Hardware Retailing March 2019

Serving Hardware, Home Center & Building Material Retailers

DISTRIBUTOR PROFILE SERIES

Growing Strong How Ace Hardware Is Taking on Evolution in the Industry 43

Hook Customers in the Fishing Department 38

VOLUME 216 • ISSUE 3 • MARCH 2019 • HARDWARERETAILING.COM

How to Play the Pricing Game in the Amazon Age 59

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All The Products We Need Orgill’s Inventory Selection Keeps Our Shelves Fully Stocked!

“Orgill offers a full selection of high-quality products, which makes it easy to provide my customers with exactly what they need.”

Taylor Baker l Foothills Hardware & Builders Supply, North Carolina l An Orgill customer since 2015

Why We Like Working With Orgill: • Strong vendor partnerships • Broad product selection • Strong retail programs that help us improve our store

Watch the video to learn about the partnership between Orgill and Foothills Hardware!

1-800-347-2860 ext. 5373 • information@orgill.com • www.orgill.com

DISTRIBUTOR PROFILE SERIES

Growing Strong How Ace Hardware Is Taking on Evolution in the Industry 43

ALL-INDUSTRY CONFERENCE May 7-9, 2019 — Las Vegas

An Evolving Industry The home improvement industry is transforming.

The North American Retail Hardware Association (NRHA) is prepared to help independent retailers grow through this evolution. Join retailers, wholesalers and manufacturers at the NRHA All-Industry Conference at the National Hardware Show® as we discuss proactive measures to stay ahead in the channel.

VOLUME 216 • ISSUE 3 • MARCH 2019 • HARDWARERETAILING.COM

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Serving Hardware, Home Center & Building Material Retailers

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Hook Customers in the Fishing Department 38 How to Play the Pricing Game in the Amazon Age 59

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What’s on your mind?

The brand new NRHA forum is an online space for retailers to share ideas, ask questions and get feedback from their peers across all wholesale affiliations throughout North America. The forum is free for independent retailers and covers a wide range of topics like marketing, merchandising, training, industry news and more. Log in and connect today!

JOIN THE CONVERSATION AT NRHA.ORG/FORUM

Serving Hardware, Home Center & Building Material Retailers

DISTRIBUTOR PROFILE SERIES

Growing Strong How Ace Hardware Is Taking on Evolution in the Industry 43

Hook Customers in the Fishing Department 38

VOLUME 216 • ISSUE 3 • MARCH 2019 • HARDWARERETAILING.COM

How to Play the Pricing Game in the Amazon Age 59

ALL-INDUSTRY CONFERENCE May 7-9, 2019 — Las Vegas

An Evolving Industry The home improvement industry is transforming.

The North American Retail Hardware Association (NRHA) is prepared to help independent retailers grow through this evolution. Join retailers, wholesalers and manufacturers at the NRHA All-Industry Conference at the National Hardware Show® as we discuss proactive measures to stay ahead in the channel.

nrhaconference.com

14'

STANDOUT *

Standout Strong.

With 14 feet of standout and the ability to survive a 100-foot drop, Shockforce is a game-changer ready to dominate every jobsite. A diamond coated 360-degree end hook delivers 50% more gripping power and big, bold markings make it even better. And for superior performance in any light condition, the Shockforce Nite Eye offers a green-on-black high visibility blade. Shockforce … it’s the new standard for trade professionals. *14 foot standout based on maximum performance.

© 2019 Apex Tool Group, LLC | ATG-4721

See the entire line of Crescent brand products now at www.crescenttool.com.

Headquarters Staff

COMING IN APRIL

PUBLISHING EXECUTIVE VICE PRESIDENT AND PUBLISHER Dan Tratensek

COMMUNICATIONS DIRECTOR OF MARKETING AND COMMUNICATIONS Whitney Daulton SPECIAL PROJECTS EDITOR Liz Lichtenberger

136 N. Delaware St. #200 Indianapolis, Indiana 46204 Phone: 317-275-9400 Fax: 317-275-9403 Email: nrha@nrha.org Website: nrha.org SOCIAL MEDIA LINKS

FEATURES EDITOR Melanie Moul ASSISTANT EDITORS Kate Klein Chad Husted Todd Taber SENIOR DESIGNER Lynnea Chom GRAPHIC DESIGNERS Kelsey Truex Marcel Cornett

@NorthAmericanRetailHardwareAssociation

WEB DEVELOPER Kevin Trehan

@nrha_official

PRODUCTION SERVICES

North American Retail Hardware Association

PRODUCTION MANAGER Nancy A. Vondersaar

@nrha_official

SALES AND PRODUCTION ASSISTANT Freda Creech

HEADQUARTERS STAFF

CIRCULATION

PRESIDENT AND CEO Bob Cutter

CIRCULATION DIRECTOR Richard Jarrett

VICE PRESIDENT OF FINANCE AND BUSINESS SERVICES David Gowan EXECUTIVE COORDINATOR Marci Taschler

CIRCULATION/SUBSCRIPTION/ LIST RENTAL INQUIRIES

MEMBER SERVICES

PHONE 314-432-7511 FAX 314-432-7665

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

SALES/NRHA VENDOR PARTNER

RETAIL OUTREACH COORDINATOR Renee Changnon, 317-275-9442, rchangnon@nrha.org EVENT MANAGER AND RETAIL SUPPORT Katie McHone-Jones, 317-275-9426, kmchone-jones@nrha.org

RETAIL LEADERSHIP INSTITUTE EXECUTIVE DIRECTOR Scott Wright, 317-275-9417, swright@nrha.org DIRECTOR OF RECRUITMENT Tom Marcum, 317-275-9430, tmarcum@nrha.org

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

STATE AND REGIONAL ASSOCIATIONS MIDWEST HARDWARE ASSOCIATION John Haka, 5000 Woodward 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; AK, ID, OR, WA

WEST REGION MANAGER Jon Dawson, 136 N. Delaware St. #200, Indianapolis, IN 46204; 317-275-9420, Fax: 317-275-9403, jdawson@nrha.org NORTHEAST REGION MANAGER Lowell Huffman, 136 N. Delaware St. #200, Indianapolis, IN 46204; 317-275-9443, Fax: 317-275-9403, lhuffman@nrha.org SOUTHEAST REGION MANAGER Nick O’Connor, 136 N. Delaware St. #200, Indianapolis, IN 46204; 317-275-9409, Fax: 317-275-9403, noconnor@nrha.org BUSINESS DEVELOPMENT MANAGER Brad Lyons, 136 N. Delaware St. #200, Indianapolis, IN 46204; 317-275-9424, Fax: 317-275-9403, blyons@nrha.org CANADA John Magner, 500 Queens Quay W., #101 W. Toronto, Ontario M5V 3K8; 416-598-0101 x220, Fax: 416-598-9191, jmagner@yorkmedia.net

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 2019 by the North American Retail Hardware Association.

No editorial may be reproduced without prior permission of the publisher.

HARDWARE RETAILING | March 2019

In April, we will continue our distributor profile series by featuring Do it Best Corp.

Learn about how the co-op helps its members around the world continue to compete and grow.

MIDWEST REGION MANAGER Chris Miller, 506 Citadel Circle, Westmont, IL 60559; 630-234-3272, Fax: 317-275-9403, chris@millermediainc.net

Hardware Retailing (ISSN0889-2989) is published monthly by the North American Retail Hardware Association, 136 N. Delaware St. #200, Indianapolis, IN 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.

2

Service Is the Center

DIRECTOR OF SALES Lowell Huffman

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; AR, KS, LA, MO, NE, NM, TX

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

Do it Best Corp.

NRHA MISSION

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

NRHA BOARD OF DIRECTORS CHAIRMAN OF THE BOARD TJ Comstock, Northwest Hardware LLC, Billings, Montana EXECUTIVE VICE CHAIRMAN Greg Schlecht, Greg’s True Value, St. Francis, Wisconsin DIRECTORS Daniel Harris, Palos Ace Hardware, Palos Heights, Illinois; Lemont Ace Hardware, Lemont, Illinois Will Aubuchon, Aubuchon Hardware, Westminster, Massachusetts Jared Smith, Jared’s Ace Hardware, Bishopville, South Carolina David Dishke, Grand River Home Hardware, Caledonia, Ontario Steve Fusek, Fusek’s True Value, Indianapolis SECRETARY-TREASURER Bob Cutter, NRHA President and CEO IMMEDIATE PAST CHAIRMAN Megan Menzer, Newton’s True Value, Cherryvale, Kansas

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© COPYRIGHT 2019. ALL RIGHTS RESERVED.

Contents MARCH 2019 | VOLUME 216 | ISSUE 3

80 ASSOCIATION

Consult With Confidence The North American Retail Hardware Association has a new initiative to help you improve your company culture in the name of growth.

43

86 PROFILE

DISTRIBUTOR PROFILE

Ace Hardware: Going Strong

Ace Hardware Corp. is on a growth path and is evolving to help retailers meet customers’ needs. Learn from top executives, including president and CEO John Venhuizen, about the co-op’s strategic plan and new initiatives. Then, read the success story of the retailers who own Desert Foothills Ace Hardware in Phoenix.

Lure Customers In Expanding your operation’s fishing products can be a great way to reel in new customers. Hear how retailers in Alaska and California are catching big sales through a customer-focused fishing assortment.

4

Departments

59 OPERATIONS

70 RESEARCH

68 INDUSTRY AWARDS

76 INDUSTRY NEWS

Imagination Magic The 2019 Reimagine Retail program from the National Hardware Show® sets its sights on products. Learn how you could bring a fresh mix of items that will delight customers this year.

HARDWARE RETAILING | March 2019

90 MERCHANDISING

The Beginning of the Endcap Knowing the secrets of good merchandising can help you create compelling endcaps. Review the do’s and don’ts for effective endcaps.

38 CATEGORY

Game, Set, Price-Match How does Amazon always seem to have the lowest prices? Two analysts share their insights on the e-commerce giant’s retail strategy and suggest ways you can stay one step ahead.

Beyond These Walls Retailers Jillian Sexton and Hardy Tan Vy stay busy running their operations, but still take time outside their businesses to better their communities.

Retail Echoes Sears and Amazon are cornerstones of retail history. Chart their similar origins and learn how 2018 was a pivotal year for both companies. Consider their future challenges and opportunities.

Be Local, Support Local Independent We Stand co-founder Bill Brunelle explains how connecting with Main Street organizations can help you strengthen your business and find new opportunities to grow it.

06 . . . . . . . . . . . . . . . . . On the Web 08 . . . . . . . . . Independent Thinking 10 . . . . . . . .Taking Care of Business 12 . . . . . . . . . . . . . . . . NRHA News 18 . . . . . . . . . . . . . . . . . . . . . Trends 22 . . . . . . . . . . . . . . . New Products 32 . . . . . . . . . . . . . . . . . . Checkouts 94 . . . . . . . . . . . . . . . . Newsmakers 98 . . . . . . . . . . . . . . . . . . Last Word

On the Cover Martin Ruggiero, co-owner of Desert Foothills Ace Hardware, uses Ace Hardware programs to excel.

Photo by Kelsey Truex

THE TOOLS TO BUILD YOUR DREAM, YOUR WAY

PRO Hardware knows independent businesses are vital to your local economy and to the American way of life.

Our retail program supports you as an independent retailer by providing the tools to build your business while maintaining your store’s individuality and independence.

Being a PRO gives you access to a $6 billion national network of hardware, farm, and lawn & garden distributors along with a dedicated merchandising and marketing team to help you and your store.

PRO works to create new and innovative advertising materials to assist you in promoting your story and shows you the steps to utilize each of them to suit the personal needs of your store.

Vendor Partners:

That’s the power of independence.

Learn more about the PRO Hardware program by contacting Shari Kalbach, Vice President, 303.792.3000 or shari.kalbach@pro-group.com.

Find us online at www.prohardware.com PRO HARDWARE DISTRIBUTORS: The Bostwick-Braun Co. Toledo, OH • 419.259.3600 Horizon Distribution, Inc. Yakima, WA • 509.453.3181 Wallace Hardware Co., Inc. Morristown, TN • 423.586.5650

On the Web PROFILE

Minutes in the Day Read more about retailers Jillian Sexton and Hardy Tan Vy at TheRedT.com/spare-time to learn how they spend their free moments bettering their communities.

RESEARCH

DISTRIBUTOR PROFILE

Growing at Ace Hardware Over the past 95 years, Ace Hardware Corp. has built a well-known brand and adapted to meet the changing needs of consumers and retailers.

Visit TheRedT.com/ace-qa to read extended Q&As with Ace executives about the co-op’s current programs and its plans for the future.

Ace Ambitions Ace Hardware retailers are growing successful retail operations throughout the world. Boston’s Ace Hardware in Page, Arizona, and Oceanside Ace Hardware in Oceanside, California, are examples of Ace stores that are going strong each day.

A Pattern in History Chart the historic rise and fall of Sears with historian Jerry Hancock at TheRedT.com/sears-history. Discover how Sears lost its footing and what’s next for the once-powerful retail titan.

This series of quick lessons on topics such as selling skills, merchandising, product knowledge and operations is made for all employees. To download this month’s featured lesson, visit nrha.org/trainers-toolbox.

How to Build A Great Endcap Take the endcap challenge on Page 90, then take advantage of this lesson from the Trainer’s Toolbox archives. Test what employees know about building endcaps and get pointers to be sure yours are effective.

Unique Vibe: Read about the unique culture at Oceanside Ace Hardware and how it serves the community at TheRedT.com/oceanside-profile.

Better and Better: Learn the benefits Boston’s Ace Hardware has seen by focusing on training at TheRedT.com/bostons-profile.

SOCIAL MEDIA LINKS

@HardwareRetailing @hardwareretail

6

HARDWARE RETAILING | March 2019

NEW LOOK - SAME LEGENDARY PROTECTION n Greater shelf appeal n Contemporary new look n Cohesive brand presence on the shelf

n Improved shop-ability n Easy product comparison and selection n Expresses functional, decorative and inspirational applications

Visit us at www.UGL.com or call 1-800-845-5227 to see how we can partner with you to create a successful UGL dealer program.

Independent Thinking

What’s Your Culture?

W

“Perhaps it’s time

to stop lamenting on the culture you have and start focusing on developing the culture you desire.

NRHA can help.

”

hen you consider the culture of your organization, how would you describe it?

What words or phrases come to mind? Do you have a results-oriented culture where everyone is pulling together in the pursuit of a defined goal? Or is it more of a control-based, top-down culture that suggests it’s your way or the highway?

Perhaps it’s a caring culture where employees feel they are the most important cog in the wheel and that management has their backs. More than likely, your culture fits somewhere in between these extremes.

In a recent Harvard Business Review (HBR) study on the subject of organizational culture, there were four attributes of culture listed in the research. The first attribute is that culture is a group phenomenon or is shared. It doesn’t exist within a single individual, but resides in “shared behaviors, values and assumptions” most commonly experienced through what the study calls “unwritten rules.” Simply put, like leadership, you can’t do culture by yourself.

The second attribute of culture is that it is pervasive. This means it connects with every level in an organization, from top to bottom, and manifests in “collective behaviors, physical environments, group rituals, visible symbols, stories and legends,” according to the research. It’s your organization’s personality and identity, so to speak.

Culture also has to be enduring, according to the study, with the ability to direct the thoughts and actions of group members over the long term. It’s not just the flavor of the day, but becomes a timeless trait of the organization that attracts people who want to work for companies with cultural characteristics similar to their own. In turn, organizations become much more likely to hire people who are deemed to be a good cultural fit with the team, and the positive cycle continues.

Finally, the HBR study suggests that culture is implicit, meaning that people within the organization become “effectively hardwired to recognize and respond to it instinctively.”

They don’t have to think about it; it just happens.

“The truth is, every organization has a culture, whether you know it or not. It’s just a matter of whether yours is by accident or purposeful.” These words don’t come from the HBR study, but rather from Michael Wynn, president of Sunshine Ace Hardware, a nine-store operation based in Naples, Florida. Wynn and his team have spent a decade improving their organizational culture through a process introduced by Linda Small, owner of Retail People Solutions Inc. And they’ve made great strides.

On Page 80 in this issue, you can read more of Wynn’s remarks on the cultural shift his organization has made since they started implementing Small’s Vision Process. You can also read what other retailers have gained through the same process since Small launched her consulting firm.

This year, the North American Retail Hardware Association (NRHA) is teaming up with Small to offer her Vision Process to independent home improvement retailers. The process focuses on developing a healthy culture conducive to success, and it will become the latest offering through the Retail Leadership Institute arm of NRHA. Along with the Retail Management Certification Program and the Foundations of Leadership program, the Vision Process focuses on developing an intentional culture through leadership and through the implementation of time-tested retail best practices and processes.

If you couldn’t answer the opening question about defining your culture, you’re not alone. If you could, and you don’t like the answer, perhaps it’s time to stop lamenting on the culture you have and start focusing on developing the culture you desire.

NRHA can help.

Scott Wright, Executive Director, Retail Leadership Institute

swright@nrha.org

8

HARDWARE RETAILING | March 2019

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Taking Care of Business

Love and the Local Hardware Store

W

“As small business

owners, there are plenty of things you can do to help ensure America’s Main Streets and other small businesses continue to thrive.

”

hen I was 8 years old, I had a crush on a girl in our neighborhood named Julie. The only problem was, my cousin had a crush on the same girl. Whether Julie had a crush on either of us remains a mystery, but that wasn’t too important at the time.

What was important was how I was going to woo Julie’s attention away from my cousin. Rest easy, dear readers, eight-year-old Dan had the perfect plan.

See, the local Coast to Coast Hardware I would go to every weekend with my dad had a shiny new official Chicago Bears helmet, shoulder pads and jersey set on display in the sporting goods department.

All I had to do was save up enough money to buy this set and, well, what eight-year-old girl could resist a guy showing up to the playground wearing an official Bears uniform (complete with shoulder pads)?

