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Serving Hardware, Home Center & Building Material Retailers

Stealing the Spotlight A Snapshot of the Industry’s Best Young Leaders 44

How to Plan When You’re Next in Line for Succession 38

VOLUME 211 • ISSUE 1 • JULY 2016 • HARDWARERETAILING.COM

Impulse Sales: Getting Beyond the Shopping List 56

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VOLUME 211 • ISSUE 1 • JULY 2016 • HARDWARERETAILING.COM

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Impulse Sales: Getting Beyond the Shopping List 56

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NEXT MONTH

Stepping Out of Ownership

he new store buyers featured this month in Hardware Retailing are just half of the succession planning equation. We will focus on the other half in the August issue of the magazine, detailing the plans and processes of past owners or current sellers who are working toward stepping away from their businesses. Don’t miss the sellers’ side of succession planning.

Next month, you will also enjoy some fun and insightful perspectives from retailers who wrote letters offering business advice to their younger selves. In addition, August’s issue will highlight the lawn and garden category, and offer suggestions for how to sell products related to trends such as hydroponics, fairy gardens, landscape design and backyard ponds.

As long as there are pipes to be ft, carburetors to be rebuilt and wiring to be run, there will be pros whose frst instinct is to grab a Channellock® tool and get to work. That’s why we do everything we can to ensure a seamless buying experience for our valued retail partners. The brand America trusts for tough, reliable hand tools is the brand you can count on for streamlined ordering and comprehensive sales support.

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July 2016 | HARDWARE RETAILING

Headquarters Staff

PUBLISHING

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. FEATURED BOARD MEMBER

PUBLISHER, VICE PRESIDENT OF PUBLISHING Dan Tratensek

COMMUNICATIONS

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

DIRECTOR OF COMMUNICATIONS Whitney Daulton ASSOCIATE EDITOR Liz Lichtenberger ASSISTANT EDITOR Renee Changnon ASSISTANT EDITOR Kate Klein LEAD GRAPHIC DESIGNER Lynnea Verville

CONTROLLER David Gowan

GRAPHIC DESIGNER Graeme Haase

EDUCATION

WEB DEVELOPER Kevin Trehan

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

MARKET RESEARCH ANALYST Sara Logel

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

PRODUCTION SERVICES

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

PRODUCTION MANAGER Nancy A. Vondersaar

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

SALES AND PRODUCTION ASSISTANT Freda Creech

RETAIL LEADERSHIP INSTITUTE

CIRCULATION

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

CIRCULATION DIRECTOR Richard Jarrett

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

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

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

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

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

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

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

HARDWARE RETAILING | July 2016

ADAM BUSSCHER IMMEDIATE PAST CHAIRMAN

Adam Busscher, owner of Picton Home Hardware Building Centre in Picton, Ontario, was elected to the NRHA Board in 2008. He tripled the size of his first store and later opened a second. WHAT HAVE YOU LEARNED FROM MEETING FELLOW RETAILERS? I’ve learned that we all face the same challenges. No matter where I go, whether it’s Hartville, Ohio, or Toronto, every retailer has the same concerns. When we work together, we can make the industry better and make each other better. 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 DIRECTOR David Dishke, Grand River Home Hardware, Caledonia, Ontario DIRECTOR Steve Fusek, Fusek’s True Value, Indianapolis SECRETARY-TREASURER Bill Lee, NRHA President and CEO IMMEDIATE PAST CHAIRMAN Adam Busscher, Picton Home Hardware, Picton, Ontario

Contents JULY 2016 | VOLUME 211 | ISSUE 1 INDUSTRY AWARDS

2016 Young Retailers of the Year Be inspired by these bright, young industry leaders who are building successful home improvement businesses, while also investing deeply in their communities.

56 CATEGORY SPOTLIGHT Impulse Items This article shares tips from retailers who are experts at finding and selling impulse items. Learn how to get better at enticing customers to spend a little more than planned.

64 MADE IN AMERICA Worth the Investment: Buying and Selling USA-Made Products New research from the North American Retail Hardware Association (NRHA) shows retailers and consumers still care whether products are made in the U.S.

Departments

“

It made me feel like I belonged in the industry, and it gave me a determination to succeed.

”

—Karena Reusser, Modern Home & Hardware

38 OPERATIONS

54 INDUSTRY AWARDS

Succession: The Entering Generation’s Perspective

Insight From Past Young Retailers of the Year

Retailers who have stepped into businesses as new or next-in-line owners have worked through planning and financing their purchases, but they’re also tackling daily duties, such as building trust and writing paychecks.

NRHA has been honoring Young Retailers of the Year for 20 years. Past honorees share stories about the significance of the recognization, and how their careers and businesses have changed.

HARDWARE RETAILING | July 2016

06 08 10 12 16 18 34 71 74

On the Web Independent Thinking Taking Care of Business NRHA News Trends Retailers’ Choice Products Checkouts Newsmakers/Calendar Last Word

On the Cover The 2016 Young Retailers of the Year are, clockwise from bottom left: Richard Lukowiak, Travis Hellvig, Jared Sawyer, Marc Currie, Dan Moulton, Kyle Martinez, Christian Herrick and Aimee Nichols NRHA photo by Lynnea Verville.

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On the Web

SUCCESSION PLANNING

NRHA PROGRAM

Perspectives on Succession

Free Prescription Savings Card

In this month’s feature, “Stepping In,” we share entering-generation perspectives on succession. For more resources, check out these tools:

NRHA is offering an alternative way for you to get prescription medications at a discounted rate with its new free RxCut® prescription savings card program. For more information and to download the card, visit TheRedT.com/RxCut.

Are you and the owner able to set a clear timeline for when you will purchase the business? Yes No

Expert Insight: Wayne Rivers, co-founder and president of the Family Business Institute, sat down with Hardware Retailing to share his thoughts and expertise on handling transitional planning for the family business. Visit TheRedT.com/Succession-Expert.

Quiz: Thinking about buying a business? Visit TheRedT.com/Buying-Questionnaire to take a quiz that will help you think through some of the important questions you should be considering.

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

1 Worksheet: Effective Cross Merchandising

2 PowerPoint: Creating Effective Dump Bins

AWARD WINNERS

CATEGORY TRENDS

Young Retailer Honorees

Impulse Sales

In this issue, you’ll meet the 2016 NRHA Young Retailer of the Year honorees. These profiles are only a glimpse at the accomplishments of these individuals. For full profiles and to view their honoree videos, visit TheRedT.com/2016-YROTY.

At TheRedT.com/ImpulsePsychology, Kit Yarrow, psychology expert and author of “Decoding the New Consumer Mind,” shares insights into the various types of impulse sales and how they can be win-win situations for both retailers and consumers.

HARDWARE RETAILING | July 2016

Video: Getting Ready for a Special Event

Video: During and After the Special Event

SOCIAL MEDIA LINKS

@hardwareretail facebook.com/HardwareRetailing

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Independent Thinking

A Country of Big Dreamers

“Your independent

family business is the epitome of what freedom offers. You’re the backbone of our economy and our communities, and the numbers back it up.

”

ur freedom, bought with tremendous struggle and the lives of many brave men and women throughout our nation’s history, has created a miracle of opportunity, creativity, entrepreneurship and wealth. This amazing freedom that we enjoy has allowed us to pursue our personal dreams, and to succeed and to fail. Your independent family business is the epitome of what freedom offers. You’re the backbone of our economy and our communities, and the numbers back it up. There are 27.9 million small businesses in the U.S., and almost 6 million of those businesses have employees. Small businesses like yours employ over 50 percent of the working population in the U.S.—that’s over 120 million people! Small business contributes 64 percent of new private sector job growth and 46 percent of private sector nonfarm GDP. You should be very proud of the contribution you’re making to your communities. You remind all of us of the opportunities to take risks and create value that freedom allows. Don’t believe our next generation of young adults is afraid of pursuing their dreams, either. We are still a country of risk takers and dreamers. In fact, about 543,000 new small businesses are created every month, and about just as many close. Freedom provides opportunities for constant experimentation and reinvention. It allows good ideas to grow and bad ideas to fail. Freedom allows for individuality to flourish and provides anyone a chance to pursue personal ambitions and dreams. Retailers play a huge role in today’s economy. You can be proud that you’re a retailer, serving your customers and employing your fellow citizens. You’re part of a community of 3.8 million retail establishments, providing about 42 million jobs. And, like most hardware retailers, 98.6 percent of all retailers employ fewer than 50 people. We are a country of small, private business owners pursuing the American dream. You may be reading this around Independence Day. It’s a great time to reflect on the blessings and opportunities that our wonderful country provides us. I’m sure our Founding Fathers could never have imagined what they set in motion over 200 years ago. Freedom unleashed the unbelievable power of the human desire to have a better life for our families and create something of lasting value to pass on to our children. The American dream is alive and well, but it needs constant protection and nurturing. Our great experiment in freedom and opportunity can be compromised. We need to constantly remind our political leaders how vital it is to support policies that encourage, and do not diminish, this powerful economic engine of entrepreneurship. We, here at your trade association, are proud to serve you and your independent family business. The risks you take and the contributions you make are inspiring. You remind us every day of how lucky we are to live in our great, free country! Happy Independence Day and God bless America!

Bill Lee, President and CEO

blee@nrha.org

Sources for the data: U.S. Small Business Administration, National Retail Federation and Forbes magazine

HARDWARE RETAILING | July 2016

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Taking Care of Business

A Little More Salt than Pepper

“There’s something

truly inspiring about meeting retailers as they are at the beginning of their journeys, filled with ideas about where they will take their businesses, families and communities.

”

want to share a secret with all of you… lately I’ve been feeling pretty old. I know, I know. You are all probably thinking, “Old? But he’s so young, handsome and full of vigor!” Well, consider the following facts. Next month, my youngest will be heading off to college. My wife and I have been together for far longer than we were ever alive without each other. I have a grandson from our oldest daughter. And this year will mark my 20th anniversary with NRHA. Oh yeah, and my beard is more salt than pepper, my knees hurt and I am hard-pressed to get much more than six hours of sleep a night. From the sounds of all this, I’m well on my way to becoming a grumpy old man. (No offense to any grumpy old men out there.) It’s not that I resent getting older, or I am not grateful for all the blessings I have in my life. It’s really just more about having the realization that I guess hits all of us sooner or later… our youthful exuberance and idealism may well be in the rearview mirror. This realization isn’t necessarily a bad thing. In fact, I think it is through the prism of this realization that we can truly appreciate when we see these youthful qualities in others. I think this is one of the reasons that I, and so many others in our office and around the industry, take such enjoyment out of our Young Retailer of the Year Awards. Like me, these awards also are marking their 20th anniversary with NRHA this year, and we have recognized well over 100 retailers as part of this program. It is great to learn about all the truly innovative and exciting things these impressive individuals are achieving in retailing. For me, however, their retail accomplishments are only part of what makes this event so enjoyable. There’s something truly inspiring about meeting retailers as they are at the beginning of their journeys, filled with ideas about where they will take their businesses, families and communities. Hopefully, they will achieve all of their lofty aspirations. They certainly have the knowledge, tenacity and work ethic to do so. For those of you who have been around the block a few times (like myself) you know there is rarely a straight path to achieving the goals you set when you are younger. We also know the steps you take to overcome the challenges and adversity you face on the way to your goals become the building blocks for things like character, perseverance and wisdom. In this issue of the magazine, we take a look at both ends of this spectrum. We get a little better acquainted with the eight outstanding individuals selected as this year’s Young Retailer of the Year Award honorees. We also examine some of the challenges new business owners face as they take their first steps toward realizing their career aspirations in our story titled “Stepping In,” which begins on Page 38. So, whether you are just starting out down your path in hardware retailing or you have a bit more snow on the roof (like me), you will likely be inspired and motivated by the stories of these energetic, savvy entrepreneurs.

