Hardware Retailing September 2016 by NHPA

Serving Hardware, Home Center & Building Material Retailers

Cajun Cool Cabirac Adds Spice to NRHA Board 46 THE TECH ISSUE: Making Your Store Smarter 54 Data Security Is a Big Deal— and Not Just for Big Boxes 68 Selling Smart Home Trends 78 VOLUME 211 • ISSUE 3 • SEPTEMBER 2016 • HARDWARERETAILING.COM

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Cajun Co Cabirac Adds Spice to NRHA Board THE TECH ISSUE: Making Your Store Smarter 54

When your customer needs new or repaired screens, think Phifer. Phifer began its leading insect screening business by building relationships with independent hardware stores just like yours. We offer a wide selection of screening materials and accessories that are perfect for the DIY consumer or professional installer. Phifer’s full line of insect and pet-resistant screens, sun control fabrics and screen repair service support will help increase your profits. Be ready to handle your customer’s screening needs before they walk into your store. Visit phifer.com to learn more, or contact us now to place an order.

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Data Security Is a Big Deal— and Not Just for Big Boxes 68 Selling Smart Home Trends 78

VOLUME 211 • ISSUE 3 • SEPTEMBER 2016 • HARDWARERETAILING.COM

BOOK

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Serving Hardware, Home Center & Building Material Retailers

NOW AVAILABLE :

Free Training Resources If you are looking to establish a training program or enhance your current offering, NRHA has you covered! Download these valuable FREE training resources today!

Trainer’s Guide This quick-start guide gives trainers the knowledge they need to start a formal training program, or make their existing program better.

Financial Basics This library of resources will help retailers and employees better understand and use the data from NRHA’s Cost of Doing Business Study.

Trainer’s Toolbox This series of short videos, worksheets and PowerPoint presentations gives trainers easy-to-use lessons on a variety of valuable topics.

Visit www.nrha.org/freetraining to download your free training resources today!

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SEPTEMBER SPONSOR

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INDUSTRY NEWS

OPERATIONAL TIPS

NEW PRODUCTS

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

Serving Hardware, Home Center & Building Material Retailers

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NEXT MONTH

Revisiting Your Core Categories

he next issue ofHardware Retailing is a resource you won’t want to miss, no matter what plans you have for your store in the coming months. In October, we will focus on how you can turn around core categories that have gotten tired or become less profitable. Any retailer can learn from examples and tips on identifying and reviving departments that are underperforming.

And while the election is all over the news, we’ll sidestep the passionate politics of the presidential race to take a look at issues that may impact businesses like yours. In addition, be sure to read next month’s spotlight on the hunting category. You will hear from retailers about the must-have products to stock for the hobbyists who see hunting as a way of life.

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

Headquarters Staff

PUBLISHING

NRHA MISSION

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

PUBLISHER, VICE PRESIDENT OF PUBLISHING Dan Tratensek

COMMUNICATIONS

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

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

CONTROLLER David Gowan

GRAPHIC DESIGNER Graeme Haase

EDUCATION

WEB DEVELOPER Kevin Trehan

DIRECTOR OF MEMBER SERVICES Allison DeWitt, 317-275-9414, adewitt@nrha.org TRAINING MANAGER Jesse Carleton, 317-275-9418, jcarleton@nrha.org

PRODUCTION SERVICES PRODUCTION MANAGER Nancy A. Vondersaar

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

SALES AND PRODUCTION ASSISTANT Freda Creech

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

CIRCULATION

RETAIL LEADERSHIP INSTITUTE

CIRCULATION DIRECTOR Richard Jarrett

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

CIRCULATION/SUBSCRIPTION/ LIST RENTAL INQUIRIES

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

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

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

SALES VICE PRESIDENT OF SALES Bob Cutter

THIRD VICE CHAIRMAN

Daniel Harris, owner and managing partner of Palos Ace Hardware in Palos Heights, Illinois, and Lemont’s Ace Hardware in Lemont, Illinois, was elected to the NRHA board in 2013. Harris and his wife Patricia purchased their first store in 1998. WHAT DO YOU THINK IS UNIQUE ABOUT THE INDEPENDENT HOME IMPROVEMENT INDUSTRY? Our industry is full of truly independent retail store owners, which allows us to customize our operations to our communities’ needs. I feel like so many of my customers are also my friends.

NATIONAL SALES MANAGER Lowell Huffman

NRHA BOARD OF DIRECTORS

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

CHAIRMAN OF THE BOARD James Cabirac, Kief Hardware, Cut Off, Louisiana

STATE AND REGIONAL ASSOCIATIONS

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

EXECUTIVE VICE CHAIRMAN Megan Menzer, Newton’s True Value, Cherryvale, Kansas

MICHIGAN RETAIL HARDWARE ASSOCIATION Patrick Harrington, 603 S. Washington Ave., Lansing, MI 48933; 517-394-1710; Fax: 517-394-6754

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

FIRST VICE CHAIRMAN T.J. Comstock, Northwest Hardware, LLC, Billings, Montana

MIDWEST HARDWARE ASSOCIATION John Haka, 2301 Country Club Drive, Suite A, P.O. Box 8033, Stevens Point, WI 54481-8033; 715-341-7100; 800-888-1817; Fax: 715-341-4080

GREAT LAKES REGION MANAGER 136 N. Delaware St. #200, Indianapolis, Ind. 46204; 317-275-9400, Fax: 317-275-9403, sales@nrha.org

SECOND VICE CHAIRMAN Greg Schlecht, Greg’s True Value, St. Francis, Wisconsin

SOUTHEAST REGION MANAGER Nick O’Connor, 136 N. Delaware St. #200, Indianapolis, Ind. 46204; 317-275-9409, Fax: 317-275-9403, noconnor@nrha.org

THIRD VICE CHAIRMAN Daniel Harris, Palos Ace Hardware, Palos Heights, Illinois; Lemont Ace Hardware, Lemont, Illinois

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

PACIFIC NORTHWEST REGION Ronald F. Moore, 3857 Wolverine NE, Suite 20, Salem, or 97305 (UPS,FedEx); P.O. Box 17819, Salem or 97305 (U.S. Mail); 503-375-9024; Fax: 503-375-7980; Alaska, Idaho, Ore., Wash. SOUTHWESTERN REGION Jeff Flora, 638 W. 39th St., Kansas City, MO 64111; P.O. Box 419264, Kansas City, MO 64141; 816-561-5323; Fax: 816-561-1249; Ark., Kan., La., Mo., Neb., N.M., Texas