Sadly, my plan never made it to fruition. I never saved up the money. My affections moved on from Julie, and I was likely distracted by something like the release of that new Star Wars movie.

What I am left with, some 40-plus years later, is the memory of eagerly heading to Coast to Coast each weekend with my dad to ogle that Bears get-up and root around the store for the supplies he needed for our weekend projects.

After we got our supplies, our weekend trips usually led to a stop at the drug store where my dad would pick up prescriptions and chat for hours with his pal Lou, the local pharmacist. On lucky days, we would stop on the way home and pick up a pizza from Louie’s (no relation to Lou the pharmacist) for dinner.

I know that our world has changed, and I can now order my grandson a full-fledged official Chicago Bears helmet and jersey through Amazon Prime when the time comes for him to impress the Julie in his life.

Those trips with my dad, however, weren’t about “the product.” They were about the time my dad and I spent together and the conversations he shared with his friends in our community.

In this issue on Page 76, and in other upcoming issues throughout the year, we will feature a column from Bill Brunelle, who is the co-founder of an organization called Independent We Stand.

Bill and Independent We Stand are dedicated to helping local businesses thrive and preserving America’s Main Streets by making consumers aware of the importance of a robust small business community.

I know most of you reading this column are small business owners, and I would assume all of you support Bill’s cause. But as small business owners, there are plenty of things you can do to help ensure America’s Main Streets and other small businesses continue to thrive. One of those things is by actively supporting a local small business association that advocates on behalf of business owners. I highly recommend you read Bill’s column to find out how supporting these organizations can do so much for strengthening your small business community.

If we can all find ways to work together in our efforts to support locally owned businesses, you can rest assured that when the time comes, all our children and grandchildren can have those same rich experiences I had with my father as a kid.

Dan M. Tratensek, Publisher

dant@nrha.org

10

HARDWARE RETAILING | March 2019

NRHA News

NRHA Introduces 2 New Podcast Series

W

hat are you listening to when you’re stuck in traffic or doing chores around your house? For many people, podcasts fill their time in a productive and fun way.

Whether it’s true crime stories or business tips, podcasts can be a great tool to multitask and learn something new.

In April, Hardware Retailing will launch two new podcast series. If you haven’t ever listened to a podcast, think of it like a radio talk show you can listen to anywhere.

They are delivered in episodes that can be downloaded to your computer or smartphone. So what are these two new podcasts going to be about?

“Taking Care of Business” is hosted by Dan Tratensek, publisher of Hardware Retailing magazine. In each episode, Tratensek will interview a variety of guests, including high-profile retailers, industry experts and wholesaler executives. This series will give you a seat at the table with some of the industry’s leading members.

“Tell Me More” is hosted by Renee Changnon, NRHA’s retail outreach coordinator. Changnon will share interesting stories from retailers throughout the U.S. and Canada. Whether a retailer has odd tales from the aisles or had a unique journey into retail, this podcast will highlight retailers who bring new perspectives to the industry.

Subscribe today at TheRedT.com/pod to be ready to listen to “Taking Care of Business” and “Tell Me More” next month. If you’ve got a great idea for a podcast, send your episode suggestions to Renee Changnon at rchangnon@nrha.org.

3 Ways to Use Podcasts • Learn something new.

Podcasts offer a unique way to learn new information. Find a topic you’ve always wanted to know more about or a series that can help you grow your business and listen while you review the books or unload a shipment.

• Use as a unique training tool.

Encourage staff members to take an hour a month to listen to a podcast that will help them in their roles. Recap what they learned at your next team meeting or employee review.

• Take some personal time.

Listening to podcasts on your drive in or while you go for a jog can give you that extra time you’ve been looking for to expand your knowledge.

In Hardware Retailing’s new podcast, “Tell Me More,” host Renee Changnon learns more about Cody Goeppner (right) of Bleyhl Co-Op.

12

HARDWARE RETAILING | March 2019

REGISTER TO ATTEND

March 26–28, 2019

myace.com • 630-990-6900 myace@acehardware.com TXT

NRHA News

NRHA Training: A Success Story

W

hen a customer walks through the doors of HomCo Lumber & Hardware in Flagstaff, Arizona, they know they won’t be passed from person to person to get an answer to their question. But this wasn’t always the case.

Over the last year, leaders of the operation made a point to invest in store associates’ success by providing a training program that combines salesfloor lessons with North American Retail Hardware Association (NRHA) training resources. All new hires are enrolled in the 8- to 12-week program, which is called The University of HomCo. To learn more about how HomCo Lumber & Hardware’s training program has helped educate, empower and retain its hardworking associates, Hardware Retailing spoke with the store’s training coordinator, Cathleen Goff.

Hardware Retailing (HR): What’s your goal as training coordinator at HomCo Lumber & Hardware?

Cathleen Goff (CG): I’ve been with HomCo for three years now.

When our former training coordinator left the company, I was approached to take over training by our chief operating officer, who thought my skills and personality would work well in this position. From my time working on the floor and listening to our associates talk over our radio system, I had some ideas that I wanted to implement to make training even better.

For example, we used to hire and train employees for specific departments, like paint or plumbing. This meant we had experts in these departments, but in a retail environment, those experts aren’t always in the store every shift, which makes it difficult for employees to be able to help customers in every area of the business.

When I stepped in as the training coordinator, I wanted to create a plan that would ensure all employees were able to help customers no matter the department. In my opinion, offering a comprehensive training program shows our employees our commitment to their success, which in turn leads to better employees who are more engaged, feel valued and want to stay on board for the long haul.

HR: How did you develop this training program?

CG: Last year, as part of a management training retreat, we toured the Zappos headquarters. I was inspired by the investment Zappos makes in each employee. The results were astounding—long-term retention, high employee engagement and an overall sense of belonging.

I decided that in order for the program to really succeed and cover the entire store, it should last eight to 12 weeks.

In addition, hiring and training sales associates for the entire store instead of a specific department just made more sense.

First, I watched and listened. I created the training schedule around the needs of the store. For example, the most assistance requests came from the service counter, so that’s the first stop for all new hires.

14

HARDWARE RETAILING | March 2019

HomCo Lumber & Hardware employees celebrate associates who complete a training passport as part of the company’s program.

I often heard requests for key-cutting and screen orders, so the second stop is the cut counter. More challenging departments to learn, like plumbing, electrical, paint and building materials, are slated for the final weeks of training.

To show employees their progress and keep them motivated, we use a passport system. I stamp their passport after they complete online and in-person training for each department.

If they complete their passport, we celebrate in the store with confetti and hang their certificate on the wall.

Our retention rate for new employees who have completed this program is over 90 percent since its inception last summer.

HR: How does NRHA Training fit into this program?

CG: I assign specific times during shifts for NRHA online training, and then they use what they learned on the salesfloor.

We provide headphones and space for them to learn online.

By scheduling time for them to train online, I know they’re processing and retaining the information. By the end of the week, they need to complete and pass the test for that department to move on to the next area of the store.

For more about an NRHA Training Membership, visit nrha.org/training. To learn more about HomCo’s training process, visit TheRedT.com/homco.

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NRHA News

Fall 2018 Retail Management Certification Program Finishes Strong

A

fter six months of hard work, students from the North American Retail Hardware Association’s (NRHA) Fall 2018 Retail Management Certification Program came to NRHA headquarters in Indianapolis for their final visit. It culminated with the students presenting their coursework—business improvement projects to enrich their operations.

On the first day of the visit, students attended a variety of sessions, which covered topics like employee engagement, mutual accountability, a look at the leader’s role in sustainable excellence and a workshop on budgeting and financial application.

The next day, students attended more educational sessions, including a case study on how to delegate effectively and a discussion on conversational intelligence.

The rest of the day, students presented their business improvement projects in two groups. The top four projects overall were presented to the main group.

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HARDWARE RETAILING | March 2019

The top four projects selected were from Jonathan South of Teghtmeyer Ace Hardware in Columbia City, Indiana; Kattie Blanchard of Bleyhl Co-Op in Grandview, Washington; Ginette MacKinnon of Meteghan Home Hardware in Meteghan, Nova Scotia; and Katie Stuen of Wilco in Oregon.

At the end of the third visit, NRHA hosted a dinner bringing together all of the students, their sponsors and RMCP educators to celebrate the achievements of every student in the course.

During the dinner event, the class chose Jonathan South as the winner of the business improvement project. For his project, South developed an employee training program.

For all attendees, RMCP not only helps their business grow, but it also helps individual students learn and develop as well.

If you have a manager or leader in your company who would benefit from this college-level course, contact Tom Marcum at tmarcum@nrha.org or 317-440-9782.

Students in the Fall 2018 NRHA Retail Management Certification Program selected Jonathan South, store manager at Teghtmeyer Ace Hardware in Columbia City, Indiana, as the winner of the best business improvement project for the term.

March 2019 | HARDWARE RETAILING

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Trends

Sponsored by HIRI | HIRI.org

Homeowners Make Project Plans for 2019 Fewer homeowners are planning projects to redo, improve, repair or maintain their houses early in 2019 compared to the year prior, according to fourth-quarter research from the nonprofit Home Improvement Research Institute (HIRI).

About 65 percent of homeowners have one or more projects they hope to accomplish in the next three months, for a year-over-year decrease of 6 percent in projects planned, the research shows.

“After roughly a year of increased planning, this drop is ultimately not surprising given the strong levels throughout the rest of the year,” HIRI reports in its Project Sentiment Tracking Study. Because numerous home projects are not necessary to do annually, the overall number of projects homeowners plan “can be very cyclical,” the study says.

% of Homeowners Planning 1 or More Projects

Younger homeowners are the most likely to have projects in the works, with 75.6 percent of older millennials (in the study’s 30-39 age group) and 67.5 percent of younger millennials and older members of Generation Z (in the study’s 18-29 group) planning at least one home project.

In general, more than half of homeowners who participated in the research are opting for DIY projects, though the percentage of people who instead want to hire professionals varied by project type.

For example, more than 80 percent of the research participants who are planning lawn, garden and landscaping projects are doing their own work. However, of the people planning to do more ambitious projects related to alternative energy, such as installing solar panels, only about 30 percent intend to do the work themselves.

Top Motivators for Projects

By Age Group

18-29

67.5%

30-39

75.6% 67.5%

18-29

30-39 40-54

55-plus

65.1% 57.6%

Across all age groups,

65.1 percent of homeowners are planning at least one project.

Source: Project Sentiment Tracking Study, HIRI

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HARDWARE RETAILING | March 2019

25.9%

22.9%

Need to repair or replace

Routine maintenance

21.0%

17.5%

Want to modernize/ upgrade/redecorate

An increase in finances

FIRST CHOICE. BEST CHOICE.

SM

SUCCESS TAKES ROOT AT THE SPRING MARKET At Do it Best, we’re committed to keeping our focus on what matters most — helping our members grow and achieve their dreams. We continue to deliver the right products and the best programs to be the first and best choice for independent home improvement entrepreneurs.

The Do it Best Spring Market SM is your chance to discover firsthand how advancements like The Color BarTM , Retail Performance and Digital Marketing Services generate immediate sales and long-term profitability. You’ll meet the experts — Do it Best leaders who are ready to share strategies and customizable tools that can be implemented in days. And don’t forget the thousands of jaw-dropping purchasing opportunities available only at this event.

Come see for yourself how Do it Best is supporting our members as their first and best choice for home improvement products and services.

2019 DO IT BEST SPRING MARKETSM Indiana Convention Center, Indianapolis | May 17-20 For registration information, contact 888-DO IT BEST or memberservices@doitbest.com

independentsdoitbest.com Vince Slack, Meeting and Market Planning Manager

New Products

“We love Case Knives for

their long history. We’ve been impressed with the following they have as well as how great they are as collectibles.

”

—Dan Hechler, Hechler Hardware & Paint

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“The Gym1 is a great way

1

”

—Courtney Blew, Waverly Ace Hardware

1. Collectible Knives

2. Portable Gym

The Case® Winkler Recurve Utility No. 6 is a fixed-blade knife built for performance. The skeletonized, full tang blade of heavy gauge 80CrV2 carbon steel is designed for durable service, and the recurve blade shape with a 4 ¾-inch cutting edge offers an optimal surface area. The knife is accompanied by a form-fitted, reinforced leather sheath complete with reversible belt loop and dual lanyard holes.

The Gym1 core unit is the basis for a variety of workout accessories that allow users to run, box, kick, swing and weight train using a doorway. The unit attaches to a door frame using no tools or screws and provides a full-body workout without harming the frame.

W.R. Case & Sons Cutlery 888-442-1932 or caseknives.com

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to release stress at the office or in a home. It works as an all-ages product that we really love.

HARDWARE RETAILING | March 2019

Gym1 617-440-4948 or gym1.net

Retailer Picks These four products were selected by retailers like you! Share your favorite products by contacting Chad Husted at chusted@nrha.org.

“We can hardly keep

Dot’s Pretzels on the shelf, and recently we’ve gotten more requests for the rub.

We’ve started using it during grilling events to see how customers react when they learn about the rub.

4

”

—Emilie Schnick Dishno, TNT Ace Hardware

“We’re big into our

3

housewares and kitchen department, and Nordic Ware pans are great additions for us. They hold up over time and offer a variety of designs.

”

—Lisa Rooks, Revell Ace Hardware

3. Seasoning Rub

4. Dog Treat Baking Pan

Dot’s Pretzel Rub brings the taste of Dot’s Homestyle Pretzels to a variety of foods. It can be used as a breading for meatloaf, chicken, pork, fish or in a deep-fry batter. It can also be used on cheesecake, sprinkled on ice cream or covering the rim of a bloody mary.

The aluminum Puppy Love Treat Pan allows dog owners to bake their own treats in the shape of a classic dog bone.

The sheet allows 16 treats to be cooked at once. The nonstick coating should be hand-washed.

Dot’s Homestyle Pretzels 701-340-0289 or dotspretzels.com

Nordic Ware 952-924-8561 or nordicware.com

March 2019 | HARDWARE RETAILING

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New Products

5

6

5. Work Gloves

6. Battery-Powered Sprayer

MidWest Quality Gloves’ Top Grain Sheepskin Leather Driver Gloves featuring 100 percent biodegradable leather with all natural vegetable tanning. The gloves are chemical-free, hypoallergenic, safe on skin and safe on the environment.

The gloves are tanned via an organic method relying on natural vegetable tannins from bark or other plant tissues.

The M18™ Switch Tank™ Interchangeable Sprayer and Water Supply System allows for three interchangeable tanks to be loaded. The tanks include a 4-gallon water supply, a 4-gallon concrete sprayer and a 4-gallon pesticide sprayer. The powered base includes the motor, Redlithium™ battery compartment and Redlink™ electronics.

MidWest Quality Gloves 800-821-3028 or midwestglove.com

Milwaukee Tool 800-729-3878 or milwaukeetool.com

HOLDS

700 + LBS THE ABSOLUTE STRONGEST DUCT TAPE THE ABSOLUTE STRONGEST DUCT TAPE Holds more than 700 pounds with than a single of tape.

Holds more 700 loop pounds with a single loop of tape.

T-RexTape.com Extreme real-world test; tape not weight-rated for towing applications.

T-RexTape.com ©ShurTech Brands, LLC 2019/78677

All Rights Reserved.

Extreme real-world test; tape not weight-rated for towing applications. ©ShurTech Brands, LLC 2019/78477

All Rights Reserved.

7

RETAIL READY

8

SCAFFOLDING FOR YOUR STORE

• • •

Complete mason frame scaffold system Best sellers, low SKU count all fit in 8’ bay Special order programs available

7. Rechargeable Lamp The SunLight features an integrated solar panel allowing it to recharge itself and increase efficiency through an integrated sundial and kickstand for setup. Its small size, 100-lumen dimmable lantern and 50 hours of run time make it optimal for outdoor excursions. The SunLight is available in teal, grey and as part of a four-pack.

• • •

Widest product offering Best in class packaging Best in class signage

BioLite 844-424-6548 or bioliteenergy.com

8. Pet Shelter The Pet Gazebo® provides a safe and sheltered environment for a pet both indoors and outside. The shelters feature a locking door as well as a drop-down window panel for access and multiple colors of all-weather canopies.

The Pet Gazebo comes in 3-foot, 4-foot, 5-foot and 8-foot heights for any size pet.

BECOME A METALTECH DEALER: WWW.METALTECH.CO

Advantek 800-664-4939 or advantekpet.com

DISTRIBUTION CENTERS CA - FL - IL - OH - PA - TX - LA March 2019 | HARDWARE RETAILING

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New Products

9

10 Why waste your money on other Brands?

9. Coffee and Espresso Machine The EM1040 Espresso Machine and Coffee Maker Combination brews both a full pot of coffee as well as espressos. It can brew from ground coffee as well as a variety of pods.

A 1.5-liter water tank provides water for both beverages.

Espressione jjm@espressione.com or espressione.com

CorrosionX

TC-11

Rust Patrol®

WD-40

CRC 3-36

Control

Rust Patrol® lubricates, cleans, displaces moisture, penetrates, prevents corrosion, and frees rusted parts.

Aidant Brands®

10. Erasable Armband The Wemo Wearable Memo is a slap bracelet that users can write on and later erase. The armband can be written on using permanent pen which can be removed using an eraser. Wemo armbands are waterproof and come in four colors, including green, blue, white and beige.

Mira Design 212-921-5890 or mirausa.com

For information, visit

RustPatrol.com Follow RustPatrol on:

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HARDWARE RETAILING | March 2019

Prevent Rust • Lubricate • Penetrate Results of Rust Patrol® against competitors from a 47 day side-by-side test using 5% salt fog on 1010 carbon steel.

11 11. Window Screens BetterVue® Improved Visibility and UltraVue® Excellent Visibility insect screens feature Phifer’s Water Shed Technology™, repelling water and resisting dirt and grime to preserve optical clarity.

