Hardware Retailing January 2022

6 Ways to Steer a First Place Outside Sales Team Page 40 Market Measure: Looking Back to Plan Ahead Page 25 Stack the Deck With the Right Building Materials Page 46

“Turn

your problems into assets by choosing Midwest

“My grandfather started this company in 1967 with a core value of putting our customers as the #1 priority. That remains true now and for the years to come…”

-Andy DeVries, President, Midwest Fastener Corp.

Exceeding Expectations. One Fastener Destination at a Time!

CONNECTIONS Follow Us Online

HEADQUARTERS

1025 East 54th St. Indianapolis, Indiana 317-275-9400

NHPA@YourNHPA.org YourNHPA.org

OUR MISSION

The North American Hardware and Paint Association (NHPA) helps independent home improvement and paint and decorating retailers, regardless of affiliations, become better and more profitable retailers.

NHPA BOARD OF DIRECTORS

CHAIRMAN OF THE BOARD

Jared Smith, Jared’s Ace Hardware, Bishopville, South Carolina

EXECUTIVE VICE CHAIRMAN

Craig Bond, Tommy’s Paint Pot, Eugene, Oregon

DIRECTORS

Alesia Anderson, Handy Ace Hardware, Tucker, Georgia

Jay Donnelly, Flanagan Paint & Supply, Ellisville, Missouri

Ned Green, Weiders Paint & Hardware, Rochester, New York

Scott Jerousek, Farm and Home Hardware, Wellington, Ohio

Ryan Ringer, Gold Beach Lumber Yard Inc., Gold Beach, Oregon

Jackie Sacks, Round Top Mercantile Co., Round Top, Texas

SECRETARY-TREASURER

Bob Cutter, NHPA President and CEO

STATE & REGIONAL ASSOCIATIONS

MIDWEST HARDWARE ASSOCIATION

Jody Kohl, 201 Frontenac Ave., P.O. Box 8033 Stevens Point, WI 54481-8033

800-888-1817; Fax: 715-341-4080

NHPA CANADA

NHPA CANADA

Michael McLarney, +1 416-489-3396, mike@hardlines.ca 330 Bay Street, Suite 1400 Toronto, ON, Canada M5H 2S8

CIRCULATION, SUBSCRIPTION & LIST RENTAL INQUIRIES

CIRCULATION DIRECTOR

Richard Jarrett, 314-432-7511, Fax: 314-432-7665

COMING IN FEBRUARY

Hiring Strategies

Businesses are struggling to fill open positions and find exceptional workers, and the home improvement industry has not been immune to the difficulties of the current tight labor market. Learn how several independent home improvement retailers have utilized unique hiring strategies to find potential employees and learn best practices for navigating the hiring process no matter the current labor situation.

50% Percent of Small Businesses Reporting Unfilled Job Openings

32%

20202021

Source: National Federation of Independent Business

Hardware Retailing (ISSN0889-2989) is published monthly by the North American Paint and Hardware Association, 1025 East 54th St., Indianapolis, IN 46220. Subscription rates: Hardware Retailing (Payable in advance): U.S. & possessions $50/year. Canada $75/year. All other countries $100/year. (Air Mail $60/year additional). Single copy $7. The Annual Report issue can be purchased for $30.

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

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

All editorial contents © 2022 North American Paint and Hardware Association. No editorial may be reproduced without prior permission of the publisher.

REPRINTS: For price quotations, contact the Editorial Department at editorial@YourNHPA.org. Printed in the U.S.

EDITORIAL, DESIGN & PRODUCTION 317-275-9400, editorial@YourNHPA.org

MANAGING EDITOR

Melanie Moul, mmoul@YourNHPA.org

PRODUCTS & DIGITAL EDITOR

Hans Cummings, hcummings@YourNHPA.org

ASSOCIATE EDITOR

Lindsey Thompson, lthompson@YourNHPA.org

ASSOCIATE EDITOR

Carly Froderman, cfroderman@YourNHPA.org

SENIOR DESIGNER

Aubrey Smith

GRAPHIC DESIGNER

Autumn Ricketts

DIGITAL MEDIA SPECIALIST

Kevin Trehan

PRODUCTION MANAGER

Austin Vance

SALES & PRODUCTION ASSISTANT

Freda Creech

MARKETING & COMMUNICATIONS

EXECUTIVE DIRECTOR, MARKETING & COMMUNICATIONS

Whitney Daulton

CORPORATE COMMUNICATIONS MANAGER & EDITOR

Julie Leinwand

NHPA SALES

FIELD SALES MANAGER & SOUTHERN SALES DIRECTOR

Scott Gilcrest, sgilcrest@YourNHPA.org, 317-508-7680

MIDWEST SALES DIRECTOR

David Brodowski, dbrodowski@YourNHPA.org, 440-520-9551

NORTHEAST, NORTHWEST & CANADA SALES DIRECTOR Jordan Rice, jrice@YourNHPA.org, 217-808-1641

EXECUTIVE STAFF

PRESIDENT & CEO

Bob Cutter

CHIEF OPERATING OFFICER & PUBLISHER

Dan Tratensek

CHIEF FINANCIAL OFFICER & EXECUTIVE VICE PRESIDENT, BUSINESS SERVICES David Gowan

MEMBER SERVICES & TRAINING 800-772-4424, NHPA@YourNHPA.org

DIRECTOR OF MEMBER SERVICES & EVENTS Katie McHone-Jones, kmchone-jones@YourNHPA.org

TRAINING MANAGER & EDITOR Jesse Carleton, jcarleton@YourNHPA.org

RETAIL ENGAGEMENT SPECIALIST Renee Changnon, rchangnon@YourNHPA.org

DATA & INFORMATION COORDINATOR Natalie Harris

EXECUTIVE DIRECTOR, PAINT & DECORATING PROGRAMS

LeAnn Day, lday@YourNHPA.org

EXECUTIVE DIRECTOR, ADVANCED RETAIL EDUCATION PROGRAMS Scott Wright, swright@YourNHPA.org

As a Do it Best member-owner, you can invite your customers to explore the industry’s largest selection of liquid paints, primers, and sundries.

The Color Bar™ transforms your paint department into an informative, inspirational customer experience that will keep them coming back.

Add product training and support, exclusive brands, and efficient delivery from our warehouses, and it‘s easy to see how Do it Best can establish your business as the first, best and only choice for paint.

Discover how Do it Best can help you become your community’s paint shopping destination. Call us today at 888-DO-IT-BEST (888-364-8237) or visit doitbestonline.com.

Outside Sales Smarts

Outside sales can increase revenue but an effective program can be difficult to get started. Listen to advice from two retailers on how to create a sustainable and profitable outside sales team.

Industry’s Annual Report

Get the details and data from 2021 in this year’s Market Measure report. Read this recap of another remarkable year for the industry and get projections and insights to help you plan strategically this year.

Decked Out

With many homeowners expanding their living spaces outside, decks have become more popular. See what’s trending in decking and how you can help your customers choose the products they need.

Hardware Retailing’s newest department, Project Point, features DIY projects you can share

ONLINE Stay Informed

Check out these stories and more at hardwareretailing.com/january ON

Follow the magazine on Instagram for industry trends and news, how-to management resources and more exclusive content.

HardwareRetailing HardwareRetail HardwareRetailing

Equipping Your Team

When you hire an outside salesperson, you’ll need to have systems in place, both from management and the salesfloor, to support them in their new role. Check out these resources that will help you and your team with this transition.

Finding New Customers

All employees should be involved in helping the outside sales staff find new customers. A new Trainer’s Toolbox, “Generating Leads: How Sales Associates Can Help Their Outside Sales Staff,” shows them how.

Job Descriptions

During the hiring process, make your expectations clear. These sample job descriptions cover the basic responsibilities and qualifications of an outside sales representative and other positions in a retail business.

Sales Advice

If you want to be more effective at outside sales and grow your reach, consider these tips from leaders who have built successful sales programs.

Find More Stories Online

RESEARCH Expert Analysis

Hardware Retailing talked to two experts—an economist and housing market analyst and a consumer confidence analyst—for insights their into the home improvement industry for 2022.

CATEGORY Innovation on Deck

Learn creative ways to display decking materials to make it easy for your customers to shop and decide what products they need.

Lumber prices in 2021 led homeowners and contractors to seek other decking options including composite materials.

INDUSTRY EVENTS Insights, Revisited

From keynotes on leadership and industry trends to panels on supply chain and diversity, watch all of the presentations from the 2021 NHPA All-Industry Conference on demand.

CATEGORY Get Organized

See additional DIY organization projects you can share with customers to get them organized this month and all year round.