Dan M. Tratensek, Publisher

dant@nrha.org

HARDWARE RETAILING | July 2016

NRHA News

Retailing: By the Numbers

ll smart decisions are based on research, be it product development, marketing strategies or financial decisions. It’s important to look for trends, industry best practices and any other data that supports those decisions. At the North American Retail Hardware Association (NRHA) and Hardware Retailing magazine, we understand the value of industry research, and we strive to provide our readers with new and relevant data. Below are five recent studies and research reports we’ve developed in the past year. Other data-driven resources can be found at TheRedT.com/Research-Guides. Also, in the year ahead, we have some exciting research initiatives planned, such as looking at retailers’ adoption of chip card readers and what they’re doing to put together succession plans. We’ll also be revisiting NRHA’s extremely popular Merchandising for Profit Study.

HOME SWEET HOME STUDY

COST OF DOING BUSINESS STUDY

NRHA sponsored a study with Independent We Stand and found that a purchase made at a local home improvement store keeps twice as much money in the community compared to the same purchase made at a big box. To view the full study, visit TheRedT.com/HSH-Study. To use these findings in your store, download a free, shop-local marketing toolkit at TheRedT.com/ShopLocal.

For almost 100 years, NRHA has gathered financial data from independent home improvement stores to create the industry’s only benchmarking report, which helps you identify areas of opportunity with your store. You can download the 2015 Cost of Doing Business Study at TheRedT.com/2015-CODB, and watch for the 2016 Cost of Doing Business Study that will be released this fall.

2016 SOCIAL MEDIA STUDY

MARKET MEASURE REPORT

2016 RETAILERS’ WEBSITE USAGE

In 2016, more than 280 independent home improvement retailers completed an online survey about their usage of social media for their businesses. To download the study, visit TheRedT.com/Social-Media, and to download a free toolkit that can help you improve your store’s social media use, visit TheRedT.com/SMKit.

At the end of each year, Hardware Retailing magazine and NRHA releases their Market Measure Report that reviews home improvement growth, store count, financial metrics, housing statistics and an outlook of the years to come. To download the 2015 Market Measure Report, visit TheRedTcom/2015-Market-Measure.

To get an idea of how many independent home improvement stores have websites and the different informational or e-commerce capabilities their websites provide, we surveyed more than 100 retailers. Use this questionnaire to see how your business’s website compares to others, and find ways to improve. Download the study at TheRedT.com/Website-Usage.

HARDWARE RETAILING | July 2016

FAMILY FARM & HOME WILL DOUBLE ITS STORE COUNT … because they joined OUR co-op Al Fansler and his family operated a chain of 27 stores, but they had an even bigger vision for Family Farm & Home. To expand the company, Al, Tim and Bob needed a true partner. That’s why they chose the best option—True Value®.

(Left to right) Son-in-law Bob Tarrant, Al Fansler and son Tim.

FREEDOM TO RUN THEIR COMPANY THEIR WAY WITHOUT INTERFERENCE Family Farm and Home proudly shares the business results the company achieved as a member of our co-op. (Your individual results will vary.)

GROWTH

FROM 27 TO

47 STORES

DOUBLE-DIGIT PROFIT INCREASE

IN KEY CATEGORIES

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

We understood the family’s long-term business strategy. Tim Fansler, co-president and chief marketing ofcer, says, “True Value demonstrated a level of expertise within our wide range of product categories that we couldn’t fnd anywhere else.” Today, the company operates 47 stores in three states with plans to add 5 more stores this fall. True Value ofers sound business solutions and resources to ensure Family Farm and Home’s future growth and proftability. Al, Tim and Bob are more than our business partners, they’re family.

TAILORED ASSORTMENTS SUPPORTED BY

MARKET DATA

NRHA News

Seasonal Knowledge? Check.

raining—that’s one thing that never goes out of season. As you’re in the heat, quite literally, of selling season, there are some important areas where your staff can refresh their knowledge: • FAQs about Gardening • Mosquito Control Product Knowledge • Push Mower Selling Tips • Keeping Customers Safe NRHA knows you and your employees don’t always have time to sit through hours of training. That’s why we’ve created Trainer’s Toolbox, a collection of 3- to 5-minute lessons that may include short videos, presentations or worksheets, for you to use with your employees. Review the above topics, and others, in merchandising, selling skills, product knowledge and operations, at your next staff meeting. Access this content at www.nrha.org/freetraining.

HARDWARE RETAILING | July 2016

A Free Way to Save $$$ on Health Care

RHA has launched a program offering retailers an alternative way to get prescription medications at a discounted rate. These savings are made possible by RxCut®, a savings card program now available to retailers at no cost. Effective immediately, retailers can download, use and distribute the prescription savings card. No signup, financial commitment or participation in NRHA’s health insurance program is necessary. Regardless of primary insurance provider, users of the savings card can present it at the pharmacy when picking up prescriptions for themselves and family members. “Store owners need to be able to offer any and all solutions to their employees regarding health care costs,” says Bill Lee, president and CEO of NRHA. “This prescription savings card allows us to offer an alternative solution when it comes to health care costs, and we’re happy to do that.” For more information, and to download the RxCut® savings card, visit TheRedT.com/RxCut.

NRHA Goes Coast-to-Coast with Fuller Center Bike Trip

icyclists have taken off on a cross-country fundraising trip, and they’re working on several service projects along the way. The Fuller Center Bicycle Adventure riders will complete six projects sponsored by $1,000 NRHA grants. The cyclists are traveling from Seattle to Washington, D.C., starting in mid-June and ending in mid-August. They are raising funds for The Fuller Center for Housing, which is a nonprofit organization lead by volunteers with a goal to bring houses back to life in order to provide decent, affordable homes to families on terms they can afford, at cost with no interest. The bike adventure riders will stop to do service projects along their route in Spokane, Washington; Kellogg, Idaho; Craig, Colorado; Peoria, Illinois; Indianapolis; and Springfield, Ohio. NRHA partners regularly with The Fuller Center by providing grants to fund home renovation work. The association was also a sponsor of the 2015 Fuller Center Bicycle Adventure. The NRHA grants must be used to buy materials from independent home improvement retailers. If you’re interested in getting involved with the Bicycle Adventure or other Fuller Center projects, contact NRHA president and CEO Bill Lee at 800-772-4424.

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July 2016 | HARDWARE RETAILING

Trends Just One More Thing Every customer who walks into your store is an impulse sale opportunity, according to a study conducted by TimeTrade Systems, Inc., which found that 82 percent of consumers purchase more than they originally planned once they’re in a store.

Applied to Retail: Brick-and-mortar stores are the top spots for shoppers to spend impulsively, so keep your impulse displays fresh and continue to bring in new items.

In addition, 84 percent of Americans have made impulse buys at some point, up from 75 percent in 2014, according to 2016 data from CreditCards.com. Princeton Survey Research Associates International conducted the poll of approximately 1,000 adults for CreditCards.com.

Find unique or low-cost local goods that catch customers’ attention, and place them in areas where shoppers spend time waiting, such as at the key counter or near the cash register. Cross-merchandise products such as hand sanitizer on clip strips near camping gear, or put bug spray near the lawn chairs and firewood.

An impulse purchase, according to the poll, is defined as an “unnecessary or unplanned decision to buy a product just before the purchase was made.” The study also found people aren’t just making small impulse buys; they are spontaneously purchasing big-ticket items, as well.

To learn more about the impulse category and ways other retailers are merchandising their impulse products, turn to Page 56. And visit www.TheRedT.com/Q1Trends for first-quarter 2016 data on housing trends and consumer confidence.

5 in 6

Where Most Shoppers Make Their Impulse Purchases

Americans have made impulse purchases, most commonly in person and for themselves.

54% of respondents have spent $100 or more on an impulse buy.

Source: 2016 survey about impulse purchasing, CreditCards.com

HARDWARE RETAILING | July 2016

Have Made Impulse Buys in Store . . . . 79% Have Made Impulse Buys on a Computer . . . . . . . . . . . . . . . . . . . . . . . . .13% Have Made Impulse Buys on a Smartphone or Tablet . . . . . . . . . . . . . . . . . 6% Have Made Impulse Buys Through Other Means . . . . . . . . . . . . . . . . . . . . . . . . . 1%

Okay guys, listen up! This year we’re getting healthy and going all natural. No more junk food with synthetic additives like menadione sodium bisulfite complex or accelerated growth compounds like choline chloride - and definitely nothing with artificial flavors! Sound impossible you say?

Not at all, just look for Cole’s in the feeder.”

NO Added Synthetics • NO Added Chemicals • NO Artificial Flavors Just All Natural Bird Seed for Your Feathered Friends. Remember...

If you can’t read it, Don’t feed it!™

NO BIG-BOX COMPETITION!

1-877-426-8882 • coleswildbird.com

Retailers Honor 35 Products from the 2016 National Hardware Show® with Retailers’ Choice Awards

ver the past 50 years, Hardware Retailing magazine has been recognizing the coolest and most-buzzed-about products featured at the National Hardware Show® through its Retailers’ Choice Awards program. This year, a panel of volunteer judges selected a total of 35 products out of the thousands on display. This year’s panel included James Cabirac of Kief Hardware in Louisiana; Greg Schlecht of Greg’s True Value in Wisconsin; Gary and Judy Copeland of Valley Supply in Indiana; Kevin Walters of Buchheit Enterprises in Missouri; Daniel Harris of Palos Ace Hardware in Illinois; Will Aubuchon of Aubuchon Hardware in Massachusetts; and Jared Smith of Jared’s Ace Hardware in South Carolina. The Retailers’ Choice Awards differ from most awards programs in that it relies on the opinions

HARDWARE RETAILING | July 2016

of independent home improvement retailers. These recognize manufacturers who are delivering the products retailers need to attract customers. Continue reading to discover which products were considered the best by retailers in the industry.

While searching the showfloor for innovative items on the first day, each panelist walked about...