CANADA John Magner, 500 Queens Quay W., #101 W. Toronto, Ontario M5V 3K8; 416-598-0101 x220, Fax: 416-598-9191, jmagner@yorkmedia.net

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

DANIEL HARRIS

HARDWARE RETAILING | September 2016

DIRECTOR Will Aubuchon, Aubuchon Hardware, Westminster, Massachusetts DIRECTOR Jared Smith, Jared’s Ace Hardware, Bishopville, South Carolina DIRECTOR David Dishke, Grand River Home Hardware, Caledonia, Ontario DIRECTOR Steve Fusek, Fusek’s True Value, Indianapolis SECRETARY-TREASURER Bill Lee, NRHA President and CEO IMMEDIATE PAST CHAIRMAN Adam Busscher, Picton Home Hardware, Picton, Ontario

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Learn more about Stanford Home Center and its new Do it Best Rental Center at independentsdoitbest.com

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Contents SEPTEMBER 2016 | VOLUME 211 | ISSUE 3

CHAIRMAN PROFILE

Down on the Bayou Meet the North American Retail Hardware Association’s new board chairman, James Cabirac, who owns Kief Hardware down South in Cut Off, Louisiana.

78 CATEGORY SPOTLIGHT

Creating a Smart Home Door locks, light systems, thermostats and security cameras have a lot in common—particularly since their smart versions are increasingly popular among consumers. Learn about smart home product trends and how to sell them.

90 RESEARCH

Consumers’ Changing Habits Check out new research from market research firm Consumer Specialists about how consumers approach home improvement projects, and which shoppers are more likely to engage heavily in planning and completing those projects.

Departments 0 1 0 1 0 0 01 01 01 0 1101 1 10 0 1001 0 01 1 0101 1 01 0 1101 1 10 0 0110 1 00 1 0 1 0 1 0 0 01 01 01 0

54 OPERATIONS

Revolutionizing Retail The latest technology could change the way you do retail. Learn how to create a smart store with the latest technology, which allows you to offer mobile payment options, streamline your training process, upgrade your security systems and more. 4

HARDWARE RETAILING | September 2016

68 RESEARCH

Are You at Risk of a Data Breach? You’ve heard about Home Depot and Target, but have you considered that your business might be more at risk for data breaches than the big guys are? Three experts talk about why cybercriminals target small businesses and what you can do.

06 . . . . . . . . . . . . . . . . . On the Web 08 . . . . . . . . . Independent Thinking 10 . . . . . . . .Taking Care of Business 14 . . . . . . . . . . . . . . . . NRHA News 22 . . . . . . . . . . . . . . . . . . . . . Trends 24 . . . . . . . . . . . . . . . New Products 36 . . . . . . . . . . . . . . . . . . Checkouts 94 . . . . . . . . . Newsmakers/Calendar 98 . . . . . . . . . . . . . . . . . . Last Word

On the Cover James Cabirac, owner of Kief Hardware in Louisiana, is an innovative retailer who makes an art of adding fun to his operation . He got busy in the industry as a teenager when he became a store manager at age 18 . NRHA photo by Whitney Daulton.

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

More Innovative Tools From ®

Single-Ring Shop Shears Power and Control Perfected.

• Spring-loaded, stainless steel blades • Full-length steel blades extend through handles for strength to cut heavy materials

Legacy™ Series Tape Measures A classic look with high performance features

• Titanium-coated blades 3X harder than steel

* *1-inch blade d width models

www.WissTool.com

www.LufkinTool.com

On the Web WARNING!

System Found Unauthorized Access On Your Computer.

Help!

CYBERSECURITY

Data Breach Prevention and Preparation

TECHNOLOGY

Smart Home Story To learn more about how technology can help improve your operation, check out the video at TheRedT.com/smart-store-video, which addresses smart marketing, data security, payment processing and more.

NRHA ABROAD

NRHA Visits 10 Countries in 12 Months NRHA staff member Hilary Welter is spending the year traveling the world and connecting with the home improvement industry in different countries. Follow her journey at TheRedT.com/nrha-abroad.

In this month’s feature, “Breached,” industry experts share insights on cybersecurity. For more information on securing your data, check out these resources: Expert Q&A: Visit TheRedT.com/ data-security-qa to read online-only Q&As from Member Insurance and the FBI Cyber Division about how to prevent a data breach, or handle one, should it occur. Resources: Interested in learning more about cybersecurity but don’t know where to turn? Check out the list of resources available at TheRedT.com/security-resources.

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

1 PowerPoint: Home Networking Cables

2 Infographic: Lightbulb Buying Guide

SOCIAL MEDIA LINKS

@hardwareretail facebook.com/HardwareRetailing 6

HARDWARE RETAILING | September 2016

Independent Thinking

Fostering Leadership

he word “leadership” may be one of the most clichéd terms in business today. It means something different to almost everyone. But, when asked, many of us say the biggest roadblock to growing our businesses is that we need better leaders.

What’s a Leader? At the risk of adding to the confusion, I’d like to weigh in with a few of my thoughts about leadership. A leader is someone others want to follow. A leader has a desire to achieve a goal, understands that he or she needs the help of others and knows how to best recruit their help. A leader has a strong set of personal values, like honesty, integrity, humility, a great work ethic, a desire to serve, an ability to communicate and a willingness to put others first. “Leadership” without these values is really just manipulation or coercion.

Leaders Among Us

“This eight-week online course will introduce your employees to the fundamental concepts around learning to lead people effectively.

”

We seem to spend a lot of time and energy in our industry bemoaning the difficulties of finding “the right people.” What are we hoping—that people with MBAs will walk through our doors and apply for an assistant manager’s job? Let’s be real: We’re retailers, many of us in small towns and rural locations, and we hire mostly high school grads at best and pay modest salaries. This is our reality, so let’s deal with it. Among our employees, even though they may not have had the advantages of experience or higher education, I guarantee you have some really smart, ambitious people who just never had the opportunity to grow and learn. Leaders come in all shapes and sizes, at every level in a business and with all levels of education. Potential leaders are scattered throughout your business.