These features provide cleaner screens and an increased life expectancy for the product. Both screens are certified to Greenguard standards for low chemical emissions into indoor air during usage.

Phifer 205-345-2120 or phifer.com

12. Kneeling Aid The ProFlex® 365 Mini Kneeling Pad measures 4 inches by 6 inches with 1 inch of thickness and has a handle to attach belt loops, keychains or toolboxes with either a grabber clip or carabiner.

The pad is made from thick nitrile rubber closed cell foam which is nonconductive and won’t absorb liquids.

12 STYLISH. MODERN. SECURE. OBSIDIAN Look into Obsidian - the new low profile, electronic touchscreen deadbolt from Kwikset.

Look into HSI for the complete line of quality Kwikset products.

We offer same day shipping with no minimum requirements.

Offer your customers more by calling HSI today. Your Residential Hardware Experts!

from

Ergodyne 800-225-8238 or ergodyne.com

800-334-5625 | www.sld-hsi.com March 2019 | HARDWARE RETAILING

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New Products

13 American Made & Profitable For Over 80 Years

14 13. Dimmable Recessed Lighting Westinghouse Lighting’s Energy Star Dimmable Recessed LED Downlights are convenient one-piece downlights featuring a pre-attached trim that creates the seamless look of traditional recessed lighting. These downlights are suitable for damp locations and are available in 4-inch and 6-inch sizes.

Westinghouse Electric westinghouselighting.com

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

Ask for our Product Catalog which provides product descriptions and size specifications.

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

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HARDWARE RETAILING | March 2019

14. Earth Auger The Earthquake® 1-Man Earth Auger uses the E43™ powerhead to drive an 8-inch bit into the ground. The auger takes unleaded gasoline in its Viper® two-cycle engine and has industrial air filtration equipment to extend its service life. A welded steel handlebar gives the user a strong base for control.

Ardisam 800-345-6007 or getearthquake.com

15

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15. Charcoal-Filtered Sports Bottle The Eau Good Duo bottle utilizes Binchotan charcoal sticks to filter drinking water and improve flavor.

The bottle can also be used to infuse flavors from fruits into water. The charcoal has a six-month lifespan and is secured in the bottle to prevent it from falling out. The spout is leak-proof and also disassembles for cleaning.

Black+Blum USA sales@black-blum.com or blackblum.com

16. Multiuse Massager The TriggerPoint AcuCurve Cane is a home remedy to relieve muscle tightness, aches, pains and stress or sports-related muscle tension.

The extra-firm tip applies targeted pressure to help break up knots in muscle fibers. The double massage ball design allows for release of tight muscles around the spine to improve flexibility and upper body movement.

Implus 800-446-7587 or tptherapy.com

March 2019 | HARDWARE RETAILING

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New Products

17

18

17. Heat Gun

18. Soil Probiotic

The RIDGID® Butane 18-volt Heat Gun is a cordless tool that uses natural gas for fuel. The gun reaches temperatures up to 1,400 F and can hold a temperature above 1,200 F for up to 25 minutes. Cool-down mode helps extend the motor’s life while also allowing for quicker storage.

Soil Activator™ creates healthier plants and higher yields, with reduced fertilizer and water use. It improves plant nutrient uptake by converting soil minerals into absorbable nutrients. Soil Activator is 100 percent certified organic and contains no GMOs or chemically synthesized materials. It can also be used in conventional growing.

Emerson Electric 800-474-3443 or ridgid.com

Earth Alive Clean Technologies 438-333-1680 or earthalivect.com

 The Professional's choice in hand tools and portable industrial lighting  Innovation developed from real world needs  Setting the quality standards for the industry  Committed to providing outstanding products, value and service

#90126

PROGRIP™ #90133

TAPE DRYWALL JOINTS Use with Joint Compound

PROGRIP™

ENCINTE LAS UNIONES DE LOS PANELES DE YESO Utilice con compuesto para uniones

6" / 15.2 cm WARNERTOOL.COM

#90101

PROGRIP™

PATCH CRACKS

Use with Lightweight Spackling

REPARA GRIETAS

SCRAPE PAINT/ ADHESIVES

3" / 7.6 cm

RASPE PINTURA/ ADHESIVOS

Utilice con masilla ligera para reparaciones

WARNERTOOL.COM

Use with Paint/ Adhesive Removers Utilice con removedores de pintura/adhesivo

11/4" 3.1 cm

WARNERTOOL.COM

WARNERTOOL.COM 30

HARDWARE RETAILING | March 2019

1-800-444-0606

Category Trends

New Products

Delivered Twice a Month

Part of a Trusted Brand

Easy Peasy.

It’s no secret that independent retailers can make buying decisions quickly, so Hardware Retailing is making sure you have access to all the newest products and trends in the industry. Hot Products Hub e-newsletter delivers dozens of new products and category trends twice a month so you can stay current and one click ahead of your competition.

SUBSCRIBE AT HARDWARERETAILING.COM/SUBSCRIBE

Brought to you by

Checkouts EVENTS

You Make a Good Case

W

hether it’s a display for every state coin in the U.S. or antique farm tools decorating a store, collections can develop fervor in their fans.

Knives, particularly those manufactured by the W.R. Case & Sons Cutlery Co., have become collectible items and family heirlooms passed down through generations.

East Texas Hardware in Kilgore, Texas, has celebrated the knife brand with an extensive array of knives from Case.

To celebrate that partnership, the business hosted a stop of the Case® 2018 Generation XX Tour in September to welcome Case knife enthusiasts and offer exclusive deals while viewing the latest designs.

“We’ve always had a large selection of Case knives, and people who really care about knives love the Case collection,” says Jimi Mankins, manager of East Texas Hardware. “We knew the tour was coming up on the calendar, so we put together a proposal to be a stopping location for our region based on our customers’ proven appreciation for these items.”

East Texas Hardware offered special discounts, and specific knives were available only during the event in a live auction.

Proceeds from the auction benefited the local Boys & Girls Club.

The event also featured a workshop for children ages 8 to 16.

The event drew around 400 Case knife enthusiasts, Mankins says, including multiple attendees from outside Texas. The Case tour included 12 stops in nine states, allowing collectors to engage with Case representatives at each location and see the latest developments.

“One of the big draws is the community that forms around these knife collections,” Mankins says. “People love sitting around and talking knives. They discuss which is their favorite and why. There’s a lot of love for a product made in the U.S. and for collectibles specific to one location, like the knife we auctioned off for $2,950 for charity.”

East Texas Hardware also offers other unique niche items, such as archery equipment. The event also featured free food and door prizes for the attendees.

Photos courtesy of James Draper, Kilgore News Herald Case Knife enthusiasts from all over the country flocked to Kilgore, Texas, and the special tour event at East Texas Hardware.

The store has long been known for its selection of knives.

Looking for creative ways to engage customers? Whether it’s promotions, merchandising or special events, we cover it here.

Have an idea? Contact Melanie Moul at mmoul@nrha.org to have your story considered for publication.

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HARDWARE RETAILING | March 2019

COMMUNITY EVENTS

Full STEAM Ahead at Friedman’s

O

nce a month, Friedman’s Home Improvement in Santa Rosa, California, becomes a laboratory where children can learn about the world. The retailer partners with the Children’s Museum of Sonoma County to host a free workshop where children can be creative while learning more about one of the STEAM disciplines, an acronym referring to science, technology, engineering, arts and math. Each workshop includes a project center, where participants get a hands-on experience building with objects found around the hardware store, and an exploration station, where a representative from the museum teaches them more about the theme for that month.

In one workshop, for example, children learned about the principles of creating sound and how it’s created. They then used that knowledge to create their own instruments using pipe, string or other items Friedman’s provided for the project.

At another workshop, children built gravity racecars and got an up-close look at a real NASCAR vehicle, which was parked in the store’s parking lot.

“The goal of our program is to inspire future builders,” says Rebecca Ehrlicher, events and branding manager at Friedman’s. “We want to make learning about the STEAM disciplines approachable and fun, giving children a first touchpoint in a way that encourages creativity and interaction.

It is an investment in our future.”

In one workshop at Friedman’s Home Improvement, children learned why pumpkins and cranberries can float.

COMMUNITY RELATIONS

Helping Artists Get Their Start

F

or three young artists, Evans Ace Hardware is the holder of one of their first commissioned works of art.

David Evans, owner of the store in Hamilton, Montana, worked with the instructor in a local art studio and three high school students to commission a set of four murals depicting the four seasons and the town’s history. Evans, who has a degree in fine arts, suggested a series of murals showing some local historical icons, portrayed in the art nouveau style, and let the students use their own creativity.

The students had several meetings with Evans, talking through their ideas, showing sketches of what they had planned and discussing their color selections. Evans provided all of the supplies, even ordering some special artist paints he didn’t normally stock, which were recommended by the students.

While the students weren’t paid for creating the mural, they did get the experience of understanding what artists go through when they’re hired to do a painting.

“I wanted the kids to feel as if it was an actual commissioned artwork, giving them a sense for what it would be like to work as a professional artist,” Evans says.

“The students just blew me away with what they came up with. The publicity has been beyond what we expected, too.

The mayor gave us a certificate of beautification and the local feedback has been very positive. We are the second oldest business in our town, and I think we have the responsibility to keep some of our local history alive.”

The mural outside Evans Ace Hardware has four panels, each showing a different season and historical icon from the area.

March 2019 | HARDWARE RETAILING

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Checkouts

OPERATIONS

Can’t Beat the Classics

F

rom a smell that brings back childhood memories or hearing a long-forgotten song, nostalgia can be powerful.

For Shawn Evans, that special memory is hardware stores. More specifically, old hardware stores and the little things about them that are hard to find in modern home improvement operations.

“Those old hardware stores we had when I was growing up in Michigan were just like that stereotype of the small-town hardware store,” Evans says. “From the smell to the creak of the wood floors, you knew where you were without seeing it.”

When Evans and his family bought Landrum Do it Best Hardware in Landrum, South Carolina, it was everything he wanted in a location. The building was built in the 1930s and featured the type of nostalgia he treasured.

The business grew, and it soon needed more space.

They chose to build a brand new building at a different location, complete with all of the modern comforts customers have come to expect.

For Evans, losing the old building was a necessary sacrifice for his business.

Despite moving into a new location, Landrum Hardware was able to bring a bit of its history with special flooring.

For over a century, we have insured the lumber and building material industries.

A long time has passed since we first started insuring the unique risks of wood-based businesses in 1895, but our core values remain the same – we are committed to bringing our policyholders the most comprehensive and current coverages along with sophisticated risk management practices to keep their businesses safe and prosperous.

Put our time in the building material industry on your side. Contact us or your broker for a competitive quote.

It’s about time you moved your insurance to PLM.

800.752.1895 | www.plmins.com 34

HARDWARE RETAILING | March 2019

AMERICA’S OLDEST AND LARGEST MUTUAL INSURANCE COMPANY DEDICATED TO THE WOOD PRODUCTS AND BUILDING MATERIAL INDUSTRIES. WE INSURE HARDWARE STORES, HOME CENTERS AND BUILDING MATERIAL DEALERS.

However, there was one thing he wasn’t willing to part with—and he was willing to accept some odd looks to get it.

“I wanted that classic sound of an old wood floor. I knew we couldn’t have the whole store be on creaking wood floors, but I think it’s a necessary part of the feeling you get walking into a hardware store,” Evans says. “Plus, I knew our long-time customers would say, ‘This is nice, but I miss the old floors.’”

During construction of the new Landrum Do it Best Hardware location, Evans specified to his contractor that a wide center aisle would have wood flooring, and it would be constructed in such a way that it would reliably creek when stepped on in certain spots.

“The way the floor is constructed is essentially exactly opposite of what a good contractor is taught to do. I’m sure they want it known that I asked specifically for them to build the floors this way,” Evans says. “We put the flooring in, and it squeaked just like I wanted, then we sanded it and put linseed oil down to give it a classic look, too.”

The new location draws rave reviews for the flooring, which greets customers from the front door and leads them to a central information station. The rest of the store features a modern floor.

“When people first walk down that wooden aisle, they gain a real appreciation for the old days and how places like hardware stores felt,” Evans says. “It’s exactly what I wanted.

In fact, I might have gone a bit overboard on the squeak. But I wanted the customers to notice it when they walked in, so we had to get their attention.”

Shawn Evans, owner of Landrum Do it Best Hardware, installed flooring designed to squeak as customers walk.

By Chad Husted, chusted@nrha.org

Luring Them In Retailers Provide Fishing Services and Products to Catch Community Interest

F

ishing and outdoor enthusiasts are all about the experience. Whether it’s the first rays of sunlight hitting a stream at dawn or the tug on the line that alerts an angler to a new catch, the small moments enrich the lives of dedicated hobbyists and professionals.

Those memories keep a fisher motivated to get back out there and land another fish and form another memory.

Retailers are already part of that process, and they should believe that memories created during a trip into a store for fishing supplies will stick with an outdoorsman just as much as the trip out on a boat or hiking up an Alaskan stream.

Getting the right gear before a trip can make all the difference for an angler, and when a retailer serves as a trusted partner for adventurous customers, they share in those customers’ fishing successes.

Products designed for outdoor enthusiasts are nothing new to many home improvement retailers. The same independent drive and spirit to take on home improvement projects with their own hands is likely found in fishers looking to pull their own dinner out of a lake. However, there is more to catering to the fishing community than stocking a few rods among the camping gear and portable grills.

Hardware Retailing spoke to two retailers who have found a way to be a resource for standard hardware items and advocates for fishing hobbyists. Whether it’s offering the best product selection, distributing permits or hooking prospective adventurers up with knowledgeable guides, there are multiple ways to snag a fisher’s attention.

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HARDWARE RETAILING | March 2019

A retailer hoping to catch the attention of area enthusiasts should have employees on staff who know where to find the fish and what a customer should be looking to catch.

Knowing Your Waters For Trustworthy Hardware & Fishing in Soldotna, Alaska, fishing isn’t just a niche market. Soldotna is a major hub situated on the Kenai River and is the most popular sport fishing destination in Alaska. Every July, the sockeye and king salmon season comes to a peak as anglers from around the world rush to the town to catch a once-in-a-lifetime fish.

Scott Miller co-owns Trustworthy Hardware & Fishing with his brother Brian. The brothers have been involved in the hardware business along with their father ever since he opened the first location in 1986. However, it wasn’t until 2007 that Trustworthy Hardware & Fishing fully embraced Soldotna’s place as a fishing mecca and reestablished the business on a new property with a custom-designed salesfloor.

“We went from 6,800 square feet to 16,500 square feet in a new building on property we own. We still focus very much on dedicated hardware categories, but every summer we switch up the store and move our fishing products front and center,” Miller says. “We have tens of thousands, if not hundreds of thousands, of fishers come into town each summer, and this location is a block away from the river. We’re in the right spot to catch these customers and earn their repeat business.”

March 2019 | HARDWARE RETAILING

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Trustworthy Hardware & Fishing in Soldotna, Alaska, supplies an international cast of anglers each summer as the salmon season opens on the nearby Kenai River. The business also sponsors an ice fishing competition in the winter.

Trustworthy Hardware & Fishing’s location means it can serve a dedicated fishing scene.

In Truckee, California, Mountain Hardware & Sports serves various tourist hubs known for their outdoor offerings. The business has three locations, with the Truckee store supporting a healthy tourist community that welcomes visitors looking to enjoy the mountains or take a cruise on nearby Lake Tahoe.

The business was founded in 1977 as a general store providing whatever the community needed, says vice president Heather Svahn. That mission has grown to encompass a number of hardware and outdoors categories over the years, including a fishing department dedicated to supplying anglers in the Sierra Nevada mountain range.

“We’ve had a symbiotic relationship with Truckee as it grew up and became the community it is today. All of our departments, from outdoors and home decor as well as hardware, have developed to meet the area’s needs,” Svahn says. “We supply the everyday items our year-round residents need to maintain their homes as well as their hobbies, while also acting as a resource for the visiting family looking to have a week of fun.”

Mountain Hardware & Sports and Trustworthy Hardware & Fishing have researched their fishing markets to feature products and knowledge that are useful for experienced anglers seeking a prize-winning catch as well as novice adventurers out for a fun afternoon. This attention to the surrounding area is key for a retailer hoping to attract a strong fishing following, Miller says.

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HARDWARE RETAILING | March 2019

“There are plenty of old sayings about how much fishers talk. You do want a reputation, but you want that reputation to be about the quality of your products, the assuredness of your service and the dedication you put into valuing a customer’s time,” he says. “We have repeat customers who have been coming to Alaska each season for decades.

By proving to these customers how serious we are about this sport and making their trip a success, we’re able to earn that business each season.”

Catch the Big One With Stellar Service Whether customers come into a fishing destination store looking for the latest battery-powered drill or a local fly designed to attract an Alaskan salmon isn’t normally under a retailer’s control. Convincing that customer to come back for another visit can be heavily credited to what a retailer offers in addition to the products the customer buys on their way to cast a line.

Services retailers can offer that attract members of the fishing community include issuing licenses and permits on-site, offering free line unwinding and winding with a rod wrapping machine, repair services and connections with area guides and tours.

On top of the on-site services, developing strong supply lines and planning ahead for common needs during strong fishing seasons can be great assets, Miller says.

Trustworthy Hardware & Fishing has built relationships with manufacturers that allow it to order products at prices that encourage anglers to buy their supplies once they are in town rather than

before they make their trip to Alaska. This includes manufacturers of fishing accessories from national brands as well as local producers around Soldotna.

“We’re competing with big-box outfitters in the Lower 48 as well as online retailers that can have supplies and equipment shipped ahead of time for anyone planning to fish during our prime seasons,” Miller says.

“We offer things the national chains can’t offer, like rods specifically designed for our fisheries and our waterways. Those kinds of products offer incentive to shop for your gear once you get to Alaska and to Soldotna.”