23,000 steps

TRACTOR WHEEL COVERS The Wheelies™ Tractor Wheel Covers™ are customizable wheel covers designed to dress up lawn tractors. Constructed with a durable chrome finish, the wheel covers won’t rust and can be securely attached to wheel rims. The covers are available in five color accents and in 6-inch, 8-inch, 10-inch and 12-inch diameters. GOOD VIBRATIONS 920-684-9310 or www.gvpower.com

ERGONOMIC RAKE Amazing Rake is an ergonomic pickup rake designed to take the backbreaking work out of yard cleanup by eliminating bending and stooping that can be hard on the knees and back. This lightweight 3-in-1 tool rakes, scoops and picks up yard debris while cutting yard cleanup time in half. R & R GROUP, LLC 800-826-6144 or www.amazingrake.com

TIE-DOWN STAKES PRODUCT LINE The Speed Cinch product line revolutionizes the way a user can secure ropes and cords with its patented “Feed It, Cinch It, Lock It” design. Speed Cinch eliminates the need to tie and untie knots and is made of impact-resistant nylon. Even when wearing gloves, the cinches are easy to use and are constructed of UV-protected material that preserves them for many years of use. SPEED CINCH, INC. 800-355-5244 or www.speedcinch.com

MULTI-PURPOSE CART The UpCart stair climbing folding cart combines an all-terrain chassis with a folding handcart. The UpCart’s design allows for function in most applications, including on stairs, sidewalk curbs, grass and gravel. When it is not in use, the UpCart folds completely flat for convenient storage. TRIFOLD, LLC 800-539-3653 or www.upcart.com July 2016 | HARDWARE RETAILING

Retailers’ Choice Awards 2016 WHEEL CHOCK AND TIE DOWN STRAP KIT Thoughtfully designed, the Wheel Chock and Tie Down Kit is ideal for individuals looking to secure an ATV, lawn mower or UTV. The system includes two 2-inch by 6-foot straps that are capable of covering 10-inch to 30-inch tires, and four powder-coated wheel chocks that permanently fasten to the floor in front and back of the tire. Universal in use, this system can be used to travel short or long distances, securely transporting cargo along the way. ERICKSON MANUFACTURING, LTD. 519-359-0736 or www.ericksonmfg.com

ERGONOMIC SHOVEL The Ergieshovel® is an ergonomically designed shovel, which reduces bending while shoveling through the placement of a second handle. Made in the U.S., the Ergieshovel has a powder coated steel shaft, a heavy-duty blade, extra-large d-grips and it comes with or without a galvanized steel wear strip. ERGIESHOVEL 800-749-1273 or www.ergieshovel.com

SWIVELHEAD SCREWDRIVER The Worx® 2-in-1 20 Volt Cordless Switchdriver™ Drill Driver with dual rotating chucks is designed to make switching between two bits faster and smoother. The electronic torque control feature helps eliminate over-driving and stripping screws. The powerful and variable 2-speed gearing tackles tough jobs around the house, shop and garage. POSITEC 888-599-3711 or www.positecgroup.com

HOSE TORCH KIT The Bernzomatic Hose Torch is made for high-heat soldering and brazing in hard-to-reach spaces. A hose and slender body provide maximum accessibility, while an adjustable swirl flame provides hot, efficient heat and fast soldering times. An instant on/off trigger makes one-hand ignition quick and easy, while a continuous run-lock button allows for extended use. BERNZOMATIC 800-359-9678 or www.bernzomatic.com

HARDWARE RETAILING | July 2016

Before

After

1-800-841-9473 | phifer.com

Retailers’ Choice Awards 2016

GAP-FREE PAINTING STRIP ‘SnotTape is a specially formulated, reusable-gel strip used in painting to fill and seal gaps, bumps and dips caused by irregular and textured surfaces. It works by creating a paint barrier that stops paint bleed. ‘SnotTape is designed for use on painted walls as well as brick, cement, wood and steel surfaces. ‘SNOT CO. 844-776-7668 or www.snottape.com

BUG REPELLENT ShooAway is a chemical-free bug repellent that prevents flies, bees, mosquitoes, gnats and wasps from outdoor barbecues and events. ShooAway’s gently rotating blades are holographs that refract light in such a way that when in use, it displays a color light show above the area and creates an atmosphere that repels unwanted insects. SHOOAWAY USA, LLC 916-800-8373 or www.shooawayusa.com

UNIVERSAL REPLACEMENT GRIP Re-Grip is designed to provide a safe and comfortable nonslip grip on any tool, handle or lever. Easy to install, the strong and durable elastic grip is held extended by an inner coil, forming a tube that fits over the handle. Users simply pull the tab at the bottom to unwind the coil, which allows the grip to shrink and compress securely to size. PREVAL® 877-753-0021 or www.regrip.com

MULTI-USE COOLER The Coolest™ is a multi-use cooler designed to address a wide variety of outdoor event needs. The cooler has a rechargeable blender, a wireless Bluetooth speaker, a waterproof USB charger, an LED light, a bottle opener, built in place settings and a tie-down bungee cord. It is made with oversized rubber wheels and a telescoping handle and is available in three bright colors. COOLEST, LLC™ 917-405-6563 or www.coolest.com

HARDWARE RETAILING | July 2016

LAWN GREETINGS MY YARD CARD® offers a unique line of yard greetings for all events and celebrations like birthdays, anniversaries and graduations. Users can stake in the yard a statement that stands over 18 inches tall and spans over 20 feet. All packages include a celebration message, stars, balloon, a specialty character and stakes for easy setup. MY YARD CARD, LLC 888-970-9319 or www.myyardcard.com

7,496 kwikset skus.

no minimum order. When a customer comes looking for a Kwikset style or fnish you don’t stock - HSI has you covered. We stock over 7,400 Kwikset SKU’s and are ready to ship each one the same-day from one of our fve warehouses across the country. And with no minimum quantity requirements, you can be the retailer with the supply for every Kwikset demand. Ofer your customers more with Kwikset from HSI.

RED WINE STAIN REMOVER Chateau Spill® is a red wine stain remover that is a professional-grade ESR® formula that interacts to combat wine and household spills. Chateau Spill is also available in versions that target general stains created by children. The product contains no chlorine, peroxide or phosphates and is safe for colorfast fabrics. ESR, LLC 512-814-6493 or www.chateauspill.com

available with No Minimums from

800-334-5625 | hardwaresuppliers.com July 2016 | HARDWARE RETAILING

Retailers’ Choice Awards 2016 VIBRATION ABSORBTION GRIP Comfort-Tech™ Innovative Grip-Wrap enables users to work longer with reduced fatigue while preventing tingling, soreness and unnecessary stress in arms and hands from prolonged use of power and hand tools. For a comfortable and secure grip, simply wrap around the handle of any tool including hammers, axes, shovels, chain saws and weed trimmers. The Grip-Wrap is made in the U.S. and offered in an array of colors. SIMS VIBRATION LABORATORIES 877-257-2761 or www.limbsaver.com/comfort-tech

LED EMERGENCY BULB The Black & Decker® LED Emergency Bulb provides safety and security with instant lighting whenever its needed. The emergency bulb turns on automatically in the event of a power outage. Users can replace their existing light bulbs with the emergency bulb in any standard medium-base socket. The emergency bulb’s built-in lithium-ion battery recharges during regular use, providing up to 4-hours of on-demand emergency lighting. THE NCC, LLC 800-730-3707 or www.thencc.com

AUTOMOTIVE REMOTE LIGHT SYSTEM The C3050K Wireless Remote Light Management System by BlazerInternational® helps users easily place lights onto their vehicles. The C3050K eliminates drilling through the firewall or dashboard, is fast and easy to install and eliminates the need for a switch. The unit has eight terminals for wired connections while the remote provides easy access for switching lights on/off. BLAZER-INTERNATIONAL®/ MAT HOLDINGS, INC. 800-241-3808 or www.blazer-international.com

limitless options. same-day shipping. Baldwin is about creating a signature look that seamlessly blends hardware with a style unique to the homeowner. No limits. No boundaries. HSI ofers retailers the Baldwin Estate and Reserve collections with same day shipping and no minimum order requirements. A world of customization, just a phone call away. Ofer your customers more with Baldwin from HSI.

PAINT MIXER ATTACHMENT The HYDE® StirWhip™ mixes heavy materials without overworking a user’s drill. Its nylon “fingers” flex to fit through pour spouts and reach into corners for more complete mixing and maximum lift from the bottom of multi-sized containers. StirWhip is an excellent choice for paint, compound, concrete, grout, thinset, epoxies, lacquers, adhesives and sealants. The 3/8-inch steel hex shaft is made for use with 500 to 1500 rpm drills. HYDE TOOLS, INC. 800-872-4933 or www.hydetools.com

with Same-day Shipping from

800-334-5625 | hardwaresuppliers.com July 2016 | HARDWARE RETAILING

Retailers’ Choice Awards 2016 REPLACEMENT LINE HOSE The HammerSTOP™ is a supply line that integrates two patented technologies to eliminate damaging water hammer in dishwashers, icemakers and washing machines. The HammerSTOP absorbs unexpected surges in water pressure and is rated with a working pressure of 125 PSI. HammerSTOP™ features a UltraCore™ supply line that is resistant to chemicals, leaves no taste or odor in the water and is lead- and BPA-free. DANCO 800-523-5135 or www.danco.com

REUSABLE ICE PACK Chill Puck is a refreezable ice pack designed specifically for an individual drink. Molded to fit the bottom of 12- or 16-ounce cans and standard size bottles, the Chill Puck stays cold for up to 45 minutes and maintains up to a 10-degree cooler difference in beverage temperature. CP CONCEPTS, LLC 847-7722820 or www.chillpuck.com

HARDWARE RETAILING | July 2016

BOTTLE OPENER SUNGLASSES Cheers’ patented bottle opener sunglasses keep the sun out of users’ eyes and guarantee that one always has a bottle opener on hand. Constructed with UV protection and Tin-Pin technology, Cheers sunglasses come in a variety of designs, types and colors. The sunglasses are great for the beach, camping trips, music festivals and extreme sports. CHEERS, LLC 855-375-9771 or www.cheerssunglasses.com

high style. high tech. high speed. HSI stocks all the Schlage options your customers are looking for. So if the product isn’t on your shelf or in your warehouse, we’ve got you covered. From stylish levers, knobs and handlesets to the latest Bluetooth enabled Schlage Sense, HSI has it. And with same-day shipping from our fve warehouses and no minimum order requirements, you can satisfy your customer without the typical hang-ups. Give us a call and see how special order is supposed to work.

SMART PHONE GRIP LoveHandle® Smartphone Grips are designed as an accessory for a variety of electronics. The universal fingertip strap features a 3M® adhesive to attach to any case, phone or tablet, giving users a comfortable and secure grip during handling. The LoveHandle comes in gold, rose-gold and silver colors. It also comes in a new extra-large size for tablets and e-readers. DMD PRODUCTS, LLC 281-778-2051 or www.lovehandle.com

with Same-Day Shipping from

800-334-5625 | hardwaresuppliers.com July 2016 | HARDWARE RETAILING

Retailers’ Choice Awards 2016

KINDLING FIRE STARTER Stump Chunks is an all-natural fire starter made entirely from tree stumps. It is designed for users who want a faster and environmentally safe way to light their wood stoves, fireplaces, fire pits or charcoal for grilling. Stump Chunks is made in the U.S. and designed to be used year-round. STUMPCHUCKS, LLC 603-935-5405 or www.stumpchunks.com

INFRARED PORTABLE HEATER The Heat Storm Workspace Heater is the perfect heating solution for shops, garages, job-sites and open or enclosed patios. It is weatherproof and dust-proof. Mounted either horizontally or vertically, the carbon fiber bulb makes this unit durable. The Workspace heater is compatible with the company’s Tripod Stand and Rollcage for increased product portability and versatility. ENERGY WISE SOLUTIONS, LLC 877-891-7333 or www.heatstorm.com

STORAGE BIN TRACKS BinTRACKS™ offers a simple, innovative solution to solving everyday storage needs. It is a system designed to hang bins and totes from garage, basement and closet ceilings, taking up less floor space. BinTRACKS can be used in compact spaces, is easy to install and is expandable as the homeowner’s storage needs grow. HYPERLILY, LLC 951-888-0629 or www.bintracks.com

HARDWARE RETAILING | July 2016

NATURAL BUG REPELLENT Bug Protector™ is a DEET-free, all-natural bug repellent that provides long-lasting protection from mosquitoes, gnats and other insects. Developed for outdoor use, Bug Protector is made from a blend of four essential oils. It is safe for people and pets, can be used on gear and is made in the U.S. PROTECTOR PRODUCTS COMPANIES 888-301-4820 or www.bugprotector.com

PEERLESS IS COMMITTED TO BEAUTIFUL AND FUNCTIONAL BATHROOM PRODUCTS. SOLAR BOTTLE LANTERN KIT The Afterglow™ Solar Bottle Lantern Kit from Echo Valley® transforms any empty beverage bottle into an illuminated solar lantern. The product consists of a solar module and integrated rubber stopper with three strands of copper wires, each containing several micro-amber LED’s, which create dramatic lighting at night. A steel wire hanger is included in the kit so that the Afterglow lantern can be hung up as well as used as a tabletop display.