Builders in Kearny, Nebraska

EDITORIALLY SPEAKING

CONNECTIONS

Send Melanie a Message mmoul@YourNHPA.org

Melanie Moul

“NHPA’s mission is to help you become better and more profitable, and we have solutions and resources to guide you.”

The Paradox of January

THE BEGINNING OF THE YEAR is a paradox of sorts—a time to both reflect on the previous year and look forward to the new one. It’s a time to break bad habits and start new (hopefully good) ones.

It’s also a time when many of us quantify the past year and set measurable goals for the coming year. When asked the question, “How do you measure a year?” theater buffs may sing their answer: “In daylights, in sunsets, in midnights, in cups of coffee. In inches, in miles, in laughter, in strife.”

Kids (and probably some teachers!) measure the year in days spent in school, always counting down to the next break. Those of us who are managers probably often live by our calendars and measure the year in how many items we tick off our to-do lists. When I look back on the year, I measure it in time spent with my family, returning to the office, celebrating milestones, and yes, in cups of coffee.

Here at Hardware Retailing, we’re already starting a new habit by shifting our annual Market Measure report to the January issue, previously published in December. On Page 25, you can read the report which measures the year for home improvement retailers in profit margins, total operating expenses, sales per square foot, gross margin per employee and more. This annual report highlights the growth trajectory for the industry of the prior fiscal year and offers projections and insights from the North American Hardware and Paint Association (NHPA) and the Home Improvement Research Institute to help inform your decision-making this year.

We’re also looking ahead to the many ways we will serve retailers this year. The first is with a new department in this magazine, Project Point, which you can find on Page 48. This space will feature DIY projects you can share on your social media platforms to drive traffic to your stores and make a name for yourself as the place for projects. These projects will include a package of supplements to make it easy to share the project with customers in your store and on social media.

As you execute your 2022 plans, please remember NHPA’s mission is to help you become better and more profitable, and we have solutions and resources to guide you.

I’m hoping I can spend some of this year’s 525,600 minutes with you in your stores. Maybe over a cup of coffee?

Melanie Moul Managing Editor

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TAKING CARE OF BUSINESS

Dan Tratensek

YourNHPA.org/tcb-pod

“We are seeing younger, aggressive independent business owners finding ways to grow their operations.”

Young Retailers Are the Future

FOR THOSE OF YOU who have had the occasion to see me present on any number of topics throughout the last year, you might have picked up on some familiar themes that I like to touch on.

One of these themes involves the current state of business growth in our industry and the fact that we are entering into the age of acquisition and consolidation. Sure, we have seen consolidation at retail for quite some time, but over the last 18 months, the typical pace of acquisitions has kicked into overdrive.

There are a lot of reasons for this increase in acquisition and consolidation activity, including record sales in the industry; record profits for home improvement stores; an abundance of cash assets; difficulties involved with greenfield expansions; and an aging ownership base.

But it seems like now, more than at any other time in the past several decades, we are seeing younger, aggressive independent business owners finding ways to grow their operations. And at no other time, has it been as important to recognize and celebrate the next generation of retailers who are expanding their businesses, driving growth and helping our industry evolve.

That’s why I wanted to take a moment and encourage anyone who reads this column to think about the young retailers you work with or know who are excelling in their professions and setting the standard for excellence among their peers.

This year will mark the 26th year the North American Hardware and Paint Association has held its Young Retailer of the Year program. Throughout this quarter-century of recognizing the achievements of this industry’s young leaders, we can confidently say that this program has helped shape the arc of the independent retail channel. Not only do the awards represent a great way to recognize and encourage those young, passionate professionals who are starting their careers in the industry, but they have also served as a bit of a springboard to greater involvement.

Year after year, we hear feedback from our Young Retailer of the Year honorees about how winning the award introduced them to the industry in a broader sense and was a gateway to involvement beyond their own stores.

So, as we see the pathway for growth in the industry changing so rapidly and no sign of this age of consolidation and acquisition changing, what better way to secure a solid future for the independent channel than by getting more bright, young, enthusiastic leaders involved in this growth.

To learn how to nominate an individual for the Young Retailer of the Year award, go to YourNHPA.org/YROTY. Don’t wait! Nominations are due Jan. 28.

Dan M. Tratensek Chief Operations Officer & Publisher

Recognizing young leaders who represent the future of independent home improvement retailing

Nominations are due soon for the 2022 Young Retailer of the Year awards. 2 6TH

Do you know an inspiring young retailer? Submit your nomination by January 28, 2022. Learn more at YourNHPA.org/yroty

MEMBERSHIP Get Started

Visit YourNHPA.org/membership to learn more about NHPA membership.

Exploring NHPA Membership

EACH YEAR , the North American Hardware and Paint Association (NHPA) works to add new programs, services and partnerships to better serve independent retailers. Read how the association can help you with the resources below—and visit YourNHPA.org for more information and a full list of member services.

The Retail Marketplace

The NHPA Retail Marketplace is the industry’s marketplace for buying and selling independent home improvement stores, with public and private listings available.

Employee Training

The association has a library of online training with more than 280 five-minute modules, covering product knowledge, project sales, customer service, operations and more.

Manager Training

NHPA offers online training courses to help new and seasoned leaders with leadership, financial management and building and leading a team.

Advanced Store Operations Training

The Retail Management Certification Program teaches business owners and key employees profit-focused retail operations.

Compliance Training

NHPA offers HR compliance and workplace safety training courses in some of the most common topics affecting home improvement and paint and decorating stores.

Podcast

NHPA’s podcast features industry experts, leaders and retailers discussing trends, retail success stories and how-to management advice.

Two Magazines

NHPA publishes two monthly publications, Hardware Retailing and Paint & Decorating Retailer

Roundtables

NHPA moderates retailer roundtables on topics including finance, operations, technology and more.

Business Services

NHPA offers a wide range of business services, including health insurance and credit card processing, to help retailers save time and money.

Virtual and Live Events

The association hosts events throughout the year, including the NHPA All-Industry Conference, the Young Retailer of the Year Awards and free webinars.

Cost of Doing Business Study

NHPA conducts the study to help retailers compare their businesses to industry averages and make more informed decisions for their operations.

New Year, New Inbox

Visit YourNHPA.org/subscribe to sign up for newsletters that are right for you!

Follow Our New Instagram Account

Follow the Hardware Retailing Instagram account @hardwareretailing for industry news and exclusive updat

ARE YOU BROWSING your social media feed in search o home improvement product trends, management advice and indu news? Hardware Retailing is excited to announce the official laun of its Instagram account. Be sure to follow @hardwareretailing for news, best practices, trends and downloadable resources. updates. feed of industry launch

TRAINING

Spotlight on Employee Training

Visit YourNHPA.org/membership to learn more about our training programs.

THE CUSTOMER SERVICE that independent home improvement retailers can provide is one of their biggest differentiators from big-box merchants. With the Certified to Help designation from NHPA, retailers have a way to tell their customers about the training their employees have received and reinforce the message that they are the best place to receive outstanding customer service and product knowledge. NHPA’s Certified to Help designation is a marketing campaign available to any retailer whose employees have completed a prescribed set of retail sales courses from NHPA’s training library, including product knowledge and selling skills. When a retailer and their staff successfully complete all of the requirements for a course, they will receive a package of marketing materials from NHPA with the message “Certified to Help” and “Help is on the way. Our trained employees can answer your questions.” Window clings, aisle signage and more will reinforce a positive customer service message. It’s also a great way to recognize the hard work employees have done to complete their training.

3 Easy Steps to Get Certified to Help

1. Have employees take the required courses.

2. Apply for the Certified to Help designation at YourNHPA.org/membership

3. Use the marketing materials to promote your outstanding customer service.

TRENDS

CATEGORY Clean Sweep

Educate customers on getting their garage spaces organized with tips from a garage rehab specialist at hardwareretailing.com/garage-solutions

MERCHANDISING

A Place for Everything

THE PRODUCTS CUSTOMERS NEED TO STAY ORGANIZED

A RECENT SURVEY from YouGov, conducted on behalf of productivity app creator Evernote, found that 41 percent of New Year’s resolutions involve getting more organized or being more productive. Whether they make it a resolution or not, many homeowners are looking for solutions to keep their homes organized and decluttered, leading to an increased demand for home organization products. By 2023, spending on organization items is expected to reach $12.7 billion, according to the U.S. Home Organization Products Market Report 2021.

Aid your customers’ organizational efforts by merchandising these products to show how the items can be used to contain clutter and create orderly spaces.