Some of these unique products include locally designed flies from an area manufacturer that have been proven to attract the most sought-after fish in Alaskan waters. Trustworthy Hardware & Fishing also purchases bulk lead that is then converted by a local manufacturer into custom weights.

These weights allow anglers to have an advantage in areas around Soldotna, as the weights help fishers reach optimal depths for the Kenai River.

“We have products specific to the needs of fishers in our area, and we have a lot of supply of these items,” Miller says. “We choose to focus on products that can’t be found in other stores, and we maintain a high inventory of these items.

In categories like fishing, it’s very easy to bring in a lot of inventory and scatter those products across to large part of the market. We keep our products focused on the Kenai River and the fisheries we service.”

Permitting Exploration Both Mountain Hardware & Sports and Trustworthy Hardware & Fishing issue permits at their locations, allowing anglers to not only stock up on supplies but gain licenses for the multiple fisheries, locations and types of fishing allowed in their areas.

“We’re lucky that California has completed a changeover to an online system for selling fishing permits, but no matter your system, the people issuing the licenses need to be the same people who can offer the best advice on what a customer needs and where they should head for the type of fishing they want to try,” Svahn says.

Up-to-date knowledge of a state’s rules and regulations surrounding permits is also crucial to enhance customer satisfaction and build a reputation as a resource for anglers of any experience level, Miller says.

Trustworthy Hardware & Fishing has multiple staffers trained on issuing permits, which during peak season can be a full-time task. The operation also has two employees who are familiar with the most current regulations in order to answer customer questions quickly and correctly.

“Alaska has crazy-complicated regulations when it comes to fishing, and just in our river, there are open sections, closed sections, places where you can and can’t drive a boat and many other stipulations,” Miller says. “We want our customers coming in, getting supplies and the permits they need, and back out having a great time on the water.”

If You’ll Permit Me Permits and licenses are necessary for a number of outdoor activities, from weekend camping trips to major excursions on the open water. For retailers looking to expand their offerings for outdoor enthusiasts, here are two tips on how to best train employees on issuing licenses and some key red flags to watch out for.

Visit TheRedT.com/fishing-permits for more.

• As a fishing destination, retailers focusing on the outdoor life are likely already knowledgeable about fishing opportunities in their area. This knowledge should extend to the regulations laid out by a state’s governing authority, such as when certain species can be harvested or what areas allow boats.

Associate who can readily answer these questions for customers without referencing a guide make for a strong team and reputation in the fishing community.

• If someone is coming in looking for fishing gear, they’re likely intending to use it sooner rather than later. At Mountain Hardware & Sports, the process of receiving a permit is part of the larger plan of selecting a piece of equipment for a customer. If the customer already knows what kind of fish they are looking for, one employee can start the issuing a permit while another associated educates the customer on the best fly to use and whether they need a guide on the water.

March 2019 | HARDWARE RETAILING

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Mountain Hardware & Sports, in Truckee, California, serves fishing enthusiasts in the Sierra Nevada mountains.

Reel-Good Guides While demonstrating staff knowledge and offering up-to-date information on allowable catches and when a season will open and close are excellent services a retailer can offer, sometimes having connections outside a business is the real key to becoming an integral part of the fishing community. Trustworthy Hardware & Fishing and Mountain Hardware & Sports have developed strong relationships with area guides and charter companies that are available to offer their expertise on specific fishing seasons and styles.

For Mountain Hardware & Sports, the sheer diversity of the natural landscape means there are several options for visitors depending on whether they’re looking to fly-fish a mountain stream or troll a deep lake. By maintaining relationships with multiple guides and having employees who can speak professionally about local fishing opportunities, the business is able to assist customers in a unique way.

“We know our area experts well, and we can recommend a guide who is great with families looking to enjoy a fishing trip with their kids as well as a guide who can handle an experienced angler,” Svahn says.

Retailers testing the waters of the fishing category can stay afloat knowing that dedicated fishers are often enthusiastic in their support for the sport as well as the gear involved. A strong reputation and the knowledge to back it up can be a great niche for hardware stores in the right areas.

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With the proper research for what local fisheries are looking for in products and services, retailers can become major players in the outdoor category.

“It’s all about finding the right match for your market. If you’re ready to make a commitment to the fishing category, it’s because you saw an opportunity to serve that market in your area,” Svahn says. “You had reason to believe it would work, so don’t be quick to throw the baby out with the bathwater. Keep looking for the right kind of demand that you can supply, and you can find loyal customers for the long term.”

HARDWARERETAILING.COM

Serving Hardware, Home Center & Building Material Retailers

SPECIAL PROFILE ON ACE HARDWARE CORP. 2019

Ace Hardware Retailer-Centric Change and Growth

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Onward and Upward Future-Focused Ace Carries Values Forward

A

ce Hardware Corp. is on a growth path that maintains its retailer-owned cooperative model, continues to pursue its core values and finds new, adaptive ways to support its retailers.

The co-op is celebrating its 95th anniversary in 2019.

The company is also rolling out next-day product delivery to 70 percent of Ace stores nationwide, leveraging its expanded supply chain more than ever and building on recent, rapid e-commerce growth.

Headquartered in Oak Brook, Illinois, Ace serves more than 5,200 retailers worldwide, including nearly 4,500 stores in the U.S. In the following section, you’ll find Hardware Retailing’s interviews with four top Ace executives, including president and CEO John Venhuizen, and a profile of the brothers who own Desert Foothills Ace Hardware in Phoenix.

Table of Contents 45 . . . . . . . . . . . . . . . . . John Venhuizen 46 . . . . . . . . . . . . . . . . . . . . . John Surane 47 . . . . . . . . . . . . . . . . . . Lori Bossmann 48 . . . . . . . . . . . . . . . . . . . . . . . . Kim Lefko 49 . . . . . . . . . . . . . . . . . . Desert Foothills Ace Hardware Extra, Extra! Online Exclusives

This special section on Ace Hardware Corp. is published by Hardware Retailing magazine, which holds and reserves all copyright on the content contained herein.

This special Hardware Retailing supplement is part of a yearlong series profiling the home improvement industry’s distributors.

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For full Q&As with Ace executives, visit TheRedT.com/ace-qa.

To read additional retailer profiles, visit TheRedT.com/ace-profiles.

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EXECUTIVE Q&A

Evolving for Growth Ace Maintains Mission While Embracing Change Hardware Retailing (HR): What is new with Ace’s strategic plan?

John Venhuizen (JV): It’s our belief that, while the tactics

HR: What are some ways Ace’s strategy has changed over time?

JV: We are disproportionately investing, not in lieu of but

will change, strategically, the three battles we will wage to win the retail war are service, convenience and quality. We want an irrational pursuit of amazing service. When you walk into an Ace store, the consumer has to feel it is noticeably better than the competitor. The definition of convenience is changing, but really working in our favor. We’re trying to exploit the fact that just under 75 percent of the U.S. is within 15 minutes of an Ace store. We have $1.9 billion of inventory sitting in our stores within 15 minutes of most of U.S. homes and businesses. We’re going to continue to accentuate and leverage that. When it comes to quality, we compete against some very big, well-funded enemies, but our niche is to have high-quality, differentiated, locally relevant products. Having the widest assortment of goods with the most unique, locally relevant product is critical to our foundation and our strategy.

in addition to, three really important things.

First is digital. We spent a lot of money to re-platform our website. We were up 40-some percent in 2018 in e-commerce sales, and on every single one of those sales, 100 percent of the profit goes right to that local store. That growth is going to be material going forward. We’re delighted with the 40-plus percent increase, but we’re just getting started, and we’re going to continue to invest significantly.

Second is The Supply Place, our business-to-business function. The Supply Place is our No. 1 fastest-growing area. We’re going to continue to disproportionately invest in that.

Third, from a supply chain perspective, we’re investing the majority of our capital to ensure we have the biggest, best, most efficient supply chain. We’re providing a new, unique and relevant benefit to local owners. Our stores now can order whatever they want to satisfy and win over a customer, and we’ll ship it to them the next day. We want to be faster than Amazon on products we stock.

HR: How has purchasing the wholesale companies Emery-Waterhouse and Jensen Distribution served Ace’s mission?

JV: A supply chain is a hard, capital-intensive, low-margin business. The way to make a capital-intensive, low-margin business work is by skill and scale. The No. 1 thing we can do to help the local home improvement store owner is to drive down the cost of goods. In the very first year, we were able to deliver, through synchronization of costs across multiple vendors, just under $20 million in lower cost of goods.

HR: Where do you see Ace’s place in the home improvement market?

JV: In the home improvement industry, local owners really are competing against the biggest, best, most well-capitalized companies in human history. Look at Home Depot, Lowe’s, Menards and Amazon. These are direct competitors, and the way we’ve articulated this is, who do you want to go to war with against those Goliaths? We think you’re going to want to be aligned with a co-op that can bring you the lowest cost, best brand, biggest, best supply chain, best economics and most services. We think the combination of those things is a powerful proposition for local owners. The consumer is the one that makes the choice and that’s why brands matter.

HR: What’s your vision for the future of the co-op?

JV: The co-op is alive and well and aligns completely with the aspirations of our owners. We have grown.

We have more equity than debt and more capital to fuel our aspirations than we need.

We’ve entered our 95th year with record sales, 6 percent revenue growth and a lot of momentum. How will we sustain ourselves for the next hundred years? I think it’s by being the best, most helpful hardware stores on the planet.

Corporately, our mission is to be the best provider of products, services and operating methods to entrepreneurial retailers around the world. I’m more excited about tomorrow than I am about today.

John Venhuizen President and CEO Venhuizen has worked at Ace Hardware for more than 25 years, serving in a variety of leadership positions. In the past, he has overseen marketing, business development, strategy, supply chain, IT and Ace International.

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EXECUTIVE Q&A

Staying Focused How Ace Pursues Differentiation Where It Counts Hardware Retailing (HR): What is your merchandising strategy for Ace? John Surane (JS): I think it’s important that we stick to what our core strategy has been for merchandising over the years. It really is about becoming famous for four big segments or categories in the store, which are paint, backyard and barbecue and home preservation, which would be the core plumbing, electrical, hardware products. The fourth key segment is holiday, where we really get into trim-a-tree and unique, innovative gifts.

We have to be the best at sourcing those categories and finding the best brands and creating the most differentiation within those four big buckets of product categories.

HR: How will the co-op do that?

JS: It’s really all about focus. It’s knowing what we stand for and then trying to go after it. For example, our paint department has grown the number of merchants we have in that department and resources we put toward it and grown significantly over the years. We heavily adjust resources to make sure we have enough people in that department so we can work closely with our manufacturers and sourcing agents to procure the best assortments. Again, best costs, best assortments and the most differentiation to make that department really work.

HR: How is your team making sure Ace Hardware is always differentiated?

JS: They have to understand what the trends are, what consumers are seeking. Then they have to work from there to establish relationships with brands and find the ones that aren’t sold on Amazon, which is very difficult. To the extent we can, they look for the stuff that is not sold online and not in the big boxes. We have the most success there. Our owners love those brands and we win with those.

HR: Is differentiation an ongoing process?

JS: It really is. This is why I believe in the co-op. Having 4,500 stores banding together as one co-op in the U.S. market and supporting some of these key products and brands in big categories, allows us to have the scale we need to get manufacturers and brands to favor us and come to us and say, “I’m going to offer you these products or my brand exclusively. I’m not going to sell this brand to one of

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the big boxes or in the rest of the hardware channel.”

We are seeing more and more of that every day because of our growth and because of our great retailers banding together to grow these categories. We’ll never stop trying to find more and more of those brands.

For example, we work with a brand of power tools that has a very strict channel strategy. They sell to Home Depot and they sell in the industrial channels, but they’re not on Amazon and they’re not in Lowe’s or Menards. We’re putting together big strategies to grow their business, and they’re favoring Ace in many ways because of our growth and again because of our retailers sticking behind that brand.

HR: What does it look like for them to favor Ace? JS: The level of support, be it in terms of the assortment they’re offering us, field support, programming, support of our shows, support of our retailers, advertising dollars.

All of those things make up a program that enables us to grow.

There’s a give and take. We support them as much as we can, and they support us with all of the resources and funding that they can. We believe that’s a win-win.

HR: How have you zeroed in on the categories that are key for Ace? JS: We say that our brand stands for helpful in service and convenience. We think about what categories require engagement of an associate in the store. For example, paint. You can’t go into a hardware store, a home center or anywhere else and purchase paint without the help of an associate because you have to get the paint tinted.

There’s engagement and a level of service that has to occur. Categories like lawn and garden, outdoor power equipment, barbecue, paint, plumbing, electrical and hardware are high-engagement, high-touch categories with Ace store associates. Those are where we focus so retailers can really leverage helpful, best-in-class service.

John Surane Executive Vice President, Chief Merchandising and Sales Officer Surane oversees merchandising, sales and Ace Hardware’s wholesale division. He has worked toward enriching Ace’s selection of high-quality, differentiated products.

DISTRIBUTOR PROFILE SERIES

EXECUTIVE Q&A

Supply Chain Moves Ace Innovates to Help Retailers Stay Competitive Hardware Retailing (HR): What are some major supply chain improvements that are underway?

Lori Bossmann (LB): Ace’s business is driven a lot by

Now, with Logistics Revolution, they really have access to 100,000 SKUs within a day.

the weather. We have an opportunity, as an organization, to really shine when tragedies or big weather events— such as hurricanes, snow storms or flooding—happen.

We are using a program that incorporates weather forecasting to predict how much sales will go up due to weather events, such as hurricanes. The significance of that is that we have a two-week lead time on orders by being ahead of the weather. We tested this in 2018 on 21 categories. Our forecasting accuracy improved 6 percent.

We’re rolling out the program from 21 to 100 categories.

We’ll leverage it in any categories we can, going forward.

What we’re calling the Logistics Revolution is a significant initiative. Our supply network can reach 70 percent of our stores within 250 miles of a distribution center. Our average Ace store has 25,000 SKUs. Our warehouses have 100,000 SKUs. The Logistics Revolution is giving stores access to those SKUs within one day. Our goal is to roll it out to 70 percent of Ace stores by the first quarter of 2019. This initiative is really enabling store associates to say “yes” more often to customers.

If the store makes an order by 2 p.m., we can guarantee delivery for the next day.

HR: What spurred these changes?

LB: All these changes are always a response to our

HR: How does the Logistics Revolution work?

LB: In order to offset costs, we optimized our current replenishment routes with retailers. We used software that basically looks at service routes to optimize delivery routes.

We have 4,500 stores that are within local markets, in close proximity to the customer, and we can leverage the Logistics Revolution to get them the product within a day. That’s something that no other retailer out there has because they don’t have 4,500 physical store locations within the marketplace. The real value is that we have stores within all those markets that have 25,000 SKUs.

“All these changes are always

a response to our retailers and helping them be more competitive in the marketplace.

”

retailers and helping them be more competitive in the marketplace. However, we were the leaders to really push forward the Logistics Revolution because we thought that the retailers needed next-day delivery to be competitive.

We were also getting a lot of feedback, as our retailers grew their B2B businesses, that they needed more frequent deliveries. The program is a driver to help them service their B2B customers much better and on a more timely basis. Now, they can get a one-day replenishment order and supplement it with the Logistics Revolution.

There’s also no order minimum.

HR: What other supply chain projects is your team working on?

LB: Within the last several months, we’ve also rolled out an Uber-like app that allows our retailers to know exactly where their delivery vehicle is. The reason this is important is that when a normal replenishment order arrives at the store, they usually staff up and have to have extra help come in to receive the order. About 95 percent of the time, our delivery trucks arrive within 30 minutes of when we say they will. However, for the 5 percent of the time that they’re delayed, retailers want to know where their truck is so they can shift staff members to other tasks instead of having them wait and be unproductive.

The app is a way to use technology to really help communicate to our retailers. On a map, the retailers can see exactly where their delivery truck is. It’s immediate information that is especially helpful when you have storms or there’s a traffic accident.

Lori Bossmann Executive Vice President, Chief Supply Chain Officer Bossmann oversees supply chain operations, inventory replenishment, retail support, loss prevention and property administration.

She has been with Ace for more than 30 years.

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EXECUTIVE Q&A

A Marketing Balance Ace’s Dual Focus on Both Local and National Initiatives Hardware Retailing (HR): What are your current marketing initiatives?

Kim Lefko (KL): It’s really a blend. We have this philosophy

HR: What are some other important initiatives you’re working on?

KL: Probably the biggest one is digital. When we talk

that we test, learn, refine and scale. So, we’re always trying new things, but ultimately, we need to balance national advertising with local, relevant advertising because of the nature of our business. Keeping a national brand presence is important for us. That’s why TV advertising is still a major area of investment for us. We’re also investing in digital advertising on a national level.

Each individual region and each individual store is local. We balance the national advertising with very local, relevant advertising. Probably our two biggest levers at the local level are PR and social media. We provide tools and support so a local store can really make its presence felt using marketing.

Events are also very important. We have four national events that we advertise and promote nationally, but locally, retailers can really activate and create a draw at the store level. Those events are geared around what we would call our famous categories, which are barbecue and grills, home maintenance and preservation and holiday and gift giving. New in 2019 is our 95th anniversary. The events are nationally promoted through radio and TV, but locally activated at the store level.

about digital marketing, it really comes down to a few key areas. The first is AceHardware.com. Through the website, if you’re a local Ace retailer, you can show your pricing. You can show your promotions and offers and events happening. And that’s an incredible marketing opportunity for the individual hardware stores located across the country.

The second major investment in digital is our app.

We’re now in the process of redeveloping our app, and we will be relaunching that in the back half of 2019. As we think about the app, it really is geared toward commerce and Ace Rewards members. We have several million members in our Ace Rewards loyalty club. How we connect and engage with them on a very personal level is a key marketing initiative. It’s a major value-add to the brand on the national level, but also on the local level because we can segment out the shoppers for an individual store and put together programs specific to that region or that individual store.

