Issuu

Serving Hardware, Home Center & Building Material Retailers

Coaching the Team Bringing Out the Best in Your Employees 42

A New Era of Store Services 56

VOLUME 212 • ISSUE 1 • JANUARY 2017 • HARDWARERETAILING.COM

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Orgill Stands By Us From Expansions to Programs, Orgill Helps Us Make Our Business Better

“Orgill is extremely professional, and we know they’re here for us. They stand behind us 100 percent.” Jackie and Michael Sacks l Round Top Mercantile Company, Texas l An Orgill customer since 1988

Staying Competitive

Trying New Things

“Orgill’s pricing helps us stay competitive while stocking

“Working with Orgill, we found many areas where we

the latest and greatest items.”

could expand our offering.”

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“When we expanded, Orgill helped us every step of

“Orgill’s advertising programs help us reach more

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merchandising the store.”

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Learn best practices and emerging trends. This can’t-miss event presents a diverse lineup of industry experts to speak on a variety of topics to help improve your business. This year’s lineup will dive into what’s in store for the future of independent retailing.

Coaching the Team

Learn it here. Interested in joining us?

Bringing Out the Best in Your Employees 42

Gain valuable knowledge to apply to your business and join the largest gathering of independent retailers in the world at the NRHA All-Industry Conference, held at the National Hardware Show®, May 9-11 in Las Vegas. You won’t be disappointed!

“From what they want to how they buy, consumers have changed dramatically in the past decade. That means that retail has to change, too.” Kit Yarrow, Ph.D | NRHA All-Industry Conference Keynote Speaker FOR MORE INFORMATION, GO TO NRHACONFERENCE.COM

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A New Era of Store Services 56

2017 NRHA ALL-INDUSTRY CONFERENCE 12/15/16 9:24 AM

VOLUME 212 • ISSUE 1 • JANUARY 2017 • HARDWARERETAILING.COM

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Serving Hardware, Home Center & Building Material Retailers

Coaching the Team Bringing Out the Best in Your Employees 42 A New Era of Store Services 56

VOLUME 212 • ISSUE 1 • JANUARY 2017 • HARDWARERETAILING.COM

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The Possibilities Are Brewing

n the February issue, catch a glimpse of why customers are getting hopped up on the trend of homebrewing. Discover what homebrewers want and need for their beloved beverage-making hobby, and learn from independent home improvement retailers who have made a name for themselves in the homebrewing industry.

Also coming up in next month’s issue, we will be evaluating the life cycle of new products on your shelves. From product discovery and stocking inventory to testing the waters and determining if a product will stay or go, learn best practices for keeping your salesfloor fresh and your shelves stocked with what your customers want.

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Headquarters Staff

What Do NRHA Members Have Access To? IN-DEPTH ONLINE TRAINING

PUBLISHING

Give your employees confidence in product knowledge, merchandising, selling skills and more with seven online training courses. Trained employees sell more!

PUBLISHER, VICE PRESIDENT OF PUBLISHING Dan Tratensek

COMMUNICATIONS DIRECTOR OF COMMUNICATIONS Whitney Daulton FEATURES EDITOR Liz Lichtenberger

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 COO Bob Cutter

ASSISTANT EDITOR Renee Changnon

CONTRIBUTING EDITOR-NEW PRODUCTS Marci Taschler SENIOR DESIGNER Lynnea Chom GRAPHIC DESIGNER Graeme Haase WEB DEVELOPER Kevin Trehan

EDUCATION

PRODUCTION SERVICES

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

PRODUCTION MANAGER Nancy A. Vondersaar

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

SALES AND PRODUCTION ASSISTANT Freda Creech

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

CIRCULATION

RETAIL LEADERSHIP INSTITUTE

CIRCULATION DIRECTOR Richard Jarrett

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

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

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

NATIONAL SALES MANAGER Lowell Huffman

NRHA CANADA

MIDWEST REGION MANAGER Tony Sarantakis, 404 Afton Circle, Barrington, Ill. 60010; 847-934-9515, Fax: 847-934-2494, tonytakis@aol.com

NRHA CANADA Michael McLarney, 528 Queen St. E., Toronto, Ontario, Canada M5A 1V2; 416-489-3396, mike@hardlines.ca

WEST REGION MANAGER Chris Miller, 506 Citadel Circle, Westmont, Ill. 60559; 630-234-3272, Fax: 847-934-2494, cmiller7288@gmail.com

STATE AND REGIONAL ASSOCIATIONS

NORTHEAST REGION MANAGER Brian Ziff, 17 Cutler Knoll, Watertown, Conn. 06795; 203-509-0125, Fax: 317-275-9406, bziff@nrha.org

MICHIGAN RETAIL HARDWARE ASSOCIATION Patrick Harrington, 603 S. Washington Ave., Lansing, MI 48933; 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.

GREAT LAKES REGION MANAGER Bill Mancuso, 136 N. Delaware St. #200, Indianapolis, Ind. 46204; 317-275-9424, Fax: 317-275-9403, bmancuso@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, Ontario M5V 3K8; 416-598-0101 x220, Fax: 416-598-9191, jmagner@yorkmedia.net

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

BUSINESS SERVICES

NRHA partners with a variety of experts to offer you a suite of business services so you can spend more time running and improving your business. For more information about becoming a member visit nrha.org/membership. NRHA MISSION

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. NRHA BOARD OF DIRECTORS CHAIRMAN OF THE BOARD James Cabirac, Kief Hardware, Cut Off, Louisiana EXECUTIVE VICE CHAIRMAN Megan Menzer, Newton’s True Value, Cherryvale, Kansas FIRST VICE CHAIRMAN T.J. Comstock, Northwest Hardware, LLC, Billings, Montana SECOND VICE CHAIRMAN Greg Schlecht, Greg’s True Value, St. Francis, Wisconsin THIRD VICE CHAIRMAN Daniel Harris, Palos Ace Hardware, Palos Heights, Illinois; Lemont Ace Hardware, Lemont, Illinois DIRECTOR Will Aubuchon, Aubuchon Hardware, Westminster, Massachusetts DIRECTOR Jared Smith, Jared’s Ace Hardware, Bishopville, South Carolina

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.

DIRECTOR David Dishke, Grand River Home Hardware, Caledonia, Ontario

Periodical postage paid at Indianapolis, Indiana, and additional mailing offices.

DIRECTOR Steve Fusek, Fusek’s True Value, Indianapolis

POSTMASTER: Send address changes to Hardware Retailing, P.O. Box 16709, St. Louis, MO 63105-1209.

NRHA’s growing research library helps you stay relevant. Stay updated on trends and track how your business is performing.

ASSISTANT EDITOR Melanie Moul

CONTROLLER David Gowan

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

INDUSTRY-SPECIFIC RESEARCH

ASSISTANT EDITOR Kate Klein

All editorial contents copyrighted 2017 by the North American Retail Hardware Association. No editorial may be reproduced without prior permission of the publisher.

SECRETARY-TREASURER Bill Lee, NRHA President and CEO

REPRINTS: Contact the Editorial Department at 317-275-9400 for price quotations. Printed in the USA.

IMMEDIATE PAST CHAIRMAN Adam Busscher, Picton Home Hardware, Picton, Ontario

HARDWARE RETAILING | January 2017

Contents JANUARY 2017 | VOLUME 212 | ISSUE 1

68 INDUSTRY EVENT Q&A with the National Hardware Show®

What improvements would you make to your store if you had a little extra cash? Find out more about the National Hardware Show®’s Reimagine Retail program and how you can enter for a chance to win $100,000.

70 MERCHANDISING

Merchandising for Profit

OPERATIONS

Employee, We’ve Got a Problem

Investing time in coaching the right people—and parting ways with the wrong ones—can be challenging for independent businesses that don’t have traditional human resources personnel. With insight from two hardware retailing human resources managers, this article discusses what kinds of employees and situations benefit from coaching and which are better served with a clean break.

56 CATEGORY SPOTLIGHT

Store Services 2.0 Sponsored by Saint-Gobain ADFORS Store services across industries are developing beyond the traditional with the addition of buy online, pick up in store capabilities. Explore what it could mean for independent home improvement retailers and what customers expect with the next generation of convenience.

NRHA last conducted its landmark Merchandising for Profit Study in 2002 to quantify the sales lift generated by different merchandising techniques. This year, with help from The Farnsworth Group, NRHA revisited these time-tested merchandising techniques to assess their viability. Learn more about the results from our latest study.

Departments 06 . . . . . . . . . . . . . . . . . On the Web 08 . . . . . . . . . Independent Thinking 10 . . . . . . . .Taking Care of Business 14 . . . . . . . . . . . . . . . . NRHA News 18 . . . . . . . . . . . . . . . . . . . . . Trends 24 . . . . . . . . . . . . . . . New Products 36 . . . . . . . . . . . . . . . . . . Checkouts 74 . . . . . . . . . Newsmakers/Calendar 78 . . . . . . . . . . . . . . . . . . Last Word

On the Cover Kim Tarrant, human resources manager at Family Farm and Home, which has more than 50 locations in Michigan, Indiana and Ohio, shares some human resources best practices . NRHA photo by Lynnea Chom

HARDWARE RETAILING | January 2017

Deep “V” Jaws Open wider for better grip on pipes and more Grip Zone – Non-Marring Gentle Grips Concave rubber grip area won’t mar chrome pipes Unique Tooth Design Angled teeth provide more torque with less effort Exposed Steel Handle Tips For reaming, prying, and tightening tub drains www.CrescentTool.com

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On the Web

HR MANAGEMENT

Human Resources Tools for Success In this month’s feature story, human resources managers share insights on how to help struggling employees and important points to consider when firing. To help you improve your human resources practices, we’ve created these resources. Verbal Coaching Worksheet: Visit TheRedT.com/verbal-record for a worksheet you can use to track interactions with problem employees, such as scheduled meetings and verbal warnings. This tool can help you ensure you are keeping a record of all communications. Resource List: Visit TheRedT.com/ hr-resources for tools to help you with human resources management in your company. This list is ideal for retailers looking for solutions to problems with employees or those who want to build strong human resources practices.

SOCIAL MEDIA

Downloadable Holiday Graphics Social media is an important tool for engaging your customers. To make engagement easier, the North American Retail Hardware Association created graphics for you to share on major holidays. Download the package at TheRedT.com/holiday-graphics.

This series of quick lessons on topics such as selling skills, merchandising, product knowledge and operations is geared toward all levels of employees. Visit nrha.org/freetraining to download this month’s lessons, listed below.

1 PowerPoint: Lawn and Garden Merchandising Tips MERCHANDISING

Popular Study Updated NRHA last updated its Merchandising for Profit Study in 2002. This year, we worked with nearly a dozen retailers to update the study and quantify the sales lift generated by popular merchandising techniques. Find the full results at TheRedT.com/mfp-2016. 6

HARDWARE RETAILING | January 2017

2 Worksheet: Setting Selling Skills Goals

SOCIAL MEDIA LINKS

@hardwareretail facebook.com/HardwareRetailing

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Independent Thinking

STIHL Helps Build a Strong Foundation for Leadership

“ The NRHA

Foundations of Leadership Program is a response to retailers who understand that stronger leaders make stronger businesses.