3 Merchandising Tips to Boost Sales

Baskets, Boxes and Tubs

Create displays and endcaps that show customers how they can organize and store different items in baskets. Put items you already sell, like toys, in the baskets to encourage impulse sales.

Closet Organization

From custom-built wood systems to metal closet shelves to traditional wood hanging rods, offer options to fit different needs and budgets. And don’t forget the hangers!

Pantry Products

Display clear containers with food items inside to show how they can help organize the pantry. Other products like spice racks, lazy susans and label makers complete the sale.

Sources: Evernote, New Survey Reveals How Americans Are Approaching 2021 New Year’s Resolutions; The Freedonia Group, U.S. Home Organization Products Market 2021

learn. engage. explore.

When you’re browsing your feed in search of industry, news, trends and operations tips, look no further than the Hardware Retailing. Follow us on all your favorite platforms for daily deliveries of how-to management content, new products and downloadable resources.

PRODUCTS

Retailer Recommendations

Send a note to editorial@YourNHPA.org about products you can’t keep on the shelf. Include your name, your business name and reasons why you love it.

Fun & Functional Product Innovations

2021 RETAILERS’ CHOICE AWARDS

FOR THE PAST 55 YEARS , the Retailers’ Choice Awards have brought insights from independent retailers on the best products on display at the National Hardware Show.

The awards, presented by the North American Hardware and Paint Association during the show in Las Vegas, honor manufacturers for their innovation.

The Retailers’ Choice Awards differ from most award programs in that they rely on the opinions of actual retailers who know what their colleagues need in a product to attract customers. The judges were all independent home improvement retailers who walked the show floor and selected products they felt were unique and interesting.

This year’s panel included:

• Cody Goeppner, Bleyhl Co-Op, Director of Retail Operations

• Roman Chavez, Bleyhl Co-Op, retail manager

• Robin Smith, Petersburg Hardware

• Dennis Bishop, Petersburg Hardware

• Sherry Bishop, Petersburg Hardware

• Brian Johnson, Sunpro Retail Manager

• Ian McNaughton, Owner, Gravenhurst Home Hardware

On the following pages, discover which products retailers felt had the most potential to excite customers and boost sales in their operation.

Cocoa Bombs

Mobi Cocoa Bomb molds come in three different designs: snowflake, gingerbread man and holiday tree. The mold cavity accommodates any packet-size cocoa powder, even jumbo size. The completed bomb fits in most size mugs. Cocoa Bomb molds can also be used for making solid chocolate and ice cubes.

MOBI USA mobicreations.com or 914-763-6351

Dog Toys

Original Territory’s 2-in-1 Dog Toys are designed with durable fabric and a flexible rope structure for all types of interactive play. Plus, they include a squeaker ball that pops out for an extra level of fun. They are suitable for tug, fetch and many other fun activities.

ORIGINAL TERRITORY www.originalterritory.com

GCI Outdoor Freestyle Rocker XL

The Freestyle Rocker XL™ provides comfort for a relaxing outdoor experience with a broader and tougher frame. This heavy-duty rocker has a 400-pound weight capacity and is designed with patented Spring-Action Rocking Technology. It is outfitted with patented Eazy-Fold™ Technology for easy opening and closing and a carry handle. It also includes a mesh backrest, beverage holder and phone pocket.

GCI OUTDOOR gcioutdoor.com or 800-956-7328

Chip Key Decoder

The Chipkey® Decoder allows retailers access to high tech, patented Sidewinder key duplication without the extra costs. The Decoder transmits digital images of customer keys and pre-cut keys from Hy-Ko’s headquarters and are shipped directly to the store. Add 60 million vehicles to your key coverage without investing in costly Sidewinder key cutting equipment, key inventory and staff training. The Decoder also identifies all Hy-Ko key blanks and digitally verifies in-store key cuts for accuracy.

HY-KO BRANDS hy-ko.com or 800-292-0550

Wild Bird Food

The idea behind Bird Grubs product was to offer a nutritious and unique alternative to other insect-based feeds such as mealworms. Bird Grubs (dried black soldier fly larvae) has been tested extensively against traditional mealworms at sites in Canada, and found a 50 percent improvement in both bird consumption and bird attention at feeders, and upon testing completion, a significant increase (up to 16x) in calcium was noted as well.

ARMSTRONG WILD BIRD FOOD

armstrongbirdfood.com or 905-779-BIRD (2473)

Home Test Kit

SLGI Asbestos Home Test Kit allows users to check for the presence of asbestos fibers in most types of bulk materials. Simply follow the instructions to collect the sample, register the kit on SLGI’s website and ship the sample back using the prepaid shipping label. SLGI will email the user when their kit is received and again once the results are ready within the specified turn-around time.

SCHNEIDER LABORATORIES GLOBAL INC.

slabinc.com or 800-785-LABS (5227)

Pigs in a Blanket Molds

These molds for “pigs in a blanket” snacks are available in a variety of designs. Choose from Piggies, Sharks, Mini Hot Dogs, Bear Butts and Rocket. These molds are made from premium FDA food grade silicone and are all BPA free. Molds measure 9 1⁄2 inches x 8 inches and are dishwasher safe.

MOBI USA

mobicreations.com or 914-763-6351

Collar Keeper

The Collar Keeper is an innovative solution to a daily frustration. No more fumbling with buttons to hang collared shirts or walking around with droopy collars. The Collar Keeper is designed to make it simple to hang collared shirts. The Collar Keeper easily snaps onto hangers you already have at home. Just slide each collar leaf into each slip and keep your collars crisp.

COLLAR KEEPER

thecollarkeeper.com or thecollarkeeper@gmail.com

Kitchen Grease Drain Guard

Cooling Towel

The Chilly Ice Towel is a scientifically designed towel that keeps users cool, even on the hottest days. Made from a hyper-evaporative material, it is reusable and washable. Cooling time lasts up to a few hours and is more effective than using a wet rag or bandana. Store the towel in its case to keep it moist and ready for when you need it. To clean, just hand wash it with a little soap and water, or machine wash and air dry.

WEST COAST IMPORTS wciimports.com

Grease Hero PLUS storage system is designed to hold Grease Hero drain guards. Simply put the Grease Hero PLUS on your counter top and pour the oil directly from the pan into the center of the Grease Hero. Grease Hero PLUS stores the grease and effectively eliminates unpleasant odors. Once filled, the Grease Hero drain guard is easily disposed of in the trash. Made from recycled materials, the dishwasher-safe bowl and lid storage system includes two disposable Grease Heroes.

FOG SAFE greasehero.com or 570-668-1098

Smart Bidet

The Nobelet Smart Bidet toilet improves hygiene, increases independence and reduces carbon footprints. The ToeTouch sensor can open, close and flush the toilet. An included LED display shows the current seat temperature.

TRONE PLUMBING

troneplumbing.com or 435-267-1496

Link Latch

Link Latch is an adjustable, expandable and transforming flat silicone band tie-up solution. The high quality silicone band is more durable than traditional latex core bungees. The flat design keeps the band in place and distributes pressure evenly across its load. With non-marring hooks and adjustable length it can be used for light-duty applications both inside and outside the house.

MELLA mellahome.com

Lid Latch

Lid Latch is a reusable lid-securing strap for crockpots, casserole dishes, pots, pans and more. One simple, flexible strap makes transporting food dishes easy. Made of foodgrade silicone and having flexibility of up to twice the size, the lid latch can be used on anything with a top.

MELLA mellahome.com

PRODUCTS

See More Products

To stay informed about new innovations and trends, subscribe to the twice monthly Hot Products newsletter at hardwareretailing.com.subscribe

MySoil Soil Test Kit

The MySoil® Soil Test Kit, is a start-to-finish solution for the DIY and professional community. MySoil® successfully combines accurate soil testing technologies with an easy-to-use customer experience that assists in improving soil and plant health, while effortlessly guiding sustainable practices. Retailers can easily brand and customize test kits to recommend products on their shelf or direct link to e-commerce soil amendment or fertilizer purchases from the report.

PREDICTIVE NUTRIENT SOLUTIONS

mysoiltesting.com or 855-697-6451

Handheld Automatic Shovel

Rotoshovel is the world’s first automatic handheld shovel with an auger. Ideal for homeowners, DIY gardeners and professionals, the Rotoshovel’s patented design reinvents the shovel and takes the work out of gardening and landscaping. Rotoshovel halves excavation time while staying safer and cleaner than using a traditional shovel. Its safety motor stops when users hit a root or rock, protecting them from injury.

ROTOSHOVEL

rotoshovel.com or 317-360-ROTO (7686)

Camp Kitchen

Thiessen’s Camp kitchen is foldable and features extra-large bamboo counter space that provides plenty of room for prepping outdoor meals. It includes a collapsible sink, built-in trash bag holder, storage pockets, a durable fold-out frame, adjustable shelves a feet, a coated steel windscreen and carry bag.