HR: What will the 2019 events look like?

KL: First, we will be doing the spring start, which is home maintenance and repair. We’re calling that the backyard party. It will be taking place in the March-April timeframe, and that will be very much focused on featuring a premier brand for us. Our May event will be a barbecue fest that will be focused on our top-tier brands. October is our birthday month, so that’ll be our 95th birthday celebration, and we have some fun things planned. And then December will be holiday gifts and lighting.

We’ll nationally promote the events through our preprint circular that we send out. We’ll also piggyback our TV promotion the week prior to each of these events.

And then, of course, we’re big on creating the necessary tools that we can hand off to the local store to market on their own. If you were to walk from one Ace to another, each store chooses how they want to do the event, but at the corporate level, we give them a standard sign kit and tools to execute a unified feel.

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HR: What are the benefits of the different approaches you’re taking?

KL: The biggest benefit for the local retailer is that you have the best of both worlds. You have this beautiful balance of nationally building Ace’s very trusted and loved brand.

That’s important to a local retailer because it’s the name on the front of their store. We also have to give the local store all the tools necessary to be able to market at an individual local level. Being able to personalize their marketing and be locally relevant are so important. We would never want to take away that entrepreneurial spirit and locally owned feel from a neighborhood or from a store owner. As a marketer, we have to give retailers tools to empower them while we also build the loved and iconic Ace brand.

Kim Lefko Senior Vice President, Chief Marketing Officer Lefko leads Ace Hardware worldwide marketing and advertising efforts and digital initiatives. She was appointed to her position at Ace in 2018 after working for Weber-Stephen Products.

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RETAILER PROFILE

From Famine to Flourish Brothers Grow a Business by Saving Struggling Stores

B

rothers Martin and Art Ruggiero—owners of Desert Foothills Ace Hardware in Phoenix—were already business partners before most kids their age had moved on from their high school and college jobs.

Their father, Al, had opened a hardware store in 1976 as a retirement plan. He realized within a year or so that the business wouldn’t become profitable quickly. He wanted to close the store, but couldn’t afford to break his lease on the retail space.

Martin, at age 20, and Art, who was just 15, made a choice. They decided to keep the store alive so their dad wouldn’t have to pay the penalty if he broke the lease.

Martin was in college and Art was still in high school, but they began spending their free time scrambling to manage a struggling operation they didn’t know how to run.

For years, they barely scraped by. Yet Art graduated from high school, both of them graduated from college, and the store grew up with them.

Their mother helped out at the business, and eventually they could afford to hire other employees.

The brothers learned as they went, talking to customers about what they needed and expected from a local hardware store.

“We knew every customer by their first name,” Martin says. “We really enjoyed the business and being on the floor with our customers.”

Four decades later, Martin and Art are still partners.

They have a third generation of Ruggieros rising in the company that is eager to keep it family owned.

And their business is now a flourishing multistore operation called the Jant Group Inc. with seven locations in Arizona, New Mexico and Washington state. Each store has a local name specific to its community, such as Desert Foothills Ace Hardware, which is located in the Ahwatukee neighborhood near the foot of South Mountain in Phoenix.

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“It’s kind of our niche to take

a struggling store and make it profitable. We’ve found a very successful way of doing it.

”

—Martin Ruggiero, Desert Foothills Ace Hardware

Turning Around Troubled Stores The Ruggieros’ original Phoenix store set a pattern for the brothers’ business model.

Since making their father’s store successful, they have grown their operation primarily by acquiring stores that weren’t doing well.

“It’s kind of our niche to take a struggling store and make it profitable,” Martin says. “We’ve found a very successful way of doing it.”

During the past 20 years, the brothers have bought or started four stores in Arizona; one in Santa Fe, New Mexico; and two in Spokane, Washington. They are currently on the lookout for more acquisition opportunities.

Neither Martin nor Art spends much time working on salesfloors anymore, particularly since Martin’s job now includes visiting every store location at least once a month. Martin also oversees the company’s financials and commercial sales, while Art handles human resources and operations.

They have built a management team they trust to oversee day-to-day operations at the stores and the next generation of Ruggieros are enthusiastic about keeping the family business thriving. Art’s sons Austin, age 32, and Josh, 35, are already involved in the company, and Martin’s son Troy, 25, has expressed eager interest.

“We have very capable children to take over the company,” Martin says. “They understand the business and understand our philosophy. We’re very fortunate.”

A Partner in Growth Martin and Art credit Ace Hardware Corp. with helping their operation thrive and grow. They have worked with the co-op since their first store started in the 1970s.

Ace has been an important partner for four decades, helping the brothers expand the business through acquisitions. Over the years, the co-op has helped the brothers identify store owners who want to retire or are otherwise looking to get out of their business.

In addition, the co-op has assisted with resetting product departments, provided advertising programs and a robust customer rewards program, conducted market studies and offered suggestions for the product mix for each new or acquired store.

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Martin and Art Ruggiero own seven stores in three states, including Desert Foothills Ace Hardware in Phoenix.

The Ruggieros’ most recent purchase was in 2017, when they bought their 12,500-square-foot location in Peoria, Arizona.

Their current goal is to buy two or three more stores within the next few years. Ace Hardware continues to help Martin and Art look for and negotiate with other Ace store owners who are ready to sell.

An ongoing struggle for independent retailers who do not have family members or managers lined up as successors is finding buyers so they don’t have to close their stores when they retire. “I think we can help,” Martin says.

The Jant Group now has a reputation for buying stores and making them successful thanks to a track record of making acquisitions profitable within about a year, he says.

Martin appreciates Ace Hardware’s ongoing support of the company’s growth. The co-op takes a personalized approach to serving the business, he says.

For example, Ace CEO and president John Venhuizen called Martin on Black Friday in 2018 to check how the stores were doing.

In turn, Martin feels comfortable calling Ace executives if he encounters problems in the business and has seen quick resolutions in response to concerns he has expressed.

“I can’t imagine not being an Ace dealer, to be honest,” he says.

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NRHA offers topic-focused roundtables, educational conferences, events and retail management programs. With dozens of options and ways to engage, you can explore what’s most important to you. Regardless of how involved you are, your voice matters.

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New Age of Pricing Taking a Closer Look at Amazon’s Retail Strategy

A

djusting prices according to supply and demand is basic economic theory, but now it’s happening faster than ever. Search for an airline ticket today and the cost might be different than what you saw yesterday. Ride-sharing services increase their fees when demand is high. And Amazon can change prices whenever it sees a competitor charging more.

Dynamic pricing, or continually adjusting prices in response to real-time supply and demand, is becoming the dominant pricing strategy among online retailers. Along with the conveniences of online shopping, it’s what Amazon uses to gain the upper hand in many categories.

In fact, consumers are likely to use the online retailer to compare prices as they decide where to make their next purchase. So how does the brick-and-mortar independent home improvement retailer compete when Amazon can undercut prices almost instantaneously?

To find answers, Hardware Retailing turned to two experts in e-commerce with a wealth of knowledge about Amazon and its impact on retailing today.

Their insights will help you understand the keys to Amazon’s retail strategy, including its dynamic pricing model, and how you can stay relevant in an age when Amazon is dominating retail.

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March 2019 | HARDWARE RETAILING

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How Amazon Sets Its Prices A Q&A With Gary Liu Gary Liu is the vice president of marketing at Boomerang Commerce.

The company’s founder, Guru Hariharan, worked at Amazon from 2004 to 2009, where he led teams that built much of the technology Amazon and its sellers use for inventory and pricing decisions. He founded Boomerang Commerce in 2012 to help retailers and brand manufacturers, those not named Amazon, figure out the online e-commerce game.

Hardware Retailing (HR): What is Amazon’s pricing strategy?

Gary Liu (GL): Amazon is not a price setter, it’s a price follower. For example, Amazon uses technology and automation to figure out what is the market price on a hammer or cordless drill. Then, if those are heavily shopped items, Amazon will match the price of the competing retailer. If Amazon is always matching or pricing slightly below the nearest competitor, and consumers see that over time, they’ll believe that Amazon is cheaper, which will in turn drive more traffic to the site. That strategy has allowed the company to build a loyal customer base.

This is part of what Amazon believes it can do best: Offer the widest selection, at the best price, and deliver products to customers in the most convenient way.

HR: Does Amazon always have the lowest price?

GL: No, but they do tend to be priced either at or below price for heavily shopped items. Amazon’s technology gathers information from other retailers’ websites. It looks at how much traffic is going to a competitor’s site and what prices they’re charging.

Amazon is checking prices as frequently as every 15 minutes throughout its wide catalog of products.

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HARDWARE RETAILING | March 2019

If Amazon wants to win market share in a particular category, it might be more aggressive with pricing on frequently shopped items in that category. In other cases, it may not be as aggressive on less shopped items. It might be OK with being 10 percent higher on prices for those items. It just depends on which categories and specific products Amazon wants to optimize for sales (at a lower price) or margins (at a higher price).

What is most important about Amazon is it is using automation to learn about each customer’s shopping experience on its site while monitoring prices on competitors’ sites. It tracks everything from the initial search on Amazon.com to the purchase. It can see how shoppers are searching for the products and what they finally buy. Amazon synthesizes all of that customer and competitor retailer data and updates prices accordingly.

It’s also important to note that the 80/20 rule applies to them, just like it does with other retailers: 80 percent of Amazon’s sales come from 20 percent of their products. For the other 80 percent of products, Amazon may not be the cheapest, but people still assume they’re getting a good price. Amazon can make money from products priced less competitively.

HR: How else does Amazon make money?

GL: Amazon Prime memberships are a big source for revenue. It’s a lot like Costco, where most of their profits come from memberships rather than the products they sell. Amazon Advertising is also becoming a significant revenue source with good margins as brands invest in banner ads and sponsored product ads on Amazon.com (and beyond) to drive traffic to their products sold on Amazon.

Amazon Web Services (cloud computing) is another profitable part of the business.

Amazon is also very good at add-on sales. It will suggest products that relate to what you’re buying to drive higher basket sizes and transaction values.

That tactic is basically just smart retailing.

Amazon has also become a lot like Walmart in the way it can use its leverage with vendors to get a low price to increase its bottom line.

Vendors used to go to Walmart’s headquarters in Bentonville, Arkansas, in a bid to get their products stocked in Walmart stores. Now, they’re going to Seattle to get their products stocked on the digital shelf, and Amazon is pressuring vendors to lower their costs if they want to be carried in the Amazon warehouse and be eligible to qualify for free two-day shipping.

Amazon also benefits from third-party sellers on Amazon Marketplace. These sellers can sell practically whatever they want. Amazon doesn’t have to warehouse the inventory, but they still get a percentage of the sales. That broadens the selection for consumers on the site, increases traffic and drives significant revenue that adds to Amazon’s profit margin.

HR: Do you see Amazon making advances on the home improvement market?

GL: Amazon is making headway in the home improvement space, but it’s in the middle of the path in terms of maturity.

We recently did a study that looked at online sales as a percentage of total sales in a particular category. We wanted to know what is the tipping point where brick-and-mortar stores started going

out of business because more of the products in their category were being purchased online.

Take the consumer electronics category for example. About 50 percent of consumer electronics purchases are made online. In our research, we discovered that the tipping point was between 20 and 30 percent. When that line was crossed, when 20 percent of total sales in a particular category are made online, brick-and-mortar stores such as Circuit City and RadioShack started going out of business. The same has shown to be true for other categories, such as sporting goods.

When 20 percent or more of total purchases come from online sales, that’s a big issue.

The numbers for home improvement (online sales as a percentage of total sales) are still in the teens.

That’s a signal to owners of home improvement stores that they need to take action now to stay relevant.

HR: How can brick-and-mortar retailers use technology to stay relevant against Amazon?

GL: Partnership with a wholesaler that keeps you sharp on pricing is critical. Does your wholesaler have a way to help you price-shop competitors so you are better informed on the prices in your store? Maybe it’s in the form of a daily tearsheet or automated email that keeps you up to date on price changes on key items in your market.

Use whatever tools you have at your disposal.

‘We Price-Match Amazon’ It’s a bold move. If Amazon has a better price than his, Steve Fusek, owner of Fusek’s True Value in Indianapolis offers to match it.

Customers were skeptical at first, he says, but some have taken him up on it. On average, he only makes about 22 percent margin on products sold that are pricematched to Amazon, less than half of his typical margin.

Even if he occasionally has to sell a product below cost, he sees that as a gain rather than a loss.

“I feel like it’s a long-game play,” he says. “People will only price-match for so long before they start to trust our prices.

I’d much rather have that customer in my store than just have them sitting at home shopping online. A lot of my shoppers also support the shop-local movement, and they like it that we’re taking on the big guys.”

“You can look at it as if I just gave away 22 points, or look it as if I gained 22 points,” he says. It’s a sale he would have otherwise lost to Amazon. Most of the time, customers price-match on higher dollar items, which carry a lower margin anyway. Closing the sale on a higher dollar item may result in catching the purchase of several smaller dollar, higher margins, too.

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Mega Assortments, Exclusive Brands A Q&A With Jason Goldberg Jason Goldberg has a front-row seat to the digital disruption of commerce. During his career, he started his own customer experience design firm where he worked with some large companies, including Walmart, Best Buy, Target and Bass Pro. Currently, he’s a regular contributor to Forbes, hosts a popular e-commerce podcast, “The Jason & Scott Show,” and serves on the board of directors of shop.org, the digital retail arm of the National Retail Federation.

Hardware Retailing (HR): What are some of the ways Amazon has disrupted the retail industry?

Jason Goldberg (JG): Amazon disrupted a lot of categories in a variety of ways. Amazon started with the convenience of not having to leave home to get products. It started with the categories that were easiest to disrupt—books, then consumer electronics, then apparel.

Increasingly, as Amazon comes to dominate those categories that were the low-hanging fruit, it’s moved all of its efforts and resources to increasingly complex and challenging categories. Home improvement is one of those complex categories, mainly because of the cost and size of the goods. Some items are big and super expensive to ship, such as lumber.

But the first real disruption to the retail industry wasn’t really Amazon, it was the whole idea of e-commerce. Amazon just piled on that disruption with other factors.

HR: What are some of the tactics Amazon uses to establish itself as a price leader?

JG: It’s a triple whammy of assortment, aggressive dynamic pricing and the presence of the Amazon Marketplace alternative that makes Amazon a compelling shopping tool for

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consumers and makes it tough for retailers who want to compete.

Amazon’s assortment has gotten enormous— more than 600 million products. So naturally, it becomes the first place most people go when they’re searching for something. If you go to a typical hardware store looking for a drill, for example, you’ll only see the drills the retailer has selected to carry. On Amazon, consumers feel they’re getting to see every drill that is available, anywhere. In fact, these days, instead of searching for a product on Google, consumers go to Amazon. Amazon has become the starting place for digital shopping trips.

Amazon has also carefully cultivated a reputation, not necessarily as the lowest priced, but as a lowprice seller. It watches a competitor’s price for a particular product, and when that competitor has a product in stock at a lower price, Amazon tends to lower its price to meet or beat that price. However, if Amazon notices that a competitor is out of stock on that item, it might charge more. If other retailers have stopped discounting a particular price, Amazon will stop discounting as well. To make those rapid price changes, Amazon uses a dynamic pricing algorithm, to the tune of 2.5 million price changes on its site every day.

“One of the main reasons

a customer might go to Amazon as opposed to somewhere else is that they can get reviews from other consumers that lets them know they are buying a reputable product.

”

Additionally, for about half of the products Amazon sells, it buys from a wholesaler or vendor and sells directly from its warehouse.

The rest are sold by Amazon’s Marketplace sellers. These are independent retailers selling their own goods on Amazon and paying a commission to Amazon. That means it’s easy to be shopping for a product on Amazon and see prices from several other retailers. Being able to do comparative prices in one place gives people the assurance they can get the best price.

HR: What role has the ability to gather ratings and reviews played in Amazon’s success?

JG: Ratings and reviews on products are something Amazon had early on. But as Amazon became larger, it began attracting more customers and soon had more customers writing reviews than any other company. Consumers are addicted to using those reviews to make purchase decisions. Today, one of the main reasons a customer might go to Amazon as opposed to somewhere else is that they can get reviews from other consumers that lets them know they are buying a reputable product.

HR: Would you talk about the strategy behind Amazon’s exclusive brands?

JG: Amazon has put an increasing emphasis in the last two years on creating its own exclusive brands. An Amazon brand is nothing new. One of the first was the Kindle. Alexa has been one of the most successful. None of those products were that amazing when they were first offered, but Amazon continued to refine them and respond to what its customers wanted. Today, they are leading products in their categories.

In fact, Amazon has invented more than 200 other brands. More than 90 brands alone are focused on apparel, and they are designed to look like a stand-alone brand so you might never even know it belonged to Amazon.

Amazon Elements and AmazonBasics have a lot of electronics. Happy Belly is a food brand and Mama Bear is a children’s brand. Some of these are value brands with aggressive pricing.

Some are high-end products designed to be competitive with brands of a similar value.

I don’t know of an Amazon brand focused on the home improvement market, but you can bet that if Amazon sees an opportunity to build a brand there, then Amazon will do that and be very good at it.

HR: Are there any benefits of joining the Amazon Marketplace?

JG: I would never tell a retailer not to be on the Marketplace. However, you’re going to pay a commission to Amazon for each product you sell, somewhere around 11 to 15 percent. You don’t want customers that were going to buy something from your store to buy it on your Amazon Marketplace website instead. That’s losing margin.

But what you might want to do is use the Marketplace to find the customers who would never find you. One of the safest strategies is to offer goods internationally. Look for a product that is unique or exclusive to you.

I don’t recommend using the Marketplace as a way to acquire new customers because that’s very difficult to do. Amazon doesn’t share the contact information of customers with you. People who buy on Amazon are Amazon’s customers anyway, not yours. Those customers are choosing Amazon because of the amenities Amazon offers, many of which you can’t offer anyway.