”

e’re thrilled to say that STIHL Inc. made a generous gift of $100,000 to help fund the development of the NRHA Foundations of Leadership Program and the NRHA Foundations of Leadership Annual Conference. STIHL will become the program’s exclusive manufacturer partner who, along with a consortium of leading independent retailers, will work together to develop this program. Scheduled to launch in April 2017, the NRHA Foundations of Leadership Program will promote personal leadership skill development for the next generation of retailers and help build stronger management teams to fuel growth for participating independent retailers. The 16-week online course is being developed in conjunction with Ball State University’s (BSU) John H. Schnatter Institute for Principled Entrepreneurship, STIHL and a group of leading independent retailers: Aubuchon Hardware, Buchheit, Friedman’s Home Improvement, Foxworth-Galbraith, Jerry’s Home Improvement, Sunshine Ace Hardware and Wilco Stores. These companies have invested financially in the program and are volunteering their training staffs to help guide the curriculum design. As part of the partnership, STIHL will also be the exclusive sponsor of the NRHA Foundations of Leadership Annual Conference, which is scheduled for Aug. 1-3, 2017, at the NRHA Conference Center in Indianapolis. This inspiring conference will feature presentations from BSU leadership experts, interactive sessions and industryfocused panel discussions. The conference will be free for NRHA Foundations of Leadership Program and NRHA Retail Management Certification Program graduates, as well as all former Young Retailer of the Year honorees. Students’ sponsors or mentors from participating companies and top management from consortium retailers and STIHL will also be in attendance. During the NRHA State of Independents Conference in December, research that outlined some of independent retailers’ biggest challenges to growth and largest unmet needs was presented. The need for better leaders emerged as one of the biggest roadblocks standing in the way of owners who want to grow or expand their businesses. The NRHA Foundations of Leadership Program is a response to retailers who understand that stronger leaders make stronger businesses. As Roger Phelps, corporate communications manager for STIHL, commented, “One of the greatest challenges facing small businesses in general, and the retail hardware retailer specifically, is the professional development of leaders who will be responsible for the future success of their businesses. These businesses have always been at the heart of our success, so investing in their future is a perfect fit for who (STIHL is) as a brand.” Your trade association is committed to developing new programs that are a direct response to your stated needs as an independent retailer. We are also committed to finding new and creative ways to engage industry channel partners, including retailers and manufacturers, in the development of new programs, from conception through completion. We believe this will make new programs more relevant and of higher quality and bring them to market faster. Plan now to develop your emerging young leaders in 2017. It will be good for your people and your business.

Bill Lee, President and CEO

blee@nrha.org

HARDWARE RETAILING | January 2017

Taking Care of Business

Set for Success

“It is important

to emphasize the impact a strong and consistent merchandising plan can have on a store’s key profit variables, like transaction size.

”

n the North American Retail Hardware Association’s (NRHA) most recent Cost of Doing Business Study, high-profit hardware stores generated about $23 per transaction, compared to just $21 at the average store. Think about that for a minute. If you could increase every transaction you run by roughly 10 percent, what would that mean for your bottom line? While this kind of sales increase would be great, it’s easier said than done, right? Well, one practice almost all retailers use to generate sales lift for their operations is featured merchandising. This means taking a product from its normal location on a shelf and featuring it in some other area of the store—on an endcap, at the register, in a power aisle. And while just about every retailer utilizes these merchandising techniques, how effective are they, and what kind of sales lift can retailers expect when they use them to feature a product? That’s exactly what NRHA set out to determine more than three decades ago when it first launched its Merchandising for Profit Study. This study sought to quantify the kind of sales lift that different feature merchandising techniques generate. In early 2016, NRHA, together with help from The Farnsworth Group, went to work updating this study, which had last been conducted nearly 15 years ago in 2002. But in today’s era of smartphones and constantly stimulated consumers, we wanted to determine whether in-store merchandising had lost some of its oomph. After months of research and help from nearly a dozen retailers, the answer was a resounding NO! Even as customers walking through stores are transfixed to their smartphones, having been beaten over the head with online messaging and omnichannel shopping options, good old-fashioned merchandising techniques still have a solid impact. To read more about our update to this landmark study, please turn to Page 70. I will spare you the details in this column, but suffice it to say that nearly every featured merchandising technique tested was able to generate sales lift for a product. While this basic concept may seem intuitive to most retailers, it is important to emphasize the impact a strong and consistent merchandising plan can have on a store’s key profit variables, like transaction size. And this is exactly why it is so important for retailers to make sure they utilize thoughtful merchandising techniques throughout their store wherever possible. Some of the concepts we tested, like featured endcaps, represent excellent, yet limited, opportunities for retailers to exploit. Others, like clip strips and feature/benefit signage, can be much more widely used (than something like endcaps) within a retail environment. Though both of these techniques have been proven to generate incremental sales increases for the products featured, retailers still are slow to implement them. Why? Because thoughtful merchandising and maintenance takes time. I know very well how time-pressed retailers are. There is always a customer to help, a problem to solve or an order to process. Hours in a day are limited, but when weighing the areas of your business where you should spend your time, merchandising planning should at least factor in to your thought process. If you need any more of a reason why, take a look at this story, get out your trusty calculator and start doing the math on the sales increases you can expect when you get your merchandising mind right.

Dan M. Tratensek, Publisher

dant@nrha.org

HARDWARE RETAILING | January 2017

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NRHA News

NRHA Event Brings Industry Together

etailers, distributors and manufacturers who attended the North American Retail Hardware Association’s (NRHA) second annual State of Independents Conference now have a detailed understanding of the performance and direction of the independent home improvement industry. The one-day conference, sponsored by the National Hardware Show®, took place in Chicago in December. Part of NRHA’s mission is to advocate for independent retailers, so along with providing an industry overview, NRHA shared information gathered from retailers about their relationships with distributors and manufacturers. These findings and other industry-specific presentations and discussions helped attending channel partners expand their understanding of independent retailers and how they as manufacturers and distributors can contribute to independent industry growth. Retailer panelists talked with manufacturers and distributors about their business growth opportunities and obstacles and the NRHA research presented. “In order for the independent channel to continue growing and thriving, it’s crucial that retailers, manufacturers and distributors come together,” says Dan Tratensek, vice president of NRHA. “NRHA was thrilled to facilitate these conversations for the second year in a row and looks forward to doing so in coming years.”

What did you learn from talking with retailers at the event? “Retailers shared great insights on what manufacturers can do better. We learned how retailers deal with product knowledge and what we can do to help them educate their staff on our products. We learned how we can stand out from our competitors in the eyes of retailers.” —Scott Sarver, Franmar, Blue Bear Product Line

What’s your biggest takeaway from the conference? “The research and information shared at the conference was very useful. It was also good to be in a room with other retailers who are in the same boat as I am, and it’s reassuring to see that channel partners are interested in joining the conversation.” —Jake Smith, Jared’s Ace Hardware

Why is it important for retailers, manufacturers and distributors to be in the same room at this event? “We’re all there to support America’s small business owners. And when we’re better able to understand their needs and where their pain points are, we’re better able to develop the products and services necessary to help them grow.” —Randy Rusk, Do it Best Corp.

HARDWARE RETAILING | January 2017

NRHA News

Sharing Best Practices So We All Succeed

t NRHA, our mission is to help independent hardware stores, home centers and lumberyards, regardless of wholesale affiliation, become better and more profitable retailers. We do this by focusing our programs, products and services on three important pillars: educate, advocate and associate. As we move into 2017, we’re inviting you to re-engage

with your association in whatever ways suit your business best. Whether it be tapping into NRHA’s library of educational resources to train your staff or using online-exclusive content to solve business challenges, we’re here for you. To access the resources below, visit nrha.org/membership, contact NRHA Member Services at nrha@nrha.org or call 800-772-4424.

Comprehensive Employee Training

Quick & Easy Training Resources

NRHA membership gives you access to a fully administered online training program, complete with testing and recordkeeping. Your annual NRHA membership fee gains you and your staff access to over 200 training modules spanning seven comprehensive training programs covering product knowledge, selling skills, merchandising, operations and more. Check out the following:

Improve your training program with Train the Trainer.

• Basic Training Course in Hardware Retailing • Basic Training Course in Building Materials • Basic Training Course in Selling Skills • Basic Training Course in Merchandising • Project PRO • Loss Prevention Training Series

238

NRHA training modules offered. 16

HARDWARE RETAILING | January 2017

To help you start or boost your staff training programs, there are numerous guides and quick training resources available. They’re free to all home improvement retailers and ideal to use at employee meetings. Here are just a few: • Train the Trainer Guide: A step-by-step manual on starting or improving a training program. • Trainer’s Toolbox: A growing library of quick lessons, perfect for employee meetings covering merchandising, product knowledge, selling skills and operations. • Cost of Doing Business Resources: Resources that can help your staff better understand business with the metrics presented in the annual Cost of Doing Business Study.

“NRHA was vital to my growth in this industry. It gave me the education I needed to transition into an ownership role.” Christian Herrick | Randy’s Do it Best Hardware | Member since 2007

Leadership & Management Training

Hardware Retailing Magazine and Resources

NRHA’s Retail Management Certification Program is designed to provide business owners with a comprehensive six-month college-level educational program to develop the leadership and management capabilities of high-potential employees. This program offers a learning experience that is directly applicable to both the student and the business by contributing an immediate return on investment. It has a direct effect on the positive business performance of the participant companies. Visit nrharmcp.com for information about upcoming sessions, scholarship opportunities and program details.

The industry’s leading magazine, and your instruction manual. Because Hardware Retailing magazine is published by NRHA, the revenue generated is reinvested into programs for you. The magazine offers how-to management advice, industry news, trends and new products. Plus, Hardware Retailing delivers more than a magazine.

Average ROI per student is

$60,000

• Weekly email newsletter • Monthly digital publication • Online-exclusive stories, guides and media • HR mobile app Visit hardwareretailing.com for daily stories and to subscribe.

January 2017 | HARDWARE RETAILING

Trends Looking to Niches and Category Expansion The new year presents a fresh opportunity to evaluate your existing product selection and decide if it’s time to expand or add categories to your store. Hardware Retailing surveyed owners of hardware stores, home centers and lumberyards, and 61 percent of respondents report intentions to add or expand categories in 2017. The categories retailers plan to prioritize for hardware stores and homes centers are lawn and garden, plumbing, electrical, rental and farm and pet. Lumberyard owners intend to focus on plumbing, hardware and electrical. The dominant trend for retailers who want to add new categories this year is an emphasis on lawn and garden and outdoor living products. A high percentage of survey respondents answered “other,” noting interest in growing niches such as farm and ranch, clothing, outdoor power equipment, sporting goods, lighting and appliances. On the survey, retailers also note that outdoor

power equipment, rental, farm goods and sporting goods were the top niche contributors to sales in 2016.

Applied to Retail: Analyze your top-selling categories to see if you have opportunities to add niches or more specialized products in the areas you already sell. Keep an eye out for unique items at your distributors’ spring shows, and touch base with your peers in the industry to get ideas for smart ways to grow categories. In addition, engage your staff and customers in the process. Put a suggestion box at the checkout area and ask customers what products or categories they would like to see more of in the store. Ask for recommendations for locally made specialty items to differentiate your product mix.

Which of the Following Categories Do You Plan on Adding Within the Next Year? Respondents could select more than one answer.

Hand Tools

11.7%

Hardware

12.8% 14.4%

Power Tools Building Materials

15.4%

Housewares

15.4%

Electrical

18.1%

Paint & Sundries

18.6%

Plumbing

19.2% 31.4%

Other

44.7%

Lawn, Garden & Outdoor Living 0%

10%

20%

30%

40%

50%

Source: NRHA/Hardware Retailing

HARDWARE RETAILING | January 2017

Visit the Clean + Contain Expo to find more than 400 exhibitors offering the latest cleaning & organizational solutions, closet & clothes care, bath accessories and unique pet-care items.

March 18 - 21 • Chicago Free Badge Registration at

www.housewares.org

Trends

Consumer Confidence Up in Third Quarter

Consumer confidence rose by 2.4 percent over 2015’s third quarter, according to the Consumer Confidence Index from The Conference Board. The Purchasing Manager’s Index went up 0.8 percent, which means the manufacturing sector is growing.