Finding the right product at the right price doesn’t have to be complicated. Peerless offers an assortment of affordable shower and tub shower ensembles, in a variety of styles. Choose from neo-angle, round and corner entry shower kits, and a full line of bathtub and shower walls. With Peerless, we make it easy to get exactly what you need.

ECHO VALLEY® 800-592-9678 or www.echovalley.com

July 2016 | HARDWARE RETAILING

Retailers’ Choice Awards 2016

REPAIR PUTTY Erase-A-Hole is a wall repair product that easily allows the user to patch holes in drywall, plaster and wood surfaces. Users apply Erase-A-Hole in a circular motion, scrape the excess with the cap and repaint or stain. It dries white, does not shrink, can be sanded and is made in the U.S. InventHelp®/Intromark 800-851-6030, ext. 1365 or www.marketing@intromark.com

DUMMY LOCK The Not-A-Lock by EK USA provides the appearance of security while preventing the user from being locked out. The Not-A-Lock opens after someone pulls the latch, so no key is necessary. It is constructed to guard against inclement weather. It can be used on sheds, trailers and any low-security application. EK USA 800-338-2030 or www.ekusa.com

CATEGORY LEADER FISHING AND HUNTING KNIVES

7-Inch Tapered FLEX Fillet 4-Inch Rhino

Get them in your store today! BECOME A DEALER

TODAY 30

HARDWARE RETAILING | July 2016

DEALER BENEFITS! - Dealer Direct Pricing - National TV and Print Ads - Displays & Marketing Materials - Online & Toll Free Dealer Support -

RECREATIONAL EQUIPMENT WAGON The Big Kat Buggy is a recreational wagon that can be loaded with supplies, then attached to a tow hitch for transport. Upon arrival, users simply remove it from the vehicle and roll it to the site. Big Kat Buggy is great for families and sports enthusiasts, as it means no longer having to make multiple trips. BIG KAT BUGGY 912-623-2138 or www.bigkatbuggy.com

AIR COMPRESSOR Wood Industries’ Eagle Silent Series Compressor line is specifically designed for the professional contractor. Features include gauges set on 60-degree angles and metal tubing and control panels that help guard against the elements at the jobsite. There are seven different portable and silent compressor styles and sizes in the product line, ranging from a 1- to a 20-gallon unit. WOOD INDUSTRIES, INC. 800-551-2406 or www.eaglecompressor.com

Dual-Slide Assortment Racking System

New Exclusively from Midwest Fastener! Double your assortments overnight with our new dual-slide specialty assortment racks. Did you know up to six out of 10 shoppers visit the fastener aisle? It is proven that specialty product drives traffc. Now, making your department a specialty destination can be accomplished without extending your fastener aisle linear feet.

2015

Ph:800.444.7313

fastenerconnection.com

Retailers’ Choice Awards 2016 ERGONOMIC DUSTPAN The Step-On-It® Dustpan makes sweeping up messes easier by minimizing continual bending to reposition the dustpan. A foot hole is molded into the ergonomic Step-On-It design, allowing the user to guide and hold the dustpan in position while sweeping. Molded teeth along the sides of the product clean material out of the broom, and a pliable rubber edge creates a tight seal with the floor so dirt is swept directly into the pan. BUTLER HOME PRODUCTS, LLC 508-597-8000 or www.cleanerhomeliving.com

MULTI-USE ICE FUNNEL The Ice Shoot is a plastic funnel that facilitates channeling ice from an ice dispenser directly into any container. Preventing kitchen floor ice spills, the Ice Shoot by EK USA is the first-ever ice funnel that makes filling a blender, cooler or ice pack a simple process. The product is made in the U.S. EK USA 800-338-2030 or www.ekusa.com

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

frogtape.com

PORTABLE FIRE Burnie™ Grill is a self-contained, single-use fire you can take nearly anywhere. No need to gather wood or lighter fluid, as the Burnie lights with just one match. It’s 100-percent natural, made out of alder wood, contains zero chemicals, leaves no waste and requires no cleanup. Much lighter than other products on the market, the Burnie weighs 3 to 5 lbs. ICEROCK, LLC/BURNIE™ GRILL 904-716-6323 or www.burniegrill.com

SEWER AND DRAIN CLEANER Fast Orange® Grease X is a specially formulated professionalgrade laundry detergent designed to clean grease, stains, tar, oil, automotive fluids and odors from work clothes. Featuring a built-in pre-treater that removes up to 99 percent of automotive stains and odors, Grease X incorporates a proprietary soil release/antistatic agent that repels future soils and keeps the washing machine clear of transferring residual grease to the next wash. PERMATEX® 860-543-7574 or www.permatex.com

July 2016 | HARDWARE RETAILING

Checkouts MERCHANDISING

Providing Customers With a Little Pinspiration

hanks to a little help from Pinterest, customers at Limeberry Lumber & Home Center in Corydon, Indiana, can find project ideas the moment they walk in the store. The front of the store now features a rotating Pinterestfocused endcap, which includes a large banner with the Pinterest logo, a display of the finished project and the supplies needed to bring that project to life. “We want to inspire the DIY nature of every Pinterestloving customer who enters our store,” says owner and president Scott Limeberry. The endcap is a new idea, started this spring after a few Limeberry Lumber staffers found inspiration in some new products they’d discovered at their co-op’s recent market. Endcaps are rotated monthly. The first one featured DIY chalkboard planters. The top shelf showcased the finished project, and the shelves below housed the necessary materials, including terra cotta pots, chalkboard paint and chalk—everything customers needed to create customizable planters for their home gardens. Marketing coordinator Katlyn Whelan designed the Pinterest banners, which she had printed at the local UPS Store for about $80. “It was well worth it, as we plan to use these banners for many seasons to come,” Limeberry says. Customer response has been positive, he says. “Our customers love the idea. Many have said they can’t wait to see what we come up with next.” In fact, the staff built off the success of the endcaps and the store featured a Pinterest project as part of its first ladies’ night, held this past spring. The sold-out event was held in conjunction with the store’s grand reopening and included supplies for attendees to put together a Mason jar wall vase. Attendees also enjoyed wine from a local winery, appetizers from a local restaurant and chair massages from a local spa. “We received so much positive feedback,” says Limeberry. “Attendees said they’d been to similar events at larger stores, but they sometimes had to travel 45 minutes to attend. They loved having something local that catered directly to women in our community.”

“We want to inspire the DIY

nature of every Pinterest-loving customer who enters our store. —Scott Limeberry, Limeberry Lumber

”

Top: The Pinterest project endcap is rotated out every month. Bottom: The store’s first ladies’ night, which include a how-to workshop for a Pinterest project, was part of the store’s grand reopening and was a sold-out event.

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 | July 2016

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Checkouts

PROMOTIONS

Bingo Winner in Aisle 4

t’s usually difficult to get children to stand still for very long, but Kami Underdahl managed to do it… at least for a few minutes. The children in her store were playing Floor Bingo, one of the activities she created as part of the store’s grand opening event this past May. To play, each child had to stand on one of the specially marked “bingo squares” on the floor and wait for their number to be called. Those standing on winning squares received a prize. Underdahl Hardware Hank in Red Lake Falls, Minnesota, is the third in the family’s collection of stores in northern Minnesota. As Underdahl invited the community to celebrate the grand opening, she wanted it to be a family event. Any time there’s a special event, she looks for ways to include children in on the fun. Earlier this year, Underdahl celebrated the 10th anniversary of her store in Karlstad, Minnesota. The date fell on Easter, so she marked the occasion with an in-store egg hunt. Nearly 50 children attended the hunt, searching for eggs and hoping to win a prize. “We want family events that give kids good memories about being in a hardware store,” she says, “and giving them something to do gets their parents in the door.”

The Floor Bingo activity gave children something to do while their parents explored the store.

MERCHANDISING

How Much is That Sasquatch in the Window?

ustomers at the Buchheit store in Jackson, Missouri, don’t have to search very hard to spot the elusive Sasquatch. In fact, they’ll find the legendary Bigfoot right off the main aisle guarding the gigantic copper still also on display. These kinds of creative displays can be found throughout the Jackson store, which is one of eight total in the Buchheit chain. While Buchheit locations are serious about offering their customers a complete range of hardware, farm, outdoor power equipment and lawn and garden supplies, they also mix in an assortment of other eclectic items, ranging from smoked hams and whiskey jugs to old-fashioned pedal cars and antique signs. On the retail spectrum, the stores fall somewhere between a Home Depot, Tractor Supply, Bass Pro Shop and Cracker Barrel, with something for everyone to see. Other unique sights for visitors include turkey and deer tracks painted on the floor to guide them through the massive selection of unique candies, treats and other impulse items; a full selection of antique-looking signs on the wall opposite the checkout lanes; and a stuffed groundhog that recounts the operation’s founding on Groundhog Day.

Bigfoot is just one of several creatures that shoppers at Buchheit’s Jackson location may find as they browse the aisles.

July 2016 | HARDWARE RETAILING

Stepping In New Owners Discuss the Challenges of Buying a Business

tepping in as the next-in-line owner of his family’s business has added significantly to Pete Klingbeil’s to-do list. One of his tasks was earning the trust and respect of customers who had done business with his dad for decades and didn’t recognize the 20-something as anyone but a young newcomer. All of the other employees of Klingbeil Lumber in Medford, Wisconsin, were at least 10, if not 20, years older than Pete, and his father Bill had been an owner for nearly 40 years. “Oh, you’re Bill’s boy,” customers would say when Pete introduced himself. But he has built rapport over time with staff and customers by working alongside them and serving them–spending months loading trucks with lumber, training employees to use a new POS system and putting in 12-hour days. Building those relationships has been a process, though, and he hasn’t outgrown being “Bill’s boy” to all of the contractors and homeowners who buy supplies from him. However, Pete is learning by doing, and he is certain that

as his dad hands over more responsibilities—such as managing payroll and running the lumberyard—he will be ready to be the boss when Bill retires in two or three years. In the home improvement industry, businesses like Klingbeil Lumber regularly pass from one owner to the next, often through generations of a family, to a trusted employee or to an outside buyer. Every succession story is different. But each one involves months or years of planning and preparation, even if the stages of transition vary in order and style. In the following pages, we’ll share perspectives from retailers who have purchased or are working to buy businesses. This article is the first of a two-part series on succession planning, and offers the perspectives of different types of buyers who are either the next generation of a family to take over or are the first nonrelatives to come in as owner-operators. We’ll provide specifics on how the retailers found advisers, figured out financing and prepared to lead. Next month, you’ll hear from the sellers of those same businesses and learn their side of the stories, including the processes they went through to sell.

Brandon Buckalew

Pete Klingbeil

Chris Hughes

Jim Stoner

EGF Hardware Hank

Klingbeil Lumber Co.

Hardware Plus

Buckalew and his father have been working through a five-year transition plan. Brandon is buying the business from his parents later this year.

Klingbeil began buying the business from his father five years ago by making payments from his salary. His dad plans to retire within two or three years.

As a Hardware Plus employee, Hughes had several years to learn the ins and outs of running the business before purchasing it in 2008.

Ace Hardware of Cape Haze

HARDWARE RETAILING | July 2016

Stoner came across Ace Hardware of Cape Haze when he was looking for a business to buy, and bought the store in 2014.

Stage 1: Preparing to Buy • Make a financial plan. • Identify a home improvement business to buy. • Consider if you and your family are emotionally ready for the added responsibilities.

