCIATION John Haka, 2301 Country Club Drive, Suite A, P.O. Box 8033, Stevens Point, WI 54481-8033; 715-341-7100; 800-888-1817; FAX 715-341-4080 PACIFIC NORTHWEST REGION Ronald F. Moore, 3857 Wolverine NE, Suite 20, Salem, or 97305 (UPS,FedEx); P.O. Box 17819, Salem or 97305 (U.S. Mail); 503-375-9024; FAX 503-375-7980; Alaska, Idaho, Ore., Wash. SOUTHWESTERN REGION Jeff Flora, 638 W. 39th St., Kansas City, MO 64111; P.O. Box 419264, Kansas City, MO 64141; 816-561-5323; FAX 816-561-1249; Ark., Kan., La., Mo., Neb., N.M., Texas

SALES VICE PRESIDENT OF SALES Bob Cutter NATIONAL SALES MANAGER Lowell Huffman MIDWEST REGION MANAGER Tony Sarantakis, 404 Afton Circle, Barrington, Ill. 60010; 847-934-9515, Fax: 847-934-2494, tonytakis@aol.com WEST REGION MANAGER Chris Miller, 506 Citadel Circle, Westmont, Ill. 60559; 630-234-3272, Fax: 847-934-2494, cmiller7288@gmail.com NORTHEST REGION MANAGER Brian Ziff, 17 Cutler Knoll, Watertown, Conn. 06795; 203-509-0125, Fax: 317-275-9406, bziff@nrha.org GREAT LAKES REGION MANAGER Brad Lyons, 136 N. Delaware St. #200, Indianapolis, Ind. 46204; 317-275-9424, Fax: 317-275-9403, blyons@nrha.org SOUTHEAST REGION MANAGER Nick O’Connor, 136 N. Delaware St. #200, Indianapolis, Ind. 46204; 317-275-9409, Fax: 317-275-9403, noconnor@nrha.org CANADA John Magner, 500 Queens Quay W., #101 W. Toronto, ON M5V 3K8; 416-598-0101 x220, Fax: 416-598-9191, jmagner@yorkmedia.net

Hardware Retailing (ISSN0889-2989) is published monthly by the North American Retail Hardware Association, 136 N. Delaware St. #200, Indianapolis, Ind. 46204. Subscription rates: Hardware Retailing (Payable in advance): U.S. & possessions $50.00 year. Canada $75.00 year. All other countries $100.00 year. (Air Mail $60.00 year additional). Single copy $7.00. The Annual Report issue can be purchased for $30.00. Periodical postage paid at Indianapolis, Indiana, and additional mailing offices. POSTMASTER: Send address changes to Hardware Retailing, P.O. Box 16709, St. Louis, MO 63105-1209. All editorial contents copyrighted 2016 by the North American Retail Hardware Association. No editorial may be reproduced without prior permission of the publisher. REPRINTS: Contact the Editorial Department at 317-275-9400 for price quotations. Printed in the USA.

HARDWARE RETAILING | April 2016

FEATURED NRHA BOARD MEMBER

ASSISTANT EDITOR Kate Klein

“The promotions and events that we do set us apart from other businesses. We all try to come up with out-of-the-box ideas.

”

MEGAN MENZER FIRST VICE CHAIRMAN

Megan Menzer, co-owner of Newton’s True Value in Cherryvale and Independence, Kansas, was elected to the Board in 2011. A fourth-generation owner, Menzer’s family has operated Newton’s True Value for 91 years. She began working at the store at age 12. After graduating college, she returned to the family business full-time. TELL US ABOUT A FUN OR UNIQUE PROMOTION YOU HAVE DONE. Last year, instead of Santa Claus, I dressed up as Elsa from the movie “Frozen.” We had 250 kids come to the store in a two-hour time frame to see Elsa. That was in December, and people are still talking about it.

Building on a rich heritage to serve our communities for generations to come.

That’s how I define success.

John Hannan

Spahn & Rose Lumber Company

At Do it Best Corp., we are driven to help our 3,800+ independent member-owners achieve their own definition of success. John Hannan is at the helm of Iowa-based Spahn & Rose Lumber Company, which dates back to 1904. The company recently opened a new flagship location in Dubuque that expanded its floor space from 9,000 to 28,000 square feet and added 2,200 new items – to better compete with the national chains. They worked with the Do it Best Corp. SignatureTM Store Design team to customize their impressive showroom and feature historic photos that reinforce the company’s rich heritage. In addition to driving substantial sales growth, the new location reinforces Spahn & Rose’s deep roots and ongoing commitment to the community. Tell us how YOU define success. Call us today at 888-DO IT BEST (364-8237).

Learn more about Spahn & Rose Lumber and its impressive new showroom at independentsdoitbest.com

independentsdoitbest.com

Contents APRIL 2016 | VOLUME 210 | ISSUE 4

Features

42 MANAGEMENT & OPERATIONS The Inventory Cycle In this story, you will hear how several progressive retailers solved common inventory problems. Understanding how to make the inventory process run smoothly is key for your operation.

56 CATEGORY SPOTLIGHT

Lumber & Building Materials Learn about innovations and trends in lumber and building materials by exploring the National Association of Home Builders’ model home, and find some tips to sell the trends.

64 INDUSTRY EVENT

NRHA All-Industry Conference Read up on keynote speakers, seminars, awards ceremonies and everything else you won’t want to miss at NRHA’s All-Industry Conference, held in conjunction with the National Hardware Show®.

66 INDUSTRY EVENT

National Hardware Show® Preview the new features, layout and highlights of this year’s show.

Departments 06 08 10 14 20 24 36 68 70

On the Web Independent Thinking Taking Care of Business NRHA News Trends New Products Checkouts Newsmakers/Calendar The Last Word

On the Cover

56 4

HARDWARE RETAILING | April 2016

Dennis McCarthy, manager of Mayer Paint & Hardware in Rochester, New York, is in the process of purging slow-moving inventory from his store NRHA photo by Whitney Daulton.

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On the Web INVENTORY MANAGEMENT

Tips for Driving Your Inventory Productivity Hardware Retailing created a calculator to input your store’s metrics and calculate how much inventory inaccuracy is costing your business. Also available is a list of best practices for inventory accuracy. Find these resources at TheRedT.com/inventory.

FREE MARKETING MATERIAL

PRODUCT TRENDS

Shop-Local Signage for Mother’s and Father’s Day

Top Trends at Design and Construction Week

Mother’s Day and Father’s Day are both just around the corner, and it’s important to encourage customers to shop local for these holidays. Hardware Retailing has created free themed shop-local marketing materials you can display in your store. You can download them at TheRedT.com/momdad.

This month, Hardware Retailing highlights trends in building materials found in 2016’s version of The New American Home on Page 56. To see more products and innovations featured at the International Builders’ Show and the Kitchen and Bath Industry Show, visit TheRedT.com/DC_Trends.

We also offer a complete toolkit of other shop-local promotional materials you can use any time of year. To find those materials, visit TheRedT.com/shoplocal.

This series of quick lessons on topics including selling skills, merchandising, product knowledge and operations is geared toward all levels of employees. Use them at your next meeting! Visit nrha.org/freetraining to download this month’s lessons, listed below.

1 Video: Introduction to the Inventory Cycle

2 PowerPoint: Inventory

Management: How You Can Help

VIDEO

NEW RESOURCE

Products That Sand, and Products That Suck

Analyzing Payroll

Back by popular demand, Publisher Dan Tratensek shows us several of his favorite products on the market. In the first installment, you’ll see several sanding products and unique suction hooks. Tune in by visiting TheRedT.com/productsvideo1.

Want to get better control of your payroll expenses? NRHA created a resource that addresses the issue of payroll and provides case studies on some industry best practices. Also included is a video you can share with employees to help explain this complex topic. Visit TheRedT.com/codb-payroll.

3 Video: How to Take Care of Live Plants in the Store

4 Video: Customers FAQs About Gardening

SOCIAL MEDIA LINKS

@hardwareretail facebook.com/HardwareRetailing

Website links can get long and wordy, so Hardware Retailing is making it easier to find our online content. Simply type in TheRedT.com/ followed by the unique code for each link. Why “The Red T?” Check out our logo!

HARDWARE RETAILING | April 2016

Independent Thinking

An Event You Can’t Miss

e know you probably already attend several shows a year. Hopefully, you take advantage of at least one of your wholesaler or co-op markets. For the ongoing needs of stocking your shelves, learning about your supplier’s programs and participating in training, they should be the most essential and important events on your travel schedule. You may also visit one or more other shows, looking for housewares, giftware, sporting goods or lawn and garden products. But there’s another event you simply can’t miss: The National Hardware Show®.

Why Attend the National Hardware Show? The National Hardware Show is something quite different. It’s where you’ll see vendors that aren’t at your market, and you’ll see products your regular vendors carry, but don’t bring to market. You’ll also see inventors with new products and unique categories you may be trying to source. The entire Show is focused on the breadth of products you carry. Every core hardware category is fully represented. Exhibition areas like lawn and garden, outdoor living and the tailgating categories are unmatched anywhere else. You’ll find ideas about new products and trends you can put to work in your stores.

“Give the National

Hardware Show a try— I guarantee you’ll go back to your business full of new ideas and with lots of great new products to excite your customers.

”

The Show Is Focused on You, the Independent To demonstrate its commitment to the independent retailer, the Show is now branded “The National Hardware Show, brought to you by NRHA.” The Show organizers recognize that the independent retailer controls about $160 billion of home improvement sales each year, slightly over half— and that makes you a significant player in this market. So, you and your association, NRHA, are front and center at the Show. At the Show, you’ll find your home at the NRHA Village and Stage. It’s a central place on the Show floor where retailers can meet, relax and hear ideas from today’s retail thought-leaders. There are also several social events focused on the independent retailer as well, like the Young Retailer of the Year Awards, the Independent Retailer Reception and the Retailers’ Choice Awards. The National Hardware Show has become the largest gathering of independent retailers in the world. Rub elbows with retailers from all over, from every co-op and wholesale affiliation. It’s the one time we gather as a united industry.

See You in Las Vegas The National Hardware Show kicks off Tuesday, May 3, at the NRHA Young Retailer of the Year reception and awards program. The exhibits open Wednesday, May 4, and continue through Friday, May 6. And there’s so much more to do in Vegas: shows, great food, shopping, casinos and people-watching! Give the National Hardware Show a try—I guarantee you’ll go back to your business full of new ideas and with lots of great new products to excite your customers. It will be an eye-opening and mind-expanding experience! While you’re at the Show, stop by your home, the NRHA Village, to say hello.

Bill Lee, President and CEO

blee@nrha.org

HARDWARE RETAILING | April 2016

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Taking Care of Business

Retailing Ain’t Easy

“Proficient inventory

management can be the difference between running a highly successful operation and a failure.

”

ust over a month ago, Indianapolis was rocked by a particular bit of news: Beloved sports icon Peyton Manning was retiring. Sure, Peyton hadn’t thrown a football for the Colts for several seasons, but people here in Indy still considered Peyton to be the hometown quarterback. Because of his close ties to Indy, the local news coverage about his retirement was pretty nonstop, so I got to hear time and again all those things that went into making Peyton such a great quarterback. One of the things that struck me about this narrative was that, while Peyton certainly had some innate gifts that made him well-suited to his position (thank you, Archie), his success wasn’t rooted solely in his physical prowess. Instead, what Peyton relied on throughout his career was simply out-preparing the other guys. While others were back at the hotel sleeping or eating fancy dinners, Peyton was studying game footage, reading scouting reports and poring over the playbook. For me, this reinforced a pretty simple concept about excellence—being good ain’t easy. Even for someone who was born to be a quarterback, being good took a lot of hard work. And this hard work wasn’t just on the glamorous stuff like throwing Hail Marys or running the bootleg. Like it or not, the same can be said for retailing—being good ain’t easy! You can take a wonderful location, beautiful merchandising and solid advertising and still run a store that produces more like Johnny Manziel than Peyton Manning (my apologies to those of you who are in Cleveland). On Page 42 of this issue, we address the issue of inventory management. Now, aside from a handful of you out there, most would agree that inventory management is not among the most glamorous retailing tasks. But while it might not have the high profile of retail activities like promotions, events, customer service or merchandising, inventory management is likely one of the most critical elements of your operation’s success. In fact, getting products on the shelves and off the shelves in the most efficient manner is really the basic foundation of any successful retail operation. And guess what? It ain’t easy. Properly managing your inventory requires you (or someone you have designated—sorry, assistant managers) to count products, examine empty pegs, pore over reports and actually print and read order histories. The process might not sound like fun, but proficient inventory management can be the difference between running a highly successful operation and a failure. In this issue, we talk to several progressive retailers who have addressed inventory management head on, sharpening their pencils and tackling the task. This glimpse into high-performing operations is not the end-all, comprehensive report on inventory management. However, it will hopefully provide you with some insights and inspiration into how you can improve different elements of the inventory management process in your business. And remember, whether it’s retailing or football, there is no shortcut to excellence. But if you really want to take a tip from one of football’s greatest QBs, try screaming “Omaha” at the top of your lungs whenever you find an empty peg hook. I hear it makes a difference.