Existing-Home Sales (in millions)

Economic indicators were up in the third quarter, with home prices, consumer confidence and the manufacturing sector increasing above the same period in 2015.

Total Existing-Home Sales 6.0

Housing lagged some, with a drop of nearly 1 percent in the average number of residential housing starts and no change year over year in the number of homes sold. However, home prices increased to $240,000, up from $227,000 in third-quarter 2015.

5.5

5.0

4.5

4.0

O N

2015

A S

2016

Months

Manufacturing and Consumer Confidence Show Growth 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

Completed sales of existing single-family homes (single family, townhomes, condos and co-ops), at a seasonally adjusted annual rate.

Existing-Home Price (in thousands)3

The average of the median prices 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

-0.9% 3,436

98.3 100.7

2.4%

5.48 5.39

-1.6

$227 $240

50.8 51.2

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

HARDWARE RETAILING | January 2017

Q3 2016

3,468

All numbers are derived from July, August and September data.

Q3 2015

5.7%

0.8%

SOMETIMES FORTUNE

SMILES UPON YOU.

OTHER TIMES IT SIZES YOU UP AND NODS.

Not just any product can be a Cat® product. And not just any business can be a Cat Home & Outdoor Power Authorized Sales and Service Center. We’re entering the portable generator market because we believe, as the global brand synonymous with power and durability, we’re uniquely suited to build a generator like no other. We’re out to be the best in the industry and we’re looking for partners who share that attitude. If you think you have what it takes. If you’re prepared to be an extension of the Caterpillar legacy – one of durability, reliability and raw power – we’d love to hear from you. Visit cat.com/jointheteam.

RP5500

RP7500 E

RP6500 E

© 2016 Caterpillar. All Rights Reserved. CAT, CATERPILLAR, BUILT FOR IT, their respective logos, “Caterpillar Yellow”, the “Power Edge” trade dress as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission.

RP3600

New Products

“With CleanSmart, you can

spray it without wiping it to get the job done. CleanSmart cleaners kill bacteria but are safe for kids and pets.

”

—Sara Carpenter, Steve’s Ace Home & Garden

1 “My son loves this toy tool

belt. It encourages him to use his imagination. He likes to wear it and act like Mom or Dad around the house fixing things.

”

—Tricia Kerth, Steve’s Ace Home & Garden

1. Eco-Friendly Cleaner

2. Toy Tool Belt Set

CleanSmart Daily Surface Cleaner is a product designed for messes in the kitchen and bathroom. The spray is dedicated to killing germs while reducing the harmful chemicals in households. With smart science and simple ingredients, CleanSmart kills organisms like E. coli, salmonella, RSV, influenza and strep without the use of bleach or alcohol. The cleaner is 100-percent kid-friendly. The CleanSmart Disinfectant Spray provides quick disinfecting on the go.

The Deluxe Wooden Tool Belt Set from Melissa & Doug is a great toy for children 3 to 7 years old. The tool belt set comes with five child-safe wooden tools: hammer, screwdriver, wrench, ruler and painted saw. All of these wooden tools fit in the adjustable tool belt and a child’s hand. A name tag on the tool belt can be personalized with a pencil or washable marker. The set helps teach sorting, problem solving and counting skills, as well as encouraging fine motor skills, hand-eye coordination and imaginative play.

Simple Science, LLC. 612-367-4540 or www.cleansmarthome.com

HARDWARE RETAILING | January 2017

Melissa & Doug, LLC. 800-284-3948 or www.melissaanddoug.com

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

“Dura-Prime can be used to

prime most everything, like wood, aluminum, gutters, steel, and more. In my opinion, it is the best primer on the market for exterior applications. —Bob Halla, Cowls Building Supply

”

“Our sales rep suggested

we give these votive candles a try, and they have done extremely well. They are a wonderful gift to give and the scents are so unique.

”

—Tricia Kerth, Steve’s Ace Home & Garden

3. Bonding Paint Primer

4. Votive Candles

Dura-Prime is a bonding primer and is designed for use on new, peeling or weathered surfaces, including wood, metals and masonry. Dura-Prime blocks rust and tannin bleed with two coats. Dura-Prime helps paint last two to four times longer than traditional paint primers. It penetrates, seals and encapsulates peeling, cracking and damaged surfaces. The product provides a stable surface for longest lasting top-coat life.

Classic Votive Candles from Mixture are hand poured and made to order in the U.S. These candles are made out of a 100-percent renewable soy wax in simple containers. The candles are available in clear cylinder containers or in 10 different colors. These votive candles are available in 60 different scents. Mixture 913-944-2441 or www.madebymixture.com

Mad Dog Paint Products 507-645-7431 or www.maddogprimer.com

January 2017 | HARDWARE RETAILING

New Products

5. Locking Impact Extension Tool Sponsored Product The GearWrench® Locking Impact Extension product line features longer extensions in 3/8-inch and ½-inch drives. Delivering speed, strength and better access, the Long Locking Impact Extensions include a pull collar locking mechanism, so users can reach confined bolts and fasteners. The product line meets ASME specifications and is backed by a lifetime warranty. Apex Tool Group 800-688-8949 or www.gearwrench.com

6. Plug Cutter Tool Montana Brand Tools© 3-piece set of plug cutters features a patented, self-centering design, making cutting wood plugs easy. Made of precision CNC machined high-alloy steel, the cutters include a retractable guide pin, 2-point cutting blades, heavy-duty single piece construction, and an innovative anti-skate design. They are designed to stay sharper longer for extended tool life. Montana Brand Tools 888-809-5673, Ext. 345 or www.montanabrandtools.com

HARDWARE RETAILING | January 2017

7 8 7. Handheld Battery Window VAC

8. Instant Traction Agent

Kärcher’s battery-powered Window Vac cleans any surface. This lightweight, cordless device vacuums away all cleaning solution from the windowpane, eliminating drips and unsightly streaks. The Window Vac is useful for cleaning the shower, bathroom tiles, glass countertops and mirrors, eliminating the need for paper towels and dirty rags.

Traction Magic® by GAIA Enterprises is a chemical-free and environmentally safe compound that, once applied, provides instant traction on most slippery surfaces. Traction Magic will not damage surfaces, works instantly and is easy to use in applications like stuck vehicles, wet and slick sidewalks, loading docks, scaffolding, driveways and decks. Made in the U.S., Traction Magic is safe to use around people and pets and is available in jugs, pails, bags and a one-ton tote.

Kärcher North America 800-537-4129 or www.karcher.com/us

GAIA Enterprises, Inc. 800-783-7841 or www.tractionmagic.com

New Products

9 9. Smart Baby Monitor

10. Decorative Flower Pot

The iBaby Monitor M6S Wi-Fi baby monitor from iBaby Labs allows a user to monitor a baby in Hi-Deﬁnition through a mobile device app. The iBaby Monitor allows users to control the camera angle remotely or play soothing music to comfort a baby while sleeping. The monitor features humidity sensors for climate control, night vision LEDs, two-way audio and a full 360-degree panorama for an exact visual angle.

Lightweight and made from a durable polyresin material, this whimsical dog flowerpot by Garden Accents can be used both inside the home or outdoors on a deck or patio. Fill the flowerpot with a favorite plant and enjoy it all year long. Garden Accents 815-382-5751 or www.gardendecoraccents.com

iBaby 650-396-2436 or www.ibabylabs.com

BRPT HONDA POWERED Honda engine for powerful and reliable performance

LIFT HANDLES Built-in lift handles make transport easy

NARROW WIDTH

SHARK TEETH

With just a 24” width, fits through narrow paths and gates with ease

Carbide tipped Shark teeth for power and durability

www.braveproducts.com/HRM | (866) 281-4421 ALSO CARRYING

LOG SPLITTERS

EARTH AUGERS

HARDWARE RETAILING | January 2017

PRESSURE WASHERS

NEW PUMPS

BOOTH #2661

11. Smart Garage Door Opener

12. Disposable Microfiber Cleaning Pads

The ATOMs Garage Door Opener is a connected garage door opener featuring IFTTT (If This Then That) compatibility to allow homeowners to protect the largest entry point of their home. With the ATOMs door opener, homeowners connect through the SkylinkNet Internet Hub to other smart devices, including Amazon Echo, Nest®, Cam™, WeMo® and Philips Hue. The ATOMs’ features include a built-in LED light, backup battery, password protected three-button remote, durable chain with reinforced steel belt drive and ultra-quiet operation.

Genie Pads® are absorbent, disposable microfiber-scrubbing pads that work with the Swiffer® WetJet® to lift and lock in dirt, grease and grime during the cleaning process. Grout Genie has an affixed twin-row polypropylene bristle brush that enables users to deep clean grout, while the absorbent microfiber pad collects the dirt. The Grout Genie cleaning and finishing pad can also be used on other hard surfaces, including finished wood, laminates, vinyl or linoleum flooring. When finished, simply discard the Genie Pad.

Skylink 909-673-1778 or www.skylinkhome.com

Genie Brands 800-930-7980 or www.groutgenie.com

New Products

14 13

13. Reusable Shopping Bag The Tote Buddy by Momentum 1 Products is a useful storage solution for reusable shopping bags. Easy to use, the tote bag is eco-friendly and functional with shoulder straps for easy shopping trips and a Velcro closure that helps keep everything in its place. The Tote Buddy is constructed of durable fabric that allows it to stand on its own for quick loading and stand up to repeated use. It is available in many colors and patterns, with new choices offered frequently. Momentum 1 Products 858-395-9701 or www.thetotebuddy.com

Low Cost Starter Assortments Available

14. Drill Press Tool

Power Panel Asst P3869

a division of Woodland Scenics® pinecar.com • (573) 346-5555

HARDWARE RETAILING | January 2017

Endcap Asst P3878 Order from your favorite distributor.

The NOVA™ Voyager 18-inch Drill Press is a tool which features the DVR® Smart Motor—a direct drive motor with no belts or pulleys to provide a smooth, vibration-free drilling experience. The NOVA features an LCD screen that allows the user to access a picture menu. Once a drill bit is selected based on the size and type of material a user is drilling into, the computer automatically selects the correct speed. The NOVA Voyager customized features include favorite speed settings, pilot hole, forward, reverse and brake function and inch to metric conversion. Teknatool 866-748-3025 or www.teknatool.com

15 16 15. Motion Sensored Outdoor Fixture

16. Vinyl Window

The LED Battery Powered Spotlight by Mr. Beams® is an outdoor security fixture ideal for either home or business application. Once activated, the motion sensor light remains on for 30 seconds, provides over 400 square feet of coverage and is completely battery-operated. The light’s housing is constructed of ABS plastic that mounts easily to most surfaces and is well-suited for damp exterior locations.

Ply Gem® Windows 1500 Vinyl Collection now offers twotone dark bronze exterior with neutral interior colors in its product line of windows. Architects and builders alike are combining dark window exteriors with lighter interiors for design flexibility. In certain situations, dark exteriors absorb more solar heat, which can warp vinyl windows. Ply Gem addresses this challenge with proprietary technology–a dark capstock over a white co-extruded under layer–to reflect sunlight and limit fading.

Mr. Beams 877-298-9082 or www.mrbeams.com

Ply Gem 888-975-9436 or www.plygem.com

New Products

17. Inflatable Reusable Shim

18. Bath Spout Cover

The WINBAG® is a powerful, inflatable shim made of fiberreinforced material. It is designed for use in the construction industry but is easy for DIYers to use as well. The WINBAG provides a maximum pressure of up to 300 pounds. With the WINBAG, there is no need for a wooden or plastic wedge for adjusting, leveling, pressing or lifting. The WINBAG can be used in the construction industry for door, window and cabinet installations, installation and leveling of appliances and many other uses.