NRHA Foundations of Leadership Course In early 2017, you will have a new way to develop leaders so that you can grow your business. Your association is working with a consortium of leading independent retailers and Ball State University’s Institute for Entrepreneurship and Free Enterprise to design and launch the NRHA Foundations of Leadership Course. This eight-week online course will introduce your employees to the fundamental concepts around learning to lead people effectively. Each week, the course will focus on a new leadership concept through a video presentation, readings and self-reflection. Students will work in a highly interactive online environment, challenging each other to grow. Included as part of the course, but optional, is an invitation to each student and a guest to attend the Annual Foundations of Leadership Conference at the NRHA conference center in Indianapolis at no additional cost. This will be an inspiring two days devoted to networking, learning and being challenged to grow as leaders. Attendees will meet other independent retailers from across the U.S. and Canada, including graduates of the NRHA Retail Management Certification Program and NRHA Young Retailer of the Year honorees. Watch for more information in the coming months about this new NRHA program that will help you build the future of your business.

Bill Lee, President and CEO

blee@nrha.org

HARDWARE RETAILING | September 2016

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Unwavering commitment to our

INDEPENDENT DEALERS Cutting-edge innovation. Commitment to quality. Dedication to you. To learn more about becoming a valued Benjamin Moore dealer, visit us at benjaminmoore.com/newdealers © 2016 Benjamin Moore & Co. Benjamin Moore and the triangle “M” symbol are registered trademarks, licensed to Benjamin Moore & Co.

Taking Care of Business

We’re Living in a Pokémon Go World

“You might personally

choose to eschew the use of a smartphone or still insist on relying on paper maps, but your customers expect more from your business.

”

t was the summer of 1977 when my dad brought home the box. I remember him having us all come together in the family room to learn about the strange package he had tucked under his arm. This surprise was pretty special. Inside this colorful package was a marvel of modern technology. It was just a little bit larger than a shoe box and was made from black plastic accented with faux-wood grain, with two knobs jutting out from the top. Just a few turns of the screwdriver later and my family had stepped into a new age of home entertainment—we were playing Pong. This was probably the first time I remember technology really impacting my life. Five or six years later, I remember another milestone in my awareness of technology. My friend and I just learned one of our local banks was getting some sort of new machine that would allow you to deposit or withdraw money when the bank was closed. It was called an Automatic Teller Machine, and we were highly skeptical. How was this safe? Anyone could just pry open the box and abscond with the cash inside. It would never work. Flash forward to today. The phone sitting on my desk has more computing power than every Pong machine ever made. I can transfer money anywhere in the world with one push of a button. I have a camera, video recorder, GPS, translator, music player, calculator and 10,000 other functions all contained in a device roughly the size of a deck of playing cards. And we are nowhere near “done” when it comes to our technological journey. The rapid emergence of sophisticated technology has impacted every aspect of our lives. We communicate differently, entertain ourselves differently and yes, we shop differently. In this issue of Hardware Retailing, we have several articles that focus on the use of technology and both the positives and negatives that accompany it. As you read these articles, it’s important to keep one thing top of mind: Technological innovation is here to stay, and its impact will continue to affect every one of us. I say this because I often hear people lament about the negative impact technology has on our lives. “No one ever talks anymore.” “We are constantly inundated with information.” “Kids don’t know what a library is used for.” While all these things may have some basis in truth, society has changed and there is no going back. We are through the looking glass with technology and even the crustiest codgers among us have to realize you can’t turn back time. This is especially true when you are considering technology and the role it needs to play in your business. You might personally choose to eschew the use of a smart phone or still insist on relying on paper maps, but your customers expect more from your business. They expect a website, easy access to information, quick checkout, loyalty programs, a searchable database of products, price checking and more. So whether or not you are ready to embrace the plugged-in world we live in, your customers are and your competitors are. If you want to succeed today, you just can’t be playing Pong in a Pokémon-Go world!

Dan M. Tratensek, Publisher

dant@nrha.org

HARDWARE RETAILING | September 2016

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At Your CheckOut. Anderson Metals Corporation, Inc. P.O. Box 34200 Kansas City, MO 64120

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OTHER TIMES IT SIZES YOU UP AND NODS.

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

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NRHA News

NRHA Abroad: 10 Countries in 12 Months

he home improvement industry is one that stretches across borders. There are home improvement stores around the world. But how do the trends, products and merchandising techniques overseas differ from what we see in North America? What are our peers up to on the other side of the pond? North American Retail Hardware Association (NRHA) staff member Hilary Welter is on a journey to find out. For one year, Welter is living, working and connecting with the home improvement industry across the world in 10 countries and 12 cities with a program called Remote Year. Welter is one of 75 professionals participating in the Remote Year program, which brings together professionals from around the globe to spend a year working, traveling and exploring abroad. Throughout the year, she will be spending time absorbing the world of retailing in new places. In addition to visiting international retailers, she will connect with associations and manufacturers and attend industry events.

HARDWARE RETAILING | September 2016

Where in the World? Welter spent August in Lisbon, Portugal, and is off to Rabat, Morocco, at the beginning of September. Her stops for the remainder of the year include: • October – Sofia, Bulgaria • November – Split, Croatia • December – Prague, Czech Republic • January – Valencia, Spain • February – Mexico City, Mexico • March – Bogotá, Colombia • April – Medellín, Colombia • May – Lima, Peru • June – Córdoba, Argentina • July – Buenos Aires, Argentina

Following Along Over the year, Welter will be sharing stories and retail experiences on her blog, “NRHA Abroad.” Learn about her journey and check out what she learned in Lisbon at TheRedT.com/nrha-abroad. Stay tuned for new posts each month.

NEW!

Fast Cut and Deep Cut Hole Saws!

The Deep Cut saw combines the tried and tested tooth form from the previous Dual Pitch product, with a new tooth material for enhanced heat and wear resistance. The Deep Cut saw also features an increased hole saw depth of 2" (51mm), and is ideal for cutting metal of more than 3mm thickness, tubes with a wall thickness of greater than 3mm and wood up to 2" (51mm) thick.