THIESSENS

facebook.com/thiessensoutdoorgear or 877-972-5742 and

Magnetic Wall Hooks

Gator Magnetics is a patented magnetic storage solution that holds exponentially more weight than ordinary magnets or glue strips and can easily be removed and relocated to any of the many steel surfaces commonly found in the garage, workshop, laundry room, pantry or office. It will not damage the surface or leave a gummy residue and can be used with the Gator Wall System.

GATOR MAGNETICS gatormagnetics.com or 763-780-4475

Shock Strap

ShockStrap® tie downs feature a built-in urethane shock absorber that allows the strap to maintain constant tension on loads as they travel. No need to pull over and re-tighten. It uses durable polyester webbing and Grade 8 hardware to keep the shock and ratchet in place and features modular construction for field replacement if needed, large S-hooks with retention clips and sewn-in soft loops on each end.

BIHLER FLEX

theperfectbungee.com or 908-329-9136

Portable Griddle

The Pit Boss Ultimate 3-Burner Lift-Off Griddle combines power with portability. The Ultimate Griddle is fitted with an armored ceramic cooking surface that’s easy to clean and protects against scratches and rust. These units work aesthetically as the centerpiece of backyard cooking arrangements, while also being flexible enough to hit the road thanks to Pit Boss’s lift-off technology.

PIT BOSS pitboss-grills.com or 480-923-9630

Spice Sampler Pack

This multi-pack spice sampler from Pit Boss features flavors for beef, pork, chicken and poultry. The Prime Beef Rub features a smoky, natural, mesquite hardwood flavor that works well on steak, chuck roast or beef ribs. The Chicken & Poultry Rub is an award-winning blend of spices that complements poultry dishes, as well as veggies and eggs. Rounding out the sampler pack is the Homestyle Pork Rub. Its smoky and savory flavors make it the perfect rub for ribs, pork shoulder, roasts and more.

PIT BOSS pitboss-grills.com or 480-923-9630

Spartan Mosquito Pro Tech

Spartan Mosquito Pro Tech kills mosquitoes for up to 30 days so users can enjoy the outdoors. It doesn’t require batteries or electricity; just add warm water and shake thoroughly. It kills mosquitoes that may carry West Nile virus, Zika virus, dengue fever, St. Louis encephalitis, Western equine encephalitis and Eastern equine encephalitis. Mosquito Pro Tech is 100 percent American made and features a 30-day money back guarantee.

SPARTAN MOSQUITO spartanmosquito.com or 844-625-2742

Motorized Pool Tube

The PoolCandy Tube Runner is a motorized pool tube featuring a battery-operated threeblade propeller that moves users effortlessly through the water. It offers complete freedom of movement with 360 degrees of control allowing users to move forward, reverse or even spin in a circle all at the touch of a button.

B&D GROUP poolcandy.net

Saber Paint

SaberPaint® RT Capless Paint Markers feature a patented retractacle system that requires only one hand to operate. They are non-toxic, chloride-free, Xylenefree and Prop65 compliant. The alcohol-based formula remains permanent and resists fading. SaberPaint RT is available in black, blue, green, red, yellow and white.

FARO TOOLS

farotools.com or 833-500-FARO (3276)

SHIPPING SUPPLY SPECIALISTS ORDER BY 6

2022 Market Measure

5 Future-Focused Industry Insights

See the latest data on how independent retailers are performing and market projections for 2022.

Wednesday, Jan. 19

2 p.m. ET

The results are in.

You’ve seen firsthand the unprecedented growth in the industry for the last two years. Now, get the numbers and find out what it means for 2022.

Join NHPA’s Dan Tratensek and The Farnsworth Group’s Grant Farnsworth for this exclusive webinar. YourNHPA.org/webinars

Market Measure

THE INDUSTRY’S ANNUAL REPORT

Another remarkable year for the home improvement industry is complete, and while at this point last year many retailers couldn’t fathom breaking the records 2020 brought, 2021 was a banner year, again.

The annual Market Measure report highlights the growth trajectory for the industry of the prior fiscal year. The North American Hardware and Paint Association (NHPA) analyzes a combination of government data and industry surveys to make projections using internal models and those models established by firms like the Home Improvement Research Institute/IHS Markit.

In 2020, the unprecedented growth was so unusual that the models we typically use couldn’t

accommodate the rapid increase. This caused us to restate our size of the industry prediction for 2020. When the dust settled, we saw the industry grow by 22.3 percent and final total sales tallied $497 billion.

One of the resources we use is the annual Cost of Doing Business Study. The data from this year’s installment detailed what retailers had been telling us throughout 2020: Not only were sales hitting never-before-seen highs, independent retailers were also turning in one of the most profitable years on record. Both hardware stores and home centers posted their highest-ever profits before taxes—8.9 percent and 6.7 percent respectively. Retailers also saw customer counts expand and watched cash-on-hand increase.

Get additional recaps and forecasts from two analysts at hardwareretailing.com/2022-insights

The Consumer Impact

Consumers were eager to spend their money at independent home improvement businesses in 2020, which led to independent retailers increasing their market share by about 40 basis points.

Despite this demonstrable growth, 2020 did leave retailers with a fair share of concerns. Chief among them were the still-broken supply chain, labor challenges and the ever-present question of how long COVID-related spending on home improvement would continue.

Toward the end of 2020, most retailers were cautious in budgeting for more growth in 2021. We knew the first few months of the year would comp strong because they were measuring against a pre-pandemic Q1 2020. However, most retailers were just hoping they could carry any additional profits from the start of 2021 through the balance of the year.

In fact, when NHPA surveyed independent retailers toward the end of 2020, 80 percent of survey respondents indicated they would be budgeting sales flat or down for 2021.

Our projections for Q1 were accurate, as 2021 started with strong comps. By midyear, most retailers had seen a bit of a summer swoon in sales, but comps were still holding relatively strong. When we polled retailers again in early Q3, 60 percent of respondents said sales were up over the same period in 2020, with the average increase sitting at 14.9 percent.

While some of this increase was the result of inflation, retailers were still outpacing 2020 sales and performing considerably better than their

conservative budgets. In fact, nearly 56 percent of retailers surveyed said they were performing better than their expectations.

As we headed into the back half of 2021, we continued to hear a similar refrain from retailers: “We would be happy if we could just comp flat against the last six months of 2020.”

In Spite of It All, Growth

Barring the persistent challenges of supply chain and product and labor shortages, along with pandemic restrictions being lifted for consumers, we saw most retailers hold the line against the previous year.

So, after two years of unprecented industry growth, where does that leave us to make projections about 2022 and beyond?

As this report goes to press, we anticipate the final quarter of 2021 to finish flat against 2020 and leave sales for the industry up 8.2 percent over 2020. No small feat coming off the largest single-year increase we have seen for the industry.

Moving forward, we see 2021 as a bit of a reset point for the industry. In the past, industry sales have bumped along with increases of about 3.5 to 4.5 percent, and we anticipate a return to this normalcy for the next three to five years.

Based on a more measured several years of increases for the industry, we put the overall five year compound annual growth rate for the industry (2020-2025) at 4.7 percent.

Of course, with all the continued ripples from COVID still creating uncertainty for just about every industry, we make these predictions with a bit of a cautious eye toward future potential disruptions.

U.S. Home Improvement Industry Sales

How Retailers Are Preparing for 2022

Home Improvement Product Sales Performance

Home Improvement Retail Sales

MARKET MEASURE

2020-2025

July

August

Top Chains: Individual Performance

These chains represent home improvement retail operations that carry at least two core categories and have sales

adjustments to the included chains were made to the 2021 data.

Sources: Company reports, NHPA surveys and NHPA estimates ªStore counts include operations in the U.S., Canada, Mexico and all other locations. *As of Dec. 1, 2021

Market Share Profile

Source: NHPA calculations

Benchmark Your Business

To get your copy of the 2021 Cost of Doing Business Study to analyze your operation, visit YourNHPA.org/codb

COST OF DOING BUSINESS STUDY

A Real-World Look at Retailers’ Financials

The 2021 Cost of Doing Business Study presents the North American Hardware and Paint Association’s (NHPA) annual financial and operational profile of independent hardware stores, home centers, lumber and building materials outlets and paint and decorating outlets. (Paint and decorating outlet data is not included here. Visit hardwareretailing.com/paint-data for those metrics.)

This study assesses the financial performance of home improvement retailers who graciously submitted confidential financial reports for fiscal year 2020 to NHPA. The study presents composite income statements and balance sheets plus averages for key financial performance ratios.