The Moby Bath Spout Cover brightens up the bath while keeping babies safe from bumping their heads. The sleek design includes an adjustable strap to secure and tighten on most spouts. The top opening allows for easy access to the shower diverter and the tail hook hangs neatly when not in use. It is dishwasher-safe and mold- and mildew-resistant. Skip Hop 877-475-4746 or www.skiphop.com

Red Horse USA, Inc. 941-404-6064 or www.winbagusa.com

CUSTOMERS EXPECT PROFESSIONAL GRADE PERFORMANCE. Impress Them with Jetcoat Pavement, Foundation and Roof Coatings

F O U N D AT I O N

D R I V E W AY

ROOF

J E T C O AT D E L I V E R S Q U A L I T Y A N D D U R A B I L I T Y T O P R O F E S S I O N A L S A N D D O - I T- Y O U R S E L F E R S W H O C O N T I N U E T O A P P R E C I AT E T H E VA L U E L O N G A F T E R T H E P R O J E C T I S D O N E . That’s because we never stop innovating. JETCOAT stands the test of time because our R&D team has developed and patented the most advanced coatings formulations in the industry.

JETCOATinc.com 800-394-0047

19. Ventilation Fan and Bluetooth Speaker

20. Premium Dog Food

The Ventilation Fan with Sensonic Stereo Speakers allows consumers to enjoy high-quality audio via most Bluetoothenabled devices. The fan-speaker combination has a powerful, yet quiet operating ventilation fan with built-in dual highfidelity speakers that deliver high-end stereo performance while concealed behind a fan grille. The fan’s housing depth and metal construction help to deliver enhanced acoustics that mimic a concert hall experience.

Taste of the Wild produces premium, grain-free pet formulas that are based on animal’s ancestral diets. The Taste of the Wild Pine Forest® Canine Formula with Venison & Legumes provides a lean, highly digestible protein to give dogs energy and flavor without the extra fat. This dog food has probiotics and prebiotic fiber to help support health digestion, while the perfect balance of omega fatty acids, legumes, fruits and protein sources make it a nutrient-packed formula.

Broan 262-673-4340 or www.broan.com

Taste of the Wild Pet Foods 800-342-4808 or www.tasteofthewildpetfood.com

Made in America

The Little Big Shot® Super Nozzle delivers more force with less water, and will not leak. Fully adjustable, it provides superior performance and water eﬀciency for a full range of watering and clean- up needs! This powerful nozzle is available in either brass or aircraft-grade aluminum. Each Little Big Shot® is Made in USA and assembled by a disabled US Veteran. Brass

Help us provide more jobs for Veterans!

Fully Adjustable

40% More Force

SKU# 4445037 K-CO Products, LLC • 1601 Alton Parkway #D • Irvine, CA 92675

SKU# 700377

by a disabled U.S. Veteran

Aside from being perhaps the most Earth Friendly nozzle on Earth, the Little Big Shot® sells very well, whether in-line or oﬀ-shelf. Stock it now and see for yourself! Every Little Big Shot® sold provides much needed income for a disabled US Veteran! Visit our GoFundMe link below to learn how you can help us create jobs for disabled U.S. Veterans. https://www.gofundme.com/Jobs4Veterans

40% Less Water SKU# 1403-3211

Aluminum

Will Not Leak! SKU# 7514409

Phone: (949) 276-5252 • FAX: (949) 276-5253 • e-mail: david@kco-products.com • www.kco-innovations.com

Checkouts MERCHANDISING

Old Furniture a Fixture at Akard True Value

ot all store fixtures have to be expensive to be effective. For Leigh Ann Akard, some of the most eye-catching displays she has are pieces of furniture repurposed to hold merchandise. Akard uses the center section of Akard True Value in Zionsville, Indiana, for a growing niche of home decor and giftware. She wanted a way to display those items that was a little different than the regular run of metal pegboard and shelving in the rest of the store. With a little creativity, she discovered it wasn’t difficult to find some options. For example, a pair of wooden ladders that had been collecting dust in the backroom now hold a variety of gift items while adding a vintage appearance to the display. “These ladders were not sturdy enough to be used as ladders anymore, but we were able to use them to create a display,” she says. “I also visit Goodwill stores and garage sales, where I’ve found several pieces of furniture that we’ve been able to use as fixtures.” Store staff often help in making minor repairs to the furniture, or in refinishing them so they fit into the overall appearance of the department. The displays work together with the unique mix of products in the department to create a niche category that has given a significant sales boost to the store and attracted more customers.

Top: When owner Leigh Ann Akard found this cabinet, she refinished it to fit in with the vintage appearance of the rest of the department. Bottom: Two wooden ladders now serve as fixtures that can be moved anywhere in the department.

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 | January 2017

January

HARDWARE C O M PA N Y

26-28, 2017

Opryland Convention Center

Nashville, Tennessee

Margin Building

Sales Built Event

Hardware Come check us out! Call Pat McCutcheon at 800-333-0520 ext. 212 or go to www.househasson.com

Checkouts

UNIQUE NICHE

Crafting a New Niche

rt supply enthusiasts no longer have to make the one-hour-plus trip to Las Vegas to enjoy their craft, thanks to Pahrump Rentals & Do it Best Hardware’s newest endeavor. The hardware store, located in Pahrump, Nevada, recently added a 600-square-foot paint and hobby center that stocks all kinds of art supplies, including pastels, oil paints, coloring books and much more. The center came to be from a combination of customer and manager demand. “I got a little artistry from my grandma and had no resources in town growing up,” says manager Meghan Thomas. “When customers started asking for art supplies, I jumped on the opportunity.” One of the stores in the strip mall where the hardware store is located was vacant, and Thomas got to work transforming the space into Do it Best Paint & Hobby. “There’s no one in our area who could give us advice on art supplies. It’s so different from hardware, so I spent hours researching online. Eventually we got in touch with good vendors, and they were happy to guide us.”

The customer response has been overwhelmingly positive, says Thomas, and has attracted a younger crowd. “Our main customer base has always been seniors, but young people are finding out they don’t have to go all the way to Las Vegas for these supplies. We have high school kids come in every day after school to find out what they can get.” Currently, adult coloring books and professionalgrade colored pencils are the most popular items. The store wasn’t planning to host a grand opening event until customers expressed interest. With support from its co-op and art supplies vendors, grand opening guests enjoyed food and drinks and participated in an art supplies raffle. “Word of mouth is the most important advertiser in our community. The town has really come forward and helped us,” says Thomas. Thomas hopes to expand the crafting niche in the future. She’s waiting for the other space in the strip mall to open up. “Six hundred square feet is not nearly enough for everything. I’m dying to add fabric and yarn.”

Meghan Thomas and her team added a 600-square-foot paint and hobby center to her offerings. Do it Best Paint & Hobby offers a variety of paints, brushes, coloring books and more.

HARDWARE RETAILING | January 2017

Safer Solutions for Your Customers Franmar’s BLUE BEAR products are the effective, safe, and affordable replacements of traditional hazardous products in the marketplace, such as methylene chloride. Over 30 years of dedication and development are blended into Franmar’s safe line of removers and cleaners. Users are guaranteed a more pleasant experience during restoration when using BLUE BEAR products.

Paint & Urethane Stripper • SAFER! No Methylene Chloride • Removes Multiple Layers of Paint, Varnish, Enamel, Urethane, Lead Based Paint, and More with ONE Application • Made with 100% American-Grown Soybeans • Low Odor

Cleaner & Degreaser • Cleans Grime, Oils, and Grease • Heavy-Duty Formula • Ideal Follow-Up to BLUE BEAR Paint & Urethane Stripper

Available through: Made in the USA

Call us today! 800.538.5069 Or visit us online: www.franmar.com

Checkouts

MERCHANDISING

Behind the Scene of Building Projects

oofing, siding and insulation are some of the major projects homeowners may know they need to do around the house, but sometimes they need encouragement to get started. Caleb Wiggins, manager of the Saskatoon Co-op Home Centre in Saskatoon, Saskatchewan, Canada, wants to help them. He and his staff built a display that offers building materials products, along with how-to information. The display takes the outline of a home’s walls and roof. On the outside of the display, customers can see, for example, how to install certain types of insulation. Inside the display, there is space to store a few bags of the insulation the store offers. “We prompt customers with the products they need to do the project and then show them how to do it,” he says. Wiggins brings the display out in the fall and keeps it out until the spring, when he replaces it with other seasonal products. The display lets customers see some of the bulkier building material items normally stored in the back of the store and reminds them about projects they may need to do around their own homes.

The display at Saskatoon Co-op Home Centre shows how to do some common home improvement projects as well as the key building products that go along with them.

American Made & Profitable For Over 80 Years

With a variety of clearly marked spring assortments, Ajax offers your customers ease of selection for their specific needs. Each assortment comes in their own unique case. Our storage cabinets and kits, provide spring assortments of Steel Lock, Brass Lock, Music Wire, Stainless Steel, Extension, Compression and more, each making dispensing efficient and economical. Ask for our Product Catalog which provides product descriptions and size specifications.

Toll Free: 855-966-AJAX (2529) www.ajaxwire.com ajaxwire@aol.com 119 Bloomingdale Road, Hicksville, NY 11801

COMMUNITY RELATIONS

Far Away, But Not Forgotten

eteran Brad Chrisman, manager of Mills Ace Hardware in Lincoln City, Oregon, says mail call for soldiers who are stationed overseas can be a trying experience. “Nothing’s worse than being one of those guys who didn’t get anything.” So when Chrisman was approached by a customer about implementing a Notes for Soldiers program in the store, it was an easy call to make. “It’s important to let soldiers know they haven’t been forgotten,” he says. The program is simple: The customer brought a box to leave at the checkout counter and left postcards in it for customers and employees to write letters to soldiers. Mills Ace has two locations in Lincoln City, and both stores participate. Other businesses in Lincoln City are taking part as well. Every Friday, the customer picks up the cards and mails them out. Just two months into the program, more than 300 postcards have been mailed. “This program really resonated with the community, and it helps Mills Ace not just be a business in the community, but really be a part of it,” says Chrisman. The program resonates with employees, too, he says. “More often than not, more cards are filled out by employees and their families.”

Mills Ace employee Megan Fredrickson shows off the Notes to Soldiers box.

Over the holidays, employees took blank cards home for family members to fill out. Holiday cards were donated by a local retirement home. Chrisman sees this program lasting a long time. “It’s really popular during the holidays, but it will definitely be something we do year-round.”

STUMPS WORST ENEMY UNIQUE SIDE DISCHARGE FRAME • NARROW WIDTH • GREENTEETH¨

... built better than they have to be

BOOTH #2661

www.dosko.com/HRM | (866) 418-0474 January 2017 | HARDWARE RETAILING

By Kate Klein, kklein@nrha.org

Corrective Plan and Verbal Coaching

Employee, We’ve Got a Problem! Coaching or Parting Ways With an Underperformer

This is a problem. Let’s set goals and deadlines for improving.

Initial Conversation

What happened? I would like to hear your side of the story.

ustin looked really good on paper when you hired him three months ago, but he’s been a headache ever since. You know how critical every sale is to your business, and having an underperformer like Justin on the salesfloor could jeopardize profits. A high-profit hardware store’s gross margin per employee is $88,587, according to NRHA’s 2016 Cost of Doing Business Study. And your store’s gross margin per employee keeps dipping slightly lower than $75,252, beneath what’s typical for the industry. Yet, you’ve invested time and money into hiring and training Justin, and you still think he shows promise. What should you do? In this article, Hardware Retailing provides insight on corrective action and termination from two human resource managers who work for thriving independent home improvement operations. Kim Tarrant from Family Farm and Home in Michigan and Lisa Smith from Wilco in Oregon both offer suggestions for helping employees improve their performance or, if necessary, ending their employment quickly. We also share thoughts from Tim O’Malley, who is a human resource manager for Indianapolis-area business services firm Tilson. Their perspectives apply to both large and small operations. The goal of offering these insights into coaching or firing underperformers like Justin is to help you run a smooth operation that turns payroll dollars into higher profits. The following pages provide employee management strategies, not specific legal advice. Employment laws differ by state, so consult legal counsel or a human resources professional before making decisions. The article is broken into two sections—first, a look at processes for helping workers succeed and, secondly, a discussion of what to consider when firing problem employees.