Who’s Your Biggest Competitor?

For the first time, independent retailers have listed Amazon as their biggest competitor, according to a survey by the North American Retail Hardware Association.

Amazon

23.3%

Home Depot

21.7%

Menards

17.2%

Lowe’s

9.6%

0%

5%

10%

15%

20%

25%

% of Respondents Source: 2018 NRHA/Hardware Retailing study

March 2019 | HARDWARE RETAILING

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Build on Your Strengths You likely won’t be able to beat Amazon at its own pricing game. Your best tactic for competing is to just be yourself and build on the strengths you already have. However, when it comes to price, there are some ways you can stay relevant to a generation of consumers who are increasingly shopping online.

Curate Your Product Mix Go to Amazon and search for a hammer, for example, and you could get hundreds of results.

That’s overwhelming for most shoppers, especially if they don’t know exactly what type of hammer is suited for their project. Independent retailers provide a service to customers by limiting their selection and helping them find the product that best suits their needs. Use the one-on-one time you have with vendors at your wholesaler markets and feedback you get from customers to aid your decisions about creating your assortments.

“Curate your selection so you can help customers make an easy decision,” says Goldberg. “Maybe you stock only five brands of hammers, but it’s because you did the research and are giving the customer the best quality products and can explain why.”

Get Your Inventory Online Shoppers often head to Google to search for a place to shop. “When they do a Google search, they might type in a magic word at the end: nearby,” says Jason Goldberg. Even if you don’t sell product online, at least list the products you carry so you can share that data with Google, which will help you show up in that search. “Guess who is never going to show up in that search? Amazon,” he says.

Don’t Mind Showroomers Some customers are likely to stand in your store and compare your prices with Amazon.

Don’t sweat it when customers want to be well-informed when they make a purchase. “You don’t want them to buy it from you and then go home and have buyer’s remorse when they look at the product online and find out they dramatically overpaid,” says Goldberg. “Or, that they got an older model from you and there’s a newer one available on Amazon.” To up the ante, you might want to price-match Amazon to show customers you are confident in your prices.

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Take Time to Price-Shop Given that customers may be price shopping you online, you should be doing the same thing.

It’s good to know if Amazon is significantly lower than you on frequently shopped items. However, remember that with home improvement products, your biggest competitors are probably still the big-box stores. Know what your prices are relative to others in your marketplace. If there’s an item where you just can’t compete, try offering an alternative. Proprietary brands or locally sourced items give you a point of differentiation.

Leverage Your Personality The personal touch that comes from being a trustworthy retailer with knowledgeable employees is something most independent retailers claim they own. Don’t take it for granted that customers feel the same way. Be tireless in monitoring the customer service levels in your store and relentless in giving employees the product knowledge they need. Humanize the shopping experience by putting staff photos and bios on

your website, featuring them on social media and using them in your circular advertising. The knowledge of your staff is as much a part of your value proposition as your prices.

Use E-Commerce to Retain Customers If your business includes an online store, use it to enhance the in-store experience, not replace it.

You still want to encourage customers to come to your store. Your website gives customers confidence that you have what they need, even if they’re not using it to order.

“Use e-commerce less as a way to capture new customers that will never visit your store and more as a way to retain existing customers and get a higher share of their wallet,” says Goldberg. Customers working on a project don’t want to drive to your store only to find out you don’t have everything they need. Instead, if they see it online, they can have confidence you’ll have it and may give you their business instead of going somewhere else. Of course, for that to happen, you need to be sharp on your inventory control so your online store is accurate.

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Use Your Reimagination The 2019 Reimagine Retail Program Dives Into Products

E

ach year, the National Hardware Show® (NHS) develops new opportunities for independent retailers to explore the show floor and expand their businesses. Three years ago, NHS launched Reimagine Retail, a program dedicated to helping independent retailers invest in a project that would set their businesses apart.

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HARDWARE RETAILING | March January2019 2019

As independents, however, capital isn’t always readily available to put toward passion projects. For many retailers, Reimagine Retail offers the chance of a lifetime.

For the first two years, NHS awarded one independent retailer $100,000 to put toward a business improvement plan.

The first two years of the program showed just how innovative independent retailers can be. From expanding in-store and

online services to retrofitting with renewable energy solutions, the ideas retailers put forth demonstrated their passion for growing their operations.

Now in its third year, the 2019 version of the program has a new twist, and the focus is on category growth and development.

Instead of one grand prize, NHS will be awarding several prizes to independent retailers at the show, allowing the winners to buy directly from NHS exhibitors. In addition, NHS is excited to offer scholarship awards to held fund retailers’ travel.

“Independent retailers represent a significant portion of the home improvement market, and we want them to know that the National Hardware Show takes their growth seriously,” says Rich Russo, vice president of the National Hardware Show.

“The 2019 Reimagine Retail program gives more independents the opportunity to explore new avenues for their businesses.”

Retailers can spend the money with any of the nearly 3,000 exhibitors on the show floor, which span more than a dozen relevant home improvement categories.

“The product mix at the National Hardware Show is one of the most extensive at industry trade shows, so there will be nearly endless ways for the winning retailers to spend their award money,” Russo says.

“At the 2019 show, we also anticipate nearly 1,000 new exhibitors, so retailers will have the chance to find something truly unique for their operations.”

For the latest details about how to enter the 2019 Reimagine Retail program, visit nationalhardwareshow.com.

Continue the Celebration The North American Retail Hardware Association (NRHA) will host the 2019 NRHA All-Industry Conference May 7-9 at NHS. The annual event brings together independent retailers, regardless of wholesale affiliation, for many chances to network with channel partners, learn operations ideas and discover new products.

This year’s event will feature insights from industry experts, exclusive research and a multitude of opportunities to meet other retailers and learn more about your association.

“Every year, we meet new faces and hear new ideas at the NRHA All-Industry Conference,” says NRHA executive vice president Dan Tratensek.

“This event is all about celebrating independent retailers and bringing them together for inspirational conversation and networking.”

For more information about the highlights, visit nrhaconference.com. Visit TheRedT.com/subscribe and choose NRHA Events & Conferences to be the first to know all the details.

Recalling the Reimaginers 2017 Winner: Caribou Jack’s Trading Co. In Soda Springs, Idaho, there weren’t many community places to meet, enjoy a good meal and shop for essentials. Caribou Jack’s Trading Co. owner Robert Lau envisioned a restaurant that would complement his home improvement store’s grilling category and serve as a place for Soda Springs residents to gather.

Construction began shortly after Lau returned from Las Vegas, and less than a year later, the restaurant opened to the public.

“This program helps shine a spotlight on smaller communities; there are thousands across the country,” he says. “We don’t want people to forget those small business owners.”

Visit TheRedT.com/caribou-jacks-bbq to read more about Lau’s restaurant endeavor.

2018 Winner: Woods Hardware Matt Woods was hopeful when he entered the first Reimagine Retail program in 2017. His concept for a virtual walk-through and online store for his Cincinnati business Woods Hardware took him to the finals that year, but he didn’t walk away with $100,000.

Woods re-entered the 2018 program with a more complete vision.

In his case, the second time was the charm.

“Be passionate about your idea,” he says. “Being able to articulate why your vision is going to shake the industry is critical.”

Read more about Woods’ concept at TheRedT.com/woods-rr.

March 2019 | HARDWARE RETAILING

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By Todd Taber, ttaber@nrha.org

Reinvention of the Retail Giant Sears and Amazon Share Similar Pasts, Divergent Futures

F

ounded nearly a century apart, Sears and Amazon echo one another through the decades.

Both companies began as small startups indistinguishable from most. Sears took root along railroad tracks and later became a true destination shopping source for Americans. Amazon, which started in a Seattle garage, would soon capture the imagination—and spending power—of shoppers across the world.

Both companies succeeded by offering a diverse inventory, low prices and revolutionizing delivery services to put

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HARDWARE RETAILING | March 2019

products in customers’ hands faster than ever before.

Shoppers looked forward to receiving the latest Sears catalog in the mail, and today, customers refresh with bated breath on Prime Day, hoping to snag rock-bottom prices on popular products. Homes ordered entirely from the Sears catalog still pepper neighborhoods across the country, and in October, Amazon announced plans to invest in prefabricated houses and launched its first printed catalog.

For greater insight into the companies’ historical successes and setbacks, turn to Page 98.

Though there are similarities to be drawn, the companies enter 2019 on remarkably different footing. Amazon executives are overseeing the construction of its second headquarters and watching the company’s Prime subscriber base flourish. Meanwhile, after filing for bankruptcy protection at the end of 2018, the Sears team is locked in a daily fight for financial survival, hoping to turn the tide on hundreds of store closings and regain its former position as a retail titan.

Learn more about the remarkable histories of both companies. Discover how 2018 proved to be a defining time for both and what challenges the companies face in 2019 and the years ahead.

2 Retail Giants Take Form Long before Sears and Amazon became cornerstones of American retail, the two companies began as small startups.

According to the Chicago Tribune, Richard Sears worked as a railroad station agent in Minnesota in the 1880s. One day, a shipment of gold watches arrived for the local jeweler, who decided not to stock them. Instead, he offered them to Richard Sears for $12 apiece. Sears accepted the cargo and began selling the watches to fellow station agents for $14.

Sears used his modest profit to invest in more watches, and within six months, he had amassed more than $5,000 in sales, nearly $140,000 when adjusted for inflation. Soon, Sears left his railroad career and struck out into retail full time.

Setting up shop in Chicago, Richard Sears then hired Alvah Roebuck, a watchmaker, to help him expand. The two established a high-volume mail-order company centered on low prices.

In 1908, Richard Sears retired from the company he formed along a Minneapolis railway. Succeeding him as president was Julius Rosenwald, a financier who had joined the company 13 years prior. Upon his retirement, Richard Sears’ net worth was estimated to be $25 million.

Richard Sears died in 1914, more than a decade before the company he started would open its first brick-and-mortar location and expand into markets across the U.S., marrying its robust mail-order business with convenient brick-and-mortar locations to capture sales and become an icon in global retail.

In 1986, recent Princeton University graduate Jeff Bezos accepted a job with Fitel, a financial telecommunications startup. In that role, Bezos oversaw the construction of an international trade network and later became the director of customer service for the company, according to the Los Angeles Times.

Soon, Bezos began dreaming of creating his own business. By the mid-1990s, he was working as a

senior vice president of a hedge fund, but left that career to launch Amazon, an online bookseller, from his garage in Seattle.

Investors were skeptical that a company dealing primarily in books ordered online would scale, but Bezos held firm that the exponential growth of the internet would provide the momentum his company needed to capture new business.

Bezos’ prediction held true. In 1997, the company prepared its initial public offering and opened its second distribution center to speed up shipments along the east coast. One year later, the company began selling CDs and DVDs. In 2002, Amazon entrenched itself in the digital landscape by launching Amazon Web Services, which is currently one of the most-used web hosting and cloud computing platforms.

Throughout the 20th century, brick-and-mortar Sears locations served as destination department stores for an increasingly affluent nation.

March 2019 | HARDWARE RETAILING

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2018: A Decisive Year Sears and Amazon both had a pivotal year in 2018. While Amazon soared on its highest-ever profits and raised its profile through a nationwide search for its second headquarters, Sears delivered near-fatal financial reports, closed hundreds of retail locations and ended the year enveloped in a cloud of uncertainty.

In March 2018, Sears released its financial summary for 2017, reporting $16.7 billion in revenue for the year, a 24 percent decline from 2016 levels.

By April, the struggling retailer announced plans to close its last Chicago store. The closure marked the end of an era for the company, which had strong roots in the city since moving its headquarters there and etching its name on the Chicago skyline.

It’s undeniable that Sears and Amazon have both imprinted themselves permanently onto the history of retail.

In 2018, Amazon announced it would raise the minimum wage for all distribution center workers to $15 an hour. In the past, the company has been scrutinized for poor working conditions in these centers.

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Sears then closed 48 Sears stores, 15 Kmart operations and roughly 100 Sears Hometown locations in June. By that time, the company’s stock had fallen 50 percent from the previous year. Edward Lampert, who was then the CEO of Sears Holdings after assuming the role in May 2013, publicly sought financial partners to buoy the company.

October saw a whirlwind of activity as Sears braced for financial impact. That month, the company filed for bankruptcy, announced the closure of a further 142 locations and confirmed Lampert would step down from his role as CEO but remain the company’s chairman of the board. At the time of the filing, Sears listed its total assets as nearly $7 billion and declared total debts of $11 billion.

“Sears survived the Great Depression, adapted as its shoppers traded catalogs for downtown department stores and followed customers to suburban shopping malls. But it faltered as discounters, specialty chains and online merchants wooed consumers away in recent decades, and it never seemed to find the niche that would bring them back,” wrote the Chicago Tribune.

While Sears’ financial team strategized for survival, Amazon rode the waves of a historic year of profits and milestones.

As 2018 began, Amazon announced it had created a shortlist of 20 cities for HQ2, the company’s second headquarters. The company said it would bring approximately 50,000 jobs to the region it selected, sparking a nationwide tug of war between local governments. Cities and states across the country offered special tax subsidies and other incentives to woo the company.

Amazon Go, a cashierless grocery store that relies on proprietary technology to track purchases, opened in Seattle in January. By the end of the year, there were nine Amazon Go locations in major cities across the country, and Amazon announced plans to open as many as 3,000 in the U.S. by 2021.

Meanwhile, the company’s Prime membership service, which ensures two-day delivery on products and includes music and video streaming, reached new heights. In April, Bezos announced the service had surpassed 100 million members. Prime Day, the company’s annual day of special online sales, broke records as customers spent more than $4 billion.

By September, the company became the second to be valued at $1 trillion and captured “49 cents of every e-commerce dollar in the U.S.,” according to The New York Times. At the time, Amazon employed more than 550,000 workers and generated $175 billion in annual revenue.

In 2018, Bezos was identified as the richest person in the world with an estimated net worth of $156 billion, according to Business Insider.

What the Future Holds In February, Sears emerged from bankruptcy after a judge approved the sale of most of the company’s holdings to ESL Investments, the hedge fund managed by Lampert, for $5.2 billion. This decision enabled the company to keep 425 locations open and save roughly 45,000 jobs, according to CNN. That’s not quite the happy ending the company desired. CNN reports that Sears now “owes billions of dollars to thousands of vendors, landlords and others. Many of them believe it would be better to shut all of the remaining stores and sell off Sears’ assets to raise cash and repay the debts.”

Competitors smelled blood in the water.

According to Sears’ financial reports, it closed nearly 30 percent of its locations from 2017 to 2018. Retailers that operate near those locations— including Macy’s, Dillard’s, J.C. Penney and others—stand to profit and capture sales from former Sears devotees.

Escaping bankruptcy wasn’t enough to appease analysts, who predict Sears has a rocky future.

“In our view, the company will continue to be hobbled by the same untenable problems, given that its efforts to resuscitate performance by shrinking has mainly been unsuccessful,” Moody’s Investor Services wrote after ESL Investments emerged victorious from a bankruptcy auction in January.

On the other hand, Amazon faces continued criticism on a variety of fronts, notably wages and working conditions for its distribution center employees.

In October, Amazon announced it would raise the minimum wage of all fulfillment center workers to $15. However, the company simultaneously announced it would stop giving stock shares and monthly bonuses to thousands of those workers.

The company faced scrutiny for the alleged working conditions inside these fulfillment centers, with some employees reporting laboring in 100-degree heat and being held to near-impossible fulfillment quotas, according to The New York Times.

The selection process for HQ2 was not without criticism. In an op-ed from the Los Angeles Times, the newspaper’s editorial board urged regions in contention to land HQ2 to seek solid commitments from the retailer. Many other politicians and organizations chided Amazon, one of the world’s most profitable companies, and Bezos, the world’s richest man, for seeking financial incentives and diverting funds from other projects.

No matter what financial and federal scrutiny the companies endure throughout 2019 and in the years ahead, it’s undeniable that Sears and Amazon have both imprinted themselves permanently onto the history of retail.

For many consumers in 2018, the sight of shuttered Sears stores and new brick-and-mortar Amazon locations became increasingly familiar.

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By Bill Brunelle, Independent We Stand

Building a Better Future 5 Reasons to Join a Main Street Organization in Your Community

J

ust like any good foundation, the community is strongest when all its pieces work together.

Around town, small businesses often come together in Main Street organizations, such as small business associations, downtown improvement districts and shop-local programs. These groups dedicate themselves to supporting small businesses as a way to further the community.

Consider how the following ways of working with a local small business organization can help you build a better future for your business and your community.

1. Your reach gets bigger.

Main Street organizations connect you with other small businesses in the community. Through those connections, you can brainstorm new ideas, cover more ground with outreach campaigns and get more people talking about your business. By participating in community events and establishing new local traditions, your Main Street organization can introduce you to new customers, new partners and new supporters. Whether you want to solve a problem within your store or introduce a new initiative to the entire community, your Main Street organization can help you build a path forward with other like-minded small businesses.

2. Your brand becomes more recognizable.

In addition to building your network, your Main Street organization can help you build your brand. Retail success today requires an omnichannel marketing approach.

Small businesses sometimes struggle with implementing and maintaining these strategies. However, your local Main Street

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organization can make it as simple as sharing a buy-local Facebook post or downloading a press release template.

Main Street groups also typically offer members valuable promotional opportunities, such as a free listing in a small business directory, social media graphics, customizable point-of-sale materials and group discounts on local media advertising. By leveraging these resources, your small business can spread awareness of your company and tap into the Main Street organization’s buy-local brand.

3. Your voice is more powerful.

More than a foundation, your local Main Street organization is also a platform. Is there an issue in your community that matters to you, such as a new development that could threaten your business or a new tax incentive that would help your bottom line?

By joining your local Main Street organization, you can find opportunities to make your voice heard. That’s because Main Street organizations don’t only provide services to members; they also advocate on behalf of the entire small business community.