Dan M. Tratensek, Publisher

dant@nrha.org

HARDWARE RETAILING | April 2016

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NRHA News

How Does Your Business Measure Up?

o you need a resource that will help you make better business decisions? Participate in NRHA’s Cost of Doing Business Study! The Cost of Doing Business Study, which has been conducted annually for almost 100 years, is the industry’s only comprehensive benchmarking study. It combines the financial results of more than 1,000 independent hardware stores, home centers and lumberyards, serving as an effective tool to help you compare your store’s financial performance to industry averages.

What’s in It for You? As a participant in the study, you will receive a robust, free Personalized Financial Analysis. This includes a variety of resources that will help you make informed financial decisions about the future of your business. The analysis includes: • COMPOSITE FINANCIAL STATEMENTS: These pages provide financial statements for both typical and high-profit stores, and include your store’s financial data for comparison. • YOUR RATIOS: This section includes your financial ratios, along with a summary of the ratios used within the study, which can be helpful in understanding the overall financial condition of your business. • STRATEGIC PROFIT MODEL: This section combines the principal elements of the income statement and balance sheet in a profit-planning equation. With this data, you can compare your results to both typical and high-profit stores. • WHAT-IF SCENARIOS: This section provides a summary of the information you submitted on the Cost of Doing Business survey. You can use it to create potential scenarios for your company. For example, if you predict that the cost of inventory may increase by 1 percent, you can manipulate other areas, such as decreasing payroll or increasing customer count, to see what changes can be made to preserve net profit.

“NRHA is producing a library

of financial resources because we want to empower retailers and help them make smart business decisions.

”

—David Gowan, Controller, NRHA 14

HARDWARE RETAILING | April 2016

Participation is Easy! We know you’re busy, so NRHA is offering five easy ways for you to participate. You can fill out and mail in the Cost of Doing Business Study survey, mail in a copy of your 2015 year-end financial statements, complete the online submission form, email your financial documents to NRHA or fax your information to the association. For more information on participating, visit TheRedT.com/codb2016.

An Extra Resource To accompany the study, NRHA is developing a library of resources to help you and your employees better understand the financial metrics within the Cost of Doing Business Study. “NRHA is producing a library of financial resources because we want to empower retailers and help them make smart business decisions,” says Gowan. “We’ve also included employee-focused videos to help their employees better understand how different financial metrics impact their bottom line.” In December, we released “Improve Your Average Transaction Size.” This month, NRHA is releasing “Understanding Payroll,” which will include a PDF examining payroll expense and a video that can help employees better understand how payroll and their productivity impacts sales. To download this resource, visit TheRedT.com/codb-payroll.

NRHA News

Shop Local: The Movement

pring is here, and that means warmer weather has arrived, your busy season is about to begin and you are preparing events and promotions around two important holidays: Mother’s Day and Father’s Day. As you head into your busy season, take this opportunity to share your store’s local identity with customers and the impact their purchasing decisions have on the community. To help in doing this, NRHA and Independent We Stand created a Mother’s Day and Father’s Day shop-local signage package that uses data from NRHA’s Home Sweet Home Study, which examines the impact shopping at a local home improvement store has on a community versus shopping at a big box. This free signage package includes posters, shelf talkers, bag stuffers and more. Did you know that purchases made at a local home improvement store keep twice as much money in your community than the same purchases made at a big box? Let your town know! To download these free marketing materials to use in your store, visit TheRedT.com/momdad. Other marketing materials, which can be used all year, can be downloaded at TheRedT.com/shoplocal.

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HARDWARE RETAILING | April 2016

Annual Study Shows Small Business Challenges

he Advocates for Independent Business (AIB), a coalition of trade association and organizations that represent locally owned independent businesses, of which NRHA is a member, released its 2016 Independent Business Survey, done in conjunction with the Institute for Local Self-Reliance.

This study surveyed more than 3,200 independent businesses and analyzed the challenges these companies face. Below are the most urgent threats facing independent retailers, according to the survey. To read the full survey, visit indiebizadvocates.org.

Top 3 Challenges Facing Independent Business Owners

I face competition from Internet retailers.

My big competitors receive better pricing and terms.

Health insurance benefits are too costly.

Source: 2016 Independent Business Survey, Advocates for Independent Business and Institute for Local Self-Reliance

NRHA News

NRHA Sponsoring Fuller Center Service Work

RHA is providing seven grants to fund a series of volunteer service days overseen by The Fuller Center for Housing, which is a nonprofit group working to eliminate poverty housing. Each $1,000 NRHA grant will go toward one of seven projects located along the cross-country travel route of the Fuller Center Bicycle Adventure. In the summer of 2016, Fuller Center volunteers will bike from Seattle to the District of Columbia, and do service projects along the way. Tool manufacturer Stanley Black & Decker is donating an additional $500 to each 2016 bicycle adventure project. By sponsoring the 2016 bike route projects, NRHA is continuing its support of The Fuller Center for Housing. The association has provided grant funding for the organization’s work across the U.S., and contributed grants to each of the service projects along the 2015 bike trip route. NRHA grants go toward project materials, which local Fuller Center chapters buy from independent home improvement stores. “With the energy of the service-minded cyclists and this generous financial backing from the North American Retail Hardware Association and Stanley Black & Decker, the bike adventure is able to facilitate an immediate and lasting impact on the covenant partner communities with which it works,” says bike adventure coordinator Connor Ciment.

HARDWARE RETAILING | April 2016

BUILD A BETTER BUSINESS. THE NATIONAL HARDWARE SHOW: What’s in Store for you? New Products. Big Brands. Essential Connections. “A core value at Aubuchon Hardware is to take responsibility for momentum through innovation and change. There is no better place than the National Hardware Show to fnd new and innovative products and ideas for driving our business forward.” - WILL AUBUCHON

Aubuchon Hardware, Massachusetts

New Show Day Pattern: Wednesday, May 4 - Friday, May 6, 2016 Las Vegas Convention Center | Las Vegas, NV LEARN MORE & REGISTER TODAY • NATIONALHARDWARESHOW.COM

Trends

Top 10 Most Important Green Products and Practices In order of importance to builders and remodelers.

Paying More for Green Contractors are continuing to integrate greener and more sustainable building materials and products into their building projects, striving to meet consumers’ demand for highly efficient, healthy homes.

Properly Sized and Installed HVAC Systems

The data provided below comes from Green and Healthier Homes, a report by Dodge Data & Analytics, created in partnership with the National Association of Home Builders. The report shares data from surveys of homebuilders and remodelers on multiple aspects of green building, such as cost and the different projects green builders are pursuing. “One factor driving the growth of green in the residential sector is the association of green homes with healthier homes,” the report says. “Most (83 percent) of homebuilders and remodelers believe consumers are willing to pay more for a healthier home,” with a majority of consumers willing to pay 1 to 4 percent more.

Durable Materials

Highly Efficient HVAC and/or Water Heating Equipment

Insulation Exceeding Code Minimums

Applied to Retail: Stay on top of green building trends by reading Dodge & Data Analytics’ complete report that can be found at TheRedT.com/GreenBuilding. Understanding the most popular and efficient green building practices will help you assist customers as the remodeling season begins. To read about more building material trends, turn to Page 56.

Energy-Efficient Appliances

Increased Moisture Control and Ventilation

Willingness of Homebuyers/Homeowners to Pay More for a Healthier Home According to homebuilders and remodelers.

Windows Exceeding Code-Mandated Energy Performance

Water-Conserving Appliances

Willing to Pay More

83%

Not Willing to Pay More

12%

Don’t Know

Source: Dodge Data & Analytics, 2015

HARDWARE RETAILING | April 2016

Efficient Lighting

Water-Conserving Plumbing Fixtures and Faucets

ROBBIE HAS PLENTY TO SMILE ABOUT … now that he’s with OUR co-op

Business is booming since Robbie left the other co-op behind to join our family. Although he’s proudly independent, Robbie never rides alone. Our team at True Value® is always at his side. We ofer Robbie sound business solutions and resources to ensure his future growth and proftability. We fuel his success. Today, Robbie has real relationships with folks who care. He no longer feels like “just another number.” After all, Robbie is family.

FREEDOM TO RUN HIS STORE HIS WAY WITHOUT INTERFERENCE

Robbie proudly shares the business results he achieved as a member of our co-op. (Your individual results will vary.)

CUSTOMER COUNT

MARGIN DOLLARS

INCREASED 9%

TRANSACTIONS

INCREASED

68,000

IF YOU VALUE WHAT WE VALUE GIVE US A CALL AT 1-888-291-7229 TrueValueCompany.com

PROFITS INCREASED

39%

Trends

Manufacturing Sector Wanes at Year’s End

Manufacturing declined throughout 2015, as the Purchasing Managers’ Index (PMI) fell below 50 in October and remained below 50 through the end of the year. The below-50 reading means that the manufacturing sector is contracting. Of the data provided below, PMI is the only leading indicator, foreshadowing changes the economy may experience in the coming months.

Existing-Home Sales (in millions)

The fourth quarter of 2015 ended with a weak manufacturing sector, though housing starts and consumer confidence were up.

Total Existing-Home Sales 6.0

In Fortune, Michael Montgomery, economist with IHS Global insight, addresses the manufacturing sector, attributing “this weakness to an ‘anemic global demand for goods’ in combination with the drag of a strong dollar on exporters here at home.“

5.5

5.0

4.5

4.0

2015

Months

Housing Remains Strong, Manufacturing Contracts ECONOMIC METRICS

DEFINITION

Housing Starts (in thousands)1

The number of new residential single-family and multifamily homes that have begun construction, using seasonally adjusted rates.

Consumer Confidence2

The level of optimism that consumers express about the state of the economy, shown through saving or spending money.

Existing-Home Sales (in millions)3

Number of completed sales involving existing single-family homes (single family, townhomes, condos and co-ops) at an adjusted annual rate.

Existing-Home Price (in thousands)3

The median price for all existing housing types.

Purchasing Managers’ Index (PMI)4

The health of the manufacturing sector based on measuring new orders, inventory levels, production, supplier deliveries and the employment environment.

PERCENTAGE CHANGE

7.1% 1,130

92.7 96.0

3.5%

5.1 5.2

1.9%

$207 $221

57.6 48.6

Source: U.S. Census Bureau 1, The Conference Board 2, National Association of Realtors 3, Institute for Supply Management 4 HARDWARE RETAILING | April 2016

Q4 2015

1,055

Numbers derived from the average of October, November and December data.

Q4 2014

6.7%

-15.6%

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New Products

“Everyone lives such busy

lives, and coloring is a great stress reliever. These coloring books have sold well for the limited time they’ve been out.

”

—Carrie James, Ace Hardware of Richardson

“This is a must have product

for anyone on the go. The JUNOJUMPER is small in size, but very powerful and can even jump-start a car.

”

—Ian Williams, Fresno Ag Hardware

1. COLORING BOOK DISPLAY

2. PORTABLE JUMP START BATTERY

The Coloring Book Floor Display by Peter Pauper Press holds any combination of 64 coloring books, plus six colored pencil sets. These coloring books are designed for kids and adults. Each coloring book includes 31 full-page designs on heavyweight, acid-free paper. Pages are micro-perforated for ease of removal and measure 9.5 inches wide by 9 inches high. Consumers are seeking out coloring books more than ever in an attempt to relax and de-stress. There are several different books to choose from.

The JUNOJUMPER is a sleek, lightweight external battery that houses an impressive 6,000 mAh battery pack capable of jumping a completely dead car battery in seconds. The multifunctional battery also features a USB 5V 2.1A output, allowing it to charge power-hungry devices such as smartphones, cameras and tablets. The newly designed JUNOJUMPER is only 7 ounces, making it extremely lightweight and portable. The kit comes with one JUNOJUMPER, one pair of safe jumper cables and a user manual. It charges via Micro USB cable or 12V cigarette port. Cables are included.

PETER PAUPER PRESS 914-681-0144 or www.peterpauper.com

HARDWARE RETAILING | April 2016

JUNO POWER 888-503-5368 or www.junopower.com

RETAILER PICKS These four products were selected by retailers like you! Share your favorite products by contacting Renee Changnon at rchangnon@nrha.org.

“My Paint Saint is a practical solution for quick touch-ups. Our paint department has found it to be a profitable add-on to any paint sale. —Gwenn Werner, Parry's

”

“Once this power tool is used, the serious wood worker and tool user does not go back to the other import brands. —Jeff Bean, Olympia Supply Co.

”

3 3. DIY PAINT BRUSH

4. OSCILATING POWER TOOL

My Paint Saint is a high-quality brush built into the lid of an airtight paint can, which makes touch-ups and paint storage easy. The lid twists on and off without requiring screwdrivers or mallets. Inside ridges let users wipe off excess paint, and the lid catches drips, too. When done with touch-ups, users can put the brush/lid back and reseal it for next time without needing to clean the brush. It is intended for use with water-based paints, including latex, milk paint, chalk paints and more. It holds up to 13 ounces of paint.

The Fein FMM 350Q MultiMaster is an all-in-one tool for interior construction professionals performing original insulation or rehab work. It is useful on windows, floors and stairs; in kitchens and bathrooms; and for some exterior work. It can also be used for automotive aftermarket work, on boats, in the workshop and for other applications. It has a high-performance 350W motor that has a balanced armature with ball bearings at both ends for smooth operation. Its fan provides optimal air throughout and motor cooling. The generator provides constant speed under loads and infinitely variable speed control.