HARDWARE RETAILING | January 2017

Follow These 6 Steps to Coach or Part Ways With a Problem Employee

I See Progress

You’re following your performance improvement plan. Good start.

You’re Continuing to Improve

You’ve grown so much professionally and become a strong asset to our team.

First Written Reprimand

You need to get more serious and work on these specific problems.

You’re making really good progress. Keep up the good work.

Success!

We need to have a chat. Your performance isn’t improving yet. How can I help you?

You’re performing better, but please continue to work on these weak areas.

Good Effort

I Don’t See Progress

Second Written Reprimand

I want you to succeed, but you have to take initiative to improve.

Termination

This hasn’t worked out, even though you’ve had many opportunities to improve.

January 2017 | HARDWARE RETAILING

Taking Corrective Action

ou might notice a worker making mistakes, but more than likely, you’re also getting feedback from other employees and customers about how that worker takes too long to make deliveries and isn’t keeping shelves stocked. Family Farm and Home, which has 50 locations in Indiana, Michigan and Ohio and about 850 employees, has a goal that is probably the same as yours for every struggling worker, even if you only operate one store. “We don’t practice, ‘If A happens, then B happens,’” Tarrant says. “Our goal is always to coach and help team members improve.” However, Family Farm and Home starts each new employee with a 30-day probationary period, and a manager can use the introductory period as reason for termination, she says. Thirty days can be enough time to show if a worker’s attitude is affecting the team’s ability to gel and work together or if the employee isn’t going to have reliable attendance. Managers can

identify if a person is a bad fit for the business based on whether he or she doesn’t accept coaching, isn’t a team player and has a negative attitude, Tarrant says. Employee performance problems need to be identified and handled efficiently to avoid interrupted or poor service at the store. “We want to encourage employees to improve their behavior in order for it not to be obvious to the customer or get in the way of us doing business,” Smith says. She works with nearly 1,000 Wilco staffers, because each store has as many as 50 employees.

Make Expectations Clear An important step for helping employees succeed is to clearly state your expectations for their performance, O’Malley says. A written policy manual is an important part of that. Family Farm and Home provides all employees with a handbook that details performance standards and the company’s processes for

Family Farm and Home provides managers with a guide to human resources, and gives new employees a handbook that details company policies and standards.

HARDWARE RETAILING | January 2017

WHAT’S IN STORE FOR YOU? SAVE THE DATE 2017 NATIONAL HARDWARE SHOW Tuesday, May 9 - Thursday, May 11, 2017 Las Vegas Convention Center | Las Vegas, NV

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employee discipline so workers understand up front what the policies are and managers know how to follow the procedures. “We have in our handbook what we call progressive discipline,” Tarrant says. “There are three steps to our progressive discipline policy, and each case is unique. Depending upon the job each team member is doing and their experience level, they may need different amounts of coaching.” Those three steps are one verbal reprimand followed by two written warnings, but the process isn’t rigid. Tarrant encourages managers to make sure employees understand their jobs, have the tools they need to succeed and are given opportunities to improve. She also recommends they talk through employee issues with other managers and consult her office if they have questions. One manager might not realize he isn’t clearly communicating how a job should be done, but another manager’s perspective can help him see the situation differently, she says. “A lot of issues with our team members arise because our team members either don’t know what we want them to do or they don’t understand what we want them to do,” Tarrant says.

Starting the Process The process for corrective action at Family Farm and Home starts with what Tarrant calls verbal counseling. A store manager talks with an employee about a mistake and asks the worker to fix the problem. The initial conversation could be very informal and could happen on the salesfloor. The manager is expected to keep a written record of any verbal coaching and put the record in the employee’s file. The next steps in the correction process are written warnings. A manager should have the employee sign those written warnings, or note in writing if the employee refuses to sign them, O’Malley says. Once a manager has taken corrective action with an employee, O’Malley recommends

“We take responsibility for the person we hired. We want them to be successful in our environment. —Lisa Smith, Wilco

HARDWARE RETAILING | January 2017

”

that the manager have repeated check-in conversations to keep an open dialogue going. Those discussions should affirm that the manager is an ally in the improvement process. “Have the conversation with the employee that things aren’t going well, but you, the manager, are there to help them correct that,” O’Malley says. At Family Farm and Home, when conversations aren’t enough to fix the issues, the manager and problem employee meet to develop a written performance improvement plan. They set timelines and goals. “Continuous follow-up is what we encourage,” Tarrant says. “You start with verbal counseling. Once you’ve exhausted options there, you go to written reprimands.” The manager must use written reprimands prior to choosing to fire an employee, but doesn’t have to immediately terminate a worker just because he or she has been written up twice, Tarrant says. “It is our job as managers to help them understand and help them be successful,” she says. “Our managers have to use the progressive discipline. What is not required is a hard-and-fast rule. It’s not two write-ups and then termination. We have to look at each one on a case-by-case basis.” Wilco managers are also expected to approach individual situations with flexibility and the understanding that each circumstance is unique. “We take responsibility for the person we hired. We want them to be successful in our environment,” Smith says. “When they don’t do well, we have to backtrack and say, ‘Where did we go wrong? Was this a bad hiring decision? Or a difficult time in their lives?’”

Additional Resources Do you need ideas for how to take notes when giving verbal warnings and coaching employees? For a sample verbal counseling record visit TheRedT.com/verbal-record, for a list of more resources relating to this topic, check out TheRedT.com/ hr-resources. Tilson is located near Indianapolis, and is partnering with the North American Retail Hardware Association (NRHA) to provide human resources services to independent retailers who do not have human resources managers on staff. For more information about the partnership and the opportunities it offers you, visit tilsonhr.com/nrha.

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The Path to Termination

ome infractions—such as sexual harassment or repeatedly failing to show up for work—can make firing an employee pretty straightforward, if not legally necessary. A company’s discipline policy should allow employees to have opportunities to correct their mistakes, as well as the option to immediately terminate employment due to egregious behavior, such as violent acts, O’Malley says. Other reasons for instant termination would include stealing, sexual harassment, racial discrimination, selling or abusing illegal drugs on business property, creating safety risks for employees or customers, insubordination and falsifying legal documents. Regardless of whether immediate firing is necessary, the path to firing an employee should be well documented in writing to protect the company.

Making the Decision If employees’ actions don’t necessitate immediate termination, then ask them questions and pay attention to how willing they are to accept correction and training. “Go into a conversation not assuming that the employee knew that what they were doing was wrong,” O’Malley says. “It’s coaching, as opposed to having to discipline someone. Stay calm. Do it one-on-one. Allow the employee to save some face.”

“What you want is the employee to clearly understand what it is that they’re doing incorrectly and what it is that they need to be doing differently in comparison to what they’re doing now. —Tim O’Malley, Tilson

HARDWARE RETAILING | January 2017

”

Before you decide to fire an employee, have private meetings and listen to the worker’s side of the story. “Have a process by which an employee can raise concerns and report any issues they say that could violate a policy,” O’Malley says. “What you want is the employee to clearly understand what it is that they’re doing incorrectly and what it is that they need to be doing differently in comparison to what they’re doing now.” Tarrant encourages store managers to consider carefully whether to fire, and then make termination decisions based on how many performance problems they have documented about the employee, how much time has passed between written warnings and whether they have given the worker adequate time to improve. Firing is also a decision the company needs to make with the business’ return on investment in mind, Smith says. A manager has the responsibility of deciding if an employee is progressing toward becoming a better team member, needs more time to improve or should be terminated. Wilco won’t fire a worker because of a minor infraction, but the company does have to decide how long it is going to invest in trying to train a person who is a bad fit, Smith says. Managers also have to think through whether discipline, such as a demotion, is worthwhile. Choosing to continue training or moving an employee to a new position needs to be a smart business decision, she says. How managers approach the conversations about employee performance and termination is significant, Smith says. “Doing it empathetically is really important,” she says. “I’d like to think, when an employee has an issue, that they can speak about it without feeling disrespected. It doesn’t mean they’re bad people.”

The Legal Side Managers should carefully and consistently follow store policies when reprimanding and then firing employees in order to protect the business legally, O’Malley says. If the company handbook is clear about expectations and correction is needed,

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then don’t wait until an employee is hurting staff morale and business operations before you confront problems. “Whatever the issue is, make sure you are addressing it with the individual early and often,” O’Malley says. Companies operating in right-to-work states can fire employees at will, but best practices for termination would include well-documented reprimands and written descriptions of complaints from other employees, he says. Termination should be a last resort, but when you have to do it, your careful documentation can help protect your company from employee lawsuits. You cannot prevent employment-related lawsuits because workers can file charges with the Equal Employment Opportunity Commission without help from an attorney. However, you can keep careful written records of employee conduct and give your company a strong defense in court, O’Malley says. Firing people during probationary periods at the start of their careers with your business won’t protect your operation legally in the way that disciplinary actions over time will. “That is why the progressive discipline process is critical,” Smith says. “You need information to prove that the termination was warranted.” Another way for a business to protect itself from employment-related lawsuits is to be very consistent in how it treats every employee’s benefits so workers don’t have grounds for making discrimination allegations. For example, if your business offers paid or unpaid absences for workers when a crime or accident is under investigation at the store, then don’t opt to give paid leave on a case-by-case basis, O’Malley says. “That’s where you’re going to get yourself in hot water,” he says. A paper trail and consistency can protect you, your managers and the company from legal risks, such as false accusations of discrimination based on age, gender, health, race, religion or sexual orientation.

Firing Family Members Tim O’Malley is human resource manager for Tilson, a business services firm. He oversees workers’ compensation claims, leave of absence management, unemployment claim management, pre-employment screening and more. Firing an employee is never ideal, and firing a family member is even stickier. Tim O’Malley from Tilson makes the following recommendations for dealing with relatives who are problem employees. Treat your family members as you treat other workers. Other employees and courts will not make exceptions for special treatment of an employee just because that person is your relative. “They will not see it as, ‘It was because it’s Uncle Fred,’” O’Malley says. “They will see it as how you treated an employee versus how you treated another employee. Take out of the equation that it’s your uncle. What would you do with any other employee? And that’s what you’ve got to do.”

Ending Well

Reverse the guilt trip. Prepare an answer for when your family member responds with, “But we’re family. How could you do this to me?” What can you say? “I would say, ‘Exactly. We’re family, and you’re trying to take advantage of me,’” O’Malley says. “’Would you be doing this at any other job and expect to still have your job? But you’re expecting me to continue to have you work for me because I’m your nephew?’”

If you follow employment best practices, then your staffers should not be surprised if they are fired. Workers should expect termination after months of progressive discipline because a manager has repeatedly addressed their poor performance verbally and in writing, talking about how to improve, as well as what the consequences will be if the problems aren’t fixed, Tarrant says. Regular communication

Be ready for awkward family gatherings. “I know it’s not going to make Thanksgiving dinner any easier,” O’Malley says. “It’s just not. But, ‘How can you do that to me? We’re family,’ works both ways.”