Take the Austin Independent Business Alliance (AIBA) in Texas, for example. In 2017, AIBA successfully advocated for $500,000 in public funding for local business marketing and programming. AIBA members worked with other local organizations to support the initiative and then spoke directly to the Austin City Council ahead of its vote on the funding. Ultimately, the Austin City Council voted unanimously to fund the local business marketing and programming with an existing hotel occupancy tax.

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4. Your efforts will boost the local economy.

According to the National Main Street Center (NMSC), a program operated by the National Trust for Historic Preservation, Main Street programs have driven more than $74 billion in reinvestment, created more than 614,000 jobs and launched nearly 140,000 businesses since 1980. NMSC estimates that $26.43 of investment occurred for every dollar that a community spent on a Main Street program in 2017.

The Institute for Local Self-Reliance (ILSR), a research organization focused on promoting local development, found that Main Street organizations correspond with higher revenue growth, increased local media coverage, greater support from local officials and more customer loyalty.

In 2016, ILSR reported data showing independent businesses in communities with active Main Street organizations measured average revenue growth of 7.4 percent, compared to 4.2 percent for independent businesses elsewhere.

5. Your investment will instill local pride.

Main Street organizations drum up enthusiasm for small businesses and local traditions. They keep people in the community and draw in visitors, which means more customers for your business and more regional prosperity.

Independent We Stand recognizes one Main Street organization each year for its commitment to the community in the annual America’s Main Street Contest.

Last year, the public chose Bridge Street Ashtabula in northeast Ohio as the winner. This year’s contest is now open. Nominate your local Main Street organization through April 21 at mainstreetcontest.com.

Bill Brunelle Co-founder, Independent We Stand Independent We Stand (IWS) educates communities about the benefits of supporting locally owned businesses. IWS inspires small business owners to celebrate their locally owned status and helps consumers understand their value. IWS is sponsored by STIHL, Do it Best Corp. and PPG Paints.

Show Your Local Support To find a Main Street organization in your community, consult your local chamber of commerce or search the American Independent Business Alliance (amiba.net), the Business Alliance for Local Living Economies (bealocalist.org) or the National Main Street Center (mainstreet.org) for a local chapter near you. You can also access promotional materials and small business tips with an Independent We Stand membership.

Learn how you can support your small business community at independentwestand.org.

March 2019 | HARDWARE RETAILING

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Leading With Culture NRHA and Retail People Solutions Team Up to Drive Performance

B

usiness management guru Peter Drucker once said, “Culture eats strategy for breakfast.” While delivered tongue-in-cheek, what the father of modern management theory suggests is that even the best strategies and business practices won’t get you very far if you don’t have a healthy culture where everyone knows their role and is pulling in the same direction.

A research study on improving corporate culture published in the January 2018 issue of Harvard Business Review (HBR) further underscores the importance of culture: “When properly aligned with personal values, drives and needs, culture can unleash tremendous amounts of energy toward a shared purpose and foster an organization’s capacity to thrive. It can fluidly blend the intentions of top leaders with the knowledge and experiences of frontline employees. … Leading with culture may be among the few sources of sustainable competitive advantage left to companies today.

Successful leaders will stop regarding culture with frustration and instead use it as a fundamental management tool.”

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While the HBR research illuminates the importance of culture as a driving force for any organization in any industry, as independent home improvement retailers, you have an even more pressing need to establish and embrace healthy cultures in your stores. This industry has always been people-centric, and your competitive advantage is having friendly, caring and knowledgeable employees.

So the question becomes, can a company’s culture be intentionally changed for the better?

The answer is yes, according to HBR, and to Linda Small, owner of Retail People Solutions Inc. Since Small started her independent consulting practice nearly a decade ago, her Vision Process has focused on organizational culture development as the key to building great teams. Small has utilized many of the culture improvement concepts outlined in the HBR study for years.

Instead of “culture eating strategy for breakfast,” Small calls for setting a table where culture, strategy and a healthy portion of accountability continuously nourish each other.

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The North American Retail Hardware Association (NRHA) is teaming up with Small to begin offering her Vision Process to independent home improvement retailers.

The initiative is set to launch at the NRHA All-Industry Conference, which takes place at the National Hardware Show® in Las Vegas, May 7-9. Visit nrhaconference.com for more details, including speakers, independent retailer networking opportunities and more.

To learn more about NRHA’s new alliance with Retail People Solutions and Small and how you can get started on improving your company’s culture, contact Scott Wright, executive director of the NRHA Retail Leadership Institute at 317-275-9417 or swright@nrha.org.

Visit TheRedT.com/leadership-video to hear Small talk more about her thoughts on leadership and culture.

Small’s Vision Process is a yearlong, all-encompassing program focused on four phases of implementation. Hardware Retailing talked to the following four retailers about their recent participation in Small’s program and the benefits they saw from her method of culture improvement.

• Mark Schulein, President Crown Ace Hardware 17 stores in California, Hawaii and Arizona • Amy Kaplanis, Owner Country Ace Hardware Granby, Colorado • Michael Wynn, Owner Sunshine Ace Hardware 9 locations in southwest Florida • Mike Brackin, Owner HomCo Lumber & Hardware Flagstaff, Arizona

Phase 1: Establish • Discuss and agree on vision, purpose and values.

• Create or modify core values.

• Agree on a vision statement.

• Identify the roles of owners: What is best for the business?

• Address organizational needs and address the organizational chart.

• Review job descriptions and revise them to match the vision of your organization.

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• Review and revise human resources handbooks, policy and procedure documents and operational standards to ensure they align with the culture.

• Begin a yearlong management journey, a development program for all management and potential management.

• Establish a one-year plan for implementation.

Mark Schulein: My mantra is that the best place to work makes for the best place to shop, and you can’t get there without building a great team. I’ve always been a big believer in culture, training and empowerment. Linda helped us take our core values, which were always very strong, but weren’t embedded, and turn them into tangible, actionable words that we can employ and bake into everything we do. It was a really cool process.

Amy Kaplanis: For us, initially, it was developing job descriptions, which is always painful to establish, but Linda made the process easier.

That has been super helpful in recruiting.

The next piece of it was the development of my management teams, particularly my store manager, so she could really take the reins going forward.

The beauty about working with Linda is her flexibility and her ability to work wherever your need is the greatest at that time.

Michael Wynn: During the economic downturn, we saw how difficult it was to hire and retain people. We had a good culture, but we knew if we wanted to recruit and retain the best talent when the economy rebounded, we were going to have to be more purposeful with our culture. I met Linda at an Ace Progressive Leaders meeting in Nashville through another retailer who was working with her. I heard her presentation, and I knew I wanted to work with her.

Mike Brackin: It all started when the advertising group I was part of agreed to do the customer engagement survey. I scored the lowest of the 15 stores in the group. Of course, being a lumberyard, we thought we were different and poked holes in the survey. We were in denial.

Linda told us that to validate the results, the employee engagement survey generally mirrors the customer engagement survey. So we agreed to take the employee engagement survey, and it came out even worse. We were bad. We had a heavily male-dominated, take-it-or-leave-it culture that I learned from my father. In today’s world, that type of culture absolutely does not work. Even after we started, we weren’t walking the walk.

Through Linda’s help, we kept breaking it down, and eventually, she got my people on board.

Holding people accountable was a big part of the issue, and it seemed we would take a couple steps forward and then take a step back. Linda persevered with us and had some straightforward conversations where she said that in order for her process to work, we have to hold our people accountable. I had to make some very tough decisions on personnel regarding who was on board and who wasn’t.

Phase 2: Align • Align the vision and values to current workforce and processes.

• Identify training and development needs.

• Introduce DiSC personality profiles and learn how to build relationships within the store team.

• Assess the development needs of the management team through a management journey and introduce a task management system and communication tool.

• Introduce retail best practices (one-to-ones, independent development plans, store walks, department checklists, floor observations, etc.).

• Perform store visits to assess the frontline staff and management team. Observe the implementation of best practices on the retail floor.

Schulein: Early on, Linda had us read a book called “The Energy Bus.” It’s the “one bad apple” or the “rusty link in the chain” concept. Ultimately, what it helped me realize is that some of the most knowledgeable hardware folks can still be a detriment to the company if they don’t have the cultural tie-in and a moral code. I’m a big believer that if we have a problem with a person, we will do everything in our power to turn it around, including coaching and mentoring, even discipline, whatever it takes. But if they don’t change, they are gone, because culture is so important, and it can be so easily ruined by one bad actor.

Kaplanis: DiSC profiles have been amazing for our team. We actually contracted with Linda two or three years ago just to do them. It ties into everything else, and it has been enlightening for us. The team loved it as well because it has helped them understand that everyone has their strengths and their preferred way of handling situations, and we all have to respect each other. In the end, it makes us a much more successful team, and it ties back into the culture to help us move toward a team and not just a group of individual contributors.

We’re all in this together.

Wynn: We had a good culture, but not a great one. Our culture reflected more the behaviors we tolerated instead of those we really desired or wanted to target. We had our mission and vision creeds, those high-level statements regarding our purpose and where we were going.

But it wasn’t purposeful or documented or integrated into our organization by any means.

Once we started working with Linda and formalized the program, we did see an overall improvement in customer engagement and employee retention. We started doing a better job of coaching, praising and disciplining on the behaviors that now we were saying defined us as an organization. We are much more purposeful now in who we attract, hire and bring into the organization.

Brackin: As owners, we have tunnel vision.

We look outside of the tunnel for growth and change, but we don’t really know how to implement it, and it puts us back in the tunnel.

Linda always says, if you give this 100 percent effort, it will make life easier. That’s 100 percent true. When we did the visioning and established our core values, it started to work.

Phase 3: Standardize • Introduce the interview process and standardize the hiring process to reflect core values and vision with the use of group interviews and one-to-one interview processes.

• Present options for the performance management process to link to vision and core values.

• Embed task management systems on the salesfloor.

• Continue to monitor and implement the management journey.

• Evaluate Future Leaders opportunities and discuss options.

Schulein: We have doubled down on being a people-driven business, and that means everything begins and ends with culture for us. That’s who we are, and the differentiator between other retailers is our customer service, not just in words, but in practice. It’s the No. 1 commitment we have toward our communities.

We have been awarded for it with praise and accolades and foot traffic. We might be selling nuts and bolts, but we are a people business first and foremost.

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Kaplanis: As a single store, if you are looking to grow in place or you’ve been growing in place and your processes haven’t caught up so more than two or three key people can handle them, then it’s time to call Linda.

Back in the day, the book of choice was “The E-Myth,” which was about working on your business instead of in your business.

If you are a single store owner who has been working in your business, Linda can help put the organizational structure and processes in place that will allow you to have time to work on your business and grow it.

Working with Linda has brought peace of mind that we have the processes in place. I have the support of my key management team, and we can continue to grow and still live up to the reputation we have established as an employer and an independent hardware store of choice in our county.

Wynn: Our employee retention has drastically improved and is well above industry averages.

Our customer engagement scores are now bestin-class. When we look at the consistency of how both retention and customer engagement are across the country, given so many other variables

between stores, I’m confident that the culture strategy we developed with Linda deserves a lot of the credit.

Brackin: Now we do group interviews, and our candidates have to answer questions on core values before they start the interview process.

We have eight to 12 individuals from different facets of the business taking part in the interview process. The candidates receive our core values in their employee handbook when they are hired, and they sign off on them.

We also coach to our core values. It makes it consistent and cohesive. When we have to terminate someone, we go to the handbook and show them where they violated the core values that we live by. It has even helped us in some unemployment hearings. The message is consistent from the top to bottom.

The one-to-ones have also become an ongoing conversation that we’ve gotten a lot out of. They have helped us fill positions from within where we normally would have gone outside.

There is no black and white in retail. There is a lot of gray. The core values are the glue that hold everything together.

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Phase 4: Evaluate • Evaluate the management journey team and identify next steps.

• Create an action plan for consistency and long-term success.

• Formalize the measurement of all results.

• Evaluate the communication plan.

• Review the progress of all implementations, tweak as necessary and discuss future needs.

Schulein: We’ve always tracked our performance metrics with our customers. But what we’ve found is our internal metrics have become much better. Our turnover is lower. Our engagement is higher with our team. You can feel it when you walk in our stores.

The overall energy has improved. We are a culturedriven company because Linda’s process helped us understand what that means and how to improve and accomplish it. Linda has been an incredible resource and a significant part of my company.

Kaplanis: Our average ticket size and our customer counts have gone up. We continue to get great scores

on any survey our co-op does, such as mystery shoppers and customer engagement scores. But really it’s the customer comments. The biggest thing someone can say to me is, “I love to come in your store because the environment is so fun. Everyone is laughing and having a good time.” To me, that’s a sign that my team is supporting each other and they are working together. If a customer can feel that, and it’s palpable, then we’ve succeeded.

Wynn: Culture is still the single greatest competitive advantage available to businesses today against Amazon and the big boxes. Everyone has a culture, it’s just a matter of whether yours is by accident or purposeful. So my advice is hire Linda and make your culture a purposeful one that will absolutely drive success for your organization.

Brackin: Today, our training program is the best it’s ever been. Our store looks the best it has ever looked. We’re doing some really neat things to continue growing the business, despite what Amazon is doing and that the big boxes and specialty stores have come to town. We’re doing a very good job, but the second we start resting on our laurels, we’re done.

By Chad Husted, chusted@nrha.org

Finding the Time How Retailers Have Expanded Their Community Endeavors

I

t’s perfectly normal for entrepreneurs and small business owners to focus the majority of their time and efforts on their stores and business efforts.

Running an independent home improvement business is hard work, and making the most of the available time during the day is already a difficult task.

But what if there was an extra hour in the day? Or maybe just an added 30 minutes that could be devoted to other areas of a retailer’s life? What small tasks or accomplishments could this time be used for?

While the two retailers Hardware Retailing spoke with don’t have that magical extra time in their days, they have found ways of organizing their time and their businesses to allow them to devote themselves to other initiatives.

Whether it’s giving back to community organizations or kick-starting a new program to benefit whole communities,

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these retailers have learned to maximize the time not dedicated to business ventures.

Hardy Tan Vy is the marketing manager at Benson Guam, but in his time away from his family’s business he is pursuing programs and ideas that could help the entire island community of Guam develop sustainable farming techniques. On top of this project, Vy is also active on local boards and councils while keeping Benson Guam a go-to supplier for the community.

Jillian Sexton owns three independent hardware retail businesses, including two in Nova Scotia, Canada, and another three hours away on Prince Edward Island. In between balancing her three store locations, Sexton regularly donates her time and energy to her communities, including the Big Brothers Big Sisters program and multiple community fundraising projects.

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Balancing Priorities Jillian Sexton Owner Hector Building Supplies, Sherwood Timber Mart, Canada

“There is no magic bullet to finding time. It’s all about managing a schedule and deciding what amount of time and energy you can commit to.”

expansion location on Prince Edward Island), Sexton still maintains a dedicated schedule on philanthropic boards and assisting organizations she feels passionate about.

Some of Sexton’s projects include serving on the board of directors for the Tearmann Society for Abused Women, mentoring a child through Big Brothers Big Sisters of Pictou County and organizing the mayor’s golf tournament in Charlottetown, Prince Edward Island, which raises funds for a number of charitable causes, including a food bank and a local camp for children with diabetes.

“I have a firm belief in how organizations like Tearmann can benefit people in communities and help them live quality lives,” Sexton says. “As a female business owner, it hits home for me.”

Big Opportunities to Help Still Growing Jillian Sexton just can’t sit still.

Whether it’s handling work calls during travel between her three stores or working with an organization to schedule a weekly lunch with a child in need of a mentor, Sexton is using every second of her day.

Even with the traditional obstacles that any multilocation business owner faces, Sexton has done what she always has in her business endeavors and her community projects: Hit the ground running. Now overseeing three retail locations (Sherwood Timber Mart is the

Jillian Sexton, owner of three retail locations in Canada, serves on several community boards and mentors children in her spare time.

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Dedication to strong time management also allows Sexton to volunteer on different levels, such as with Big Brothers Big Sisters. She reached out to the organization about working as a Big Sister, but initially, the time commitment looked to be too much for her schedule. That’s when Big Brothers Big Sisters suggested its mentorship program, which asks for one hour each week for lunch with a child who needs an adult’s influence and guidance.

“We’re all busy, and you can’t be everywhere at once. But I asked myself, ‘Why can’t I find an hour a week for lunch with someone who could use help?’” Sexton says. “Through being involved in these organizations, you hear stories about how lives have been affected for the better. Sometimes just through the simple act of helping out or volunteering a bit of time, it makes you want to find more ways to act.”

Sexton manages these projects while also splitting her time between her store locations in Nova Scotia and her recent acquisition on Prince Edward Island. She spends time each week traveling between the different locations and has worked to expand her community projects to her newest community on the island.

Sexton also cautions enthusiastic retailers to consider their own limits and that of their business when extending responsibilities to outside groups.

“There is no magic bullet to finding time.

It’s all about managing a schedule and deciding what amount of time and energy you can commit to,” Sexton says. “I recently had to step away from a board position on a group I thoroughly believe in just because I wasn’t able to give all of my efforts.”

Building a Community Giving Back, Doing More Hardy Tan Vy Marketing Manager Benson Guam, independent operation in Guam territory

“I’ve been able to see not only how our business can affect our communities, but what difficulties every business in Guam faces.”

Island Rising With Guam lying 3,950 miles from Hawaii and nearly 6,000 from California, the U.S. territory presents a significant logistical hurdle. This has led to an abundance of obstacles for independent home improvement retailers like Hardy Tan Vy, including many that few other retailers would even consider in their day-to-day business.

Guam has little to no agricultural industry, denying a category that independent retailers can often rely on to boost sales. The large number of immigrants in the labor force and new regulations that make obtaining a work visa more difficult has also eaten into the contractor market, which is key for Benson Guam’s operations.