Stage 2: Finding Your Advisers • Find a CPA who can look closely at financials. • Hire an attorney who can guide you through contracts and other paperwork. • Talk with mentors who are small business owners.

Stage 3: Choosing What to Buy • Choose a business to help achieve your goals. • Decide whether to rent or buy a building. • Consider purchasing adjacent property so you have space to grow.

? Stage 4: Financing the Purchase • Pay cash for a down payment. • Obtain loans to finance. • Ensure you have money to cash flow the business after taking over.

Stage 5: Setting a Timeline • Meet with advisers. • Make sure you’re ready to buy. • Work with the owner to plan a smooth transition in leadership.

Stage 6: Taking Charge • Learn about the company culture from the owner and employees, and how to lead in it. • Finalize the purchase agreement. • Congratulations! You’re the boss!

July 2016 | HARDWARE RETAILING

Deciding You’re Ready to Buy Buying a business is no small task. The first step is determining that you are in fact ready and willing to do so. Have you taken a close look at the big picture? The day-to-day duties? The store’s finances? Your personal finances? Are you financially ready and able to buy a business? It’s important to have a well-thought-out plan before you take the step into ownership. You’ll need a strong credit history, cash for a down payment and the ability to cash flow the business going forward. For many new owners, especially those who have grown up or worked for several years in the business, buying is a decision that’s been a long time coming—it’s just been a matter of when the transition will happen. Even though a transition may have been discussed, many new owners may not take a more in-depth look at the process until they are approached by their parents or the owner about buying the business. Brandon Buckalew of EGF Hardware Hank in East Grand Forks, Minnesota, is currently working to buy the store from his parents, and has plans to finalize the purchase later this year. His dad, Craig, approached him several years ago about the possibility of purchasing the store in the near future. When Brandon expressed an interest, the two set up a five-year transition plan, which has included Brandon taking on more responsibilities over time and learning more about the financial side of the business. “I don’t have a business education or an accounting background or anything like that, so my dad and I would sit down and go over balance sheets quite a bit until I could make more connections,” he says. Jim Stoner, owner of Ace Hardware of Cape Haze in Cape Haze, Florida, has a different story. He had

“It was important

to get a handle on managing employees and other aspects of the business before it was up to me to do it on my own.

”

—Brandon Buckalew, EGF Hardware Hank

HARDWARE RETAILING | July 2016

built a career in the construction industry and had known for some time that he wanted to operate his own business. He bought the store after he realized he could use his management and business acumen to make his own company successful. Stoner looked at several hardware stores before ultimately choosing to purchase Ace Hardware of Cape Haze, which he found through a broker. “I liked the location, the size, the co-op and the owner,” Stoner says. “Everything looked good with the financials, and we decided to move forward with the purchase.”

Identifying Advisers Buying a business can be a complex process, and it’s important to find a team of advisers who can successfully guide you as you take this big step. No purchase should be made without advice from a CPA and attorney who can help you make sure you have your financing in order and advise you on any legal issues that may arise. There are plenty of contracts you’ll have to read through, and they contain lots of legal jargon. A good lawyer can help you better understand what the paperwork says, and let you know if he sees any red flags. He can also advise you of any terms or agreements you will want to be sure to include in the paperwork. And a good CPA can sit down with you and your balance sheet and help you make sure you are making a sound financial investment. He can also help you assess the value of the business and figure out if you do in fact have the money to buy the business. Remember, you not only need the cash to purchase—likely hundreds of thousands of dollars—but you’ll also need to have the money to cash flow your business. Make sure you have a full financial understanding of what it’s going to cost throughout the purchase process and beyond. Make sure your team of advisers understands the independent home improvement business, or is willing to learn about it. The more knowledge your team has, the better advice they can give you as you take this big step. When Chris Hughes, owner of Hardware Plus in Osceola, Indiana, was planning to buy his business—which he purchased in 2008—he worked with an attorney to set up a corporation, which protected him legally, and worked with his CPA to make sure he had financials in order. His CPA was the same one the then-owner had used, so he knew he was teaming up with someone familiar with the industry. Hughes also spoke to a couple of other retailers who were going through the transition process to get some feedback and discuss what had and hadn’t worked for them.

Even though Chris Hughes worked at Hardware Plus for years before buying the store, he discovered he still had plenty to learn about an owner’s roles and responsibilities.

The Buckalews spoke with a representative from their distributor who handles taxes and other financials, and got some advice from him as they planned the transition. Stoner, meanwhile, says he can’t say enough good things about his CPA. “A good CPA firm can advise you along the way and is worth every penny. A lot of people can look at a spreadsheet, but where you might miss something critical, a good CPA will find it for you.” He also brought a couple of brokers and an attorney on board. Some succession plans may involve a smaller team. The Klingbeil family didn’t have a team of advisers who helped with the plan, although they did work with an accountant. Pete’s uncle, Tim, who also works at the store, serves as a mentor and adviser to Pete as he works to take over the store. Pete’s father asked Tim to serve as Pete’s mentor to help him grow in the business while avoiding potential father-son conflict. “My uncle and I are very close, and we’re able to talk like business partners,” Pete says. “We go to each other to make decisions.”

Picking a Financing Route Financing is key to the success of any business purchase, and the retailers we interviewed took a variety of approaches to coming up with the funds to buy their stores.

Buckalew is putting down a percentage of the total purchase when he buys the business this fall, and will make payments over time to pay for the rest. At least, that’s the plan—it also depends on what the bank says. He and his father already agreed that if interest rates were too high or the capital Brandon put in wasn’t enough, they would hold off on the process. “My dad didn’t want to put me in a position to fail,” he says. There are other ways to finance a large purchase. Stoner used a combination of a loan through the U.S. Small Business Administration and his current assets. He had built up a substantial retirement account while he was working in construction, and rolled the money into a selfdirected 401(k) so he could invest it in the purchase of Cape Haze Ace. Stoner’s self-directed 401(k) allowed him to choose what businesses to buy stock in, and allowed for that stock to come from his own company. The SBA loan covered the remainder of the purchase price. Stoner says it’s important to be thorough, not just in looking at financial documents, but also when looking at the business and everything that comes with it—especially when inspecting a business prior to closing on it. “Know what you’re getting,” he says. “Don’t assume everything is in tip-top shape.” He didn’t catch that a forklift needed significant repairs, and says he would’ve

July 2016 | HARDWARE RETAILING

noticed the problems if he had been more thorough in evaluating the value of the business assets, including equipment. “It’s up to the buyer to find these things out,” he says. Pete Klingbeil, a fourth generation owner, is taking yet another approach, with payments toward his business purchase automatically coming out of each of his paychecks.

Planning the Transition As you’re planning your takeover, don’t focus so much on the financial side that you forget about the emotional toll of being on call 24/7, handling employee conflict and solving problems for unhappy customers. Taking over a business is no easy task. There will be long days, sleepless nights and plenty of problems to solve. Of course, there will also be great rewards. Some retailers spend several years making a succession plan. For others, it’s a much shorter process. Buckalew and his parents put together a five-year plan to transition the store to Brandon, and he’s glad he’s had that time to work on preparing. “I would suggest anyone who has time to get involved in the business before taking over ownership should do so,” he says. “It was important to get a handle on managing employees and other aspects of the business before it was up to me to do it on my own.”

His parents still stay involved in the store and plan to help out on the salesfloor once the transition is complete. However, they will gradually work less and less. “My dad really enjoys working with people and helping them, and he knows the products and the projects well,” Brandon says. “He’s a big asset to the business, of course. I think he will like being able to not have to worry about the business and just have fun helping people.” Hughes says he was happy to have a couple of years to plan the transition with former owner Mike Monserez. They spoke with their co-op’s territory manager to make him aware of the changes, too. “We knew one day it would happen, so we were able to be prepared even though we didn’t know exactly when it would happen,” Hughes says. “We planned ahead well, and everything went smoothly.” Monserez, too, cut back on time at the store as he transitioned ownership to Hughes. They planned out what days Monserez would work and how much he would earn. Stoner’s transition was a much quicker one. He first spoke with then-owner Harold Staats in December 2013 and purchased the business less than seven months later. After closing, Staats continued to work at the store three days a week for an additional three months while Stoner learned the ropes of

Jim Stoner bought Ace Hardware of Cape Haze after negotiating a deal with then-owner Harold Staats.

HARDWARE RETAILING | July 2016

“It’s a whole

different world when you’re the one making the schedule and signing the checks.

”

—Chris Hughes, Hardware Plus

was right. They’re great people and good workers, but it’s a whole different world when you’re the one making the schedule and signing the checks.” Hughes also brought more technology to the store, a task Monserez had been uncomfortable with when he owned the business. Hughes was instrumental in getting the store on its first POS system in 2005 and says the data from that, coupled with his co-op’s rewards program, helped him reach more customers and bring in more sales in a struggling economy during the recession years.

Are You Ready to Buy? running the business. One of Staats’ managers also stayed at the store for three months after the purchase before transferring to the other store Staats still owns. The other employees stayed at Cape Haze Ace with Stoner. “This way, I wasn’t going into it totally cold,” Stoner says. “It was an extremely good transition.” Pete Klingbeil is in the process of purchasing his family’s business, but his dad, Bill, has no plans to slow down just yet. Bill expects to retire in the next two or three years, but right now, he’s still working 40 to 50 hours each week. Pete says he doesn’t feel ready to take over the business yet, but Bill is progressively giving him responsibility, and Pete knows he will be prepared when his dad chooses to retire. In the meantime, he also knows he still needs to learn more of the financial side of the operation, and he’s still learning about taking inventory and building relationships with vendors. He handles most of the advertising and hiring, and he’s learning more about the lumber side of the business. When they switched POS systems, Pete handled all the employee training. He also led the company’s change in distributors in 2014. “I’m doing more day-to-day activities than I used to,” he says. “I’m not just sitting around waiting for the business to be mine.” Buckalew started with human resources responsibilities, including payroll, scheduling and hiring new employees. Once he’d gotten some experience there, he also took on advertising and marketing duties and then continued to add additional tasks over time. Hughes found that working with employees, especially on tasks such as scheduling, was the biggest challenge. “Mike told me the most difficult part of running the store would be the employees,” Hughes says. “I was working elbow to elbow with them and thought he was crazy, but he

Stoner encourages anyone who has the opportunity and desire to purchase a business to do so—and sooner rather than later, if possible. In fact, he wishes he’d had the opportunity to buy his own business many years earlier. “If you believe you can do it successfully, don’t wait—go for it,” he says. Keep in mind that it’s important to know what your goals and wishes are, but also that you need to keep the seller’s ideas in mind as well. In the end, both parties need to think about what’s best for the company. “I don’t think the seller can be so in love with the way things are that he or she isn’t willing to change, and the buyer can’t be so in love with the planned changes that he or she isn’t willing to bend on them,” Buckalew says. If you’re thinking ahead about purchasing your family’s business or the business where you currently work and want a better idea of whether you’re ready to buy, Hardware Retailing can help. Go online to TheRedT.com/buyingquestionnaire for a questionnaire to assess how prepared you are to take over the business.

All in the Family Buying a business from a family member has the potential to become a complicated process. To look at the family dynamic and how it could affect the transition of a business, read Hardware Retailing’s Q&A with Wayne Rivers, co-founder and president of the Family Business Institute. Part of the Q&A is published on Page 74, and the rest is available at TheRedT.com/succession-expert.

This article was written by Hardware Retailing editors Kate Klein and Liz Lichtenberger.