MY PAINT SAINT 281-667-1124 or www.mypaintsaint.com

FEIN POWER TOOLS, INC. 412-922-8886 or www.feinus.com

April 2016 | HARDWARE RETAILING

New Products Project Tip

PROMOTE ECO-FRIENDLY PROJECTS Establish your business not only as a place for expert advice in everything DIY, but also as a go-to store for all eco-friendly projects. Energy efficiency was a huge trend spotted in The New American Home during the International Builders’ Show, (learn more on Page 62). Here are some projects you can share with your customers: • Conserve Water With Rain Barrels—For consumers in arid areas of the country and even lush locations, rainwater collection is a great way to water the lawn without paying for it. This is a simple project that's easy for you to promote and easy for your customers to build and install. They can then use this collected water on their gardens. • Compost Bins—A compost bin is another easy project that involves products from your store. Not only do compost bins help keep excess food waste out of the landfill, but they also improve the quality of soil by adding organic matter and nutrients. • Seal Windows and Doors—A simple project you can teach customers all year long is how to best seal their windows and doors. So they're better equipped to help these customers, take time to review with your employees the many options your store offers, including weatherstripping, caulk or even better-fitting doors and windows to seal the home.

The problem your customers are having right now.

Visit bit.ly/dustHRM to see the Dust Deputy® in action

New Products How-to Sell Sponsored by Sashco, Inc.

BIG STRETCH® WON'T CRACK Caulking isn’t exactly the most exciting project on your customers’ to-do lists. But, more often than not, the results of sub-par caulking—brittle, cracked, failed caulk—brings in frustrated, fed-up customers. Next time one comes in, point them to Big Stretch®. This water-based high-performance sealant will stick, twist, bend, and stretch to handle almost any movement. • Won’t Crack…It Just Stretches—It’s on the cartridge, but it's actually a quote from a loyal Big Stretch® user. It’s easy to sell Big Stretch® when what it does is written on the side of the container. It's great for constantly moving joints. • Sticks, Even On Difficult Surfaces—Employees don’t need to search for a product specific to every different need. Big Stretch® is compatible with a wide variety of building materials, including difficult ones like vinyl windows and siding. • Grip It, Press It, Squeeze It, Sell It—Sashco’s FREE hands-on demo blocks help you sell more caulk. Order them today at www.sashco.com/bigblk. SASHCO, INC. 800-767-5656 or www.sashco.com

THE IMPORTANCE OF DUST COLLECTION

The product that will make you their hero. The patented Dust Deputy® attaches to any wet/dry vacuum to put an end to clogged flters and suction loss.

and learn why it’s a MUST for your store!

U.S. Patent # 7,282,074

Available in your warehouse now! 2408706 302734

The Leader In Dust Collection oneida-air.com

New Products

5 6

7 5. MOPPING DEVICE

6. HEATED STORAGE UNIT

7. BBQ BLEND

The Swiffer® WetJet® Mop Starter Kit is an all-in-one mopping system that traps and locks dirt so it doesn’t get pushed around. It’s designed to break up and dissolve messes to keep floors clean. It has a dual-spray nozzle, a reinforced handle, a pad attachment and a flexible swivel head. It is safe for cleaning nearly every floor type. After the initial purchase, users must buy additional solution when it runs out.

The THERMOSTEEL™ is a heated storage unit designed for contractors to save money, reduce downtime and prevent damage to tools and materials due to extremely cold temperatures. With heated functionality, the THERMOSTEEL works by plugging in the heating element. It is constructed with the traditional KNAACK® storage box features, like security, durability and productivity. The storage unit protects tools from jobsite theft and weather damage.

Dizzy Dust by Dizzy Pig Barbecue Company is an all-purpose rub designed for flavoring. The rub is blended to bring out the best flavors in food on the smoker or grill. It provides a blend of saltiness, sweetness, spiciness, heat and peppery tones. All Dizzy Pig Barbecue Company rubs are natural and glutenfree and contain no MSG. The rubs are available in 8-ounce shaker bottles.

PROCTER & GAMBLE 800-214-8734 or www.swiffer.com

WERNER CO. 888-523-3370 or www.wernerco.com

HARDWARE RETAILING | April 2016

DIZZY PIG BBQ 703-274-3580 or www.dizzypigbbq.com

New Products

8. HOSPITALITY THERMOSTAT

9. GARDEN BULB PAD

The Omnistat™ 3 Hospitality Thermostat is a retrofit solution developed for guest room energy management. The small form factor thermostat has a capacitative touch face, and when paired with wireless Leviton Lumina RF load controls and sensors, it provides control for hospitality rooms and suites. The device detects if a room is occupied and automatically adjusts heat and cool set points based on occupancy, as well as on and off control of lights, televisions, lamps and more.

The Easy Bloom Pad® is a biodegradable paper pad containing flower bulbs. Bloompads reduce planting time to 30 seconds per pad, removing the need to dig holes to an exact depth. Bulbs are pre-spaced and need only to be placed in the ground, containers, or balcony trays, covered and packed with soil and watered. For a colorful result, The Easy Bloom Pad offers pads with two varieties of bulbs, and pads containing anywhere between seven and 20 bulbs, depending on the type of flower.

LEVITON 800-832-9538 or www.leviton.com

EASY BLOOM PAD® NORTH AMERICA 800-806-1521 or www.easybloompad.com

Series ‘S’ self-priming centrifugal pumps

Lightweight, corrosion resistant pumps for freshwater, saltwater, ag chemicals and road treatment de-icers. Use for: • Agriculture • Construction • Rental • Flooding • Swimming Pools • Golf courses • Irrigation • Aeration See us at your Spring Market Built in Lancaster County, Pennsylvania since 1974

Ph: 717-925-8240 Toll-free: 800-233-3861 Fax: 717-656-0477 email: sales@pacerpumps.com 30

HARDWARE RETAILING | April 2016

Easy-to-use, affordable POS solution for hardware dealers

YOU BUILT IT! Your business is proof of your hard work. Don’t trust it to just any business management software. ECi RockSolid can help you build on your success by automating and streamlining your entire business from point-of-sale through inventory order placement and tracking to accounts receivable. All of this efficiency comes in one package at one value-driven price point. Let us manage the software while you keep building an even better business.

“

RockSolid virtually eliminated our posting mistakes. Our end-ofmonth books take us an hour where it used to take six.” Ken Pitkin Owner, Callaway True Value

Build your future with ECi RockSolid! Watch the Callaway True Value Story: http://www2.ecisolutions.com/callaway 800-588-5128 |

info@ecisolutions.com |

lbmh.ecisolutions.com/rocksolid

NEW PRODUCTS

10 EVEN OUR TECHNOLOGY

HAS TECHNOLOGY.

11 10. RUGGED HAMMER The V5 Framing Hammer handles projects from construction to destruction. With a steel handle, this hammer is used for traditional framing and concrete form work. From a “V-shaped” head with side puller and sleek profile design, the V5 Framing Hammer features a reinforced claw for extra prying power, which is ideal for framers who spend time pulling a lot of nails.

Whether you’re at the offce or the job site, our catalog app puts a menu of our top

VAUGHAN & BUSHNELL MANUFACTURING CO. 815-648-2448 or www.vaughanmfg.com

products in your pocket. We make your search for the right product as seamless

11. PAINT AND PREP KIT

as possible. It’s one more way we provide

The REACHER three-piece tool kit lets consumers paint, prep and clean up high. The pole mountable, stainless steel flex arm adjusts instantly to any angle for use with the brush and roller attachments and any roller frame or spray paint shield. All brushes fit the brush clamp and flex arm to gain precise, compound angles. The brush clamp doubles as a rugged prep tool by threading directly on any pole. Firmly bolt on scrapers, putty knives, wire brushes, cleaning tools, keyhole saws and more. A unique mini-roller paints gutters and rafters.

better technology for better building. Find out more at USPapp.BUILD NOW AVAILABLE ON ANDROID DEVICES.

MCCAULEY TOOLS 800-685-4911 or info@mccauleytools.com

HARDWARE RETAILING | April 2016

12 13 Grow Your Hardware Business with Midwest Products Precision Cut Wood

Memory Making Milestones

12. INSULATED TUMBLER Tervis Tumblers are a favorite among consumers as they keep drinks hot or cool and allow users to pick from many different styles. The products are both microwave- and dishwasher-safe, reduce condensation and are Made in America. The Simply Southern® Anchor with Pearls design is available in a 16-ounce tumbler, a 24-ounce tumber and the water bottle. Retailers can offer a wide array of Tervis Tumbler brands and designs. TERVIS 866-TUMBLER or www.tervis.com

13. KITCHEN AND BATH SEALANT KWIK SEAL ULTRA™ Premium Siliconized Kitchen and Bath Sealant has an innovative formula that features ultra hydrophobic technology and creates long-lasting durability. The product repels water, liquids, soap scum, stains and dirt, making the sealant easy to clean. KWIK SEAL ULTRA™ is 100-percent waterproof, crack proof and safe for all surfaces. The product is available in 10.1-fluid-ounce cartridges or 5.5-fluid-ounce squeeze tubes in white, clear and biscuit to match the most common kitchen and bath fixtures. DAP PRODUCTS 888-DAP-TIPS or www.dap.com

Delicious Wenzel Sausages

April 2016 | HARDWARE RETAILING

NEW PRODUCTS

14 14. CORNER CLAMPING JIG

15. PHONE CLEANER

The Clamp-It Corner Clamping Jig is a new product from Rockler Woodworking and Hardware. The jig assembly, along with the Clamp-It Assembly Square, which is sold separately, work together to hold two panels at a 90-degree angle, allowing the builder to use both hands to fasten the joint. The jig includes an extra-wide base, high sidewalls and strong Acme-threaded clamp screws to securely hold panels. Cushioned pads and mounting holes in the body of the Clamp-It Corner Clamping Jig allow it to be anchored in place.

PhoneSoap 2.0 is a UV sanitizer for cell phones. This phone sanitizer kills bacteria growing on a phone without heat, liquid or chemicals. The two UV-C lamps produce a wavelength of light, which encompass the phone and passes through the cell walls of bacteria and viruses. It only takes five minutes to completely sanitize the phone. Additionally, users can also charge their phone while they sanitize it. To use it, users lift the lid, place the phone inside, plug it in for a charge, close the lid and, in a few minutes, remove it.

ROCKLER 877-ROCKLER or www.rockler.com

PHONESOAP LLC 855-212-8416 or www.phonesoap.com

Stock The Product That Will Be Leaping Off Your Shelves! FrogTape® is the only painting tape treated with PaintBlock® Technology which delivers sharp paint lines the ﬁrst time, every time. Available in off shelf displays, make sure your store has FrogTape® stocked so customers can experience the FrogTape® difference!

frogtape.com

16 17 Starrett Power Tool Accessories and Hand Tools

www.starrett.com/u?hard0301163

Watch the Video! starrett.com

16. FRAGRANT PAINT ADDITIVE

Your name depends on ours...

The Glade Paint Additive® makes decorating with fragrance simple and easy. Glade offers an array of fragrances, including choices such as French Vanilla, Apple Cinnamon and Clean Linen, providing a fresh aroma throughout any room. Do-it-yourselfers can use this additive to freshen rooms and combat odors. Glade Paint Additive quickly enhances rooms with a scent that lasts for months. SCENTCO, LLC 877-723-6826 or www.scentco.net/gladeproducts

17. ICE SUBSTITUTE YETI ICE is a tough product that provides superior ice protection. The product is an ice substitute that uses science to find the most effective temperature to maximize ice retention in any cooler. Its custom shape reduces freezing time, and multiple size options mean users can add it to a wide variety of coolers in many sizes. It is available in 1-pound, 2-pound and 4-pound sizes. YETI COOLERS 512-394-9384 or www.yeticoolers.com

What company is a cut above the rest?

Innovation Rules April 2016 | HARDWARE RETAILING

Checkouts UNIQUE DISPLAY

Store Traffic Climbs, Thanks to Unique Display

ustomers who come in to Boliantz Hardware in Shelby, Ohio, have a hard time missing the outdoor power equipment display. That’s thanks to the almost-10-foot-tall tree trunk in the middle of the department. The tree trunk serves as a backdrop for Stihl-branded chainsaws, leaf blowers and other power equipment. Department manager Mark McKown thought of the idea for the unique display. “Chainsaws and trees go together, and I thought it’d be neat to display chainsaws coming out of the tree,” McKown says. One of his customers is an arborist and was able to help the store find a tree trunk it could use. It was up to McKown to get it back to the store, though, and he says that was no small feat. McKown and owner Doug Boliantz used a forklift to get it inside, and bolted two 2x6’s to the bottom to hold it up.

Now, the tree trunk has mulch, logs and different tools around it to add to the display. “The display has gotten bigger over time,” Boliantz says. They change out the tools on the tree trunk with each season. In the fall, it held leaf blowers; now, in the spring, it holds tree trimmers. McKown and Boliantz say the unique display has brought more traffic through the door. “We’ll often have customers who come in and say someone told them about the display and that they had to stop in to see it,” Boliantz says. McKown says many customers touch the tree trunk to see if it’s real. Boliantz gives McKown all the credit for the display’s success. “Mark thought of it, ran with it and put everything together,” Boliantz says. “All the credit goes to him.”