The Fast Cut saw combines a new tooth material, with enhanced heat and wear resistance, and a new tooth design, providing a smoother, faster cut on a wide range of materials, when compared against the previous Constant Pitch saw. Specifically suited to cutting stainless and mild steel sheet, the Fast Cut will also cut through tubes with a wall thickness of up to 1/8" (3mm).

What company provides speed and efficiency?

Check out our new Fast Cut and Deep Cut hole saws. http://starrett.co/2bj6uGq

Innovation Rules starrett.com

NRHA News

NRHA Announces First Women’s Leadership Roundtable for December

reating a forum to share your voice, developing a network of peers and learning valuable skills and new ideas to make your business thrive is what NRHA wants to help you do. And that’s exactly what the association will do when it kicks off its first Women’s Leadership Roundtable at the Hyatt Regency O’Hare in Chicago on Wednesday, December 7. The Women’s Leadership Roundtable is the latest addition to NRHA’s successful roundtable series, joining the other seven roundtables the association already hosts as part of its Retail Leadership Institute. Women in leadership positions throughout the industry will come together to discuss best practices, current issues and new ideas about leadership and the industry. NRHA’s roundtables are designed to bring together retailers across affiliations, store types and locations to discuss, network and share ideas. The NRHA Women’s Leadership Roundtable will take this concept a step further, adding wholesaler/co-op executives and manufacturers to the group along with retailers.

“As the number of female leaders in the industry continues to grow, we at NRHA feel is it important to create a forum for women to come together regardless of affiliation, brand or business type,” says Allison DeWitt, NRHA director of member services. Much like NRHA’s other roundtables, the program’s discussion topics will be determined by an Agenda Planning Committee—a small group of roundtable attendees who volunteer to help set the agenda—and moderated by NRHA. Attendees to the roundtable will also be able to take part in the NRHA State of Independence Conference the next day, Thursday, December 8, which also takes place at the Hyatt Regency O’Hare. “Both programs are about bringing together various channel partners to learn from one another and provide a voice for retailers. We look forward to including this exciting and important discussion as a precursor to the conference,” says Dan Tratensek, vice president of publishing at NRHA. For more information or to attend, please contact Allison DeWitt at 317-275-9414 or adewitt@nrha.org.

MAVERICK’S INSTANT-READ BBQ THERMOMETERS KEEP GETTING BETTER! PT-50: 2 Way Thermocouple Thermometer • Select right or left hand display • Display rotates 180O for easy viewing • Temp Range: 40O F to 660O F • Calibratable

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DT-09: Super-Fast Instant-Read Thermometer 94 Mayfield Avenue, Edison, New Jersey 08837 Tel: 732-417-9666 • Fax: 732-417-9673

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HARDWARE RETAILING | September 2016

• Accurate temp in less than 4 seconds

Super Fast Instant Read

• Super thin tip for easy measurement Thermometer • Check several foods in record time

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NRHA News

NRHA Supports Fuller Center Service Efforts

etailers, NRHA and cyclists from the Fuller Center for Housing have made a big difference in towns across the U.S. From June 10 to Aug. 16, a group of more than 100 cyclists rode from Seattle to Washington, D.C. with the Fuller Center Bicycle Adventure, completing service projects like painting, repairs and construction along the way. NRHA provided $1,000 grants to be used to buy supplies for six of the projects. The grants were given to local Fuller Center covenant partners in each city, who then used the money to purchase materials from an independent home improvement retailer in that area. “NRHA grants provide a tangible way to show our stakeholders how the industry gives back to the people in the communities we serve,” says Jeff Cardwell, owner of Cardwell Do it Best Home Center in Indianapolis. “The reward of knowing you play a small part in helping a family in need is priceless.” Read the full story at TheRedT.com/bike-adventure.

Your Wholesaler Warehouse It’s a StoreSupply SuperStore Ordering store supplies can be a timeconsuming experience. It doesn’t have to be. Your wholesaler warehouse has the essential store supplies you need in stock, ready to ship every day—bin labels, printer rolls, paint labels, forms and whole lot more.

Your wholesaler buyer works closely with Centurion to make sure that all store supplies in stock meet the unique needs of hardware stores just like yours. You can order your store supplies online 24/7. Getting the store supplies you need couldn’t be easier. It couldn’t be faster.

Just think of your wholesaler warehouse as your personal StoreSupply SuperStore.

Because it is. VISIT CENTURION AT

Do itBest Corp October Market October 7-10, Indianapolis, IN Booth: F011

HARDWARE RETAILING | September 2016

True Value 2016 Fall Reunion September 16-18, Denver, CO Booth: 1707

WE KNOW

RETAIL PLUMBING America’s Largest Wholesale Plumbing Inventory

Exceptional Customer Service

Extended Hours of Operation

Special Order Capabilities

No Order Minimums

Order Confirmations

Same Day Shipping

Flexible Ordering Options

24/7 Online Storefront

Now offering a palette of 24 playful colors inspired by the inhabitants of Troll village. It’s time for a Troll new look! DreamWorks Trolls © 2016 DreamWorks Animation, LLC. All Rights Reserved. ©2016 True Value® Company. All rights reserved.

INSPIRING A BEAUTIFUL PARTNERSHIP! DREAMWORKS TROLLS COLOR PAINT EXCLUSIVELY AT TRUE VALUE®

TRUE VALUE IS PROUD TO BE THE EXCLUSIVE HOME IMPROVEMENT PARTNER FOR TROLLS PAINT We are committed to providing True Value retailers with sound business solutions and resources to ensure their future success and profitability.

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

Trends The Cost of Hiring the Wrong Workers Hiring the right employees is an ongoing challenge for independent home improvement retailers, but failing to do so comes with a price tag.

Top Sources of Inventory Shrinkage

One of the top two reasons for inventory loss/shrinkage in retail is employee theft, according to research from the National Retail Federation. The No. 1 cause is shoplifting, but the No. 2 cause, employee theft, costs a business more. The average dollar amount lost per dishonest employee is approximately $1,234 versus $377 for shoplifting, the research shows.

39.3% Shoplifting/ External Theft

35.8%

Yet the measures retailers take to prescreen potential new hires are frequently minimal. Despite the expense of employee theft, nearly 40 percent of retailers don’t verify prospective employees’ employment histories and even fewer check personal references, the National Retail Federation reports.