July 2016 | HARDWARE RETAILING

HARDWARE RETAILING | July 2016

THE INDUSTRY’S

BIG NIGHT NRHA Honors the 2016 Young Retailers of the Year By Jesse Carleton, jcarleton@nrha.org, Hilary Welter, hwelter@nrha.org

hen the 2016 Young Retailers of the Year took the stage at the awards banquet in Las Vegas in May, the optimism was palpable. The eight honorees showed they had the youthful excitement and business acumen to lead the industry far into the future. They were also joining a long tradition. This year marked the 20th anniversary of the North American Retail Hardware Association’s (NRHA) Young Retailer of the Year program. It’s designed to honor the significant achievements of industry retailers 35 years and younger. The 2016 class of Young Retailers, like those before them, overcame obstacles with hard work and creative ideas. They are students of the industry, seeking educational opportunities wherever possible. And as they propel their businesses forward, they invest themselves in their communities and the lives of those around them. “An entrepreneurial spirit tempered with a sense of responsibility toward their communities is what makes this year’s honorees an outstanding group of retailers,” says Bill Lee, NRHA president and CEO. “To be selected as a Young Retailer of the Year is an honor, and these young leaders exemplify the true spirit of the independent retailer,” he says.

“Rest assured, the future of the industry is in good hands.” The awards banquet was held as part of NRHA’s All-Industry Conference, which is co-located with the National Hardware Show®. The program, sponsored by the American Hardware Manufacturers Association, Apex Tool Group, Delta Faucet Company, Fluidmaster, Intertape Polymer Group and Midwest Fastener Corporation, recognizes winners in three categories: stores with less than $2 million in annual sales, stores with more than $2 million in annual sales and multiple-store operations. “We’re thankful that our sponsors stand with us in investing in the ongoing success of the independent channel,” says Lee. You can read more on the following pages, but for a full profile and video presentation of each of the 2016 Young Retailers of the Year, visit TheRedT.com/2016-yroty.

THANKS TO ALL OUR SPONSORS

July 2016 | HARDWARE RETAILING

“I have always

felt that the more connected people feel to their community, the more they will do in the community.

”

Travis Hellvig Operations Manager Hartford Building Center, Hartford, South Dakota Under $2 Million in Annual Sales

hile Travis Hellvig was barely out of college when he took on leadership at the family business, he proved he could handle the pressures of business and led the store to record high sales two years later in 2015. He also showed his maturity with the importance he placed on community involvement. In his local elementary school, he is active in an organization that teaches children about entrepreneurship, and he and his wife, Erika, coach a fifth-grade boys’ basketball team. He also had a hand in creating a local Christmas event and a farmers market, both of which draw together local businesses and the community. “I feel it’s very important to be involved in the community of Hartford, whether it’s with other businesses or just helping a neighbor in need,” he says. “I enjoy giving back to the community that has been great to us in so many ways.”

HARDWARE RETAILING | July 2016

“I want to have

a store that isn’t replicated anywhere else, so we have to be a destination with a staff that’s incredibly knowledgeable.

”

Marc Currie President Niece Lumber, Lambertville, New Jersey Over $2 Million in Annual Sales

arc Currie is the type of guy who’s committed to new ideas and is always pushing for positive change. Since day one, he’s been focused on making Niece Lumber a unique business with high-quality products and a modern vibe. He’s added new categories, remodeled the store and hugely improved the company’s online presence to make the business a destination for excellence. Currie attributes a great deal of the store’s success to his staff, and has worked to earn their commitment. “I knew I had to gain their respect, so I went out and earned it,” says Currie. “I took initiative to become a better manager and leader, and I made good decisions that worked out, so my staff has confidence in me.” He’s also earned the trust of his community, in supporting organizations including the Eagle Scouts, local high school and historical societies. He is also the Little League vice president.

July 2016 | HARDWARE RETAILING

“My goal is to

grow business revenue, and I’ll keep working and reinventing the store until everything meets my expectations.

”

Richard Lukowiak General Manager Johns Creek Ace Hardware, Johns Creek, Georgia Over $2 Million in Annual Sales

ot long after Richard Lukowiak joined the family business, he faced what seemed to be an insurmountable challenge. A leasing crisis gave him 90 days to find a new location for Johns Creek Ace Hardware or close the business. He turned the crisis into an opportunity, moving the business into a new space and taking advantage of the change to re-energize. Lukowiak doubled the store’s earning by adding niche products, revamping his most popular departments and enhancing merchandising efforts. Additionally, he’s improved customer service by implementing new employee uniforms, creating a code of conduct and investing in staff training. Being charitable is also important to Lukowiak. He supports local schools, the police department and organizations that assist veterans each year, and makes it a priority to hire young adults in an effort to help them develop job skills.

HARDWARE RETAILING | July 2016

“If there was any

genius on my part, it was in finding two very talented people and putting them in a situation where they could help build this company.

”

Kyle Martinez Owner Interstate Building Materials, Many, Louisiana Over $2 Million in Annual Sales

ost, if not all, of those honored as Young Retailers of the Year will point to employees and mentors who have helped propel them to success. For Martinez, the influence his employees would have on his success began before he had even finalized the purchase of his new business. He had always dreamed of owning a lumber and building materials operation. When one came up for sale, he created a detailed business proposal along with an aggressive timeline for setting that plan into motion, and then hired two friends to help. The gamble paid off, and the company has been profitable from day one. He started making deliveries the first day the lumberyard was open, and sales have been strong ever since. Today, less than two years later, the company has five delivery trucks and 14 full-time employees. In the community, he shares his leadership talent at the local chamber of commerce and his church.

July 2016 | HARDWARE RETAILING

“I’m always

looking for ways to be more efficient. What systems can we put in place to be better? What could we be doing that we’re not doing?

”

Jared Sawyer Owner Sawyer’s True Value, The Dalles, Oregon Over $2 Million in Annual Sales

tatus quo is not an option for Jared Sawyer. Since becoming involved in the family business, he’s looked for ways to make the company better. He made improvements to nearly every area of the store just as a new big-box competitor was entering the market. Backed by a team of employees who he says deserve equal share in the success of the business, Sawyer led the store through several remodels and multiple category resets, including the addition of 5,000 square feet to one side of the building, along with multiple new categories. One of his unique contributions is a drive-thru coffee shop in the store’s parking lot, which draws a lot of traffic to his street. Outside the store, Sawyer is involved in the local chamber of commerce as well as the local school system, where he’s taken his business philosophy to strengthen the community at large.

HARDWARE RETAILING | July 2016

“Our team is very

family-oriented. We’re in this together, and we want to build a business that has a lasting impact in the community.

”

Christian Herrick CEO Randy’s Do it Best Hardware, Timberville, Virginia Multiple Store Operations

or Christian Herrick, with every challenge comes an opportunity. When he learned that Walmart will be moving in next door, he created a complex and multi-faceted plan to do much more than survive. He plotted out in exact detail how he will use Walmart to his advantage. Customer service already set his company apart. “I emphasize two main points regarding customer service,” Herrick says. “First is the concept of putting people before tasks. Second is doing the things that nobody else will do.” Additional components for success include upgrading product assortment, enhancing visual appeal and unifying branding. Sales are continuing to increase as a result of Herrick’s efforts. He also helps his community, staying heavily involved with his church, a local homeless shelter and the chamber of commerce.

July 2016 | HARDWARE RETAILING

“I love that my

job is never the same. Managing a team, winning new customers, competing in the marketplace; it’s all fun.

”

Dan Moulton Dealer-owner Hanover Home Hardware Building Centre, Hanover, Ontario Alliston Home Hardware Building Centre, Alliston, Ontario Multiple Store Operations

ave fun, work smart: Dan Moulton’s approach to running a retail establishment has helped him thrive in a heavily competitive market. With a vision for creating a more efficient business, he led Hanover Home Hardware Building Centre through several major changes within his first year of ownership. Just three years later, he purchased an 80-percent share in nearby Alliston Home Hardware. While he pursues new growth strategies, he’s also built a positive working environment for his employees where everyone feels empowered to share their ideas. “You can’t control the economy or how many customers you have,” he says, “but you can control your attitude, integrity and work ethic. Our team has all three.” With that same positive attitude, he gives generously to numerous organizations and events, giving back to the community that has supported his business.

HARDWARE RETAILING | July 2016

“I’ve made it my

mission to always do the right thing and keep a simple business model with ‘ease of operation’ as the end goal.

”

Aimee Nichols Store Owner Berger Hardware, Hawthorne and Port Chester, New York Multiple Store Operations

hen Aimee Nichols became a partial owner of Berger Hardware at 24 years old, she implemented procedures to make the store run seamlessly. She improved inventory accuracy, streamlined the ordering process and added a variety of new services. Her new marketing initiatives and store events also helped increase foot traffic. A store remodel, acquisition of a new location and another remodel later, Nichols has driven serious sales growth and credits her success to the company’s core values. “We treat the store, the staff and our customers like family, and we vow always to do what’s right by them,” says Nichols. She’s also made a serious commitment to her community, raising more than $10,000 for pediatric cancer research through the annual store event, Cookies for Kids’ Cancer. She’s also president of the chamber of commerce and on the board of directors for Valhalla Ambulance, and she volunteers as a soccer coach.

July 2016 | HARDWARE RETAILING

Looking Back NRHA Young Retailer of the Year Awards Through the Years

or the past 20 years, the North American Retail Hardware Association (NRHA) has honored up-and-coming home improvement retailers age 35 and younger for their industry achievements with the Young Retailer of the Year award. “The individuals NRHA has honored as Young Retailers of the Year have grown in the industry and in their careers for the past 20 years,” says Bill Lee, NRHA president and CEO. “We have followed many of these individuals’ careers since winning and we are continually impressed by all of the wonderful things so many of them have gone on to accomplish. We’re thrilled to have been able to honor another set of extraordinary retailers for the 20th year in a row, and we look forward to continuing the tradition for many years to come.” To mark the occasion, Hardware Retailing spoke to a handful of past honorees to learn what the award meant to them. Read their stories on the next page and at TheRedT.com/past-winners. From becoming a business owner to growing their families, the winners we caught up with have continued to advance in their careers and in their lives. Whether they were able to gain the confidence they needed to build their careers or they went on to expand their businesses, the past Young Retailer of the Year honorees continue to stand out.

“I’m now able to work on

my business, instead of in my business, to continue to make our store better and see where I can take it in the future.

”

—Eventt Norris, 2009 Honoree, Ossian Do it Best Hardware

HARDWARE RETAILING | July 2016

Checking In With Honorees To celebrate the 20th anniversary of the Young Retailer of the Year program, Hardware Retailing reached out to several past recipients to see what they’re up to today. Some have become NRHA board members, like Megan Menzer, and some have been named Industry Top Guns, like Jerermy Melnick. Head to TheRedT.com/past-winners to read about some of the past winners of this prestigious award and learn about their careers.

Young Year

Retailer of the

YEARS

“Many opportunities

became available, and I was able to get my name out in the industry. I really attribute all of this to winning the award.

”

—Megan Menzer, 2005 Honoree, Newton’s True Value

Young Retailer of the Year Honorees: Where Are They Now? Before Winning: Shannon Carney grew up in the family business at Griffin ACE Hardware. She started working at the store full time shortly after finishing college, using her computer degree to write programs for department performance ratings and store metrics.

After Winning: Today, with her sisters, Carney is part of the third generation at Griffin Ace Hardware, which now has three locations in California. She is the president of the business and oversees operations. Her sister Kelly oversees inventory and her sister Stacey handles marketing. Her parents are also still involved..

Shannon Griffin Carney

Thriving in the Industry: Since being honored, Carney has become

Griffin Ace Hardware Santa Ana, California 1999 Honoree

more involved with her co-op, especially on tech-focused teams. Her business has become more focused on niches and specialty items, such as the Yeti and Big Green Egg brands.