Customers at Boliantz Hardware who are searching for Stihl-branded outdoor power equipment need to look no further than the 10-foot-tall tree trunk in the middle of that department. Department manager Mark McKown regularly switches out the tools on display.

Looking for creative ways to engage customers? Whether it’s promotions, merchandising, special events or unique advertising, we cover it here. Have an idea? Contact Liz Lichtenberger, llichtenberger@nrha.org, to have your story considered for publication.

HARDWARE RETAILING | April 2016

Checkouts

COMMUNITY RELATIONS

Networking Event Brings Business Leaders to Page Hardware

his past February, around the close of regular business on a Tuesday evening at Page Hardware and Appliance in Guilford, Connecticut, a crowd was just starting to arrive. The store, which just a few minutes earlier was bustling with shoppers buying hardware, was now full of local businesspeople enjoying drinks and conversation. It was time for the monthly “Business After Hours” event, and a unique opportunity for vice president Amy Earls to support local businesses and get local leaders into her store. “Businesspeople love to network, and this is a great way for us to meet new members of the area’s business community,” she says. The local chamber of commerce sponsors Business After Hours as a networking opportunity for local businesses, with different members of the chamber hosting the event each month. Earls, who is on the chamber board, says her store has taken its turn at hosting the event once a year for the past four years. The event lasts two hours and includes drinks from a nearby liquor store and appetizers donated by a locally owned restaurant across the street. Door prizes include coupons and products from area businesses. Typically, about 75 to 100 people from all types of businesses, such as lawyers, retailers and health care providers, come to the event. Most of them are current members of the chamber, but it’s also an informational time for those interested in becoming members. Attendees pay a small admission. Earls says the store pays about $300 to host the event, in addition to buying the drinks, but it’s a small price compared to the amount of publicity it generates for the store. She gets the store’s name in all of the promotional material the chamber sends out through flyers, email and social media, and gets new people in the door. She serves food and drinks in two different parts of the appliance showroom, which helps draw people into all areas of the store. While there’s a cashier on duty just in case someone needs to make a purchase, most of the return on the investment comes later. “We’ve had a few people buy their appliances from us after seeing our showroom during the event, and this year we passed out flyers talking about our spring sales promotions,” she says. “The event offers us a great opportunity to be involved in the chamber and showcase our business without too much effort. We always hear people say that, even though they are also local business owners, they didn’t know we were here.”

HARDWARE RETAILING | April 2016

The appliance showroom at Page Hardware includes working kitchens, a perfect setting for a local restaurant to serve food while attendees mingle during the Business After Hours networking event.

KNOCK, knock. WHo’s ThEre? Noah. Noah WHO? Noah great door hardware supplier? Check out Top Notch!

P :

800.233.4210

TopNotchInc.com 800.854.4146 E : sales@TopNotchInc.com W:

TOP NOTCH DISTRIBUTORS, INC. is a proud distributor of: AND

F :

Contact US today for your FREE WELCOME KIT! We’re a full-service provider of residential and commercial architectural door hardware with more than 100,000 items in stock, from over 70 manufacturers … legendary service … same-day shipping … full service keying department … 24 hour online ordering and product information. If you don’t know Top Notch yet, let’s get acquainted.

PENNSYLVANIA | MISSOURI | NEVADA | MASSACHUSETTS

Checkouts

MERCHANDISING

Unique Merchandisers for Unique Products

nique products deserve a unique way to be shown off. Inside the front store window at Mayer Paint and Hardware in Rochester, New York, store manager Dennis McCarthy lets employees use their creativity when coming up with ways to merchandise a collection of quirky gifts and local items. They replace standard gondola shelving with wooden crates and colorful buckets, and often create their own merchandisers.

Top: Instead of a standard dump bin, a wooden barrel perfectly complements the wood slats on the wall, while a hanging rack made of galvanized pipe holds buckets or small items like backscratchers and hand lotion. Bottom: On the wall, store manager Dennis McCarthy has swapped out standard shelves for old street signs, obtained through a connection in the local highway department. The signs add to the local and vintage feel of the department.

Visit us at the National Hardware Show Booth 4839 Las Vegas May 4-6, 2016

EMPLOYEE MANAGEMENT

Team Building, Plus 700 Sandwiches

he rules were simple: take teams of five or six employees, provide sandwich-making supplies and give 5 minutes for rapid-fire sandwich making. Westlake Ace Hardware, which has 92 stores in seven states, came up with the game, and turned what could have been an ordinary staff meeting for managers into the mass production of peanut butter and jelly sandwiches. The reasons? Team building for managers scattered between dozens of different stores, and approximately 700 sandwiches to feed the homeless and other people in need. Teams of store managers dumped loaves onto tables, slathered peanut butter and jelly onto bread slices and then bagged the sandwiches. “It was a blast,” says general manager John Sanders, who oversees a Westlake Ace location in Olathe, Kansas. “After 5 minutes of cardio sandwich making, you’re pretty amped up. It was great to have that kind of bonding.” The team that made the most sandwiches got bragging rights, and all the teams’ efforts together produced a meal for a homeless shelter in the Kansas City area. Sanders’ team came in first place, slapping together 45 sandwiches. “It was a lot of fun—a great time for us to bond and do something wonderful in our community,” Sanders says.

A meeting for Westlake Ace Hardware managers became a competition and an opportunity to help others, as managers prepared sandwiches for a Kansas City homeless shelter.

iChef by MaveriCk is sMart GriLLiNG Turn Your Smart Phone into a Barbecuing Command Center

By MAVERICK

ET-735 REmoTE BluETooTh BaRBEcuE ThERmomETER

Maverick makes the best remote cooking thermometers on the planet and we keep making ki th them better! In 1991, Maverick introduced the BarBChek, the frst electronic LED cooking thermometer. Today, our next generation line of remote cooking thermometers includes the iChef ET-735 Remote Bluetooth® Barbecue Thermometer. This state-of-the-art model is app-enabled to work with your smart device and can be used with up to 4 probes! Call us today to fnd out more about this exciting revolution in remote cooking.

94 Mayfield Avenue Edison, New Jersey 08837 Tel: 732-417-9666 Fax: 732-417-9673 Made in China www.maverickhousewares.com

April 2016 | HARDWARE RETAILING

Inventory in Motion Analyzing Five Critical Parts of Your Inventory’s Life Cycle

n a perfect retail world, inventory moves in and out of your store in one continuous cycle. From the time product arrives on the truck to the time it leaves in a shopping bag and is time to reorder, you’ve maximized every inventory dollar and every inch of shelf space. Turns and GMROI are high; dead items low. But sometimes that perfect cycle hits a snag, and it’s likely happened to anyone who has been in retail. Maybe, for example, you’ve ordered too much of a slow-moving item and it ends up sitting on the shelf for a long time. Or maybe your POS says you have six widgets on the shelf, and you can only find three. There are many places where the inventory cycle can break down, resulting in your business tying up valuable inventory dollars or wasting critical shelf space. When the inventory management process hits a snag, how do you get it back on track? For some possible solutions, we turn to a group of the industry’s bright young leaders who addressed inventory management solutions as part of their business improvement projects with the North American Retail Hardware Association’s (NRHA) Retail Management Certification Program (RMCP). Understanding how to make the inventory process run smoothly in your operation is an

HARDWARE RETAILING | April 2016

ongoing challenge, and it may look different for different types of retailers. But while these retailers and RMCP graduates received a final grade based on a predetermined set of criteria, how well you solve your inventory issues will be graded by higher profitability and customer satisfaction marks. If you fail, you will fall further behind the competition. On the following pages, we’ll analyze the inventory management projects of five of these retailers. Each of them addresses a critical point where the inventory cycle can hit a snag, causing problems in the rest of the process. As you consider the solutions each retailer came up with to solve his or her operation’s inventory challenge, take a look at your own store. Are you facing some of the same challenges, and if so, how do you propose to fix them? For resources beyond the pages of Hardware Retailing, go to TheRedT.com/inventory to learn how frequently you should check various inventory processes and to find a calculator that will help you determine the true cost of ineffective inventory management. Also see this month’s Trainer’s Toolbox (at nrha.org/FreeTraining) for two lessons that will help you teach employees the basics of the inventory cycle and what they can do to help keep inventory productive.

Dennis McCarthy, store manager of Mayer Paint & Hardware, came up with a plan to purge slow-moving inventory.

April 2016 | HARDWARE RETAILING

Setting the Right Order Points by 25 percent, without reducing any sales, and reducing customer-perceived outs by 50 percent. Canady also took advantage of the store’s brand-new POS system, and looked to other employees for help, including a former merchandiser, Jason Mitchener, and Donna Dunnehoo, inventory specialist. Canady’s first step was to go through products on the showfloor, then move into the assortments of lumber and moldings. “Once the store is 100 percent through this, we will take a look at the numbers and make sure it’s not hindering sales,” he says. “Then, we’ll try this in our other location.”

The Process

Ben Canady, assistant manager; Donna Dunnehoo, inventory specialist; and Jason Mitchener, merchandiser, worked together to streamline the store’s inventory.

Holmes Building Materials Two locations in Louisiana The Challenge For years, Ben Canady and the rest of the team at Holmes Building Materials, which has locations in Baton Rouge and Denham Springs, Louisiana, was focused on growth. In the meantime, inventory “kind of exploded a bit,” says Canady, assistant manager for the Baton Rouge location. “Sometimes we treated the salesfloor like a fancy warehouse.” He says part of the issue was that they erred on the side of caution, ordering a little more product than needed. But too much inventory meant tying up cash, sometimes in slow-moving items. There was also no automated way to order, and the manual process led to even more over ordering. And other areas were under stocked, leading to frequent outs in key products.

The Solution Canady decided to change the inventory control system from personnel-based to computer-based. He talked with store owner John Holmes, and the two set some goals, which included reducing the Baton Rouge store’s total inventory

HARDWARE RETAILING | April 2016

Canady divided the store into 10 sections, knowing it was important to tackle the project a little at a time. The original goal was to complete a section every 30 days, although he and Holmes agreed to extend the timetable when needed. After finalizing his project in the fall of 2014, when he participated in the RMCP class, he completed the first section in January 2015, and the team is taking each section one by one. In doing the checks, they walked the store and thoroughly scanned each section for empty hooks or shelf space. They also used a handheld scanner to check for customer-perceived outs, and then compared that report to what the POS system said was on hand. Next, they were able to stock the shelves with items they had in stock, as well as correct inventory counts, based on shrinkage and invoice errors. “After all were identified, we categorized items as either ‘true outs,’ stocking errors, shrinkage or invoice errors,” Canady says. “We felt like the more true outs we had in our report, the better our team was doing at stocking and selling.” The new POS system doesn’t yet have a solid sales history; until it does, they manually adjust the min/max quantities. “Eventually, we want the system at a point where the store will receive product to maintain an appropriate stock level.” One hurdle, and a reason for the extended timetable, was the new POS software. While it’s helpful, it takes time to learn, Canady says. He says Mitchener, who’s more familiar with the system, was a great help in utilizing it fully. And of course, he didn’t want customer service to suffer. “Taking care of customers is the most important thing.”

The Results Within the first six months, Canady saw a reduction in cost on purchase orders through his distributor, and a reduction in inventory levels for some products. He’s relied heavily on his employees and says feedback has been good. They’ve reached their goal of reducing customer-perceived outs by 50 percent. The other goal is to reduce total inventory, without reducing sales, by 25 percent. Canady says the inventory reduction is currently at 15 percent, and he expects to reach 25 percent by the end of the year.

Lessons Learned • Don’t Hesitate Hindsight is 20/20, but Canady says that if he could do it all over again, he would’ve started the process sooner. “I was a little afraid to go through our inventory like this. What if we only had two of something and a customer came in and asked for four? But once we got started, I was glad we were doing this. If I knew how well this would have gone to get us to these inventory levels, I would’ve started this project seven years ago, when I first started working here.” • Get Your POS First Canady says something else he would change would be to have all inventory on the new software program before starting the process of going through each of the departments. He also would have liked time to learn the new POS system more thoroughly. If you’re

thinking of purchasing a new POS system or making any similar big decision, try to do so before you begin going through your inventory—or wait until after you’ve completed this project to make those bigger changes. • Get Your Employees On Board Throughout the process, Canady relied on all of his employees for help, and made sure to make them aware of the project and its goals. “I sat down with each employee and explained what we wanted to do. Some were a little nervous about not ordering more product, but I said we could special order or run to the other store if we ever needed more of something. I told them we would do whatever we needed to do to make the customer happy. But when we’re ordering, we need to order the amount we think is appropriate, not just fill up the shelf.”

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April 2016 | HARDWARE RETAILING

Best Practices for Receiving “The biggest issue with night stocking was that there was no manager at night,” Matchulat says. An advantage, of course, was that no customers in the building meant stockers could work more quickly, rather than taking time to help customers. But day stocking meant there was a leader in place, and freight was worked right away. The change from day to night stocking at those three stores was made about two years ago, Motta says. The second part of the solution, which was implemented more recently, was to add a full-time stocking position at all but one of the operation’s retail locations. (The last location was too small to necessitate the new position, Motta says.)