HARDWARE RETAILING | January 2017

THERE’S NEVER BEEN A BETTER TIME TO BE A STIHL DEALER Dear Servicing Dealers, Happy New Year! At STIHL we closed out 2016 on an extraordinary note with record growth and winning market share. Kicking off the new year, we have the largest new product launch in our company’s history. With 40 new professional and consumer options, including the new STIHL Lightning Battery System™ and upgraded professional gasoline products, STIHL now has one of the widest ranges of handheld outdoor power equipment in the industry. This launch includes an exciting new line of STIHL high pressure washers, further expanding the STIHL range of product offerings for our servicing dealers. We are honored to announce once again that in addition to being the number one selling brand of gasoline-powered handheld outdoor power equipment in America* since 2009, STIHL is also the number one selling brand of gasolinepowered handheld outdoor power equipment among U.S landscape professionals.** This is a direct result of the hard work and dedication of Team STIHL, including our passionate employees and servicing dealers. I am confident the winning combination of new products and exceptional servicing dealers will make 2017 a year to remember. There has never been a better time to be a STIHL dealer. Best regards,

Bjoern Fischer President STIHL Inc. *“Number one selling brand” is based on syndicated Irwin Broh Research as well as independent consumer research of 2009-2016 U.S. sales and market share data for the gasoline-powered handheld outdoor power equipment category combined sales to consumers and commercial landscapers. **“Number one selling” claim based on 2007-2016 syndicated Irwin Broh Research of the U.S. professional landscaper market. ©2017 STIHL

makes the final meeting part of a logical, wellunderstood progression. “No team member is to be fired without proper documentation,” Tarrant says. “Managers should be able to show the team member the verbal counseling record and performance improvement plan and be able to say, ‘You were coached multiple times. We’re still not seeing change.’ That makes those conversations easier because they have documentation to back up their decision for termination.” Prompt firing after an egregious act shouldn’t be surprising, either, because properly trained employees should know company policies.

“A lot of employees

don’t know how to improve. If you hire an 18-year-old kid, it might be their first real job. I think goals are imperative. People learn at different rates, absorb at different rates. —Lisa Smith, Wilco

”

If employees are unable to perform their jobs or do not follow their performance improvement plans, then they will know what’s coming and why when they get fired, Tarrant says. At Wilco, a worker who is on a performance improvement plan gets regular coaching and meets with his or her supervisor every other week or more often to discuss how the process is going. The intention is not to get rid of an employee in a way that will hold up in court, but to help that person succeed, Smith says. “A lot of employees don’t know how to improve. If you hire an 18-year-old kid, it might be their first real job,” she says. “I think goals are imperative. People learn at different rates, absorb at different rates.” Wilco staff members who don’t make progress on their performance improvement plans typically end up leaving instead of getting fired. “Because we take so much interest in their development, a lot of employees realize they can’t do it and leave on their own,” Smith says. When employees don’t leave on their own and need to be let go, then the managers will ask them to find employment elsewhere. But that doesn’t mean the manager should send the workers away feeling disrespected, Smith says. “Empathy is about connecting physically. Making eye contact with the individual. It’s the handshake at the end of the meeting,” she says. “It’s about being positive, and it’s about explaining the infraction in detail and why the infraction is leading to progressive discipline or termination.”

Lisa Smith, director of human resources for Wilco, works with a team of store managers who strive to take responsibility for employee performance by consistently coaching workers and offering multiple opportunities for improvement.

HARDWARE RETAILING | January 2017

A Termination Checklist You have a range of issues to consider before you fire an employee, and many of them are legal. This checklist is not comprehensive, but offers some questions to ask yourself when you’re making a decision about termination.

If you are in a hurry to fire a worker, have you considered all of the reasons why you should or shouldn’t terminate the person?

Keeping a poorly performing employee is risky for your business. However, firing comes with its own risks, even if you can justify the termination. If possible, employment termination should be a last resort and should come after repeated, documented efforts to help a worker succeed.

Have you kept notes about the worker’s progress or lack of progress on a performance improvement plan?

Being careful and deliberate about firing will protect your company from discrimination-related lawsuits and other legal trouble, and will teach your staff that you value each worker. Are your termination policies listed in your company’s employee handbook?

Did the employee receive and read the handbook prior to your decision to fire him or her?

Have you updated your staff members each time you have made policy changes in the handbook?

Have you documented your verbal warnings to the employee over time?

Does the employee’s file contain written complaints or concerns from other workers?

Do you have one or more written reprimands in the employee’s file?

Have you set improvement goals with the employee, if the problem is work performance?

Have you given the employee adequate time to improve his or her performance?

Have you asked another manager or the store owner for advice about the situation?

Will the termination come as a surprise to the employee? If so, why?

Is this termination a last resort, after you have engaged in ongoing counseling with the employee?

Does the employee understand what will happen if he or she does not improve work performance?

Do you have a third person who can be present for the termination conversation to take notes on and verify what is said, if you think your side of the story might be challenged in court?

Have you ensured that your firing decision is not related to and cannot be linked to a person’s age, health, race, gender, sexual orientation, disability or worker’s compensation status?

Have you discussed the termination with an attorney or human resources professional before taking action?

Could the employee have legal grounds to sue your business if you fire him or her?

Are you being consistent in how you handle terminations, so you are being fair and following the same procedures you have used in the past?

Are you prepared to speak calmly and directly about the reasons for the termination?

If your employee is under investigation for a crime, have you decided whether to offer paid or unpaid leave of absence?

Are you prepared to pay a lump sum immediately for hours most recently worked, as well as for earned vacation days and paid time off?

Do you have an explanation of benefits and final paperwork prepared for the termination meeting?

Sources Consulted: Society for Human Resource Management and Tilson

January 2017 | HARDWARE RETAILING

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Store Services 2.0 The New Era of Convenience Has Arrived This month’s Category Spotlight is sponsored by Saint-Gobain ADFORS

HARDWARE RETAILING | January 2017

he restaurant industry has been doing it for years. Customers call in or place an order online, then go to the restaurant to get their carryout dinner. The process is so ingrained into the consumer psyche that people expect restaurants to offer this service. It’s convenient and saves time. Now, the rest of the retail industry, including some independent home improvement store owners, are getting in on the action. More retailers are offering online shoppers the ability to create an order from their store’s current inventory and schedule it for pickup that same day. Buy online pick up in store (often referred to as BOPIS) is the next step in the ever-evolving retail landscape that is

integrating e-commerce with brick-andmortar shops. It’s also evidence that, for today’s consumer, convenience is more important than ever. So when you start thinking about the store services you offer, realize that leaders in the home improvement industry are building on the traditional array of services they offer their customers and are looking for ways to add more convenience. BOPIS is one more way your store can differentiate itself. On the following pages, we’ll look at some of the retailers who have started offering this service, including two independent home improvement retailers, and then we’ll offer suggestions for how you can respond to this trend.

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The Trend is Gaining Traction Omnichannel has been a retailing buzzword for several years now. Consumers want to be able to shop online or in a brick-and-mortar store, and they want their experiences in either place to be similar. As omnichannel continues to develop, the ability to create an order online and pick it up in store seems to be the next natural progression, and consumers are ready to use it. During the 2015 holiday shopping season, nearly one-third of holiday shoppers placed an order online and then went to the store to pick it up, according to the Holiday Consumer Purchasing Trends report by the International Council of Shopping Centers. Additionally, 69 percent of those shoppers purchased additional items when they came into the store to pick up their orders. In Independent Retailing For the average independent home improvement retailer, having a website with a same-day, online order pickup service may seem

“It’s just another way we can make it easier for our customers to shop with us. It’s another convenience we can provide them.” —Brad Johanson-Smith, 5th Street Ace Hardware

5 Unique Store Services There is more than one way to make your store convenient for your customers. Look for unique store services they can’t get anywhere else. Then when they do come to your store, help them make the most of their time. On the following pages, you will find some store services retailers are offering to their customers that you may want to consider.

far in the future. You need a robust e-commerce platform that’s tied to your store’s physical inventory. But that doesn’t mean it’s impossible. Both Ace Hardware and True Value are examples of distributors who have been jumping in to help retailers with turnkey programs that make it easy to link their store’s inventory to an e-commerce site, an essential building block for BOPIS. That’s how 5th Street Ace Hardware in Washington, D.C., got started. Store manager Brad Johanson-Smith says they started offering the service in 2014 when his co-op began supporting BOPIS with its e-commerce site. Customers who place an online order can pick up their items within two hours. Johanson-Smith says that, on average, about 20 customers a month use the service, and its real value is that it’s another option to offer customers. “It’s just another way we can make it easier for our customers to shop with us,” he says. “It’s another convenience we can provide them. There’s a lot more in our catalog that is special order that can be shipped to our store, but if they want something that day, they can see our real-time inventory and pick up the product that day.” Kyle Little, co-owner of Little Hardware in Charlotte, North Carolina, has had a BOPIS option for his customers since 2012 and says it gives his customers another convenient option for how they can receive what they need. While many of the store’s customers are commercial,

Package Services

Steve Fusek, owner of Fusek’s True Value Hardware in Indianapolis, has figured out how to get customers into his store for the pickup. Fusek’s urban store is located where many residents prefer not to have packages delivered to their doors. Fusek joined a program called Access Point, which designates his store as a drop-off/pick-up point for UPS packages. For customers that choose the service, UPS delivers their packages to the store. Packages are kept secure until the customer retrieves them. Customers can also drop off pre-labeled UPS packages at the store for pickup. Fusek gets paid a small amount for each package, but the real value is in the store traffic the service generates. Fusek normally has 30 to 40 packages come through in a week, sometimes more. “UPS estimates that about 40 percent of the customers using this service make a purchase from the store,” he says. “We require them to go to our service desk in the back. Hopefully, they will find something to buy on their way back to get their package.”

HARDWARE RETAILING | January 2017

“it seems more retail customers are using it,” he says. “They might be price shopping online and want to make sure they can get a product once they’ve found it.” They fill the orders as quickly as they can, often during the same business day. How Mass Merchants are Using It With Amazon whetting consumers’ appetites for faster, more convenient order fulfillment, brick-and-mortar retailers are looking for ways to stand out. In late 2016, for example, CVS rolled out a curbside pick-up service using the free Curbside mobile app. With the service, a customer can shop CVS.com, and then get a text message from Curbside when the order is ready, usually in less than an hour. Customers drive to the store and pick up their orders without leaving

40 percent of Home Depot’s online orders are fulfilled through stores, including orders consumers pick up in the store or those they have shipped to their home from the store.

their cars, a big convenience for those in a hurry or with a carload of children. Walmart made waves in the retailing world when it recently announced it would test the next phase of order fulfillment with a vending-machinestyle tower in its Bentonville, Arkansas, store. Walmart customers who purchase a product online can visit the machine, enter their order numbers and receive their orders. Home Depot is another company that has been building a track record of success at executing omnichannel. During a 2015 presentation to investors at the Goldman Sachs Annual dotCommerce Day, Kevin Hofmann, president of Home Depot’s online business, told attendees 40 percent of Home Depot’s online orders are fulfilled through stores, including orders consumers pick up in the store or those they have shipped to their home from the store. He added that buy online pick-up in store continues to be the company’s fastestgrowing e-commerce channel. Customers spend more online, too. “Generally, the average ticket for an e-commerce transaction is considerably higher than the average ticket of the physical store,” he says. They’ve also made a large effort to provide email and chat support to

Bike Repair…and Coffee

At District Hardware and Bike in Washington D.C., owner Neil Conway offers his customers just about any service they need related to their bikes, from repair to bicycle rental. While the bike shop functions as a stand-alone business, it’s a good partner to the hardware store. “We get a lot of crossover between the two,” says Conway. “People who come in for hardware may buy something for their bike. Those who come in for a bike repair frequently pick up something from the hardware store.”