Applied to Retail: The costs of hiring quickly just to fill a position rather than finding the best person for your business can be high. Think through how you can improve your hiring process. If you and your managers hire without checking references or calling past employers, you may be exposing your business to unnecessary theft risks.

Employee Theft/ Internal Theft

16.8% Administrative/ Paperwork Error

The benefits of hiring carefully are plentiful—a retailer not only can get a better feel for job applicants’ honesty, but can also reduce turnover by finding employees who will care more about the business and be a better fit for the company overall.

Retailers’ Most-Used Integrity Screening Options Criminal Conviction Checks . .89.2% Multiple interviews . . . . . . . . .81.5% Verify Past Employment History . . . . . . . .61.5% Personal Reference Checks . .58.5% Drug Screening . . . . . . . . . . . . .55.4%

Source: The 2016 National Retail Security Survey, National Retail Federation

HARDWARE RETAILING | September 2016

Your Complete Power Source for 30 Years!

• Extension Cords • Bulk Wire • Household Cords • LED Work Lights

• Halogen Work Lights • GFCI's • Temporary Power Boxes • String Lights

One Flexon Plaza • Newark, NJ 07114 (800) 327-4673 • uswireandcable.com

STOCK AVAILABLE TO SHIP FROM OUR NJ & CA WAREHOUSES! Visit U.S. WIRE & CABLE at this year's STAFDA show in Atlanta! • November 6-8. (BOOTH #'s 1835 / 1837)

New Products

“The Papaw Stockman is by far

our biggest seller in Case Knives. In the South, people don’t have grandpas, they have papaws. —Jeremy Boone, Hometown Hardware

”

“This sunscreen is great

because it protects from the sun and can act as a moisturizer. —Jay Farr, Farr’s True Value Hardware

”

2 1. COLLECTABLE POCKETKNIFE

2. CHEMICAL-FREE SUNSCREEN

Case knives are handcrafted pocket knives perfect as a gift for any occasion. The Papaw Stockman comes in a gift tin and measures 35/8 inches when closed and weighs about 2.5 ounces. Both the case and the knife have "Papaw" engraved on it.

Naked Zinc™ Sunscreen by The Naked Bee is an SPF 30 mineral crystal sunscreen. It provides users with UVA and UVB protection without chemical absorbers. The sunscreen is paraben-free and fragrance-free and is made in the U.S.A.

W.R. CASE & SONS CUTLERY CO. 800-523-6350 or www.wrcase.com

HARDWARE RETAILING | September 2016

THE NAKED BEE 888-871-1811 or www.nakedbee.bz

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

“The ZeroWater Ready-Pour Pitcher is a great option for homeowners who want to filter their water.

”

—Bridgett Barnes, Ace Barnes Hardware

“This greeting card line is

a great addition to our store. Customers can pick up a gift and a card at the same time.

”

— Bridgett Barnes, Ace Barnes Hardware

3 3. WATER FILTRATION PITCHER

4. FUNNY GREETING CARDS

The Ready-Pour Pitcher from ZeroWater allows consumers to pour water that has already been filtered without spilling water that’s still filtering. Ready-Pour’s sealed lid and reservoir enables the pitcher to be kept full while adding up to two cups of additional capacity, helping to eliminate the wasted space on top of the pitcher.

Frank & Funny Greeting Cards are a new line of cards co-created by a professional stand-up comic. The cards feature original humor from professional stand-up comedians. Cards range from witty to irreverent, offering your customers a card for any occasion.

ZERO TECHNOLOGIES, LLC. 800-503-2939 or www.zerowater.com

COMPENDIUM, INC. 800-812-1640 or www.live-inspired.com

September 2016 | HARDWARE RETAILING

New Products

5 5. SELF-ADJUSTING PIPE WRENCH

6. MINI PROPANE TORCH

Sponsored Product

The Wireless Candle LED Speaker by Acoustic Research blends into any home, offering excellent sound and LED candlelight. It has a weather-resistant design for indoor or outdoor use. The Wireless Candle LED Speaker adds acoustic flare with a 4-watt sound output. A built-in, rechargeable lithium ion battery allows up to 12 hours of playtime. Enjoy music wirelessly from your smartphone or tablet with a Bluetooth connection.

The CAT® RP SERIES from Caterpillar is a line of portable generators designed for home and work uses. The product line is distributed through Cat Home & Outdoor Power Authorized Sales and Service Centers (ASSC), an extension of the company. Independent home improvement retailers are an ideal fit for selling this line of generators. CATERPILLAR 877-228-0909 or www.cat.com/jointheteam

ACOUSTIC RESEARCH www.arspeakers.com

RECHARGEABLE ALWAYS READY FLEX CHARGE DUAL POWER NO MORE DOWNTIME DUAL POWER LI-ION OR ALKALINE

760 LUMENS BRIGHT

SEE ALL OF OUR RECHARGEABLES AT COASTPORTLAND.COM

HARDWARE RETAILING | September 2016

SPOT BEAM OR FLOOD BEAM

10 9 9. ANGLE POWER STRIP

10. LICENSED TOOL BOX

The angled design of the APT Series by Task Lighting allows users to place power exactly where it is needed while extending the benefit of flexibility and freedom from the interruption of switches and outlets in glass and tile backsplash designs. The angled power strip line can be placed below cabinets or around desks or bar tops or under the bathroom mirror.

Sainty International’s Art Deco Tool Box is a 16-inch durable steel toolbox built with rugged, all-steel endcaps for greater strength. A nickel-plated steel latch and hinge provides added security. The Sainty International Art Deco Tool Box features a full-length tote tray, heavy-duty steel handle and durable rust-resistant powder-coated finish. The toolbox comes with a lifetime warranty and is an officially licensed NFL product.

TASK LIGHTING CORP. 800-445-6404 or www.tasklighting.com

SAINTY INTERNATIONAL LLC 805-650-1810 or www.saintyartworksstore.com

New Products

11. TOILET BOWL LIGHT

12. MOBILE SCREEN WIPES

The IllumiBowl is a motion-activated toilet night light designed to make late-night trips to the bathroom safer. The IllumiBowl requires three AAA batteries, has nine color settings and is perfect for senior citizens and young children. The IllumiBowl enhances the nighttime bathroom experience, provides a soft glow and adjusts to fit any toilet.