The Process

Stacia Motta and Amber Matchulat, store managers, found that hiring full-time stockers would be one way to more efficiently get freight from the back room to the salesfloor.

Wilco 16 retail locations in Oregon and Washington The Challenge With 16 retail locations, Wilco sees plenty of product being shipped to the stores, stocked in back rooms and put on salesfloors. Store managers Stacia Motta and Amber Matchulat saw that, while there wasn’t a problem getting that freight to the back room, there was trouble getting the product from the back room to the salesfloor. “The back room was packed full,” Motta says. “Getting that product on to the floor was a huge issue, due to the amount of time and people responsible for maintaining it while also helping customers. “The freight coming in was getting put away that day; it was just working through that huge amount of backstock to keep the shelves full that was the problem,” she says.

The Solution One part of the solution had been implemented a couple of years ago, when night stocking at the company’s three largest stores was switched to day stocking.

HARDWARE RETAILING | April 2016

Motta and Matchulat chose three Wilco stores to be the test locations for the new full-time stocking position, with the plan of testing out the new position from mid-August to midDecember of 2015. After that testing proved to be a success, they hired a new full-time stocker for all but one location, with the plan to also have one or two part-time stockers at some locations, as well as seasonal stockers when needed. Motta and Matchulat say the full-time position has helped maintain efficiency throughout the store and warehouse. “If a manager isn’t there, the full-time stocker can take on that leadership role,” Motta says. The two worked with Wilco’s central office to ensure the new stockers had the training they needed and that it was consistent across locations. They created sample stocking and push cycle schedules to illustrate the process. Along with training, another challenge was finding full-time stockers who met all the qualifications for the job, and also had leadership experience.“We updated pay scales to make some of these positions more attractive,” says Motta. Of course, support from management was necessary to ensure that adding the new position would help the company. “Our managers are on board and coming to us with questions,” Motta says. “Our district managers are fully in the loop and have been involved since day one.”

The Results Motta and Matchulat knew adding the stocking position was a good idea, as the pilot testing had proven. “We know it’s working; we have that proof it’s working,” says Matchulat. At Wilco, the out-of-stock percentage has been required to be below 1 percent. Since the new stocking position was added, the percentage has been closer to 0.5 percent. “My store even reached .18 percent at one point in January,” she says. “The new expectation is now less than 0.5 percent.” “Seeing how low those numbers are getting really shows how well this new program is working,” Matchulat says. “It’s a lot of pressure on our stocking team to maintain those levels, but they are doing it well.”

Lessons Learned • Invest Some Time “Implementing a process like this throughout the stores took a lot of time and a lot more meetings than I could have imagined,” says Motta. “We couldn’t roll out something to all of the locations without ensuring that it was going to work, and that we had the training materials and process in place beforehand to allow it to succeed.” • Make a Plan With so many variables and other people involved, it’s vital to have dates and milestones in place, Matchulat says. “Without having a clear plan, the project can seem overwhelming. This project took almost a year from start to finish. Stacia and I worked quite well together in getting meeting dates planned, and we learned to be really flexible with our time to make meetings work.”

• Start Small The large-scale project started with a couple of pilot stores before being rolled out companywide, something Motta and Matchulat say was a vital part of the process. “By trying it at a few stores and ensuring it was going to work, we had a few managers in place who could help sell the process to the rest of the company, and it allowed us to be prepared for any pushback or questions that were going to come out when the rest of the locations were on board,” Motta says. • Stay in Touch “Communication is really important, and keeping all stakeholders in the loop is not an easy task,” says Matchulat. Take detailed notes at meetings and send follow-up emails to make sure everyone is involved and can provide feedback.

Cycle Count Stock The Solution Shutting down the busy store for a complete inventory was not possible. Instead, store manager Dwayne Gibson came up with a solution: cycle count 4-foot sections of the store over a period of several months. During the process, each 4-foot section would get a location code that would be entered into the POS system so employees could easily find it in the future. Those location codes would also allow him to monitor sales per square foot. Gibson also set min/max levels for each item so ordering would be more structured and he could keep track of stock outs.

The Process

Picton Home Hardware and Building Centre

To make the counting most efficient and effective, Gibson used RF scanners to count each item, and he decided to get all of the employees involved in the process. Throughout the day, any employee could grab a scanner to count a 4-foot section of the store. Gibson created a variance report from that count and addressed missing items. He assigned a second person to recount the section, and sometimes a third or fourth person, depending on the extent of the variance. Having multiple people count helped account for human error and established a solid foundation for future counts. “We created a system to count a 4-foot section, give it a location, then have a second person count it to verify the number,” he says. “This has become something we do on a regular basis now.” After finishing the count for each section, Gibson reviewed and altered min/max order points for each item, which, with twice a week delivery, he anticipated would reduce the amount of overstock needed.

One location in Picton, Ontario

The Results

Picton Home Hardware relies on employees such as Monica Baldwin-Tripp to help with daily cycle counts so variances can be spotted quickly.

The Challenge In any store, there are a variety of factors that may influence inventory accuracy: shrinkage, inaccuracies in receiving, an occasional missed item at the cash register or merchandise in the wrong place in the store. Picton Home Hardware had an added challenge. In 2009, the company expanded the store from 15,000 square feet to a new 50,000-square-foot building. While the store had all the marks of a modern shopping experience, in the hustle to get it stocked, there was no thorough accounting of all the inventory. Previous inventory methods had been spotty: There was a year-end inventory process that wasn’t well-suited to a large store; there was not an established practice of cycle counting; and multiple employees might be ordering for the same department. Four years into the new store, no one had done a complete inventory. Numbers in the POS didn’t match what was on the shelf, and the store owners discovered a substantial amount of unaccounted inventory dollars.

HARDWARE RETAILING | April 2016

It took a full year to complete the initial inventory, but it only took a couple of months to see real results. “For a two-month period, we projected we would recover about $200,000 worth of inventory,” he says, “and we ended up accounting for $650,000. That’s when we were able to get all of the staff excited about doing this project, because they could see the results from their work.” By the end of the year, Gibson was already seeing an improvement in inventory turns and a decrease in excess stock. “We found a lot of orphan items; we were able to free up a lot of dead stock and free up dollars for more inventory,” he says. That all added money back to the bottom line and improved his customer service due to fewer out of stocks and less wait time trying to find a requested product. Today, cycle counting is part of Picton Home Hardware’s daily culture. “The entire store will get counted twice a year,” he says. Gibson has posted a map of the store showing what sections need to be counted. When employees have a free moment, they’ll grab the scanner and inventory a 4-foot section.

Lessons Learned • Get Everyone Involved “Inventory is a major initiative for every store. We get everyone involved in the process,” Gibson says. Getting all of the employees involved makes them more aware of inventory issues, so they’re more careful, for example, in the receiving process or in spotting orphan items as they’re walking the floor. Counting also exposes employees to new products they might have otherwise missed. Getting all of the employees involved gives them ownership and buy-in. “We usually don’t have to tell anyone to go and count; they actually enjoy doing it,” says Gibson. • Start Small “Don’t try to do everything all at once; that’s where mistakes happen,” he says. “Start small with just a 4-foot section at a time and go from there.” Shutting down the store for a couple of days for a

full inventory wasn’t possible for Gibson’s busy store. Counting 4-foot sections at a time allows you to stay open during the process and makes it easier to work through variances. Starting small also allows you to use day-shift employees for the work and avoid paying someone to work nights. • Do it Daily If his team constantly counts the store, they are more likely to find missing items quickly rather than waiting several months until the next inventory. Gibson can track each item’s location, and ordering is more accurate all of the time. “When we started, we discovered our variances were larger than they should have been, because items were misplaced or buried. We had way more of some items than we thought we did. Once we did a complete inventory, everything became easier to find and count.”

Shooting the Outs until the year-end physical inventory. It was time to change, says Judd.

The Solution “Our goal was to have at least 75-percent accuracy across all of our stores in the first year,” says Judd. To get there, Judd proposed training employees to shoot outs, and then fix problems as they found them. To be effective long term, identifying missing merchandise would need to be a regular process. Judd decided to standardize that process for all stores and establish preventative measures against future outs.

The Process

At McLendon Hardware, all of the employees are involved in “shooting the outs,” or checking the store for empty shelves and pegs.

McLendon Hardware Seven locations in Washington

The fastest way to grasp how many empty spots were on the shelves was to use an RF gun and scan bar codes of every place where there was a bin tag but no product. Judd involved every employee in the initial shooting of outs. After they finished shooting the store, Judd used those lists (which he compared to quantity lists in his POS system) to get an overall accuracy report for the store and to create individual reports for each department. With their list in hand, each department head reconciled out items and filled in the missing inventory. While his initial project may have been a quick fix to get product back on the shelf, today, nearly two years later, Judd has refined the process to be a part of the store’s daily life. Judd has employees shooting outs on a daily basis, and he travels to each of the company’s seven stores twice a month to do his own audit. In addition to identifying outs, Judd has instituted several preventative measures, the biggest being aisle maintenance. Every employee has certain aisles assigned to them, and they are responsible for maintaining that aisle, including cleaning and down stocking. All managers conduct monthly audits of each aisle and submit a report to Judd.

The Challenge In 2013, Steve Judd, corporate inventory manager for McLendon Hardware, was reviewing sales increases for the company’s seven stores. The store in Woodinville, Washington, posted a sales increase well above 8 percent for the year, while the other stores were below 4 percent. A walk through the Woodinville store revealed few empty hooks, and an inventory accuracy report showed the store was about 75 percent accurate, while several of the other stores were below 50 percent accuracy. “The manager of that store used to work for a national competitor, where they shot their outs all the time. You could tell a difference, because they were more in-stock and more organized than any of our other stores,” says Judd. Shooting the outs, or using an RF gun to scan bin tags on empty shelves, was something the company hadn’t done for nearly 10 years. In addition to having no company-wide process for identifying missing inventory, there was no cycle counting and no way to find shrinkage

HARDWARE RETAILING | April 2016

The Results By knowing outs in the store on a regular basis, Judd and his team can quickly identify and correct the problems that caused those outs. While he reached his goal of having average inventory accuracy rates at 75 percent or above, other results have been noticeable, too. The most noticeable difference was in shrinkage rates, which are now much lower than before Judd started shooting outs. In years past, each store’s management team only calculated shrinkage once a year after the physical inventory. “Now, we can determine shrink on a daily basis. When we catch theft right away, we can try to control it,” says Judd. Other key performance indicators have also been up in all stores. “Average transaction size went up 7.4 percent in 2014, the first year we started counting outs,” says Judd. “Inventory turns increased to 4.5 from 4.0.” While he admits that a lot of factors influence these numbers, he believes having full bins and hooks have a ripple effect through the entire store.

Lessons Learned • Always Record Changes in the POS System The first time Judd tried to reconcile all of the outs on the shelves, he let multiple people in each store get involved, and it got messy. “We fixed our problem of outs, but ruined our inventory accuracy by having too many people work on changing the counts in the system,” he says. It was easy for an employee to get busy and mark a change on paper, but not record it in the system, or just attribute an out to shrinkage instead of finding its cause. Now, there are three or four people at each store who are authorized to make changes to counts. The person making the adjustment on the shelf must be the same person entering the information in the system. • Train all Employees on the Inventory Process Judd wants all of his employees to know why it’s important to have an accurate inventory count and

what they can do to keep it that way. “There are a lot of ways in the entire inventory life cycle that something can go wrong,” he says. “It’s surprising how many of them don’t understand the inventory process.” Teaching employees to identify potential problems will get everyone involved in preventing inventory problems before they happen. • Get Ready for Omni-Channel Store management plans to implement a buy online, pick up in store, e-commerce portion on the company’s website. Customers will be able to see real-time inventory levels and order product. To make that initiative successful, Judd must keep accurate data at all times. Online sales are already an important part of retailing, and retailers who want to stay at the front of the pack and offer real-time inventory must focus on all aspects of the inventory process.

April 2016 | HARDWARE RETAILING

Purge Slow-Moving Inventory The Solution McCarthy created a process that would identify unproductive inventory items and convert them into cash. Rather than collecting everything for a single sales event, McCarthy’s plan is to use several channels for gradually clearing merchandise, at an increasing discount schedule. The centerpiece of the process is the “VIP Clearance House,” a showroom of select clearance items. Select customers will have exclusive access to this merchandise.

Goals

Dennis McCarthy, store manager, uses his plan to purge slow moving inventory as a way of optimizing valuable shelf space in his 5,000-square-foot store.

Mayer Paint & Hardware One location in New York The Challenge Mayer Paint and Hardware, like many small retail establishments that have been in business for many decades, is known for being a small store with the offerings of a big store, as well as many hard-to-find items. In fact, owner Tom Green has made such good use of his 5,000-square-foot store that the store posts annual sales well above the industry average. But that strength is also a weakness. Being the store that had everything sometimes meant they were keeping a lot of inventory that wasn’t productive, and having too much stagnant inventory was eating up a lot of valuable space and cash. While the store hosted an occasional clearance sale, there was still a lot that got missed. “We never had a regular process to address unproductive inventory,” says store manager Dennis McCarthy. “If stuff started to pile up, we might move it to a discount table. Sometimes we ended up discarding what didn’t sell or sending it back to overstock areas, and we didn’t always evaluate inventory files to catch all of the dead items.”