Retailers can use this data to measure their own performance against industry averages and establish financial plans to improve profitability.

Methodology

The annual Cost of Doing Business Study is made possible through the cooperation of hardware store, home center, LBM outlet and paint and decorating outlet operators who provide detailed financial and operational information on their individual companies. The analysis in the report is the result of extensive review by NHPA. All individual company responses are completely confidential.

Most of the figures in this report are medians. The median for a particular calculation is the middle number of all values reported when arranged from lowest to highest. The median represents the typical company’s results and is not influenced by extremely high or low reports.

To determine high-profit stores, all participating companies were ranked based on net profit before taxes. The high-profit companies in each segment are those that make up the top 25 percent. The figures reported for each of the high-profit segments represent the median for that group.

Each year, the report contains figures from a different sample group of stores, which means overall figures have the potential to vary widely from year to year based on the respondent group of stores participating each year. In this year’s study, 1,115 independent home improvement stores participated, a 6.1 percent increase from the prior year.

How to Use This Study

To get the most out of these selected results from the 2021 Cost of Doing Business Study, follow these tips.

• Compare numbers. Determine your operating expenses as a percentage of sales and calculate your balance sheet as a percentage of total assets. Compare those numbers to the study results for typical and high-profit stores.

• Look beyond the percentages. Compare your real-dollar expenditures as well.

• Consider the results. If you find your store’s individual data veers sharply from what’s contained within the study, explore the cause behind the discrepancy and develop a plan to bring your numbers on par with high-profit stores.

• Participation counts. Overall figures can vary from year to year based on the group of participating operations. Year-to-year comparisons are helpful for illustrating general trends over time.

Figures to Know

• Average transaction size is the total sales over a period of time divided by the total number of transactions in that same period.

Use It: Measure your average transaction size weekly to spot shopping trends and establish a baseline for your business.

• Payroll is the total cost of owner and employee salaries, insurance payments and benefit plans.

Use It: Compare your payroll expenses to typical and high-profit operations to find areas you could cut.

8.9%

As indicated by record sales increases, profit margins increased significantly over 2019 metrics, up from 4%.

6.7%

Record-breaking profits for home centers were up more than 5.5 percentage points over 2019, which was down from 2018.

5.5%

LBM outlets saw profit margins increase 3 percentage points over 2019 and were at their highest point over the last five years. Profit Margin

Total Operating Expense Sales Per Square Foot Inventory as a Percent of Assets Gross Margin Per Employee

33.7%

This metric reached its lowest point in a five-year period, a decrease of 16.4% from the highest five-year metric in 2016 of 40.3%.

$256

The average for sales per square foot from 2016-2020 is $209, up from an average of $193 from 2015-2019.

$85,067

Gross margin per employee went up nearly $20,000 in 2020 over 2019, which represents a 26% increase.

49.2%

This metric reached an all-time low for hardware stores, which speaks to the industry’s supply chain challenges.

Source: 2021 Cost of Doing Business Study, NHPA

28.8%

Typical home centers and high-profit home centers saw little difference in 2020, while historically they differ by 5 to 6 points.

$341

Sales per square foot were up 68% over 2019, but were still nearly half as much as the high of $607 home centers saw in 2016.

$95,303

The compound annual growth rate for gross margin per employee from 2016-2020 at home centers was 2.5%.

46.2%

For home centers, inventory as a percent of assets held steady over the last five years within a few percentage points.

22.8%

This metric was down 1 percentage point from 2019 and is the median for the last five years. The peak was 2018 at 24.5%.

$2,325

This metric has grown exponentially for LBM outlets over the last five years, at a compound annual growth rate of 26.7%.

$210,016

Gross margin per employee was up 128.6% over 2019, but employee count was also down by 10, which could be a factor in the increase.

34.1%

This metric was up just slightly over 2019 and is the median over the last five years. The peak was 46.2% in 2017.

Listen to Episode 37 of the “Taking Care of Business” podcast for insights into the key retail metrics for your business at YourNHPA.org/tcb-pod

RETAIL STORE PERFORMANCE

Overall 2020 Business Performance

The following data from the 2021 Cost of Doing Business Study is divided into three sections so retailers can compare their businesses’ performance with operations similar to their own.

Hardware Stores

Sales increased roughly 22 percent for hardware stores, leading to the highest sales per customer ever recorded for typical hardware stores. This metric rose by $5 compared to 2019, which was previously the all-time high.

Customer count also reached record levels, growing by 14 percent over the prior year. However, supply chain volatility had a tangible effect on hardware operators. The cost of goods sold rose 100 basis points over 2019 levels, but even more striking was a look at inventory on hand as a percentage of assets: 49.2 percent for a typical hardware store and 44.7 percent for high-profit stores were all-time lows. Historically, inventory as a percentage of assets runs close to 60 percent, so this drop indicates serious supply chain issues.

Expense savings in other areas led to a record bottom line of 8.9 percent for typical and 14.4 percent for high-profit counterparts. With the inability to purchase inventory due to supply chain constraints, capital expenditures were up three times what they were in the prior year.

Home Centers

Comparable sales at home centers were up 25.5 percent and customer count increased by 15.5 percent, leading to the highest sales per customer rate observed in the last four years. Similar to the hardware cohort, profit before taxes was at an all-time high.

Despite labor shortages, on average, home centers grew their employee counts by one position in 2020. Average sales per employee stood at $272,294 for typical home

centers and $257,920 for high-profit home centers. Total payroll of 17.3 percent for typical home centers was the lowest level recorded in three years.

Even with unprecedented supply chain issues, home centers observed their highest inventory per square foot in four years, indicating they don’t seem to be facing the same challenges as hardware store operators. With lumber inventory also increasing, one can infer supply chain issues mainly affected hardware goods, a fact further supported by cost of goods sold dropping by 200 basis points compared to 2019.

Lumber and Building Material Outlets

The pandemic led to incredible record sales increases for lumberyard operators. Sales per lumberyard reached $10 million for the first time. This success came even as average customer count decreased for lumberyards from 2019 to 2020. So while lumberyards observed record sales and record sales per customer, the total number of transactions actually fell. This trend could indicate trouble for the channel in years to come, as operators want to see growth in both average ticket size and customer count concurrently.

Cost of goods sold for lumber is trending in a positive direction, and reached its lowest level in the last five years. Similar to home centers, inventory as a percentage of assets is on an upward trend, recording the highest total in three years. Inventory per square foot also reached its highest level ever recorded. These data points support the belief that supply chain issues are mainly affecting hardware products. That said, inventory is also driven up by higher commodity prices.

Lumber is the only segment where employee count dropped. Some of that fluctuation is due to the shifting sample size of the lumber respondents in this study, however the decrease in employees has been observed for two consecutive years.

2020 Financial Profiles of Leading Publicly Held Chains

Profile of Top 4 Distributors

Profile of Wholesaling Merchandising Groups

Register Today

Join NHPA’s Dan Tratensek and The Farnsworth Group’s Grant Farnsworth for an exploration of the data in a Market Measure webinar on Jan. 19. Register at YourNHPA.org/webinars

THE HOME IMPROVEMENT INDUSTRY

Year in Review

PROVIDED BY THE HOME IMPROVEMENT RESEARCH INSTITUTE

Entering 2021, many within the home improvement industry proceeded with caution. Even though 2020 was rife with heartache, turmoil and disruption at a global level, home improvement was one of the few shining stars. Homeowners took their forced time at home and decided to make it productive by tackling home projects and tasks they had been intending to do but had yet to find the time. They also took on unplanned projects in response to their new way of life, health concerns and changing uses of the home. This increased time at home, long project lists and a shift in disposable income led to a surge in DIY home improvement activity and record sales for many within the industry. Led by the surge in consumer spending, the Home Improvement Research Institute (HIRI) noted a 13.3 percent growth in home improvement product sales for 2020, an astounding number considering GDP dropped by nearly 3.5 percent. With the success of 2020 behind us, many asked not if the other shoe will drop, but how heavy will it drop? Most expected relatively strong continued interest in home improvement and building, but compared to 2020, a modest uptick at best. Looking back at the past year, now we saw 2020 was just the start. In preliminary estimates for 2021, HIRI expects another 13 percent growth for all of 2021. To put that into perspective, the home improvement products market will have increased by 28 percent over a two-year span, a feat nearly unheard of in an industry this large and established.