Dust-Off® pre-moistened screen wipes are designed to safely and effectively keep mobile devices free of dirt and grime. The single-use wipes fit easily into a purse or pocket. Packets are available in a 24-wipe box, 32- or 75-wipe resealable pouches or a 200-count share pack jar.

ILLUMIBOWL 801-701-0096 or www.illumibowl.com

FALCON SAFETY PRODUCTS, INC. 908-707-4900 or www.Dust-Off.com

AMERICA’S BEST FIRESTARTER  100% All Natural Product ! Why  Super Fast & Easy ! Stump Chunks?  No Paper Needed !  Lights with a Match !

Find Out For Yourself

Call us for your Free Sample Pack or visit us online at stumpchunks.com/sample

Available in 4 sizes to fit all your customer’s needs.

Enjoyed Year Round 1.5 cu.ft. bag

.3 cu.ft. bag

.075 cu.ft. bag

Also available in these warehouses

NOT SOLD IN BIG BOX STORES

.1 cu.ft. water proof bag

Barbecues Campfires

Fireplaces Fire Pits Wood Stoves

Family Owned Business

603-935-5405

Made in USA

14 13 13. INTUITIVE KITCHEN FAUCET

14. ANCHORING FASTENERS

The ZOE touch light PRO by KWC is an intuitive kitchen faucet controlled by a touch-on, touch-off technology that changes the water temperature with the touch of a finger. One tap for cold water displays a blue LED light; two taps for warm water displays an orange LED light; and three taps for hot water displays a red LED light.

DEWALT® has a new line of cast-in-place anchors and fastening solutions designed for performance and productivity in various construction projects. This line of products provides a cordless solution for all concrete and masonry applications. Designed to deliver a fast and reliable installation, both anchors and fasteners are made for use in construction projects where they are placed prior to pouring concrete.

KWC 888-592-3287 or www.kwc.us.com

DEWALT 800-433-9258 or www.dewalt.com

Red Lion® Premium Shallow Well Jet Pumps pump up your sales volume by offering increased starting torque and more pumping power to meet your customers’ needs. Our full line is available in 1/2, 3/4, and 1 hp models. Make us your partner for reliable performance and on-the-spot training for cleanwater and wastewater products.

redlionproducts.com

September 2016 | HARDWARE RETAILING

New Products

15 Be the Complete Source for all

Supplies! You’re already selling the sandpaper and paint, now offer the rest of the products they need for

SERIOUS SPEED and EYE-POPPING DETAIL

15. NON-SCRATCH GRILL CLEANER The Non-Scratch Scouring e-Cloth® is a grill cleaning cloth designed to handle tough grease and smoke deposits on the inside of the lid, and food particles and grease accumulation inside the bottom of the grill. The e-Cloth offers a solution to clean all types of grills quickly and effectively using only water, eliminating harsh chemical residues that interact with grilled food.

Become your area’s go-to place for all PineCar Derbies: Scouts, church groups, summer camps and more!

E-CLOTH®/TADGREEN INC. 800-677-4354 or www.ecloth.com

16. COLLAPSIBLE CHAIR WITH FAN

Low Cost Starter Assortments Available

Power Panel Asst P3869

Endcap Assortment P3878

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

HARDWARE RETAILING | September 2016

The Shady Breeze™ is a collapsible outdoor chair with a built-in canopy and 2-speed fan that creates a downward breeze for maximum comfort on hot and sunny days. The Shady Breeze provides portable and desired shade for outdoor use in any situation and is a good solution for staying cool, whether it's at the beach, pool, tailgating, camping or any outdoor event. SHADY BREEZE 240-780-2793 or www.theshadybreeze.com

17 17. CULINARY APRON The Rockford Chef’s Bib Apron by Chef Works® is part of a street-inspired line of culinary apparel that provides a combination of fashion and forwardthinking functionality. Made of a 100-percent cotton enzyme washed canvas and available in three colors, the apron features reinforced stress points, a towel loop, adjustable metal neck buckle and a chest pocket with an inside tweezer pocket. CHEF WORKS 800-372-6621 or www.chefworks.com

18. SHOE ODOR REMOVER Remodeez® provides an odorless and nontoxic solution to remove odor and moisture from shoes, boots, athletic cleats and any footwear where odor is present. Rather than rely on harsh chemicals or fragrance to cover up smells, Remodeez neutralizes odor using activated charcoal derived from coconut husks to absorb odor at the source. Remodeez may be used to refresh shoes, gym bags, automobiles or areas of the home. REMODEEZ, LLC 866-654-2397 or www.remodeez.com

September 2016 | HARDWARE RETAILING

New Products

19 20 19. LEAK FREE GAS CAN

20. MULTIPURPOSE LIGHTWEIGHT WAGON

No-Spill gas cans ensure users avoid losing any fuel. Users push the button and gas flows at almost double the rate of other gas cans. Keep the button down, and the flow will automatically stop as soon as the gas touches the end of the spout. Even the can is unique, with view stripes and thicker walls. The No Spill gas can comes in 1.25-, 2.5- and 5-gallon sizes.

The Easy Go by Keter is a smart and simple multipurpose wagon. It is designed for garage, basement and yard maintenance and can be helpful with household chores and shopping. It is made from recycled materials and can hold up to 14.5 gallons. KETER PLASTIC 877-638-7056 or www.keter.com

NNING PROD WI

-WI

UCT

• AW

S•

TS UC

SAFE & EFFECTIVE

AWARD -

NO SPILL INC. 913-888-9200 or www.nospill.com

N NIN G P

Carry the products they need for their renovation plans.

MASTIC REMOVERS

PAINT STRIPPERS

• No Petroleum Solvents • Virtually No Odor • Safe for use in occupied spaces

• SAFE! No Methylene Chloride • Removes Multiple Layers with ONE Application • Made with 100% American-Grown Soybeans

See Our Full Line of Products Become a Dealer! Visit: www.franmar.com or Call: 800.538.5069

HARDWARE RETAILING | September 2016

Made in the USA

H A R DW A R E C O M P A NY

We are America’s Largest Regional Distributor

Looking for a change? Please join us at our... “I love the House-Hasson shows. I had an eye toward expanding to include more residential customers and I knew that House-Hasson could help me.” Merle Brubaker Superior Builders Supply Loysville, PA

Fall

SAVINGS EVENT DEALER Proud of Our Past. Poised for the Future.