HARDWARE RETAILING | April 2016

While McCarthy has already established a solution, as one of the most recent graduates from RMCP, the execution is still in its infancy. But after taking a few customers through the VIP Clearance House, response has been positive. In addition to clearing unproductive merchandise from the shelves, McCarthy hopes to find a spot for more new items. While he hasn’t determined yet if the VIP House will be an ongoing feature of the store once he clears out the current glut of dead inventory, he does plan to make formal merchandise evaluation an ongoing process. “Eventually I want to get to the point where we’re evaluating our inventory a section at a time, and where it’s a regular process,” he says. “I think we can make our product mix more efficient by getting to that level.”

The Process McCarthy’s plan starts with a report generated by his POS software that identifies all X items that have not been sold in the past year. Staff will pull those items off the shelf or out of the backroom and place them in totes. Next, a manager and finally the store owner will review all items in the totes and determine which items should be cleared and which need to stay in stock because, even though they were slow movers, they are essential to a complete hardware mix. As clearance items are identified, McCarthy has several channels for selling them. Next to the store is an empty house which will serve as the VIP Clearance House. The House contains select clearance items (selected by a manager), priced at a 40-percent discount or more, for the store’s VIP customers. Who is a VIP customer? McCarthy empowers each employee to select loyal customers and invite them to the House. He’ll also utilize his co-op’s loyalty program to identify VIP customers and also send invites to the House in monthly statements to commercial customers. Merchandise that sits in the House for about a month without selling moves to an in-store clearance area. Then, McCarthy will hold two sidewalk sales. This will be the final attempt to sell clearance items in store before McCarthy utilizes online channels, such as Amazon and eBay, to sell remaining clearance merchandise. Items that remain unsold will be donated to local charitable organizations or discarded.

Lessons Learned • Separate the Dogs From the Dinosaurs Not every item is a best seller. There are a few “dog” items that might only sell occasionally, but are still critical to a product mix. Having those hard-to-find items, however, cannot be an excuse for hanging on to piles of “dinosaurs,” which are typically outdated or otherwise likely never to sell. Separating the two, McCarthy says, will be his biggest challenge. That’s why he has multiple staff and finally the store owner reviewing items before they are sent to the VIP Clearance House. Sometimes, those dog items are items he needs to keep, but he just needs an updated version. • Turn a Negative Into a Positive Any store can have a clearance sale, says McCarthy, so how could he find the bright spot and go beyond merely converting clearance

product to cash? By offering his best customers the first chance at clearance merchandise, he is giving his staff an opportunity to offer something special to customers and increase their loyalty. At the end of the process, his plan to donate unsellable items to charitable organizations provides a PR opportunity for the store. • Make the Discount Schedule Aggressive The first tier of discounts will start at 40 percent and by the end, could be above 70 percent. While that may seem aggressive, especially when that may be near or below cost for many items, McCarthy says anything less wouldn’t be enough. “Discounts of 20 or 30 percent don’t do it for consumers anymore,” he says. “Those numbers are too common and don’t get people’s attention.”

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FOUR KEY INVENTORY PRODUCTIVITY FIGURES OTHER RETAIL OUTLETS Home Depot

Lowe’s

Tractor Supply Co. (2016)

Kroger

Whole Foods

Amazon (2016)

Inventory Turnover

4.7

4.1

3.3

15.1

21.2

7.7

GMROI

261%

220%

167%

345%

Inventory Per Square Foot

$46.94

$44.33

$53.65

$35.11

$30.12

Sales per Square Foot

$352.44

$279.72

$260.11

$669.54

$927.05

Source: The retail outlets’ 2015 or 2016 Annual Report.

INDEPENDENT HOME IMPROVEMENT INDUSTRY High-Proft Hardware Store

High-Proft Home Center

High-Proft Lumberyard

Inventory Turnover

2.3

3.2

7.5

GMROI

168%

167%

225%

Inventory Per Square Foot

$54.00

$56.00

$115.00

Sales Per Square Foot

$215.00

$275.00

$1,113.00

Source: 2015 Cost of Doing Business Study, North American Retail Hardware Association

DEFINITIONS

• Inventory Turnover Cost of Goods Sold

KEY TAKEAWAYS

Inventory

Normally a high turnover rate means good inventory management, while slower turnover indicates too much inventory for the sales it generates. Some retailers also look at Sales to Inventory, which is another way to measure turns. It provides an indication of the amount of merchandise on hand relative to the amount of sales volume it generates. Sales to Inventory is calculated by taking Net Sales divided by Inventory.

• Gross Margin Return on Inventory (GMROI) Gross Margin Inventory X 100 This ratio measures the amount of gross margin dollars generated by each dollar tied up in inventory. GMROI allows managers to evaluate products and departments that have varying gross margins and inventory investment requirements. It helps retailers compare high-turn/lowmargin lines against slower-moving/high-profit ones.

• Inventory Per Square Foot Inventory Square Feet of Selling Area Stores that stock more inventory per square foot typically generate higher sales. However, managers also need to consider other inventory measurements, such as turns.

• Sales Per Square Foot Net Sales Square Feet of Selling Area This classic measurement remains one of the most important gauges of a store’s productivity.

HARDWARE RETAILING | April 2016

• Compared to other businesses, independent home improvement stores are underperforming in metrics related to inventory productivity on average. They are also stocking more inventory per square foot than competitors. • Grocery stores have three to four times higher inventory turns and productivity than the home improvement industry, with fewer dollars tied up in inventory per square foot. They also produce two to three times more in sales per square foot. Amazon ranks between the two. • Since Whole Foods has smaller stores with similar layouts, it has incrementally higher inventory productivity ratios than Kroger. Kroger’s metrics include a variety of store formats, such as pharmacies and fuel centers, since Kroger Co. encompasses a wide array of store types. • The differences between typical and high-profit stores, in terms of inventory productivity, are dramatic. Typical hardware stores generate $1.30 in gross margin for each dollar invested in inventory (GMROI) compared to $1.68 for high-profit hardware stores. For home centers it’s the same scenario, with typical home centers generating $1.44 in GMROI to $1.67 at high-profit stores. For lumber and building materials outlets the gap widens, with typical LBMs generating $1.63 in GRMOI compared to $2.25 for the highly efficient, high-profit operators. Hardware Retailing staffers Liz Lichtenberger, Jesse Carleton, Sara Logel and Scott Wright contributed to this article.

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New House On the Block LBM Trends Showcased in The New American Home

By Renee Changnon, rchangnon@nrha.org

very year, home design preferences shift, technology evolves and homeowners’ tastes change. This means that home designers, builders and contractors are responding to these trends as well, making it more important than ever for home improvement retailers to stay ahead of the curve when it comes to building materials and supplies. In January, Hardware Retailing attended the National Association of Home Builders’ (NAHB) annual event and the International Builders’ Show (IBS), both part of Design and Construction Week®, in Las Vegas to find trends and talk to industry experts. Attendees included builders, remodelers, designers and other housing industry professionals. (Visit TheRedT.com/DC_Trends for a closer look at the show.) In addition to the Las Vegas Convention Center, attendees could travel to Henderson, Nevada, to tour The New American Home (TNAH) 2016, which is the “official show home” of IBS. Hardware Retailing spoke with NAHB’s Tucker Bernard, director of The New American Home program, to ask about the top building and design trends in the home. The purpose of TNAH is to demonstrate building best practices, including concepts, materials, designs and construction techniques that can be replicated—in whole or in part—in housing built or remodeled in any place and in any price range, according to Bernard. On the following pages, we’ll take you on a tour of the home, where we’ll highlight innovations in home construction and building materials. We’ll also provide tips on how to best incorporate and sell these trends in your lumber and building materials offerings. We’ll focus on three aspects of TNAH to note: the touch of luxury throughout the home; individuality represented through customization; and a stronger focus on innovations that bring technology and energy-efficiency standards to the forefront.

HARDWARE RETAILING | April 2016

All photos Courtesy of Jeffery A. Davis Photography

April 2016 | HARDWARE RETAILING

Focus on Luxury FULL-VIEW WINDOWS AND DOORS If your operation offers windows and doors, you may want to look closer at the growing popularity of full-view options. This was seen throughout the model home as well as on the floors of IBS by several window and door manufacturers. According to Bernard, more consumers than ever are leaning toward these types of high-end windows and doors throughout the home, which is a good sign for the industry. “Homeowners’ growing preference for using luxury home products is a noteworthy trend,” Bernard says. “It indicates a top-down recovery from the home building and remodeling industry, with higher-end products disproportionately increasing in use compared with the use of average-price and economy products.” Retailers who focus on lumber and building materials should know contractors and DIYers may hunt for more floorto-ceiling window and door options that let in natural light. As you promote full-view windows and doors, remember it isn’t enough anymore to just have a sample in your showroom. Today’s consumer shops online before they come to your store, so promote these on your website or social media to show customers you have something unique to offer.

STATE-OF-THE-ART KITCHENS For many homeowners, the kitchen is the main hub of household activity, and this was true in TNAH as well. The home featured several top-of-the-line design and construction features, which can be adapted for both professional and DIY customers working with a wide range of budgets. Following the same lead as many of the model kitchens on display at IBS and the Kitchen and Bath Industry Show (KBIS), the kitchen in the model home is very modern, with cabinets featuring fine, clean lines for a more simple look. Another trend Hardware Retailing saw was mixing cabinet finishes, with darker base cabinets accentuating lighter or white upper cabinets. If your business has a cabinet showroom, it’s imperative that you are constantly changing out your displays to highlight trends like this one. The kitchen display area may be one of the most fashion-driven categories in your

HARDWARE RETAILING | April 2016

TNAH’s kitchen also features a butler’s pantry, with additional storage, open shelving and small appliances for food prep.

LBM department, and customers will always be looking for something new. They may start to overlook displays that haven’t changed for a few years. Train your showroom sales staff to go after small project sales, too. Communicate to your customers that not all upgrades to the kitchen involve a full remodel. As was evident in the model home, simply adding a metallic backsplash in the kitchen merges the dark and light cabinetry together. This adds to the rich look, and any retailer can help a customer refresh a kitchen with a new backsplash. For the do-it-yourselfer, it’s a project that can be accomplished over a weekend. Now is also the time to review your tile inventory to keep up with the latest designs. During Design & Construction Week, Hardware Retailing noted that metallic tiles are a growing trend, as are subway tiles, which were featured in several areas at the convention center. Instead of granite countertops, the kitchen in the model home features a quartz surface, which adds to the overall design and also provides function. If your business offers a variety of countertops, quartz is a great option to sell customers, as it is durable and scratch-resistant. The surface is nonporous, heat- and stain-resistant and doesn’t require sealing.

IMPRESSIVE WALK-IN CLOSETS Today, walk-in closets have become much more than a place to install wire shelving to hang clothes. They’re a sought-after addition to the master suite in both new construction and remodels. In many cases, homeowners create a private dressing room, where beautiful custom cabinets and accessories provide a luxurious space to begin and end the day. In the model home, the master suite features a large and impressive walk-in closet. The closet features a section built in to hold a stackable washer and dryer unit, a convenient function that appears to be trending even beyond the model home. At both shows, Hardware Retailing spotted several master bedroom closets with laundry areas built in. It appears as though this trend will continue to grow, and to top off the luxury aspect, homeowners can add unique touches, like a chandelier and even some glass cabinet doors to showcase favorite pieces, like designer handbags and shoes. In the center of the closet is an island with a countertop for folding clothes and built-in drawers to store items underneath. While showing model kitchens and baths has been standard in LBM outlets for a long time, it’s time to incorporate luxury closets and laundry rooms into those displays as well.

The master suite of TNAH featured a large walk-in closet with custom cabinets and a stackable washer and dryer built in.

Then, for those without the space or budget for a large remodel, use this area to encourage small-budget remodels. One trend Hardware Retailing noted at IBS was to add crown molding to the interior of an existing closet. This allows your customer to personalize a closet with an easy DIY project.

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April 2016 | HARDWARE RETAILING

Customization Makes the Home BUILT-IN ELEMENTS ADD TO HOME For many homeowners, adding personal touches to the home through customization allows them to express their individuality. There were many examples of this in the model home. In the master suite, there are built-in shelves next to the bed, which can be used to display books, plants and other items. Built-in storage units continue to be a hot trend for eliminating clutter for a more open and flowing home. (Another unique element found in the master suite is a collection of several mini-fireplaces and one large fireplace built into the walls. Although this doesn’t fall into the LBM category, it is another example of how TNAH team wove customization into the home.) As a retailer, you can take advantage of the trend toward customization by offering your customers educational events, such as project tutorials. For example, host a how-to event to build a bookcase, install shelving or create a custom workbench for the garage with items from your lumber and building materials selection. By inviting customers in to the store to complete a project they may have been putting off doing, you’ll not only engage them with your business and get them to purchase your items to complete the project, but you’ll be able to cast your business as the place to go to learn how a customer can personalize their home in a variety of ways.