“Rather than just a retail shop where people come in, make their transaction and leave, we want to create a community space,” says Neil’s son, Jarrett Conway. “We plan to offer premium coffee and create a destination. We’re making the shopping trip more convenient for our customers by offering them more of what they want, and more reason to stay and shop.”

But later this year, Conway plans to move his hardware and bike business to a larger location and add a new twist—coffee. Shoppers waiting to get a key cut or a bicycle repaired can grab something hot to sip. He’ll also have a beer tap for those who prefer a cold drink on a hot day.

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customers who have questions about the products they are purchasing online.

experience to respond to the way BOPIS is changing customers’ expectations.

How You Can Respond

Accurate Inventory Control is Critical With retailers who offer BOPIS, shoppers can see if a store has product in stock before hitting the road to pick it up. If they can see online that a store doesn’t have what they need, then they’ll go somewhere else. A store that is able to offer a buy online pick-up in store service must have robust inventory control so online shoppers don’t show up at the store and the product they ordered isn’t there. “Inventory accuracy mattered before e-commerce,” Little says. “But it’s more transparent now.” He maintains extra quantity of some of his more popular items in the store, so the product might still be in the store even after the quantity registers zero online. If your store is out of stock of what a customer wants, they may be able to locate it elsewhere with just a few taps on their mobile phone. Plus, they may not be willing to wait until the next truck comes in. Putting systems in place so what is on the shelf matches what is in your point of sale system will be increasingly critical as more stores offer inventory transparency.

The online shopping experience may have created a whole new set of expectations from the consumer, but the good news for independent home improvement retailers is that despite all of the shopping consumers are doing online, they still value the in-store experience. In a 2015 survey by the E-tailing Group, 67 percent of consumers responding to the survey said that while they welcome the convenience of shopping online, sometimes it’s easier or more efficient to send the product to the physical store for pickup. Even if establishing an e-commerce presence isn’t an area where you are currently investing, it’s necessary to understand that retailers with e-commerce capabilities are setting a standard for what consumers expect from their shopping experiences. These customers place a high priority on convenience and flexibility. Here are six ways you can improve your in-store

“Inventory accuracy mattered before e-commerce. But it’s more transparent now.” —Kyle Little, Little Hardware

Provide Perfect Customer Service Consumers who buy online still value the personalized attention they receive in a store. That’s one reason Home Depot has thousands

Handyman Services

Not every customer is a do-it-yourselfer. Some may want help with small projects, whether it’s installing a door lock or a water heater. Weider’s Ace Hardware in Honeoye Falls, New York, can help. They offer handyman services for most small projects a handyman could complete in a few hours. It’s a win for both the store and the shopper. “The handyman service is a convenience for our customers,” says owner Ned Green. “We can help with those small projects that the traditional contractor may not be interested in doing. At the same time, the projects are usually centered on the products we sell in our store.” The service is especially popular among the store’s senior customers, but Green also has commercial customers who may use the service for smaller projects, such as changing out light bulbs or installing new door locks.

HARDWARE RETAILING | January 2017

of employees in its call center to answer project questions when consumers are shopping online. Johanson-Smith says that personal experience is what will differentiate his online store from Amazon. Shoppers may find similar products on both his website and Amazon, but it’s the in-store experience that will make the difference. “The one thing we provide that the others cannot is the service and extra advice,” he says. “I can’t go to Amazon and have someone tell me how to complete a project and tell me all of the extra items I need. We have to wow customers with their shopping experience here.” Employees must have the proper product knowledge training to become the experts customers seek out when they have questions. Store layout and merchandising must be arranged so customers can quickly and easily find what they need. During each part of the transaction, from greeting the customer to thanking them for their business, customers must be your priority. Help Customers Solve Return Issues Returns are something you can do better than Amazon or most any other online retailer. Customers will be returning the item to you in person instead of shipping it to a warehouse where they have to pay for shipping. An in-person return gives them the chance to ask questions or voice their complaints. First, make returns easy and hassle free, as this is what consumers have come

Specialty Blade Sharpening

Most hardware stores will sharpen a few items, such as a lawn mower blade or knife, but Weider’s Ace Hardware has a shop full of sophisticated equipment where staff can sharpen anything with an edge. They use the service as a way to attract new customers.

to expect from retailers these days. But what most retailers fail to do is ask the customer why they are returning the item and then see if they can help them find what they needed. If the customer had a complaint with the returned item, see if you can help make it right. Not only does this help save the sale, it may earn you a grateful and loyal customer. Make Special Orders Painless Consumers who shop online expect an efficient and easy ordering experience. If you offer a special order service, make sure it measures up to what they’ve come to expect from other retailers. Every employee should be trained on the special order process so customers don’t have to wait for a manager to do it. Offer a reasonable timeline when the product will arrive and don’t over promise. Most importantly, communicate with the customer at every stage of the process via email, phone or text. Always notify them if there are delays. Then, send a follow-up email a few days after the customer has taken the product home to make sure they are satisfied with their purchase. Encourage Impulse Sales One of the downsides of BOPIS is that a store runs the risk of merely being an order fulfillment center. Customers come into the store to pick up exactly what they order and leave. Retailers miss potential impulse and add-on sales. Whether you

partnered with several other hardware stores in the area to serve as pick-up and drop-off points for the service. “We created our website as a way to take this beyond just an in-store service to be more of a destination,” says Mitch. “That has allowed us to promote our store to different segments and convert new customers outside of our regular trading area.”

Customers can bring in any sort of item, including kitchen knives, circular saw blades and garden tools, for sharpening. Instead of allowing sharpening to be just an add-on service for those already shopping at Weider’s, Green wants it to be a destination. He and his son Mitch have developed a website dedicated to the sharpening service (which encourages customers to mail in items for sharpening if they live too far away) and has

January 2017 | HARDWARE RETAILING

offer a BOPIS service or not, using merchandising and customer-employee interaction to encourage add-on sales and impulse buys is as much a function of good customer service as it is a means to drive profits. Employees who suggest add-on sales help customers locate everything they need for their projects the first time they come into the store. Impulse sales suggestions can remind customers of something they may have forgotten to put on the shopping list. Review your employee training to ensure that everyone knows add-on and impulse selling techniques. A portion of that training should include project sales, so they can suggest add-on sales that fit each customer’s unique project. While BOPIS retailers with sophisticated websites may be able to suggest add-on sales through features on a website, those features can’t replace the inperson advice your employees can offer.

Teach Employees to ‘Save the Sale’ In a study titled “Unified Commerce and the Customer Experience” (a joint effort by Multichannel Merchant, the e-tailing group and KIBO), researchers mystery shopped retailers offering a BOPIS and identified key areas where they could improve their service. The study revealed that only 7 percent of store associates tried to save the sale when the customer decided to not purchase. Training employees to respond to objections a customer may have to a sale is not training them to be pushy salespeople; rather, it’s another aspect of customer service. Employees may be able to offer alternative products that better meet the customer’s needs. Or, they may be able to help the customer solve a problem they are having with the product. Saving the sale means the customer doesn’t have to go somewhere else and increases their confidence in your ability to help them.

One study revealed that only 7 percent of store associates tried to save the sale when the customer decided to not purchase.

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HARDWARE RETAILING | January 2017

Industry News

Operational Tips

New Products

Start your week 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.

Personal Shopper

If you have the capability to offer a buy online pick-up in store service to your customers, then take the service a step further. Instead of just promoting it as another method of delivery, brand it as a personal shopping service. Let customers know the name of the employee who will be assembling the order, then have that employee personally deliver it to the customer when they arrive in the store. At this point, the employee should be able to recommend add-on items commonly purchased with the items in the order and ask the customer if they have any questions about their project. Make sure customers know there is a difference between ordering product out of an impersonal warehouse and buying from a full-service home improvement store. Creating a more personalized shopping experience for your customers will allow you to differentiate your online shopping service from the many others available to them.

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Same great products, new look New York Wire and FibaTape® are now ADFORS

Innovative Insect Screen & Accessories

High Performance Drywall Tapes & Accessories

There is an ADFORS screen to meet every lifestyle need. Our full line of specialty screen is designed for a variety of unique purposes, including UV blocking, small insect protection, extra strength for high traffic areas, pet resistance, allergen protection, and increased visibility.

Our full line of ADFORS wall finishing tapes includes both FibaTape® self-adhesive fiberglass mesh tapes and innovative FibaFuse® paperless drywall tapes. From Ultra-thin to Extra Strength, FibaTape is loved by DIYers and professional contractors alike!

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These revolutionary tapes are designed to be easier, faster and stronger than standard paper joint tape while also delivering excellent value and performance.

CATEGORY Q&A Sponsored by Saint-Gobain ADFORS | www.adfors.com

ADFORS Gives Independent Retailers an Edge Against Big-Box Competitors or independent retailers looking to stock window screens, drywall tapes or wall repair products, Saint-Gobain ADFORS is a reliable and longstanding company to turn to.

ADFORS belongs to the Saint-Gobain group, the world’s largest building materials company. Saint-Gobain has been creating and delivering innovative and high-performance solutions for over 350 years. In North America, Saint-Gobain employs over 19,000 people across 256 locations, with a headquarters in Malvern, Pennsylvania. Hardware Retailing spoke with Saint-Gobain ADFORS sales and marketing director, Jim Griffin, a 10-year veteran of the company. In this Q&A, he shares insights on the products independent retailers can carry from ADFORS, advantages of working with ADFORS and how a retailer can utilize their products to stand out against the big-box competition. Why do ADFORS screening products, drywall tape and accessories fit in the hardware industry? Jim Griffin (JG): ADFORS screening products are an ideal fit for independents due to our wide range of screening options. Customers go to hardware stores for help, guidance and solutions. When a customer comes to an independent retailer for their screening needs, they can expect individual assistance.

Offering screen repair services in-house alongside ADFORS products lets the customer know they can purchase a screen but also have it repaired or fixed. These additional services offer a clear value over the big-box competitors. We have been a leader in drywall mesh tape for over 40 years. Our tapes are made in upstate New York, and like our screening solutions, there is a wide variety of specialty tapes to complement a project sale. What are some of the most popular ADFORS products for retailers to carry? JG: Demand for our specialty screens increases every year. Homeowners realize the screen is a vital component to a window system. In order to maximize that value, they match their window with the specific screen that best meets their needs. What are the specialty products ADFORS offers? JG: In the past, there were only one or two types of screens offered. Now, we have many different solutions, depending on the functional needs of the homeowner. If they are looking to save on energy, we have sun-blocking screens. If they are looking for improved visibility, we have screens that are virtually invisible. If they want their screens to be heavyduty, we have extra-strength screens. We even have screens that filter out pollen! What are some tools retailers can utilize with the ADFORS product line? JG: We have tools for the end user at every step of the decision-making process. While they are at home, they can view our videos or use our Screen Selector Guide on our website to determine which screen is the best for fit for them. At the store level, associates can use our app as a consultative selling tool. We also have in-store signage and POP materials. How can retailers best merchandise the ADFORS line of products in their businesses? JG: Retailers can utilize our digital tools and in-store signage. They should make sure to stock their screen on the shelf as well as having screen repair service available. For more information on ADFORS, call 800-762-6694 or email adfors@saint-gobain.com. January 2017 | HARDWARE RETAILING

What Would You Do With $100K? National Hardware Show® Hopes to Help Independents Reimagine Retail

hen it comes to providing a setting for retailers to learn about the latest trends, see the hottest new products and network with other progressive industry leaders, there is no venue quite like that of the National Hardware Show® in Las Vegas. Each year, thousands of independent home improvement retailers gather at the event to see the complete world of products in one location and broaden their horizons by interacting with retailers of all affiliations from around the world. This year, the show will be held May 9-11. Over the past several years, the number of independent retailers attending the event has increased, and the National Hardware Show has redoubled its efforts to add features to the show to accommodate the unique needs of these attendees.