MARKET

Celebrating 110 Years of Service and Value! October 20-22, 2016 • Sevierville Convention Center • Sevierville, TN

Call Pat McCutcheon at 800-333-0520 ext. 212 or go to www.househasson.com

Checkouts COMMUNITY RELATIONS

Howl-o-ween for Canine Friends

very Halloween in downtown Davis, California, families go trick-or-treating from business to business as part of the Treats Trail. Businesses included on the trail provide families a packaged treat, and restaurants sometimes even provide food samples. This year, Davis Ace Hardware decided to use this hightraffic time to host the fun and family-friendly Doggie Costume Contest, which was the idea of Nancy Haffly, assistant pet and garden buyer for the store. The event was shared on Facebook and Twitter, and an email was sent out informing customers to dress their dogs up and stop by the store on Halloween.

There were about 15 contestants in costumes ranging from a butterfly to a police officer. The winner of the contest, voted on by the store’s department managers, was a pair of spider dogs, with its owner dressed up as a witch. Besides the treats given out to each participant, the winners’ owner left with a large bag of dog food. “This was the first year for the doggie contest,” says Donn Porter, store manager. “We will definitely bring it back next year, because customers got really excited. We are a really big dog community, with dogs always in the store, so this event just made sense.”

Davis Ace Hardware hosted its first dog costume contest last year. The winners were these two dogs, dressed as spiders. There were about 15 contestants, in costumes that included a butterfly, a police officer and a turtle.

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

HARDWARE RETAILING | September 2016

Checkouts

MERCHANDISING

Keep the Wheels Turning

xperienced retailers should know that one of the secrets to merchandising is location. For example: Move a product from the back of the store to the front, and you’re likely to start selling more of it because more people notice it. Kelly Rodarmel, owner of Woodland Hardware & Home in Woodland Park, Colorado, wanted to experiment with that idea. He built a simple base for his cabinet hardware display and outfitted it with casters. That allowed him to easily change the location of a few key displays and keep the merchandising fresh. The cabinet hardware display has spent some time in the hardware department as well as the paint department. In either area, it’s a logical add-on sale to a project the customer might be tackling. Moving the display to a new

location keeps the department from getting stale, and rolling the entire display to a new location is much easier than removing all of the product from the shelf. Rodarmel says he consults with the team in each department as he considers which products might be a good fit for the moveable merchandisers. “We’re experimenting with these right now,” he says. “It’s a team effort. If I come up with an idea, I’ll share it with others in the department and get their input on how and where it might work best. “I’ve seen this done at other major retailers, like Cabela’s and REI, and they evidently have a lot of success with it,” he says. “Being able to move these displays around gives us the flexibility to place them anywhere in the store and experiment with how well they sell in different locations.”

Owner Kelly Rodarmel built platforms with casters for the cabinet hardware and candle displays at Woodland Hardware & Home so they can be easily moved as a complement to any department in the store.

HARDWARE RETAILING | September 2016

new radios World’s smallest radio (4.2”h and 4.2 oz.) that covers 300,000 sq. ft. Comparable coverage to most larger, heavier 4/5 watt analog radios Private, secure and interference-free conversations Meets rugged military standards for dust, moisture, shock and vibration No license required in U.S. and Canada

Exclusive Vendor To: Ace Hardware #1740 • True Value #45864 • Do it Best #4522

Effective 9/1/16 - 12/31/16 For complete details and to claim your free radio(s), go to www.myradioreward.com

(800) 248-5391 • motorola@acsradios.com • www.acsradios.com MOTOROLA and the Stylized M Logo are registered in the U.S. Patent and Trademark Ofce. All other product or service names are the property of their registered owners. © 2016 Motorola, Inc. All rights reserved.

Checkouts

UNIQUE NICHE

Ready to Take Impulse to the Next Level?

ustomers to Roaring Fork Valley Co-op in Carbondale, Colorado, come to the store for tack, feed, fasteners and… Coffee and doughnuts. Yes, coffee and doughnuts. One step in the business’ recent remodel included adding a small convenience store area, complete with booth seating, refrigerated displays of sandwiches and snacks and a soda machine for fountain drinks. This new area helps draw customers to the rest of the store and gives them a place to have a seat and enjoy breakfast or lunch when they come in to shop. The coffee is nothing new—store manager Baldo Barragan says they’ve offered it for some time—and the remodel created an opportunity to expand on the idea. “Along with free coffee, we sell fountain drinks, doughnuts and other snacks,” he says. Convenience stores do this, so why not your store? Maybe you can’t add seating, but think about adding a

HARDWARE RETAILING | September 2016

At Roaring Fork Valley Co-op, customers can sit down in the convenience store area and enjoy a snack or a meal.

small refrigerated display of breakfast or lunch sandwiches, especially for weekend warriors or contractors who grab meals on the go. Maybe they normally pick up a candy bar or bottle of water while they’re shopping—offer them the opportunity to have a sandwich instead.

COMMUNITY RELATIONS

Big Opening Creates a Buzz

ant to make a statement the day your store opens? Try finding a way to make your ribboncutting ceremony unique. That’s what Greg Pace, owner of Escalante Do it Best Home Center in Escalante, Utah, did when his store opened in October 2013. “We broke ground in early June of that year and had our grand opening in early October, so we really moved the project forward quickly,” Pace says. “When it came time for the ribbon cutting, we wanted to do something unique. We didn’t have big scissors, but we did have a chainsaw.” They also had a 21-foot pole, so they used the pole and the chainsaw—both items sold at the store—for a unique ribbon cutting ceremony. Pace says there were positive comments from customers about the ceremony—customers who were excited for the store to open. “We actually had a few residents come in and help us merchandise the store as we were getting everything set up,” he says. “They wanted to see it open sooner.” If you’re planning to open another location or even hold a grand reopening after a store reset, see if you can find a similar way to add a creative spin on your grand opening ceremony.

When Escalante Do it Best Home Center opened in 2013, the owners celebrated with a a unique ribbon-cutting ceremony.