Before Winning: Karena Reusser has been involved in her family’s business, Modern Home & Hardware, for 27 years. In 2003, Reusser was named one of the Young Retailers of the Year at a time she needed it most, she says. After winning the award, the confidence she gained helped her feel like she belonged in the industry, she says.

After Winning: “Previously, I would run into people and would hear things like,

Karena Reusser Modern Home & Hardware Woodsfield, Ohio 2003 Honoree

‘So, Karena, what do you do now, just work in the hardware store?’ Between comments like that and always meeting opposition to my age, I wasn’t sure I was meant to be here. The award made me feel like I belonged in the industry and gave me a determination to succeed in the hardware business.” She now owns the business.

Exciting Additions: The business has grown, doubling in size in 2012. The store now includes a Little Caesars Pizza and an appliance center.

Before Winning: Now-owner Rob Ferraro has been involved in the family business his entire life. After graduating from the University of Rhode Island in 2001, he took over as store manager and buyer.

After Winning: Ferraro has been able to expand the family business by creating a new branch of the company, called Aura Outdoor Products. “We manufacture a version of the ceramic Kamado Grill and 30-plus accessories that work with our grill and all other major brands,” he says.

Following in Dad’s Footsteps: Throughout his time in the industry,

Rob Ferraro Jerry’s Paint and Hardware Narragansett, Rhode Island 2011 Honoree

he has learned from his father, Bob. “My dad made many sacrifices both personally and financially earlier in the business, putting back every dollar of profit to strengthen the business,” Ferraro says. “He has taught me that the only way to succeed is through hard work. He is still involved in the business every day.”

July 2016 | HARDWARE RETAILING

By Renee Changnon, rchangnon@nrha.org

I’ll Take That, Too How Impulse Items Can Get Customers to Go Beyond Their Shopping Lists

tepping through the automatic doors and into the pharmacy, a customer who’s original mission was to pick up a prescription is now moving past aisles and aisles of products that are calling out to her. Before she knows it, her basket is full with a cold energy drink, snacks and a few beauty products. When she gets to the register, her total has more than tripled, but she is happy to pay the extra cost for the items she wanted and realized she may need. Whether shopping in a pharmacy, a big-box location or the local home improvement store, consumers are drawn to purchase impulse items for a variety of reasons. In fact, a 2016 poll by CreditCards.com found that five in six Americans say they have made impulse buys, most commonly in person. And those impulse buys aren’t always inexpensive, either. Your customers may not browse every aisle of your store, but impulse items and merchandising tactics can

HARDWARE RETAILING | July 2016

get through to even the busiest shoppers, adding to your overall transaction size and boosting store profits. To take a closer look at the impulse category and to inspire you to discover even more ways to take advantage of impulse opportunities, Hardware Retailing reached out to retailers across North America and asked them to share the impulse tactics they use in their operations. On the following pages, you will see the photos and comments readers submitted. Discover how food and local items can catch a customer’s eye, why seasonal items make great impulse themes and how integrating a selection of discounted products can encourage shoppers to buy even more. To learn more about how impulse shopping works, head to TheRedT.com/impulse-psychology to gain insights from Kit Yarrow, author of “Decoding the New Consumer Mind” and an expert in consumer psychology.

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

Add Flair to the Ordinary

Some of the best impulse items are not unique at all: they are everyday items, such as basic tools, cleaning products, batteries and other commonly used goods. Stocking products like lightbulbs and flashlights on endcaps or near the checkout is a great way to remind your customers of items they either need or will need at some point. However, it’s important to remember that impulse can occur throughout the store. Instead of letting these goods go unnoticed, think of creative, eye-catching ways to merchandise the products, which is what Ace Hardware in Normal, Illinois, has done with their unique flashlight display. “Our small flashlight sales have increased since we put up this display,” says Ashley Doll, assistant manager of the store. “Before, we had the small flashlights in the aisle and no one really saw them unless they were already looking for flashlights. Now, I see multiple people stopping and looking at the different types and sizes.” However, don’t limit your impulse assortment to be just items a customer expects to find in a hardware store. Whether you add pool accessories in the summer season or keep a selection of personal care products, like toothbrushes, by the register, your customers will appreciate the fact that you offer them goods they need, saving them a trip to another store.

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HARDWARE RETAILING | July 2016

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RETAILER TACTICS 1. CREATIVE DISPLAYS ATTRACT ATTENTION At Ace Hardware in Normal, Illinois, assistant manager Ashley Doll boosted sales in flashlights by putting them in a colorful display. By taking an item most everyone would need and finding a creative way to display it in the power aisle, the business has been able to increase sales.

2. SEASONAL ITEMS INCREASE BASKET SIZE At Grand River Home Hardware in Caledonia, Ontario, impulse sales are focused on everyday necessities at low price points and near the front of the store. According to Erin Joynt, customer service associate, supplying customers with impulse items like windshield wiper fluid and seasonal goods like bug spray are sure ways to add additional sales as people wait to check out.

3. GIFT ITEMS INTRIGUE CUSTOMERS

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Unique gift items make effective impulse sales at Akard True Value in Zionsville, Indiana. Leigh Ann Akard, co-owner and manager of her family business, added an impulse area behind the paint counter. The items are great as gifts and reasonable in price, she says. Popular finds include decorative home signs, wine bottle holders, scarves and much more.

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July 2016 | HARDWARE RETAILING

Price It Low, Watch It Go

Several retailers have invested in impulse opportunities by creating displays for low-priced items. Whether you create your own dollar area or use shelf signage to call out items that have been reduced in price, your customers get the sense that if they don’t get it now, the deal may be gone when they return. At the Ace Hardwdare in Carlinville, Illinois, manager Chad Strubbe says the business features an impulse area in the back of the store that is frequently shopped by customers. All of the items in this are less than $5, which leads to customers purchasing multiple items, he says. It might not be expensive add-ons, but multiple low-priced products can increase transaction sizes and sales. On top of the deals, have items that attract shoppers’ children. Positioning toys closer to ground level where children can see them is a great way to get parents to buy toys. Hoffman Ace Hardware does this at their checkout area with an entire island of toys that kids can see at eye level. At Akard True Value in Zionsville, Indiana, the impulse display located at the front of the store and near the paint department has created impulse sales. According to Leigh- Ann Akard, many of their customers own a lakehouse or know someone with one, so adding fun items like signs, decorative towels and wine holders has attracted more attention.

Award Winning Fastener

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HARDWARE RETAILING | July 2016

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RETAILER TACTICS 1. CREATE AN IMPULSE DESTINATION At Ace Hardware in Carlinville, Illinois, customers often are drawn to the impulse deals located in the back of the store, says store manager Chad Strubbe. By keeping products at a low price point in one prime location, customers see it as a destination to shop.

2. KEEP KIDS ENTERTAINED At Hoffman Ace Hardware, a wide selection of toys near the checkout keeps parents and kids happy. According to merchandising manager Steve Pfeiffer, the staff looks for items to stock to keep impulse fresh and fun. It’s important to always be sourcing new items. “We try to cover all the bases to stock must-have items,” he says. “We review items monthly to make sure our mix is current, fresh and flying off the shelves with good margin.”

3. KNOW WHAT YOUR CUSTOMER WANTS

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At Akard True Value, many customers head to vacation homes during the summer, says Akard. To appeal to this audience, she adds fun items that are lake-, boat- or cabin-themed to ensure additional sales. “These gifts are unique items for our customers to browse before a vacation getaway. They are different, cute and affordable,” Akard says.

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July 2016 | HARDWARE RETAILING

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Convenience store and gas station retailers know that food and drinks are a profitable impulse category, and they fill entire stores with them. These retailers can provide a good lesson if you’re looking for a way to increase impulse sales. One of the most common areas to promote and display food and drinks is near the checkout, whether products are placed on shelves in a checkout line or sitting under the counter. However, don’t forget about service counters and other areas frequented by contractors. Use clip strips with salty snacks and offer ice-cold drinks so they have something to grab before returning to work. To add more flavor to this category, many retailers are adding a local twist to the food offerings they sell. Locally canned pickles or jams and jellies are great additions to your impulse offering. Your customers will know they likely can’t find these items at the grocery store or a big-box location, which is another reason they may add these treats to their shopping carts. And locally sourced non-food items can do well, too. Many retailers have experimented with this, adding items like handmade candles, artwork, jewelry and other unique finds. With signage and proper merchandising, these items can end up becoming big impulse purchases among customers seeking to help another local business.

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RETAILER TACTICS 1. CREATE A CANDY DESTINATION Pete Rabbitt, manager at Buchheit of Jackson located in Jackson, Missouri, says the store created an impulse destination with a candy display that started ten years ago. “Impulse is huge in our business,” Rabbitt says. “The margins are pretty high, and we have impulse in almost every aisle, with clip-strips and everything. We’re really working on expanding impulse opportunities.”

2. LOCAL GOODS LEAD TO IMPULSE Susan Harlan, owner of Vickery Hardware in Smyrna, Georgia, sells impulse throughout the store with local goods. Customers can find locally sourced items, like soaps, crafts and honey. Impulse items are not always destination items, so it’s important to place them in highly visible locations.

3. KEEP DRINKS COLD At Norwood Park Ace Hardware in Chicago, drinks sold faster after store manager Marty Gaynor began selling them cold. They used to sell drinks warm, but, “as soon as we were able to get a refrigerator for our drinks, they became some of our best-selling impulse items,” he says. The store sells drinks like Red Bull, as well as old-fashioned root beer. Customers are more likely to buy a drink if it’s cold, so keep that in mind if you decide to add drinks.

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Bring It Back to the U.S. USA-Made Products Still Matter to Retailers and Consumers

here products are made, and the impact domestic manufacturing has on the U.S. economy, are issues retailers consider when adding products to their inventories, and are also important to consumers, according to data from the North American Retail Hardware Association (NRHA). The data is part of NRHA’s 2016 Made in America Questionnaire, which polled more than 100 independent home improvement retailers.

2/3

of retailers have noticed that more manufacturers have added made in America options in the past two years.

HARDWARE RETAILING | July 2016

On a scale of 1 to 10, with 10 being the most important, how important is it that manufacturers offer made in America products?

AVERAGE: 7 6

65.7%

of retailers have intentionally added more made in America products to their stores’ inventories in the past two years.

Does your store do anything extra to actively promote made in America products, either via in-store signage or circulars? YES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.7% NO . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.3% Retailers who actively promote made in America products do so primarily through in-store signage, such as posters, shelf talkers and in-aisle callouts. Some retailers note that they use flag stickers to identify made in America products. Respondents also say they use circulars to bring special attention to their made in America products.

More than half (55.7%) of respondents say their customers are seeking out more made in America products and that where an item is made is a determining factor in their purchasing decisions. Many respondents note that customers are specifically asking for made in America products or looking for items identified as made in the U.S. Also, if customers are trying to decide between products that are made in America and some that are imported, they often choose the equivalent domestic product. Many customers who do not originally enter a store searching for made in America products often purchase domestically made items after they learn from a sales associate about a store’s made in America offering.

48.1%

24.0%

77%

of respondents think customers are willing to spend more on made in America products. Of this 77%, nearly half think customers would be willing to spend 4-6% more.