HARDWARE RETAILING | January 2017

Now, the National Hardware Show is taking its commitment to independent home improvement retailers to an entirely different level. During the North American Retail Hardware Association’s (NRHA) State of Independents Conference held last month in Chicago, National Hardware Show Vice President Rich Russo made a major announcement about the show’s commitment to the channel. Russo unveiled the National Hardware Show’s Reimagine Retail promotion, which will award $100,000 to one independent home improvement retailer to use to fund a business improvement project. Following the announcement, Hardware Retailing had the opportunity to sit down with Russo to get some more details about this promotion and the impact the National Hardware Show hopes it will make on the industry.

Hardware Retailing: The Reimagine Retail promotion shows a major commitment on behalf of the show to helping independent retailers in this industry. Where did the idea come from? Rich Russo: The idea really just came out of our postshow planning sessions. We constantly challenge our teams to look for ways to better serve attendees. Retailers who have been to the show know that it serves as a hub for innovation. Retailers can see new products, learn from the educational content, network with best-in-class retailers of all types and take what they’ve learned back to their businesses. But we wanted a way that we can expose even more retailers to the show and, in the process, begin to collect and share information about best practices. HR: Why have independent retailers emerged as such an important focus for the show? RR: Some people might not realize it, but independent retailers represent more than half the sales in the home improvement market in the U.S. That’s a huge deal. Plus, when you consider that there are more than 35,000 independent home improvement retailers in the U.S. and Canada, it’s easy to understand why these businesses are so important to the companies that typically attend our show as exhibitors. So the Reimagine Retail promotion allows us to not only show our support for independent retailers in a very tangible way by providing one of them with the financial ability to fund a business improvement project, but also by creating a means to collect and disseminate a lot of valuable information outside the three-day window of the show. HR: Talk to us a little bit about that. How will the promotion work? RR: While more precise details about the promotion will be released very soon, I can give you the gist of it. Basically, we are going to ask independent retailers to submit entries that highlight what they would do to improve their business if they were to win the $100,000. We will be looking for projects that focus on four key business improvement areas: store technology, merchandising and layout, personnel development

and products and categories. Together with NRHA and a panel of industry professionals, we will review the entries and determine which project is most worthy of winning the $100,000. Finalists will be flown to the National Hardware Show in May, and the winner will be announced during the event. Runners-up will receive some awards to hopefully get them closer to their business goals as well. HR: Beyond providing $100,000 in funding for the winning project, how do you see this promotion helping other independent retailers? RR: Well, that’s the real heart of this promotion. We hope to take all the ideas that are submitted to us and share this information with other independent retailers and the industry at large. Independent retailers are so innovative and so industrious that just gaining some insights into what they would do to take their operations to the next level can only help others. We hope there will be some really interesting things that bubble up from all the entries we get—new ideas for technology, store design, products and categories and employee development. HR: Do you see this as an ongoing program or is it just a 2017 promotion? RR: We definitely see this as an ongoing promotion. We think the real value begins to come through after a few years, when we have all these ideas to share with the industry and we can share the stories about how past winners’ projects have turned out and what they learned along the way. HR: How can retailers enter the Reimagine Retail promotion and get more information about it? RR: For right now, they should stay tuned to Hardware Retailing and the National Hardware Show website, nationalhardwareshow.com, because we will be releasing more details in the very near future. We are very excited about this promotion and look forward to the impact we think it can have, not just on the winner, but on helping other independent home improvement retailers succeed.

January 2017 | HARDWARE RETAILING

HARDWARE RETAILING | January 2017

Merchandising (Still) Matters NRHA Study Confirms Merchandising’s Impact

ack in 2002, Nickelback was No. 1 on the charts, the Anaheim Angels had just won the World Series and a little TV program called “American Idol” was taking the nation by storm. It was also in 2002 when the North American Retail Hardware Association (NRHA) released an update to its landmark Merchandising for Profit Study, which helped retailers better understand the impact featured merchandising techniques could have on product sales. Flash forward 14 years and things are quite a bit different. American Idol has left the airwaves, the Anaheim Angels are now the Los Angeles Angels of Anaheim and Nickelback is, well… not so popular. With all of these changes in our society, including the emergence of constant communication, online shopping and internet marketing, NRHA felt it was time to put the findings of the last Merchandising for Profit Study to the test and determine if in-store merchandising still had the same impact it once did.

Together with help from Indianapolis-based market research firm The Farnsworth Group and nearly a dozen retailers from across the U.S. and Canada, NRHA set out to update its Merchandising for Profit Study. With the research complete, it is clear that while Nickelback may not be selling out stadiums anymore, in-store merchandising techniques are still as viable as they were 14 years ago. “These new findings can hopefully help retailers, distributors and manufacturers really see the kind of impact that merchandising can have in-store,” says Dan Tratensek, NRHA vice president and publisher of Hardware Retailing. “Going into this study, we weren’t quite sure what the data would yield because the way people shop has dramatically changed, but the data supports the fact that solid in-store merchandising is still effective,” he says.

January 2017 | HARDWARE RETAILING

The Study This year’s update to the Merchandising for Profit Study was conducted over a three-month period in late summer. Retailers volunteered to participate in the study and test different merchandising techniques in real-time retail environments. The different merchandising techniques tested included: 1. Disposable dump bins 2. Permanent dump bins 3. Power aisle stack outs 4. Service counter displays 5. Checkout displays 6. Clip strips 7. In-aisle feature/benefit signs 8. Feature endcaps: signage 9. Feature endcaps: items To determine the kind of sales lift these merchandising techniques could generate, they were tested by multiple retailers in different markets. Retailers agreed to leave the items stocked in their in-aisle position but also stock the product using the featured merchandising technique. Sales for the items tested were monitored before, during and after the test period, and control stores were also used to eliminate any market variables. The final sales data from both the control and test stores was weighted, and outliers were removed. The percentages presented in this report represent the mean average of sales lift experienced by products during the test period.

“The results of the update to the Merchandising for Profit Study prove once again that attention to detailed merchandising can provide sales lifts in both promotional and in-the-aisle settings,” says Jim Robisch of The Farnsworth Group. “Clearly, it is a reminder of how retailers have in-store solution options to the challenges of increasing their closure rates and transaction sizes with customers.” The Findings You can find many of the results of this year’s study in the following pages. Along with those results, we’ve listed the results from the 2002 study so you can compare the numbers side by side and take note of any significant changes. The Report If you would like to download a PowerPoint presentation on this study, visit TheRedT.com/mfp-2016. For more information about the findings of this year’s Merchandising for Profit Study, please contact Dan Tratensek at DanT@nrha.org. For more information on The Farnsworth Group, visit thefarnsworthgroup.com or call 317-241-5600. NRHA would like to thank the following organizations for helping in the research of the Merchandising for Profit Study: Aubuchon Hardware, Buchheit, Friedman’s Home Improvement, Home Hardware Stores Ltd., Marvin’s and Stine Lumber Co.

01 02 03 Disposable Dump Bins

Power Aisle Stack Out

2002

2016

2002

2016

2002

2016

427%

660%

197%

86%

98%

114%

Product Tested: Wasp Spray Disposable dump bins were the most effective merchandising technique tested in our study. The “temporary” nature of these merchandisers create a sense of urgency among shoppers.

Permanent Dump Bins

HARDWARE RETAILING | January 2017

Product Tested: Duct Tape While their impact didn’t register as highly as in the past, permanent dump bins still deliver a solid sales lift. Their portability and association to “bargain” merchandise make them ideal for impulse sales.

Product Tested: Trash Cans Power aisle stacks still delivered solid performance as an item sales booster. These work best with a single SKU of large items that can be bulk stacked, yet are easy to add to a purchase.

04 05 06 Service Counter Display

Checkout Display

Clip Strip In Aisle & Endcap

2002

2016

2002

2016

2002

2016

81%

85%

39%

467%

15%

25% & 177%

Product Tested: WD-40 Retailers continue to improve in merchandising areas like service counters and checkout stations. These displays work best with a single SKU of small items.

Product Tested: Super Glue This was a surprise winner. While some results may be due to the time, season or market, they reflect an increase in consumers’ response to checkout displays.

Product Tested: Work Gloves While in-aisle clip strip usage creates solid lift, these merchandisers shine when used in a prominent position like an endcap.

07 08 09 In-Aisle Benefit Sign

Endcap: % Off & Sale Sign

2002

2016

2002

2016

37%

25%

38% & 53%

Product Tested: LED Lightbulb/Lightbulb Calling out the features and benefits of products in aisle helps draw attention to products and can be done simply.

Product Tested: Weed Spray Endcaps are clearly still effective at driving sales lift, as they bring items into customer view. Simple endcaps with clear signage have emerged as the industry standard.

Endcap: Single & Multiple Item 2002

2016

25%

11% & 63%

Products Tested: Gas Cans & Fuel Treatment Results from these endcaps are relatively steady. Customers now may be conditioned to not pay as much attention to endcaps.

January 2017 | HARDWARE RETAILING

Newsmakers

How Business Issues Fared in the General Election

Upcoming Events January

ou know the results of the heated presidential election, but have you checked in on how various states voted on business issues? Four states approved minimum wage increases in November’s general election, and South Dakota residents voted down a decrease in minimum wage for hourly workers who are younger than 18. In California, voters chose to keep a plastic bag ban. The election results on these and other business issues are detailed below.

Arizona Proposition 206 Passed: Yes

Maine Question 4 Passed: Yes

Voters approved Proposition 206, which will increase the state minimum wage from $8.05 to $12 per hour by the year 2020 and require employers to give paid time off to employees for every 30 hours worked.

Question 4 increases the state minimum wage from $7.50 to $12 per hour by the year 2020 and increases the minimum wage of service employees who receive tips to $5 per hour.

6-8 United Hardware Spring and Summer Buying Market Minneapolis

10-12 The Kitchen & Bath Industry Show (KBIS) Orlando, Florida

10-12 2017 NAHB International Builders’ Show Orlando, Florida

15-16 Do it Best Winter Conference Orlando, Florida

15-17 California Proposition 67 Passed: Yes

South Dakota Referred Law 20 Passed: No

Voters approved Proposition 67, reaffirming the state’s single-use plastic bag ban. Proposition 65, another bag-related proposal, failed. Proposition 65 would have modified existing law and required businesses to contribute earnings from shopping bag sales to an environmental protection fund.

Had it passed, Referred Law 20 would have decreased the hourly minimum wage for nontipped workers younger than age 18 from $8.55 to $7.50 per hour.

Colorado Amendment 70 Passed: Yes Amendment 70 increases the state minimum wage from $8.31 per hour to $12 per hour by the year 2020.

Amendment 69 Passed: No Had it passed, Amendment 69 would have established a statewide system to finance health care services and create new taxes to fund the program.

HARDWARE RETAILING | January 2017

Initiated Measure 23 Passed: No Had it passed, Initiated Measure 23 would have given businesses and nonprofit organizations the right to charge fees for any service provided.

2017 Retail’s BIG Show New York

20-22 HDW, Inc. Spring Market 2017 Hot Springs, Arkansas

February 16-18 Orgill Spring Dealer Market New Orleans

17-19 True Value Spring & Rental Reunion Anaheim, California

March 16-18

Washington Initiative Measure 1433 Passed: Yes Initiative Measure 1433 increases minimum wage from $9.74 per hour to $13.50 per hour by the year 2020 and requires employers to provide paid sick leave to workers.

Ace Hardware Spring 2017 Convention & Exhibits Atlanta

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.

CALL FOR 2017 NOMINATIONS

Young Retailer Year of the

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