Vy has helped develop his store, Benson Guam, into a diverse and prized hardware operation on the island, despite facing stiff competition from a newly arrived big-box retailer in close proximity.

Vy applies his degree in business administration and his interest in languages and world cultures to expand Benson Guam into multiple categories, including appliances and firearms.

However, Vy’s efforts aren’t only meant to enhance his family’s business and compete against other retailers. Using his experiences living abroad, Vy is dedicated to introducing new ideas and improvements to his home.

“From my own experience and by joining with other community and business leaders in Guam, I’ve been able to see not only how our business can affect our communities, but what difficulties every business in Guam faces,” Vy says. “By improving our communities, we’re improving the quality of life for our neighbors and allowing businesses to thrive.”

Some of Vy’s community projects include making Benson Guam a central sponsor for the renovation of the local baseball and football teams’ facilities. Vy and Benson Guam funded a new commentator’s box, concession stand and restroom facility. They also donated big-ticket items, like new lighting, and donated paint for a new look.

Vy has also aided in charitable causes by helping form the Mikkel Tan Vy Foundation.

Named after Vy’s late brother, the foundation has assisted in funding college scholarships and sponsors area youth sports teams to participate in overseas events and tournaments.

In addition to his efforts at Benson Guam, Vy is also dedicating efforts to a vertical farming initiative that he hopes will offer the entire island community a better option for fresh produce.

The vertical farm operation would allow crops to be farmed indoors, where they could be safe from the violent storms that can strike the island, and would not use the already limited amount of land available on the island territory.

For Vy, finding time for projects dedicated to improving the livelihood of an entire community is both a personal and professional labor of love.

“This kind of project not only provides less expensive, fresher foods, it can be an economic improvement and create jobs that pay well,” Vy says.

“Less expensive food improves consumer spending, which can help the economy and therefore the lives of all citizens of Guam.”

Hardy Tan Vy (right) has devoted his own time and money into projects meant to improve life for all Guam residents in addition to helping run his business.

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By Jesse Carleton, jcarleton@nrha.org

Endcaps Askew Can Your Staff Fix This?

S

omething’s wrong in the picture of the endcap on the left. Can everyone on your staff figure out what it is?

In January, Hardware Retailing introduced a new series to help retailers and their employees strengthen their merchandising skills. Study the photo to identify where something is wrong or where you could make some improvements. Then, turn the page for the answers and a review of some of the basic tenets of merchandising.

You can use this article as a refresher for yourself or as a training tool for your employees. Next, you might ask employees to look around your store. Are there any endcaps that need to be fixed?

You might not have had the chance to fix it yourself, so it’s a good time to let your employees put their knowledge to practical application. There will be plenty to learn from each exercise.

Empower employees to fix merchandising errors as small as products that need to be fronted or as big as an endcap that needs to be reset. The more they know about merchandising best practices, the better equipped they will be to fix problems when they arise.

To take the learning opportunity one step further, allow your employees to create displays on their own.

You might discover some hidden talent and someone who can be a regular part of your merchandising team. Staff who are allowed to use their own ideas in creating displays are likely to take more ownership of them and will be more motivated to keep the store looking good.

Combine hands-on training with formal training, too.

You’ll want staff to know the role merchandising plays in encouraging sales and some of the best practices in making an effective display. The North American Retail Hardware Association (NRHA) offers both in its Basic Training in Merchandising course. It is available to all NRHA Training Members. You can learn more at nrha.org/online-training.

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1 Eyes on the Price

3 The Misfit

Endcaps can boost your competitive price image, so price needs to be a big part of the signage. For best results, highlight prices that are good deals. It’s also a good idea to have several endcaps with prices below $15, because displaying lower prices give you a favorable price image overall. Signage with empty spaces can make the entire salesfloor look incomplete. Endcap signage tends to be some of the most prominent in your store, so use it to maximum effect to reinforce your brand and price message.

2 Empty Spaces

4 Unbalanced

Endcap promotions are designed to move products quickly.

But endcaps also need to be full so customers have the confidence you have everything they need. When you do sell through an endcap product, replace it with something else or change out the entire endcap. Remember, it’s a good idea to rotate endcaps, on average, at least once a month. A shorter cycle may be more practical for selling promotional products when you only have a limited quantity.

1 2 3 4

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Effective endcaps group related items together. In the case of the photos below, the overall theme is floor care, but it’s also focused on a specific manufacturer. Having only a couple of items that do not relate to that manufacturer, even if they relate to the general theme, weakens the overall impact. This display also shows all the items a customer needs to complete a particular project. Finally, project endcaps will be most effective if they are seasonally relevant, in this case, during spring cleaning.

Consider symmetry and balance when creating endcaps.

Put larger items on the bottom and smaller items toward the top. In this case, the dusters on the bottom shelf are better sized for the hooks at the top. Putting them there also means similar items are grouped together, so customers can easily see all of the sizes available. A project endcap is a convenience for the customer and encourages add-on sales for a larger transaction size.

What’s on your mind?

The brand new NRHA forum is an online space for retailers to share ideas, ask questions and get feedback from their peers across all wholesale affiliations throughout North America. The forum is free for independent retailers and covers a wide range of topics like marketing, merchandising, training, industry news and more. Log in and connect today!

JOIN THE CONVERSATION AT NRHA.ORG/FORUM

Newsmakers

Trends at the International Home + Housewares Show

Upcoming Events March

T

he International Home + Housewares Show spotlights new products and growing trends in the housewares category. Visit TheRedT.com/chef-chad for a video from Hardware Retailing exploring more of the small appliances trending in the housewares category.

The March 2019 event in Chicago is the International Housewares Association’s yearly trade show. Jon Jesse, vice president of industry development for the association, describes the burgeoning trends attendees could expect to see at the event and that have gained traction with consumers.

Technology Connected smart home technology continues to grow in popularity and consumer use, with large and small home appliances incorporating features such as voice control. Trending smart housewares include pantry storage units that can sense when a consumable product is running low and order more of it.

In addition, new technologies in mechanical air purifiers and humidifiers overlap with consumers’ expanding interest in products that contribute to healthier living. Plus, smart home technology allows for customization, which is appealing to many homeowners.

“A lot of today’s consumers have more control over products than ever before.

They feel more empowered and they want to make their homes individualized rather than cookie cutter,” Jesse says.

Specialty Beverages The craft beverage market is getting bigger and bigger, according to Jesse.

Consumers are interested in buying the products necessary to make custom cocktails, beer, specialty coffee and tea, as well as purify their own water and infuse their teas and water with flavors, scents and health products.

Customers are looking for barista-type appliances and accessories to make craft drinks at home. Popular items range from unique drinkware and pour-over coffee makers to high-end espresso machines.

“Coffee continues to be evolving as a trend,” Jesse says. “Millennials are driving a significant piece of this trend.”

Healthy Living Products for healthy living are big sellers in a number of categories, including cookware and small appliances. Healthy eating and healthy home environments are on trend, Jesse says. For healthy eating, consumers are drawn to grill pans, air fryers, pressure cookers and food dehydrators. Those products are favorites among consumers who want to make flavorful food but also reduce the amount of unhealthy oils and fats they use in cooking, Jesse says.

For healthy home environments, new technologies in air cleaners and water purifiers are important trends, he says.

2-3 PACOA Spring Market Flushing, New York

2-5 International Home + Housewares Show Chicago

14-16 Hearth, Patio & Barbecue Expo 2019 Dallas

21-23 Blish-Mize 2019 Spring Buying Market Overland Park, Kansas

26-28 Ace Hardware Spring 2019 Convention & Exhibits Orlando, Florida

27-29 Wallace Hardware Co. Inc. Spring Dealer Market Pigeon Forge, Tennessee

April 6-9 Home Hardware Market St. Jacobs, Ontario

May 7-9 National Hardware Show® Las Vegas

7-9 Jon Jesse is vice president of industry development for the International Housewares Association, where he is responsible for overseeing member and retailer relations and developing programs to attract young talent to the housewares industry. He is known for his work as an executive at Kohl’s, where he helped build the retailer into a leader in selling home and housewares products.

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NRHA All-Industry Conference Las Vegas Find more events online at TheRedT.com/calendar.

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Big Boxes Seek to Improve Customer Experience

Lowe’s Ending Iris Smart Home Products Line Lowe’s is officially pulling the plug on Iris, its line of smart home products and security systems, tech news website CNET reports. The retailer sent an email to Iris users informing them their devices will no longer work as of March 31, according to the article. Lowe’s first announced plans to discontinue Iris in its third-quarter 2018 financial report. The company said Iris represented “non-core activities within its U.S. home improvement business” and the decision was aimed at “improving profitability.”

Home Depot is in the process of uniting its online and offline operations, a move that could change the ways consumers shop, according to an article from Forbes.

The big-box retailer has invested in upgrading its online inventory search capabilities, the article says. The company has also investigated ways to communicate more directly with its delivery team. “Combined, these efforts enable Home Depot to narrow package arrival times to two- to four-hour windows, an option especially important to its time-is-money professional customers,” according to the article.

A Close Eye on 2019 Retail Trends Matthew Shay, president and CEO of the National Retail Federation, says 2018 was a historic year for retailing, but 2019 presents many new opportunities for retailers to capture. In an article posted to LinkedIn, Shay says retail sales grew 4.8 percent in the first half of 2018 versus the year prior. The retail market has been expanding for nearly a decade. He believes 2018’s momentum will carry into 2019, despite possible trading obstacles with China and the threat of rising interest rates.

Economists forecast economic growth at about 2 percent in 2019 and 2020, and unemployment will likely remain low, according to The Wall Street Journal.

AD INDEX Ace Hardware..................................................................... 13 www.acehardware.com; 630-990-6900

Impress Art......................................................................... 54 www.impressart.com; 631-940-9530

Pennsylvania Lumbermens Mutual Insurance Co. ........... 34 www.plmins.com; 800-752-1895

Ajax Wire Specialty Co. ...................................................... 28 www.ajaxwire.com; 855-966-2529

IPG...................................................................................... 65 www.itape.com; 888-898-7834

PRO Hardware ................................................................... 5 www.prohardware.com; 303-792-3000

Allway Tools ................................................................. 11, 95 www.allwaytools.com; 718-792-3636

Iron & Oak ............................................................................ 9 www.ironandoak.com/hrm; 866-281-4509

ProBarrow.......................................................................... 9 www.gnedi.com/hrmpb; 866-425-3442

Ancra Cargo........................................................................ 84 www.ancracargo.com; 800-626-8353

Ironclad Performance Wear Corp.................................. 66-67 www.ironclad.com; 844-200-5664

Red Lion Products ........................................................... 15 www.redlionproducts.com; 844-250-4981

Apex Tool Group LLC ........................................................... 1 www.crescenttool.com; 800-650-8665

K-CO Products LLC ............................................................ 53 www.kco-innovations.com; 949-276-5252

Rust Patrol ....................................................................... 26 www.rustpatrol.com; 713-244-8755

Big Green Egg .................................................................... 17 www.biggreenegg.com; 800.793.2292

Lifetime ......................................................................... 78-79 www.lifetime.com; 801-882-1326

Sakrete ................................................................................. 3 www.sakrete.com; 866-725-7383

Brave .................................................................................. 57 www.braveproducts.com/hrm; 866-281-4421

Lighthouse for the Blind..................................................... 54 www.rapidfix.com; 800-542-3697

Simpson Strong-Tie Company Inc...................................... 87 www.strongtie.com; 800-999-5099

Channellock ........................................................................BC www.channellock.com; 800-724-3018

Maxim................................................................................. 57 www.maximmfg.com/hrm; 888-376-0849

ShurTech Brands ................................................................ 97 www.FrogTape.com; 800-321-1733

Coles Wild Bird................................................................... 55 www.coleswildbird.com; 877-426-8882

Metaltech Scaffolding ........................................................ 25 www.metaltech.co; 800-363-7587

ShurTech Brands ................................................................ 24 www.T-RexTape.com; 800-321-1733

Do it Best Corp.............................................................. 20-21 www.independentsdoitbest.com; 888-364-8237

Midwest Fastener ......................................................... 74-75 www.fastenerconnection.com; 800-444-7313

Stillwater Designs .............................................................. 16 www.kicker.com/giveaway; 405-624-8510

Dosko ................................................................................... 9 www.dosko.com/hrm; 866-418-0474

Mi-T-M Corporation ............................................................ 52 www.mitm.com; 800-553-9053

SureCan USA...................................................................... 35 www.surecanUSA.com; 801-827-0500

Dutton-Lainson Company................................................... 64 www.dutton-lainson.com; 402-462-4141

National Hardware Show.................................................... 81 www.nationalhardwareshow.com

Turfco ................................................................................... 9 www.gnedi.com/hrmtr; 866-397-8648

Franmar .............................................................................. 53 www.franmar.com; 800-538-5069

NRHA All-Industry Conference.......................................... IFC www.nrhaconference.com

UGL ...................................................................................... 7 www.ugl.com; 800-845-5227

Hardware Retailing Podcast ............................................... 52 www.TheRedT.com/pod

NRHA Forum ..................................................................... 93 www.nrha.org/forum

Wallace Hardware Co......................................................... 91 www.wallacehardware.com; 800-776-0976

Hot Products Hub E-Newsletter ...................................... 31 www.hardwareretailing.com/subscribe

NRHA Foundations of Leadership Program ....................... 58 www.nrha.org/fol

Warner................................................................................ 30 www.warnertool.com; 800-444-0606

Howard Products Inc.......................................................... 64 www.howardproducts.com; 800-266-9545

NRHA Membership ............................................................ 56 www.nrha.org/membership

Wastequip .......................................................................... 51 www.toter.com; 800-424-0422

HSI...................................................................................... 27 www.SLD-HSI.com; 800-334-5625

Orgill Inc. ....................................................................100-IBC www.orgill.com; 800-347-2860

Woodland ........................................................................... 29 www.pinecar.com; 573-346-5555

Imperial Blades................................................................... 85 www.imperialblades.com; 800-743-9844

Paladin Data Corporation............................................. 36-37 www.paladinpointofsale.com/nrha; 541-803-6060

Wooster Brush Company ................................................... 19 www.woosterbrush.com; 800-392-7246

*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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HARDWARE RETAILING | March 2019

CANADA BMR’s Ontario Expansion Efforts Gain Traction BMR announced in 2018 that it wants to start building its business in Ontario. The recent signing of a new dealer in Griffith, which is in the northeast corner of the province, was an important step in fulfilling that plan. BMR already has a handful of retailers in Ontario, including Windsor Building Centre in Windsor and Drummond Building Supplies in Marmora.

The group had ceased expansion efforts in the province after it was acquired by La Coop Federee at the beginning of 2015. The company spent the next three years focused on reorganization closer to its headquarters in Boucherville, Quebec.

Retailers Should Brace for a Slower Year Ahead as Housing Activity Continues to Falter News of declining activity in existing home sales in Canada follows a report from the Canada Mortgage and Housing Corp. (CMHC) that housing starts in December dropped 4 percent. Overall urban housing starts decreased by 5.8 percent to 194,594 units. Single-detached urban starts decreased by 2.6 percent, while multiple urban starts decreased at an even greater rate, by 6.8 percent.

Mild temperatures worked in favor of construction during December, but higher interest rates and the stiffer mortgage restrictions will continue to squeeze home building in 2019, CMHC predicts.

Lowe’s Canada Begins Spring Hiring Push Lowe’s is looking to fill 6,350 full-time, part-time and seasonal positions in spring 2019. The company is also looking to round out its teams at its head office in Boucherville, Quebec.

The hiring efforts, driven by the spring building, renovating

For the full story on these briefs, head over to TheRedT.com/0319-news. To read the Canadian briefs, visit hardlines.ca/hardwareretailing. For the latest independent home improvement news, interviews, trends and videos, visit hardwareretailing.com.

and planting season, come as Lowe’s closes 30 locations.

March 2019 | HARDWARE RETAILING

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©ShurTech Brands, LLC 2018/76062

Last Word

Retail Innovation at a Glance

1886

F

or Amazon and Sears, retail dominance has not been an overnight undertaking. Long before the companies made their marks on retail history, Sears got its start along Minnesota railroad tracks.

Amazon began its global ascent from Jeff Bezos’ garage in Seattle.

Take a moment to learn more about each company’s founding and the events through the years that contributed to their subsequent stumbles and monetary milestones.

1999 After being listed on the Dow-Jones stock market for more than 70 years, Sears loses its listing.

2003 Amazon launches its webhosting and cloud-computing services, becoming a cornerstone of the internet.

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HARDWARE RETAILING | March 2019

1998 Amazon branches out from books and begins selling CDs and DVDs on its website by stocking 125,000 titles.

2005 Edward Lampert, a hedge fund manager, purchases Sears for roughly $11 billion.

Richard Sears, a railroad station agent, begins selling watches in Minnesota.

1997 Amazon opens its second distribution center in Delaware as online sales begin to grow.

2012 In its 2011 financial report, Sears confirms it lost $1.1 billion in revenue.

1887 Sears teams up with watchmaker Alvah Roebuck and the two start selling watches and jewelry.

1994 Jeff Bezos begins a website selling books in Seattle, one of the emerging U.S. tech hubs of the 1990s.

2015 Amazon opens its first physical bookstore in Seattle and gets into the smart speaker business.

1893 Sears and Roebuck incorporate the business as Sears Roebuck & Co.

1925 Sears opens its first retail store in Chicago, near a warehouse it used to fulfill mail orders from its catalog.

2017 In January, Sears sells Craftsman, among its most recognizable brands, to Black & Decker.

1896 Sears Roebuck & Co. releases its first catalog featuring watches backed by a six-year warranty.

1906 Sears issues its IPO and becomes a publicly traded stock on the Dow Jones Industrial Average.

2018 Amazon becomes the second company valued at $1 trillion. Sears files for bankruptcy protection.

March 2019 | HARDWARE RETAILING

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