While 2020 growth was driven very much by consumers, 2021 was the year of the pro. With part of 2020 stymied from the pro perspective due to the lockdowns throughout much of the country, demand for a pro’s time was strong in 2021. With a glut of demand from first-time homeowners, homebuyers moving to new markets and existing homeowners wanting changes to their home, pros’ books filled up quickly and timelines were extended as many contractors didn’t have enough time or workers to keep up with the number of projects coming in. This led to a constant source of product sales, leading to an estimated 18.2 percent increase in pro building material sales in 2021.

HIRI noted a 13.3 percent growth in home improvement product sales for 2020, an astounding number considering GDP dropped by nearly 3.5 percent.

Strong demand for particular goods and services is never a bad thing, but it can cause some headaches along the way. The headaches in 2021 were felt by nearly all with a stake in home remodeling. Supply constraints have plagued many within the industry as manufacturers

struggle to keep up with demand. While some categories have begun to subside, like lumber, others continue as a thorn in the side of pros and DIYers alike. Although the root causes of constraints are varied (component shortages, shipping delays, lack of labor, etc.), the outcome is the same: project delays, product shifts and inflation. When taking inflation into account, the “real” growth is closer to the 5 percent range compared to the 13 percent nominal growth we see overall.

When taking inflation into account, the “real” growth is closer to the 5 percent range compared to the 13 percent nominal growth we see overall.

Now in 2022, we approach with cautious optimism. Demand is still strong for home improvement among DIYers and pros and doesn’t seem to be slowing down. We don’t expect to see a third consecutive year of double-digit growth but instead settling into the 3 to 4 percent range we saw pre-pandemic. Indicators tell us that unless something significant happens, any retraction is unlikely. Throughout all of 2021, we’ve seen strong demand unlike what we’ve seen before of homeowners who are still planning on undertaking home improvement projects.

The housing market, while slowing from the peak, is still quite strong. Even with increased home prices, we have yet to see existing home inventory go up, indicating there is still room to grow. Home sales often lead to flurries of project activity as new purchasers rush to make a house their home. Alongside this, there is a contingent of homeowners who previously would have made a step-up home purchase, but have been priced out of the market and are instead reinvesting in their homes with the equity they amassed in the past 24 months.

HIRI projects flat to modest growth of DIY products sales in 2022 and 6 to 8 percent growth in pro home improvement product sales. Solid supply and demand, and lingering tailwinds, indicate we will continue seeing modest growth at this new market level for the year ahead.

About HIRI

The Home Improvement Research Institute (HIRI) is the only nonprofit organization dedicated to home improvement research. The organization empowers its members with exclusive, ongoing home improvement data and information for making better business decisions. Members are the home improvement industry’s leading manufacturers, retailers and allied organizations. Learn more at hiri.org

Industry Sales By the Numbers

Home improvement product sales for DIYers and pros increased

13.3 %

Building

18.2 %

0.2 %

Building material sales for pros are projected to increase

7.1 %

Source: Home Improvement Research Institute

CANADIAN RETAIL REPORT

Unprecedented Sales Activity in Canada

PROVIDED BY MICHAEL MCLARNEY, MANAGING DIRECTOR, HARDLINES, NHPA CANADA

As the economy opens up and consumers begin spending money on travel and other sectors, Canadian retailers have a wait-and-see attitude to determine whether spending will detract from home improvement sales. Sales to contractors have been buoyed by the renovation boom that remained a constant throughout the pandemic. However, the housing market shows signs of stabilizing and returning to a more normal pace.

Economic recovery has not been as strong in Canada as in the U.S., which was impacted more severely, and economists anticipate much of the recovery will be pushed into 2022 compared to the U.S.

Supply Chain Woes

The supply chain travails of 2020 were still in effect through 2021. Many retailers reported learning valuable lessons about supply and demand over the last two years. They have been working more closely with their buying groups and key suppliers, and the scramble for products has left many shelves empty. Some retailers had to work with reduced SKUs while bulking up on better-selling items. Prices, which fluctuated wildly in 2020, continued to be unstable through much of 2021. As a result, many retailers have become more strategic to offer a more consistent, reliable source of supply.

Wildfires throughout the country posed a further challenge for supply chains. Ontario and British Columbia were hit hard by wildfires during the summer. At one point, some 300 fires were blazing in western Canada, while northern Ontario had more than 150 wildfires last summer.

Consolidation Continues

According to the 2021 Hardlines Retail Report, just four companies account for two-thirds of all home improvement retail sales in Canada. In 2019, they comprised 63.2 percent of the industry. In 2020, that had grown slightly to 63.6 percent.

The Home Depot Canada continues to lead the industry, with estimated sales now exceeding $10 billion, making it the largest home improvement retail store in Canada. Still firmly in the No. 2 spot, Lowe’s Canada continues to grow both with new stores and through the expansion and repositioning of existing stores.

Home Hardware, with nearly 1,100 stores, remains a strong brand and an attractive model for retailers. As an example of its commitment to brand recognition, the company recently relaunched its private brand, Benchmark, which includes hand and power tools and accessories and outdoor power equipment.

Canadian Tire has undertaken a great deal of restructuring of its retail business, focusing on acquisitions and expanding its private labels. The private labels include products from power tools to home decor, and more than one-third of its revenue comes from its owned brands. The retailer’s online sales continued to rise in 2021, following an increase of more than 250 percent in 2020.

Buying Groups Grow Market Share

Buying groups hold their own however, as independents consolidate buying power and marketing efficiencies under them.

The LBM buying groups are unique in Canada since they have no direct parallel in other markets like the U.S. Their operation and structure are quite distinct from the large retail banners and big-box chains that make up such a large part of the U.S. market.

Since 2016, buying groups have represented at least one-third of sales by the Canadian retail home improvement market—a market worth more than $50 billion in 2020. Last year, the market share of buying groups grew to almost 38 percent of the overall market. Those sales were generated by more than 2,500 independently owned outlets that are members of eight buying groups across the country.

The largest buying group is Home Hardware Stores with almost $6 billion in retail sales. Next is Independent Lumber Dealers Co-operative, whose combined membership accounts for close to $5 billion. The other buying groups are, in order of size, TIMBER MART, Sexton Group, Castle Building Centres, BMR Group, Delroc Industries and TORBSA.

The past year, which followed a year of double-digit growth in 2020, is estimated to have logged further growth. Growth in 2021 will reach into the double digits, with Hardlines forecasting an overall increase in retail sales of 13 percent. Forecasts show strong sales activity continuing into 2022, hampered only by the lack of product and the challenge of hiring staff.

Bonus Advice

After reading this article, get more expert advice on building a successful outside sales program at hardwareretailing.com/outside-sales.

An Inside Look at Outside Sales

6 Questions to Ask Yourself Before You Get Started

SBY JESSE CARLETON

etting up an outside sales program can open up a whole new stream of revenue for your business.

There’s a set of customers out there who will reward you with long-term, consistent sales if you can cater to their unique needs with personalized attention.

For many independent retailers, outside sales is on the list of initiatives they’ve tried once but had a hard time getting to work. While it may sound like a good idea

on paper, it’s often difficult to create an effective and sustainable program.

Hardware Retailing spoke with leaders who have established a track record of managing successful outside sales programs. They discuss how to decide if outside sales is the right fit for your business and offer tips to help you get started.

Regardless of the size of your operation, you can use these basic principles to set up your own outside sales force.

TRAINING

Get the Sales Lead

A new Trainer’s Toolbox, “Generating Leads: How Sales Associates Can Help Their Outside Sales Staff,” shows all employees how to help the outside sales team. Find it at YourNHPA.org/trainers-toolbox.

“The owner has to be engaged, and the culture in the business has to be built around helping that outside salesperson thrive.”

—Bill Baldwin, B2B Consulting Solutions

Is outside sales right for my business?

The success of your outside sales staff will hinge on how willing you are to invest your time and resources into making it succeed. You can’t just start the program and expect it to run on its own. Rather, company leaders need to be actively involved in spending time with the sales staff and listening to their needs, especially in the first years of launching a sales program.

Bill Baldwin runs B2B Consulting Solutions, advising retailers how to successfully build their business-to-business sales. Currently, he is advising Toole’s Ace Hardware, with 11 locations in Florida, and commercial sales is one of the fastest growing

segments of the company. He has worked with dozens of retail groups across the country and one common mistake he sees is leaders who are not willing to spend adequate time with their sales staff.

“The owner has to be engaged, and the culture in the business has to be built around helping that outside salesperson thrive,” says Baldwin.

“Toole’s Ace has been successful at B2B sales because the owner has been very supportive and engaged in the commercial sales department,” he says. “If you have an owner who is not invested or not willing to dedicate time to your sales team, they aren’t going to be successful.”