16.5%

11.4%

0-3%

4-6%

7-9%

10% or more

Percentage More Customers Might Spend Source: 2016 Made in America Questionnaire, North American Retail Hardware Association

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Newsmakers

Retiree Finds Focus and Fun Working in Hardware Store

Upcoming Events July 28-30 World and Main Fall Market Houston

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

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

September Prior to retiring, Dan McGrane (left) got a part-time job at Settergren’s Ace Hardware, where his son Carl is the store manager and now is his boss.

question often asked of retirees, whether their career was spent working in a hardware store, leading an office of employees or teaching a classroom of children, is, “What’s next?” Many people get excited to devote more time to hobbies, volunteering and traveling, and others want to cut their hours and continue working in part-time jobs. Dan McGrane knew before retiring from his job in health safety evaluation at a manufacturing company that he wanted to stay busy in his retirement years. So, as he ended his career, he got a part-time job. He had always been an active DIYer, so he decided to follow his passion and get a job working at the hardware store in Minneapolis where he frequently shopped. His hands-on projects had gotten his children interested in the home improvement industry, and his sons John and Carl had worked at that store while they were in high school. Dan asked Mark Settergren, co-owner of Diamond Lake Ace Hardware, if he could work part-time at one his stores, Settergren Ace Hardware, where his son Carl is now manager. Settergren told Dan he could pick up some evening hours. “One of the main reasons I wanted to work at the store is to help make sure I kept a routine instead of just staying at home,” Dan says. “I knew I wanted to work and also participate in various volunteer opportunities.” Dan’s son John now works in a different industry, but Carl has been developing his retailing career for many years. “One of my fondest memories, so far, working with Carl has been our time together,” Dan says. “He and I are often the first ones in here early in the morning, so it’s great getting to work together and catch up.” For Dan, working in the store has been a great opportunity not only to stay busy but also to help people and find camaraderie with co-workers. As more baby boomers retire and become part of a pool of potential part-time employees, they might find a hardware store interesting to work for. But retirees need to know what they’re getting into if they do decide to apply for hardware store jobs, Dan says. “If an individual has done a lot of projects and work at home, the local hardware store would be a great avenue to turn to,” he says.

9-11 Horizon Distribution, Inc. HDI Annual Conference & Trade Show EXPO Yakima, Washington

16-17 Blish-Mize 2016 Fall Market Overland Park, Kansas

16-18 True Value Fall Reunion Denver

18-20 Home Hardware Fall Dealer Market St. Jacobs, Ontario

October 7-10 Do it Best Fall Market Indianapolis

12-14 Wallace Hardware Co., Inc., Fall Dealer Market Pigeon Forge, Tennessee

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.

July 2016 | HARDWARE RETAILING

Newsmakers

more efficiently. Within nine months, the drones could be used in Walmart’s massive warehouses. TheRedT.com/Walmart-Drones

Sears to Sell Off Major Brands? Sears Holdings is continuing to look for ways to improve its business after reporting ongoing financial losses, and the company’s board of directors has decided to look at alternative approaches, like selling its popular Kenmore, Craftsman and DieHard brands. TheRedT.com/Sears-Brands

Law to Regulate Chemicals in Everyday Products A proposed federal law to protect consumers and workers could become the first major update to the Toxic Substances Control Act in about 40 years. The potential law “goes a long way to providing businesses with much needed clarity and certainty by facilitating a more predictable federal regulatory program” for chemicals, according to the U.S. Chamber of Commerce. TheRedT.com/Chemical-Regulations

Millennials More Likely to Live With Parents vs. Romantic Partners For the first time in 130 years, young adults under age 35 aren’t getting married or setting up households with romantic partners as often as they’re living with their parents. A new Pew Research Center analysis of census data shows that millennials aren’t settling down and committing to live-in romantic relationships before their mid-30s. TheRedT.com/Millennials-Parents

Who Will Buy Lowe’s Australian Business? Lowe’s hasn’t yet sold its share of a failed home improvement business in Australia, but other big-box retailers, including a large South African company, have expressed interest in buying the venture. TheRedT.com/Lowes-Australia-Update

Walmart Tests Drones to Manage Inventory

Do it Best Spring Market Focuses on Growth

Walmart’s warehouse inventory management process could soon be speeding up. The country’s largest retail company is testing drones in distribution centers to help manage inventory

Independent retailers from more than 50 countries gathered in Indianapolis in May to attend the Do it Best Spring Market. Besides finding good deals, learning about new products and networking

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with other retailers, Do it Best Corp. and its retailers took time to focus more closely on a recurring theme: growth. TheRedT.com/DIB-Spring-2016

CANADA Ex-RONA CEO Robert Dutton Joins Board of Directors of La Coop fédérée

Due to new federal regulations, many more American workers will soon be eligible for overtime pay, and the effects could be extensive. TheRedT.com/Overtime

Robert Dutton, former president and CEO of RONA Inc., has joined the board of directors of La Coop fédérée, where he will help out with Groupe BMR. Under his direction, RONA expanded beyond its original Quebec market, and became the country’s largest home improvement retailer.

Take a Look–The First Quarter Results Are In

With Final Hurdles Cleared, Lowe’s Closes Deal to Buy RONA

The first-quarter earnings data came out for The Home Depot, Lowe’s Companies, Inc., Ace Hardware Corp. and True Value Co., and the numbers show increases for the big-box retailers and the co-ops. TheRedT.com/Q1-2016

The biggest deal in the history of Canadian home improvement retailing, and one that has been in the works in one form or another for the past five years, has finally closed. Lowe’s Company has completed the acquisition of RONA Inc., in a deal worth $2.3 billion.

Predicting the Impact of New Overtime Regulations

Ace Banner Finds Growth in Canadian Market The Ace banner continues to gain traction in Canada with two recent store openings. One is Ace Peel Hardware & Supply in Caledon, Ontario. The second is an Ace Hardware store located in Leask, Saskatchewan.

Home Hardware to Sell Canada 150 Tulip To celebrate Canada’s 150th anniversary in 2017, Home Hardware Stores Limited has joined the National Capital Commission, Kingdom of the Netherlands and Communities in Bloom to be the exclusive carrier of the Canada 150 tulip. The tulip is white with red flames, the colors of the Canadian flag.

For the full story of each of these briefs, visit www.hardlines.ca/hardwareretailing.

July 2016 | HARDWARE RETAILING

Last Word

Ask

EXPERT:

the Succession Planning Wayne Rivers is co-founder and president of the Family Business Institute. He has authored four books about family business and has appeared on the “Today” show, CNN, MSNBC and CNBC, and is an expert blogger for The Wall Street Journal.

n the feature story “Stepping In” on Page 38, retailers who are new or incoming store owners share their perspectives on succession. Hardware Retailing also spoke with Wayne Rivers to gain some expert insight on how to navigate succession planning for a family business. To read the full Q&A, visit www.TheRedT.com/succession-expert.

What is the biggest challenge families face during succession planning? They don’t know how to. Things come up in business all the time that we’re used to dealing with. For example, a computer crashes. It’s a problem, but it’s happened before and we know who to call and what to do. But when it comes to succession, this only happens once a generation. So the succession muscles typically atrophy. The biggest problem is the how-to part.

When transitioning into ownership, what should a young retailer be considering, and what questions should that person be asking? What’s the younger generation’s role in this process? Their role should be to look objectively at the future of the business and how they’ll pay off Mom and Dad. Mom and Dad operated the business for years with very little debt, and now you have to buy the business or property from them. That means you’re going to be operating while servicing debt, which they never had to do. Where’s the money going to come from?

How do you recommend families address tough topics, like money? You can get a pretty good education in the basics of family business just by researching and doing some reading. But, the most help comes from other family businesses. If I were running a retail hardware store in Michigan, I’d be looking at my network of other hardware stores in the state that I know from trade shows, conventions and people that are members of my buying group. And I’d be really interested in talking to them about their experiences.

Are there steps families can take to prevent disagreements or problems throughout the succession planning process?

What are some key identifiers of successful ownership transition in a family business?

You can’t prevent them. What you need is a system for resolving the problems amicably. It’s not an issue of whether or not problems are going to arise; they are. The issue is figuring out what you’re going to do once they arise. Two people are never going to agree on everything, and then when you put it in the family, you might have 10, 15 or 20 people involved. You need a plan so that once disagreements arise, you can deal with them in a way that doesn’t destroy the bonds of family.

The planning has begun well in advance of the senior generation’s departure. Communication is frequent, scheduled, regular and healthy. The finances of the business are very well understood by all parties. Now, the most important part of a successful transition may be having the right people in place. Without the right people in place, it’s not going to work. Those four components right there are absolutely up front and demand attention.

HARDWARE RETAILING | July 2016

AD INDEX Ajax Wire Specialty Co...................................... 62 www.ajaxwire.com; 855-966-2529

Fluidmaster ..........................................................58 www.fluidmaster.com; 949-728-2000

Old Masters ...................................................... 70 www.myoldmasters.com; 800-747-3436

Amazing Rake/R&R Group LLC ......................... 67 www.amazingrake.com; 800-826-6144

GE Lighting ..........................................................72 www.gelighting.com; 1-800-435-4448

Orgill Inc. ................................................... 76-IBC www.orgill.com; 800-347-2860

Amteco ............................................................. 68 www.usetwp.com; 800-969-4811

Gojo Industries Inc. ........................................... 59 www.GOJO.com; 800-321-9647

Peerless Faucet ................................................ 29 www.peerlessfaucet.com; 800-438-6673

Apex Tool Group ........................................... 5, 60 www.apextoolgroup.com; 410-773-7800

Hardware Retailing eNewsletter .......................... 57 www.hardwareretailing.com/subscribe

Permatex ............................................................ 7 www.fastorangelaundry.com; 877-376-2839

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

Home Comfort Inc...............................................36 www.jellybeanrug.com; 800-782-0281

Phifer Inc. ............................................................21 www.phifer.com; 800-841-9473

Blazer International ..............................................14 www.blazer-international.com; 800-241-3808

Howard Products Inc. ....................................... 33 www.howardproducts.com; 800-266-9545

Sears Hometown Store .................................... 73 www.ownasearsstore.com

Bonide .................................................................63 www.bonide.com; 315-736-8231

HSI ........................................................ 23, 25, 27 www.hardwaresuppliers.com; 800-334-5625

ShurTech Brands, LLC ...................................... 32 www.frogtape.com; 800-321-1733

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

IPG .................................................................15, 62 www.itape.com; 888-898-7834

Simpson Strong-Tie Co. Inc. ............................IFC www.strongtie.com; 800-999-5099

Chemique ............................................................58 www.chemique.com; 800-225-4161

Jack Link’s Beef Jerky ........................................61 www.jacklinks.com; 715-466-6608

Sims Vibration Laboratory ................................. 37 www.limbsaver.com; 360-427-6031

Cole’s Wild Bird Products Co............................ 17 www.coleswildbird.com; 877-426-8882

MAG Instruments Inc. .........................................69 www.maglite.com; 909-947-1006

Sun Gro Horticulture ......................................... 24 www.blackgold.bz; 800-732-8667

Delta Faucet Company...................................... 72 www.deltafaucet.com; 1-800-345-3358

Midwest Fastener ....................................... 31, 60 www.fastenerconnection.com; 800-444-7313

Top Notch Distributors Inc. ............................... 35 www.topnotchinc.com; 800-233-4210

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

Nite Ize ......................................................................11 www.niteize.com; 800.678.6483

True Value Company ......................................... 13 www.truevaluecompany.com; 888-291-7229

Duckback .............................................................26 www.superdeck.com; 800-825-5382

NRHA Training Resources ................................... 75 www.nrha.org/freetraining; 800-772-4424

Warner .................................................................66 www.warnertool.com; 800-444-0606

Fish Tales ............................................................30 www.bubbablade.com; 844-486-7265

NRHA RMCP ...................................................... BC www.nrharmcp.com; 317-275-9417

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

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