MATERIAL CONNECTS INDOORS AND OUTDOORS From brick to siding and more, the exterior of the home is just as important as the interior. In many situations, consumers are looking to mesh these two separate aspects of the home to make it more seamless and connected. The TNAH project focused on how to blend and match the surrounding Nevada scenery. The design and construction team made this happen in several ways, including using a stone surface on both the interior and exterior of the home to make a seamless transition between the two heavily used spaces. This unique stone was customized and made to complement the desert backdrop.

HARDWARE RETAILING | April 2016

To mimic the desert surroundings, TNAH went with a unique stone, which was featured both inside and outside of the home.

According to Bernard, one of the goals of the project was to “blur the interior and exterior divide,” which was in many ways accomplished by utilizing the same stone finish in both areas of the home. One of the best practices of selling building materials is to use the products you sell in the construction of your own store. Dressing up the exterior and interior of your building with decorative brick and stone will not only allow you to show what your store sells, but it makes it more appealing to a wide range of customers, including female shoppers.

For the do-it-yourselfer who wants an easy way to update the home, at IBS, Hardware Retailing saw a manufacturer that put the look of wood-paneled walls into an easy DIY-sticky application to give the look of reclaimed wood walls without the amount of time required to complete it.

OUTDOOR LIVING INCREASES SQUARE FOOTAGE As a retailer, you’ve heard over the past several years the growing emphasis on outdoor living. Your customers are investing more than ever in outdoor furniture and grills, and indoor comforts are finding their way outside. Continuing with the trend of blending the interior and exterior space, the designers of TNAH made sure not to waste any of that exterior space. Many walls of the home open out to the grounds, and large, sliding doors lead to a courtyard that features an infinity pool and spa, wet bar, outdoor kitchen, fire pit and a built-in grill, along with outdoor furniture to complete the space. Full wall-length sliding doors are a trend you can expect to see, as both were reflected in the model home and at IBS. The outdoor area off the kitchen had a covered terrace, which also included the outdoor kitchen area, featuring a built-in refrigerator and icemaker, as well as a grilling station and storage with single and dual drawers.

Outdoor living was featured in many parts of TNAH, featuring tons of livable space outside to entertain, cook and relax.

Given the continuing trend toward the outdoor room, don’t overlook the cross-merchandising opportunities in grills and outdoor furniture when selling deck materials and sliding patio doors. Also remember that the outdoor room category is one where customers are often willing to pay more for luxury, so don’t be afraid to show high-end items, like outdoor furniture and wet bars.

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Energy Efficiency Is Key SAVE MONEY WITH SOLAR PANELS As more consumers than ever worry about the rising costs of utilities and the impact made on the environment, green building and energy efficiency have become important to homebuilding discussions. This is likely to continue over the next several years, and homebuilders are integrating different energy-efficient products and techniques into the projects they are completing. The model home featured many green details inside and out. Solar panels on the roof are one of the most notable ways the home achieves energy efficiency. “The latest green building products and methods are factored into every aspect of the home’s design,” Bernard says. “Green building is a growing trend in the building industry, which TNAH has been promoting since 2000.” The photovoltaic (solar) panels on the roof allow the home to achieve “net-zero energy”—so the total amount of energy used by the building is about the same amount of energy created on sight, he says. To tap into this market, you don’t have to limit yourself to selling solar panels. For example, for homeowners who can’t have solar panels on the roof because of neighborhood regulations, solar shingles may be a good alternative to offer. Adding solar panel options to your store will build a reputation for your business as an environmentally friendly and green retail outlet. Also, remind customers of the tax credits they can get for the purchase of a solar panel, and use this as a selling point showing how they will reduce the overall price of the product.

While the windows in the home are energy efficient and create great views, the design team had to change their original vision to work best in a desert atmosphere.

ENERGY EFFICIENCY WITH A VIEW In consumers’ homes, windows can provide a view, allow for natural light and should be energy efficient in construction and design. While the full-view windows and doors in the model home provide breathtaking views of the Las Vegas skyline, they also meet energy-efficiency standards, Bernard explains.

HARDWARE RETAILING | April 2016

The kitchen in TNAH features full-length windows with Low-E glass, which keeps the home insulated while providing a great view.

The large, fixed windows provide ambient sunlight and reduce the need for artificial lighting. The glass in the windows and doors features an advanced Low-E glass coating that blocks the transfer of heat and cold. Low-E glass is glass that is coated with an ultra-thin layer of metal, which allows people to see through it while also providing insulation. Instead of heat bouncing outside after hitting the glass, it bounces back inside. While the windows in the home are energy-efficient and create great views, the design team had to change their original vision to work best in a desert atmosphere. The team decided to eliminate some windows from the original design, so most of the windows face northeast. Windows facing south and west have generous overhangs.

out noise. Insulation in the walls and attic and additional sealing products helped maintain consistent temperatures throughout the home. To view a full photo gallery of the completed model home, visit TheRedT.com/TNAH_Tour.

BUILDING MATERIALS KEEP HOMES ENERGY EFFICIENT The construction of TNAH brought together many elements to reduce energy usage, and the home has exceeded many energy efficiency building requirements. In addition to using solar energy, the air tightness of its thermal shell is one of TNAH’s most notable features, Bernard adds. The home used flashing to meet the demands of hard-to-seal corners at windowsills. The insulation increased the energy efficiency and comfort in the home as well as provided air sealing and moisture management and kept

The construction of TNAH was focused on how to reduce energy usage and meet and exceed energy efficiency building requirements.

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Get your week started off right with the Hardware Retailing newsletter, which is packed with the latest industry news, retailer stories and association updates. Sign up now to get the newsletter delivered to your inbox every Monday. To subscribe to the newsletter, visit hardwareretailing.com/subscribe.

April 2016 | HARDWARE RETAILING

Learn From the Best Leadership the Focus at NRHA All-Industry Conference

almart: The now-global retail behemoth that invaded neighborhoods, towns and cities, advanced the concept of everyday low prices and competes across nearly every retail category. While we are all familiar with the Walmart name, do you really know the story behind this pioneering company or what lies ahead for its retail strategy? You can learn all about Walmart, where it came from and where it is headed, at the 2016 North American Retail Hardware Association (NRHA) All-Industry Conference. The conference is held in conjunction with the National Hardware Show®, the largest gathering of independent home improvement retailers in the world, and takes place Wednesday, May 4, through Friday, May 6, in Las Vegas. This year’s conference will focus on the companies, people and trends that are leading the way within the industry. It will examine everything from leading retail formats like Walmart, to individuals guiding successful operations as the next generation of industry leaders. In addition to education, the conference also gives you an opportunity to network with industry peers, including fellow retailers or manufacturers, and learn what new operational tools are available to improve your business, such as training or financial resources. After you learn about industry leaders and trends at the conference, you can head to the showfloor and find the latest innovative products to drive your business. For more information on the conference, visit www.nrhaconference.com.

HARDWARE RETAILING | April 2016

A Top-Notch Lineup With the retail leadership as the main focus at this year’s NRHA All-Industry Conference, the educational sessions will begin on Wendesday, May 4. The first seminar titled, “What’s the Best Way to Pay,” will analyze the revolution occurring in mobile payments. Up next will be Charles Fishman, award-winning investigative and magazine journalist, who will dive into retail giant Walmart in his keynote speech. Fishman’s first investigative book, “The Wal-Mart Effect,” got inside the world’s largest company to explain how it did what it did. The book made the best-seller lists of the New York Times and the Wall Street Journal. As an expert on Walmart, Fishman will speak to the surprising and dramatic ways that the largest company in history is changing in his keynote, “Succeeding in Spite of Walmart: Understanding ‘The Walmart Effect’ and Using It to Your Advantage.” Fishman will also share what those changes say about the American economy—and the hazards and opportunities it presents for Walmart’s competitors. “Walmart is almost twice as big as it was 10 years ago, but it doesn’t feel indomitable anymore. In fact, it feels vulnerable,” Fishman says. Following Fishman, Jim Robisch, senior partner at the Farnsworth Group, will provide insightful information on customers’ expectations and how dealers are and are not meeting them. Robisch presents at markets and conferences across the country, continuously providing analysis into consumers’ purchasing behaviors.

Later in the day, Pat Murphy, vice present of mobile relationship management at FunMobility, will focus on technology, sharing how businesses can use mobile to reach the millennial generation. On Thursday, May 5, NRHA will host a panel of young store owners. These owners will share how they began their journey to leadership positions and what initiatives they are implementing in their companies to foster leaders. Following this panel discussion, keynote speaker Mark Herbek, senior research analyst and partner at Cleveland Research Company, which is one of the largest and top-ranked independent research firms in existence, will take the stage. Herbek will provide an informative update on the U.S. economy and will dive into key initiatives driving the home improvement recovery, such as new store formats and e-commerce. To wrap up the morning sessions, Dale Hoover, an award-winning designer, brand strategist and founder of Anza Environments, will speak about the impact store design and environment can have on the bottom line. The session will examine the powerful role retail design plays in the context of today’s savvy and digitally empowered consumers. These exciting education sessions, along with other seminars and awards ceremonies, will all take place in the NRHA Village.

Networking Since the National Hardware Show and NRHA All-Industry Conference make up the largest gathering of independent home improvement retailers in the world, it offers a great chance to network with fellow retailers. Take advantage of this opportunity to meet with and learn from retailers from around the world of all affiliations and sizes. Since the NRHA Village is in the Central Lobby, it is an ideal meeting point and is also the location for the NRHA Independent Retailer Reception that takes place on Wednesday, May 4, at 5:00 p.m.

Award Programs Young Retailer of the Year Awards Tuesday, May 3 Each year, NRHA highlights young, aspiring hardware retailers and honors them for outstanding achievements as owners and managers of independently owned hardware and building supply stores through the Young Retailer of the Year program. The program, now in its 20th year, recognizes outstanding performance and encourages talented young people to pursue a career in retail hardware. To date, the program has honored more than 100 young retailers. *This event is invite-only. Please contact adewitt@nrha.org.

Packaging and Merchandising Awards Wednesday, May 4 I 2:00–2:45 NRHA will introduce the winners of the 2016 Packaging and Merchandising Awards and share insights from the judges on emerging packaging trends. Attendees will get to see the best of the best in home improvement packaging and merchandising.

Spirit of Independents Awards Thursday, May 5 I 12:00–1:00 p.m. The NRHA Spirit of Independents Awards will honor retailers, manufacturers and wholesalers who have joined NRHA to support the work of the Fuller Center for Housing. By working together with the Fuller Center, the industry is helping provide a decent place for families in need to live. These awards will recognize these generous companies and encourage others in our industry to join the cause.

Top Gun Awards Thursday, May 5 I 1:00–1:45 p.m. This program is the industry’s chance to hear what today’s top independent retailers are thinking. NRHA and Hardware Retailing magazine will once again assemble a panel of the industry’s most successful and innovative independent retailers to share their stories and thoughts on the industry.

What’s Different This Year? This year, the NRHA Village will return to its original location in the Main Lobby between the North and Central Halls. The NRHA Village will be the center for education seminars, networking activities and interactive stations that will teach visitors more about NRHA. This year also marks the 20th anniversary of the annual Young Retailer of the Year awards program that will be honored throughout the show. In addition to the Young Retailer of the Year program, NRHA hosts a variety of award shows at the conference. To learn more, see the information to the right.

Retailers’ Choice Awards Thursday, May 5 I 5:00–6:30 p.m. For more than 40 years, Hardware Retailing magazine has been singling out the best of the best products at the National Hardware Show with its Retailers’ Choice Awards. Unlike other awards programs, products selected to receive a Retailers’ Choice Award aren’t chosen by editors; they are selected by a panel of distinguished retailers who buy and sell products for a living. This program not only honors manufacturers for their innovation but also helps retailers identify new and innovative products to see at the show.

April 2016 | HARDWARE RETAILING

Products. Brands. Connections. Find These and More at the National Hardware Show®

t’s time to buy your plane ticket, book your hotel and make plans for Las Vegas, for the 71st annual National Hardware Show®, which will be held Wednesday, May 4, through Friday, May 6, at the Las Vegas Convention Center. Below, find out about the new products, big brands and essential connections you can find at the Show. To learn more, visit www.nationalhardwareshow.com.

What’s New In years past, the Show ran from Tuesday through Thursday. This year, however, that’s been changed to Wednesday through Friday. And, based on customer feedback, the Show will once again be held in the convention center’s North and Central halls, allowing for a more convenient and complete Show experience. “Independent retailers from all over the country attend the National Hardware Show,” says Rich Russo, vice president for the National Hardware Show. “The Show is focused on independent retailers and provides them with educational and networking opportunities to help them grow their businesses.” “I go to the National Hardware Show to find new products,” says James Cabirac, owner of Kief Hardware in Cut Off, Louisiana. “I look for new niches, too.