Outside sales staff must know they have the support of the management team and ownership, who need to understand the challenges of the sales team and be willing to invest in solutions.

As you determine if outside sales is right for your operation, focus your vision and goals for the program. Identify the departments you want to grow, your target market and the types of customers you are best able to serve. Also, make sure you are willing to make the investment to support your sales team, because an outside sales team cannot do its job alone. The entire team inside the store has to be involved.

How can I support my outside sales staff?

In addition to having the support of the business leadership, an outside sales staff needs support from everyone on the salesfloor.

At Toole’s Ace Hardware, outside sales is one of the company’s fastest growing segments.

BIG ON B2B

Every employee needs to understand their role in supporting outside sales by identifying and gathering leads for sales reps, says Baldwin. An inside sales team needs to be available to manage logistical aspects of the account, such as gathering pricing data, scheduling deliveries, creating orders and generating POs. This will free the outside sales rep to nurture relationships with existing customers and call on prospective ones.

Chad Andersen is vice president of Builders, which includes two home improvement centers in Nebraska, a lumberyard in Denver and countertop and truss manufacturing facilities. The outside sales team has been critical to the operation’s growth. In addition to his management role at the company, Andersen is on the sales team at the company’s Denver location.

“I have four inside sales reps who back me up,” he says. “I sell the job, but the inside salesperson manages a lot of the details from there. This frees me up to be a better resource for our customers so their jobs can go smoother.”

Finally, if you want to make your sales staff look professional, give them the tools they need, whether it’s a laptop, phone or branded delivery vehicle. Each tool helps them create a good impression and makes the customer’s life easier. For example, at Toole’s Ace, outside sales staff have laptops with POS capability so they can view inventory and process a customer’s order wherever they are, saving the customer time.

INSIDE ASSET

The inside sales team at Builders plays a vital role in managing each job so details such as ordering and delivery go smoothly.

Who do I hire for a sales team?

“If you have a stack of resumes and none of them seem to be the right fit, then start a new stack,” says Baldwin. “It’s easier to train a new salesperson than to retrain a customer to work with a new rep.”

Don’t rush the hiring process. It’s better to wait until you get the right person than to hire someone to fill a spot only to find out they aren’t a good fit. If you keep changing the sales rep you’re sending to your customers, they could get frustrated and wonder about the stability of your business.

Baldwin recommends a multistage interview process that involves several different people from the company. Include at least one company executive in the interview. Besides wanting to get their take on the candidate, you want to see how the interviewee responds to the added pressure of having a higher level executive in the room.

“It’s likely the salesperson is going to be presenting to people at all levels of a company,” he says. “We’re looking for a person who can strike up a conversation with a complete stranger and carry a conversation as if they’ve known them for 20 years.”

In addition to an outgoing attitude and good people skills, Andersen looks for three qualities in a candidate.

“To be an effective outside salesperson, you need to have a positive attitude, a good work ethic and be willing to learn,” he says. “If you have those qualities, then I can teach you to do your job.”

Dave Hoglund is another vice president at Builders’ Kearney, Nebraska, location, where he works alongside a team of about 20 salespeople. He adds that an outside salesperson needs to have an entrepreneurial mindset.

“They need to operate as if they are running their own little business,” he says.

“To be an effective outside salesperson, you need to have a positive attitude, a good work ethic and be willing to learn.”

—Chad Andersen, Builders

Hiring Process

Promote from within.

Existing employees already know your systems and many of your customers. You can also feel more confident in your hire because you already know if they’re qualified.

Use a panel format. Gather five key people from your company for the interview. Get several opinions before you hire.

Superstars need not apply. You don’t have to blow the budget to hire a seasoned veteran salesperson. A rookie may be easier to teach and more likely to mold into your company culture.

Shop your competition

If you see an employee at a competitor who has the personality you want on your team, offer them the chance for an interview. The best candidate may be working somewhere else.

Talk up your company. Show the prospective employee why working for you is better than working for the competition. You’ll need to have an attractive benefits package and a supportive work culture.

RESOURCE

Job Descriptions

NHPA has job description templates that cover some of the basic responsibilities of an outside sales representative, plus other retail positions. Find them at YourNHPA.org/job-template.

What should I pay them?

“We have the philosophy that the salesperson should be the highest paid person in the company,” Hoglund says.

There are many different variations in the way retailers pay their outside sales staff, but it’s usually a combination of a base pay plus incentives.

Salespeople tend to hate selling on straight commission, says Baldwin, because it comes with a lot of pressure to sell. Instead, give them the security of a living wage as a base pay and then offer additional incentives based on how much they sell. Baldwin begins with calculating the overhead cost it takes to have a salesperson on the road. He then offers a percentage of any sales over that cost as a commission.

Builders also follows a base-pay-plus-commission model, where commission is based on gross margin of a sales rep’s sales. But Hoglund adds in a twist. The inside sales team shares a portion of the commission earned with the outside salesperson they support.

“All of the inside salespeople want to have some skin in the game, and we want them to have an incentive to do their best at account management,” he says. “Giving them a commission has helped make the entire team stronger.”

Essentially, creating a pay structure that shifts the focus off making the sale allows outside salespeople to focus on what matters most: creating a relationship with a customer. While it may be tempting to look for the biggest sale, that approach is often done at the expense of creating a long-term customer. A better approach is cultivating relationships that will pay consistent dividends over time.

Chad Andersen (right) makes regular visits to job sites to give customers ongoing support.

RETAIL TRAINING

Outside sales reps at Toole’s Ace Hardware first must learn how the retail floor operates.

“Giving the inside sales staff a commission has helped make the entire team stronger.”

—Dave Hoglund, Builders

How do I train them?

At both Builders and Toole’s Ace, the training process for an outside salesperson depends on the person’s experience. If you’re promoting a salesperson from within the company, pair them with an existing outside sales representative as a mentor for a few weeks.

Baldwin says that if he moves someone to outside sales from another part of the company, then that person already has a systemic knowledge of the company. He pairs them up with other members of the sales team to ride along on sales calls. If the hire is from outside the company, Baldwin puts them inside the store for as long as 90 days so they can learn how the retail side operates and get to know associates on the salesfloor.

“In order to be an effective outside salesperson, you need to learn the store and all relevant processes,” he says. “You also need to build relationships with other employees. A company’s success is all about culture. Build the trust and rapport with the associates because they are the ones who will be finding a lot of the leads for you.”

At Builders, a new hire may spend as long as a year in the retail space before moving to an outside sales position.

“Starting on the inside makes them well-rounded. They need to learn all of our systems and fill out their product knowledge,” Hoglund says. “They also need to learn the nuances of what each customer needs. When we promote them to outside sales, they start off working closely with a sales manager.”

How do I manage an outside sales team?

An outside salesperson will want to be an advocate for the customer, as they should be, but also make sure they are an advocate for your business. Be clear as you’re setting the boundaries of what they can and can’t promise a customer. It’s good to go the extra mile for your customers, but make sure you are also keeping the best interests of the business in mind.

Outside salespeople should be self-motivated and self-directed, so managers should focus on overall accountability. Give them the support they need while keeping track of their overall progress. Baldwin prints sales reports twice daily to show key performance indicators, such as transactions and running margin.

“It’s easier to react daily than at the end of the month to negative trends,” he says. “You want to address bad days early and it also creates a competitive environment among the team when you’re always looking at sales numbers.”

Baldwin’s position as a sales consultant is also a support role that involves coaching and mentoring.

“I travel with a different sales rep every week,” he says. “That allows me to offer an outside perspective on ways they could better help their customer.”

Outdoor Options

HELP YOUR CUSTOMERS CHOOSE THE RIGHT DECKING MATERIALS

BY LINDSEY THOMPSON

Creating outdoor living spaces became a priority for many homeowners in the last two years. As a result, the construction industry saw a boost in requests for decks, porches and patios. The higher demand for decks combined with soaring lumber prices put a squeeze on deck construction and renovation and led homeowners and contractors to seek out alternative options, including composite materials. Learn more about the different deck materials and how to educate your customers on choosing the best option here.

OPTIONS ABOUND

Niece Lumber has several full-size deck displays so customers can see all the different options for decking materials.

CATEGORY SPOTLIGHT

CATEGORY One-of-a-Kind Pieces

Learn how one lumberyard serves customers by offering custom woodworking projects at hardwareretailing.com/unique-projects

A wood deck addition costs around $16,766 with a A composite deck addition costs around $22,426 with a 63.2% 65.8%

10-30 years

$23-42/sq. ft.

$30-60/sq. ft.

Requires cleaning, sanding, staining and sealing every two to five years

Easier for DIYers to install; absorbs less heat so stays cooler to the touch; is a recyclable and renewable resource

Requires annual cleaning

Fully resistant to insect damage, rotting, scratches, warping, splintering, staining and fading; comes in a variety of colors

TOOLS & GUIDES

Let Us Do It for You

PROJECT POINT

Welcome to a new resource for your operation, Project Point. This one-stop department offers project ideas you can share on your social platforms.

Organizer Not Your Ordinary

This DIY mason jar organizer project fulfills both function and form, giving homeowners a beautiful storage option that works in any room in the house or garage. The organizer is made from materials most home improvement stores carry, making it an easy project to share with your customers. Display all the supplies on an endcap to make it easy for shoppers to find everything they need, or put together project packs with all the supplies so customers can make one purchase to get everything they need.

Project Picks

Discover more DIY projects your customers can make to get their homes organized at hardwareretailing.com/diy-organized

What’s in Your Project Point Package

Visit YourNHPA.org/project-point to download your Project Point Package for this DIY today.

8 inches by 20 inches and between 3⁄4 inch and 1 inch thick

(3) 12-ounce mason jars without lids or bands

3⁄4-inch

Do-It-Yourself Instructional Guide

This downloadable and printable PDF makes it easy to share this project with your customers. The guide includes step-by-step instructions, a supply list, necessary tools and color photos of each step. There is also a editable version to include your company’s logo and information. 01

Merchandise Planogram

The merchandise planogram lists all of the supplies and tools a customer would need to complete the project. It offers suggestions on how to display and merchandise the supplies and tools so you can easily promote and sell the project to your customers. 02

Social Media Posting Guide

The social media posting guide provides everything you need to share this project on your own social media channels. The guide includes suggested copy for Facebook and Instagram, project photos and customizable posts to fit your company’s branding and needs. 03

picture hanging

with (4) nails

OUTREACH

Share Your Stories

Send your merchandising tips, event recaps, employee morale boosters and other stories to editorial@YourNHPA.org CHECKOUTS

Treats in Store

ALGER HARDWARE AND RENTAL OFFERS A SWEET EXTENSION

When customers of Alger Hardware and Rental are craving a frozen treat, they can stop in at Heights Cream, which opened inside the store in August 2020 and serves hard and soft serve ice cream.

THE SHOP OCCUPIES just 200 square feet of the hardware store’s footprint but makes excellent use of what was previously unused retail space. The front windows that face the sidewalk and front of the store are ideal for walk-up service, says Joel DeJong, who co-owns Heights Cream with his dad Bill DeJong, owner of Alger Hardware and Rental in Grand Rapids, Michigan.

“We wanted the neighborhood, which is close-knit and walkable, to have an ice cream shop, and we were finally in a place to build one,” Joel says. “Many hardware store customers are surprised that we have an ice cream shop. We’ve been able to market the shop to the neighborhood directly through a thriving community Facebook group.”

Heights Cream sources all of its ice cream through the local Moo-Ville Creamery, a family-owned and -operated dairy headquartered in nearby Nashville, Michigan.

The ice cream store is only open seasonally, but the DeJongs have added an ice cream cake cooler in the hardware store so customers can still enjoy delicious Moo-Ville treats year-round.

“While, on paper, the ice cream shop and the hardware store are two separate businesses, they are both driven by the mission of making our community the best it can be,” Joel says.

The Heights Cream Ice Cream Shop is part of Alger Hardware and Rental and serves up locally made ice cream.

Making a Positive First Impression

Customers at HomCo Lumber & Hardware in Flagstaff, Arizona, are greeted as soon as they walk through the door by a friendly face serving fresh-baked cookies and hot coffee. The concierge service started eight years ago from a desire to achieve 100 percent customer engagement, says chief operating officer Todd Callan.

“Our concierge is more than just a greeter, they are a ‘customer caretaker’ who can ensure all of our customers are receiving a high level of service,” Callan says.

The concierge welcomes customers, answers their questions and directs them to the items they are looking for, radioing other associates to let them know a customer is heading their way.

“We now have engagement as soon as a customer enters our store, followed by someone waiting for them in the department to help them with their project,” Callan says.

Hardware and Home Cooking

Tucked inside of Sullivan’s Hardware in Indianapolis, Sully’s Grill serves up fresh dishes for lunch, dinner and weekend brunch. Owner Pat Sullivan says the key to the restaurant’s success in the two years it has been open has been its chef, Rachel Hoover, who creates innovative dishes like bubbly ricotta cheese dip, roasted chicken brodo and a pastrami-style salmon lox sandwich.

The restaurant also hosts private events, which Sullivan says has brought in new customers.

“The restaurant has helped get people in our store who would never have a reason to come in,” Sullivan says. “You get them in and they’re like, ‘Wow! What is this place?’”

COMMUNITY

Serving Up Customers

As soon as he heard about the struggles a local food truck owner was having, Dusty Lee, owner of Stormer’s Hardware in Knoxville, Tennessee, immediately jumped in to help. The food truck wasn’t bringing in any income because the events it normally served at had all been cancelled due to the pandemic, so Lee offered the owners a spot in his store’s parking lot.

Now, nearly two years later, he hosts a different food truck each day of the week, even on Sundays when the store is closed. Lee doesn’t charge the food trucks to use the parking lot, but rather sees it as a mutually beneficial relationship and a service to the community.

“It didn’t take me long to see what an awesome marketing tool this can be. I have picked up so many new customers in our area who didn’t even know we existed, but follow their favorite food truck to the moon and back,” he says. “It really has had a positive impact all the way around. I have made several new friends and customers.”

Sully’s Grill, a restaurant in Sullivan’s Hardware, attracts new customers to the hardware store.

HomCo Lumber & Hardware concierges serve up cookies, hot coffee and smiles to arriving customers.

Stormer’s Hardware owner Dusty Lee invites local food trucks to his store’s parking lot to serve customers.

made in america*

THREE WORDS NOT EVERYONE CAN SAY

Dear Dealers,

Thank you, on behalf of all the employees of STIHL Inc. We are proud to manufacture, market and distribute the number one selling brand of chain saw worldwide and the number one brand of gasoline-powered handheld outdoor power equipment among landscape professionals in America.**

We are also incredibly proud that the majority of products we sell in the U.S. are actually made here in Virginia Beach, VA.

2021 brought significant challenges for all of us, but we stayed STIHL Strong and experienced another record sales year! This success was in large part, due to the tremendous efforts of STIHL dealers, and we thank you.

While none of us can be certain what the future will bring, we will not let uncertainties slow us down. We continue to work diligently to overcome supply chain challenges as we plan in 2022 for more new products in our expanding battery range and groundbreaking enhancements to our gas range.

Thank you again for your continued support. We send our best wishes for a safe and prosperous year. Together we will remain STIHL Strong in 2022.

Sincerely,

The Employees of STIHL Inc.

LAST WORD

WEBINAR

Measuring the Market

Register for the webinar with NHPA’s Dan Tratensek and Grant Farnsworth from The Farnsworth Group for insights into trends and industry projections for 2022 at YourNHPA.org/webinars

TRENDS

The State of Retail in 2022

WHAT EXPERTS EXPECT FROM THE RETAIL SECTOR THIS YEAR

DESPITE SUPPLY CHAIN challenges and labor shortages, retailers are coming off another unusual, but strong, holiday shopping season. Analysts predict 2022 will be another solid year for retailers, even with an expected decline in growth. For more insights into 2022, read our conversation with economic expert Katie Thomas at hardwareretailing.com/economy-2022

Global retail industry growth for 2022 is predicted to be down

Total 2022 retail sales worldwide are expected to top 6.6 percent

from the forecasted growth in 2021, which was 7.2 percent

Sale of more secondhand goods

$26.7 trillion

3 Trends That Will Shape Retail in 2022

Return policies will differentiate retailers

Using tech to enhance in-store experiences

Sources: Forecast for Retail Sales Growth Worldwide from 2018 to 2022, Statista; Forrester, Predictions 2022; Publicis Sapient, 2022 Guide to Next

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WE’RE BACK!

Join us in Orlando for the 2022 Dealer Market

February 24 - 26, 2022

Join us and celebrate our 175th anniversary at our first in-person event in two years. Leverage our online-buying tools at this truly hybrid event and improve your margins.

Discover something new while you walk the floor and collaborate with any of more than 2,000 vendors. Generate new ideas for your stores and meet face-to-face with Orgill services team members.

Visit our concept stores or rest your feet and attend in-person workshops or clinics — and take home ways to improve your business.

Whether you’re a current Orgill customer or are interested in learning how we can help your business, register today and get ready to join us in Orlando for this one-of-a-kind celebration.