HARDWARE RETAILING | April 2016

The education and networking are great—the more people you can meet, the better.” The Tailgate, Backyard & BBQ (formerly Outdoors, Tailgate & Recreation) area has moved back to the Silver Parking Lot at the front of the convention center and will include expanded products and plenty of activities. You’ll notice some other changes from the moment you step into the convention center. There will be coffee and refreshments offered each morning, as well as live music in the lobby and a free happy hour each afternoon. Got questions? There’s a new 411 line to help you out with anything you might need. Maybe you’re trying to find the time or place of a particular event, or the location of a specific exhibitor. Just call or text this number, which will be provided at the Show, and you’ll quickly get an answer. And if you aren’t sure which exhibitors can best help you with what you’re looking for, visit the Match Me information counters, where you can find some suggestions for recommended exhibitors, based on which types of products you’re interested in. This year, the Show is providing attendees with personalized exhibitor and product recommendations. When you register for the Show, you can provide information about the product categories you are most

interested in, and you’ll receive a personalized list of suggested exhibitors and products, which you can use to more easily find exactly what you’re looking for.

Find New Products One of the most important reasons independent retailers attend the Show is to discover new products. At this year’s show, they’ll have plenty of places to find them. Visit the Featured Product Gallery to find the New Product World, Eco Friendly, Energy Efficient, Emergency Preparedness & Disaster Recovery and Made in USA areas, all in one convenient location. Whether you’re looking for additional products in a specific category or want to see the hottest new products, some of which haven’t hit the market yet, the National Hardware Show is the place to be. “I attend the National Hardware Show to find the latest and greatest new items I otherwise would not have the opportunity to see,” says Adam Busscher, owner of Picton Home Hardware Building Centre in Picton, Ontario. “The value we receive from attending the Show comes from being the first retailer in our area to have new and different products, and the opportunity to associate with other retailers from all over North America.”

Work With the Big Brands The National Hardware Show is the place to find the big brands. Channellock, Big Green Egg, Apex and more will be in attendance. To make sure you don’t miss any of their booths, take advantage of your free My Show account. After you register for the Show, you’ll automatically receive an account to keep a log of favorite exhibitors and message industry professionals. My Show even learns your preferences—the more you search the list of exhibitors, the more it will learn about you and what you’re looking for, and as a result, it will provide better recommendations. Best of all, any planning you do on My Show can be accessed through the free NHS mobile app, so you can take your plans on the go.

Networking Another great aspect of the Show is the opportunity to network with other independent retailers. Take part in a happy hour on the show floor, grab a beer in the Tailgate, Backyard & BBQ area, or attend seminars or the Top Guns or Retailers’ Choice Awards shows on the North American Retail Hardware Association (NRHA) Village Stage. Take time to mingle on the Show floor. You never know who you might meet.

Start Planning Now Visit www.nationalhardwareshow.com to register to attend the Show, to sign up to receive the National Hardware Show newsletter, or to learn more about the Show.

April 2016 | HARDWARE RETAILING

Newsmakers

TreeHouse: Eco-Friendly Retailer on the Move

Upcoming Events April 17-19 Home Hardware Spring Dealer Market St. Jacobs, Ontario

May 4-6 National Hardware Show®/ NRHA All-Industry Conference Las Vegas

20-23 TreeHouse is an eco-friendly home improvement business in Austin, Texas, with plans to expand into Dallas. Even the store’s paint department is heavy on green products.

reeHouse, a home improvement store focused on eco-friendly products and projects, has an expanding business that other retailers in the industry are noticing. Since the unique startup first opened in 2011 in Austin, Texas, it has gained national attention from both big-box players and independents. Jared Littmann, owner of K&B True Value in Annapolis, Maryland, decided to spend a day in Austin and visit TreeHouse when he went to Texas for his co-op’s spring buying show. “I stopped by TreeHouse, but I wasn’t exactly sure what to expect. It definitely was not a typical hardware supply store, but more intentionally a project-based store,” Littmann says. He walked through the retail outlet, which is similar to a large warehouse with open space all around rather than tall aisles. The store was divided into sections featuring different projects, Littmann says. A few examples of projects that stood out to him were in product areas such as solar panels, sustainable kitchen products, smart home technology and composting. The store does not feature the product lines and store design of typical hardware and home improvement stores, but the business is smart to focus on what it wants to be good at, Littmann says.

HARDWARE RETAILING | April 2016

“TreeHouse is a different model from a hardware store,” he says. “They aren’t going after home repair volume, but I’m sure their transaction size is enviable. The staff is well-trained on the various projects.It certainly makes you think if you were doing one of their projects, you’d go to TreeHouse. That’s what every store wants.” In addition to a unique focus on eco-friendly projects, the store was also impressive because of its creative displays, Littmann says. However, space would be an issue for replicating what he saw in his own business, he says. “They had a section with a storewithin-a-store that showcased wireless technology in TreeHouse, and I thought that was particularly impressive,” Littmann says. TreeHouse currently has just one location, but has announced plans for an expansion to Dallas that is slated to open in early 2017. “TreeHouse was born in Texas, and it is going to grow up in Texas,” TreeHouse CEO and co-founder Jason Ballard says. “We look forward to showing that quality, beauty, health, a good earth and good homes are universal values.” To read more about TreeHouse and check out additional photos from the Austin store, go to TheRedT.com/ treehouse_expands.

Do it Best Spring Market Indianapolis

June 17-19 United Hardware Buying Market Minneapolis

July 28-30 World and Main Fall Market Houston

August 18-20 Ace Hardware Fall 2016 Convention & Exhibits Chicago

25-27 Orgill, Inc. Fall Dealer Market Las Vegas

September 16-18 True Value Fall Reunion Denver Find more details about these events and others online at TheRedT.com/calendar. To have your event added, contact Kate Klein at kklein@nrha.org.

Canada’s Home Hardware: ‘We’re Not for Sale’ After news broke that Lowe’s came to an agreement to buy RONA Inc. in Canada, Home Hardware’s CEO told the public that Home Hardware would not be for sale. TheRedT.com/HH_nosale

True Value Spring Reunion Promotes Momentum True Value retailers gathered at their co-op’s spring buying show in Houston to focus on ways to build momentum in their businesses. TheRedT.com/TV_spring16

the co-op, which saw revenue boosts across the board for all of its business divisions. TheRedT.com/ace_spring16

Retailers Find an Array of Ideas, New Products at Orgill Spring Market Retailers had an array of opportunities, from networking to ordering pallets of products at special prices, at the Orgill, Inc. 2016 Spring Dealer Market. TheRedT.com/orgill_spring16

Lumber Liquidators Leadership Changes With Lowe’s Exec Key Topics at Ace Show: New Initiatives, Growth The Ace Hardware Convention for spring 2016 was a celebration of continued financial growth for

The much-scrutinized Lumber Liquidators has appointed former Lowe’s executive Dennis R. Knowles as chief operating officer. TheRedT.com/LL_lowesexec

CANADA Exclusive Interview: Ace, Independents Part of Lowe’s Mix What will Lowe’s Canada do with the independent dealers in RONA’s affiliate network of stores after its acquisition of RONA is complete? The answer, says Lowe’s Canada president Sylvain Prud’homme, is simple: keep them all.

Home Hardware Offers Digital Gift Cards Home Hardware Stores Limited is now offering gift cards online. The company has partnered with Buyatab, a digital e-card provider, and is saying that the program, which launched on March 1, is the first of its kind in the Canada. For the full story of each of these briefs, visit www.hardwareretailing.com or www.hardlines.ca.

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Hardware Retailing eNewsletter ..............................63 www.hardwareretailing.com/subscribe

Pacer Pumps ............................................................30 www.pacerpumps.com; 717-925-8240

Apex Tool Group ........................................................5 www.apextoolgroup.com; 410-773-7800

HSI ...........................................................................23 www.hardwaresuppliers.com; 800-334-5625

Paladin Data Corporation..........................................15 www.paladinpointofsale.com; 800-725-2346

Benjamin Moore & Co. ..............................................9 www.benjaminmoore.com; 855-724-6802

IPG ..............................................................................61 www.itape.com; 888-898-7834

Pennsylvania Lumbermens Mutual Ins. Co. .............45 www.plmilm.com; 800-752-1895

Berry Plastics Corp. .................................................40 www.nashuatape.com; 800-343-1295

Mascot Metals Manufacturers ...................................17 www.mascotmetal.com; +91(571)240-0600

Phifer Inc. ...................................................................11 www.phifer.com; 800-841-9473

Big Green Egg......................................................... 37 www.biggreenegg.com; 770-934-5300

Master Magnetics Inc. ...............................................59 www.magnetsource.com; 888-293-9190

Sashco .....................................................................27 www.sashco.com; 800-767-565627

Channellock Inc..........................................................1 www.channellock.com; 800-724-3018

Maverick .....................................................................41 www.maverickhousewares.com; 732-417-9666

Sears Hometown Store ...........................................29 www.ownasearsstore.com

Cole’s Wild Bird Products Co...................................71 www.coleswildbird.com; 877-426-8882

Mide Products LLC.....................................................63 www.mideproducts.com; 888-243-7019

ShurTech Brands LLC ..............................................34 www.frogtape.com; 800-321-1733

Do it Best Corp. .........................................................3 www.independentsdoitbest.com; 888-364-8237

Midwest Fastener ...............................................12-13 www.fastenerconnection.com; 800-444-7313

Southwire Company LLC .........................................55 www.southwire.com; 770-832-4242

Duckback ....................................................................18 www.superdeck.com; 800-825-5382

Midwest Products Co. .................................................... 33 www.midwestproducts.com; 800-348-3497

Starrett .....................................................................35 www.starrett.com; 888-674-7443

ECI Software Solutions ..............................................31 www.ecisolutions.com; 800-588-5128

National Hardware Show............................................19 www.nationalhardwareshow.com

Superior Pump .........................................................49 www.superiorpump.com; 800-495-9278

Envirocare ................................................................51 www.moldexbrands.com; 877-463-2628

NRHA All-Industry Conference ...................................... BC www.nrhaconference.com; 800-772-4424

Top Notch Distributors Inc. ......................................39 www.topnotchinc.com; 800-233-4210

EZ Lawn and Garden ...............................................53 www.ezlawnandgarden.com; 781-413-3079

Old Masters .............................................................47 www.myoldmasters.com; 800-747-3436

True Value Company ................................................21 www.truevaluecompany.com; 888-291-7229

Flexon ........................................................................7 www.flexonhose.com; 800-327-4673

Oneida Air Systems ............................................26-27 www.oneida-air.com; 800-732-4065

USP Structural Connectors/MiTek ...........................32 www.USPapp.BUILD; 800-328-5934

Gojo Industries Inc. ..................................................16 www.GOJO.com; 800-321-9647

Orgill Inc. .......................................................... 72-IBC www.orgill.com; 800-347-2860

World and Main LLC ................................................ IFC www.worldandmain.com; 800-523-1268

*This index is provided for the convenience of our advertisers and readers. The Publisher assumes no liability for errors or omissions.

April 2016 | HARDWARE RETAILING

Last Word

Understand the Inner Workings of Walmart

harles Fishman is an award-winning author and investigative journalist. His book, “The Wal-Mart Effect,” got inside the world’s largest company for the first time and explains how Walmart does what it does. Fishman will be speaking May 4 at the North American Retail Hardware Association (NRHA) All-Industry Conference, held in conjunction with the National Hardware Show® in Las Vegas. He will talk about Walmart past and present, and how independent home improvement retailers have survived in spite of the retail giant.

Is Walmart still as formidable as it seemed when you wrote “The Wal-Mart Effect”? Walmart seems much less like a behemoth than it did even five years ago. But two things are true: Walmart is, in fact, bigger than ever. And Amazon is coming up fast. My kids (14 and 17) think you should buy everything from Amazon, and for the 17-year-old, that literally includes tools. He recently bought a set of screwdrivers from Amazon.

How often do you shop at Walmart and why? When I was writing “The Wal-Mart Effect,” I was in a Walmart of some kind every five days—certainly five to six times a month. I wanted to make sure I understood what was happening in the stores. I still talk and write about Walmart, and to be both informed and fair, I try to get into a Walmart at least twice a month. I’ve been in 150 different Walmarts now, in 30 states and six countries.

What’s your impression of how Walmart sells home improvement supplies? Walmart has shelves of hardware and home improvement merchandise. If you know what you want, and it’s there, great. But if you need advice, you’re in the wrong place.

Where do you buy home improvement products?

“The Wal-Mart Effect” made the best-seller lists of The New York Times and The Wall Street Journal, and has become the standard in universities and business schools for understanding Walmart’s impact on the U.S. and the global economy.

HARDWARE RETAILING | April 2016

Here in D.C., we use two local hardware stores—both Ace members and both special places: Well-staffed, well-stocked, offering patient and gracious advice. And our kids know them, too, and appreciate them compared to the big boxes, which makes us feel good.

What are you looking forward to about speaking to retailers at the NRHA All-Industry Conference? I’m a reporter, and I love business, so I love hearing what it’s like to run a business right now—what’s the mood, what’s changing, what’s making you nervous. I especially like meeting people who run their own companies. You get a different perspective than from employees of a big company.

What will you be reading on your flight to Las Vegas for the show? I’m writing a book about the race to the moon, so I’ll probably be reading a book about space suits or the lunar module.

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Worldwide Distribution & Retail Services

Where is the Industry Headed? May 4-6, 2016

Las Vegas Convention Center

Visit www.nrhaconference.com or call 800-772-4424 for more details!

2016 NRHA ALL-INDUSTRY CONFERENCE

FREE For All Retailers!

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