Win A

TRIP TREAT Or Pick Your

Checkouts

UNIQUE PRODUCT

The Light Side of Plumbing

t’s easy to start a conversation with customers heading back to the plumbing department at Meyer Hardware in Golden, Colorado. They’re likely to stop and point to the unusual lamp displayed there. Created from a mixture of plumbing fittings and other miscellany, the lamp catches most people’s attention and helps owner Steve Schaefer start a conversation—a great way for him to get to know his customers. The lamp is a creation of a local artist, the uncle of one of Schaefer’s former employees. “The creator of the lamp has a few similar ones on display in an art gallery in Denver,” says Schaefer. “But we let him put one here in the store. It spurs a lot of curiosity among customers, and we have a number of people who come in just to take a picture of it.” The lamp is made from pipe parts from the store, as well as other items the creator found at garage sales. It’s also available for sale, but most customers prefer to look. With a store at the foothills of the Rocky Mountains, Steve Schaefer is used to seeing a lot of tourists. While he offers them a number of niche items, such as fishing equipment and giant tubes for floating on the nearby river, having a curiosity such as the lamp gets his customers talking and gives him one more way to set his store apart from other retailers.

Pigeon Forge, Tennessee LeConte Center • October 12-14 Over 400 vendors and thousands of deals!

“The Distributor for Stores and Brands You Trust.”

A lamp made using plumbing fittings usually gets customers to stop and stare.

For more info, call Eddie Flynn or Richard Snowden 800.776.0976 • marketing@wallacehardware.com Register today: www.wallacehardware.com

2015

“Midwest was our choice for our new store. We have what we need for our customers and don’t turn anyone away. The dual-slide racks have allowed us to add more items and display them in the right spot.” - Ricky and Cody Miller, Owners, Miller Ace Hardware, Louisville, KY

For your very own fastener destination, contact Glen @ 800-444-7313 x 120

800.444.7313

fastenerconnection.com

The Cool

CAJUN From Milkshakes to Pokèmon, Cabirac Keeps Retail Exciting By Dan Tratensek, dant@nrha.org

here’s something about James Cabirac’s impish grin that immediately lets you know his grade school teachers likely had their hands full. Even today, you can clearly detect the hint of mischief in his eyes that suggests he’s got some sort of plan brewing that has little to do with the conversation at hand. Talk to James for a few moments and these plans come bubbling out in almost stream of consciousness fashion— promotional ideas, products he’s considering, plans for the business, thoughts about the association. Yes, at any given moment there are a lot of ideas swirling around behind James’ smile, and there’s a fair share of mischief as well. As the newest chairman of the board of directors for the North American Retail Hardware Association (NRHA) and a highly regarded operator of two separate retail businesses in Southern Louisiana, there is no questioning James’ success. But what makes James truly unique isn’t necessarily his retail acumen; it’s his somewhat unorthodox approach to injecting fun into nearly every aspect of his operation that truly sets him apart. And when it comes to fun, he doesn’t just approach it like he’s ticking another box on a retail marketing plan—he takes the idea of blending fun and retail to Willy Wonka-ish proportions.

HARDWARE RETAILING | September 2016

“James is a fantastic guy and a fantastic retailer,” says fellow retailer Adam Busscher, who has served on NRHA’s board with James for nearly a decade. “He’s got some of the wildest, most fun ideas I’ve ever seen. He’s just fearless when it comes to trying things. I can’t say how much I admire that.”

The Golden Ticket Located on the edge of Bayou Lafourche in Southeastern Louisiana, the town of Galliano is everything you might expect to find in this part of the country. Shrimp boats hustle in and out of the nearby ports, oil workers come and go for their weeklong shifts on floating derricks and alligator farming is a way of life. It was here that a young James Cabirac began looking for a job, any job, that would allow him to support himself as a teenager. James had graduated high school early and was hoping to make enough money to attend college when fate intersected with his plans. “I was really looking for a job that I could walk to, because I didn’t have a car,” recalls James. “There was the hardware store and a grocery store, and I had applied at both. I got a job offer from both of them on the same day. I almost chose the grocery store. If I had, I don’t think I ever would have had the opportunities I have been given.”

Take the Tour To learn more about James Cabirac’s vision for Kief Hardware and thoughts on the industry and NRHA, go online to TheRedT.com/kief-hardware and watch an extended interview.

September 2016 | HARDWARE RETAILING

At the start of his career in hardware, these opportunities mostly consisted of odd jobs around Kief Hardware, sweeping floors and cleaning displays at the 5,000-square-foot store, which had served the bayou community for more than 40 years. Owners Jerome and Lola Cantrelle quickly became impressed with James’ work ethic. When their own son left the business, they made the bold decision to promote the 18-year-old James to manager. “I’m sure they were a little uneasy about it, but I think they trusted me enough at that point to give me a chance,” he says. In fact, the Cantrelles had enough faith in James to broker a deal with their young manager. They would allow him to take a percentage of his salary and invest it toward buying the business—a deal that seemed too good for him to pass up. “At that time, I wasn’t really even sure if college was going to be the right choice for me,” he says. “I was enjoying working in the store and was putting in 60- and 70-hour weeks and loving it. I couldn’t pass up this opportunity to own my own business.” Shortly after the deal was struck, those wheels in James’ head began turning. So many ideas. So many plans for how he could turn this sleepy little store into something much bigger, much more successful, much more fun. At this time, James was thinking more about a career than a job, eager to build a life with his thengirlfriend, now wife Anna Marie. One of the first big success stories came with an unlikely addition to the inventory of a 60-plus-yearold hardware store—paintball supplies. When James suggested to the owners that they add the products, they were skeptical. “It was going to cost about $1,500 to bring the products in,” James says. “I was so sure we could make it work that I

HARDWARE RETAILING | September 2016

James Cabirac’s flagship location in Cut Off, Louisiana, boasts more than 30,000 square feet, and he uses a lot of that space to explore new niches.

told the owners I would pay for it out of my own pocket. Eventually, they said yes.” At the time, Kief Hardware had sales of about $400,000 per year. Within a short time, the store was producing $100,000 annually in sales of paintball supplies alone. “After that, they trusted me a lot more,” he says. And his ideas kept on coming: high-end grills, chimineas and commercial supplies. Within three years, the store’s sales had doubled. James was barely 21 years old. “It really felt like everything I did back then turned into a big hit,” he says. Some of those hits included the addition of a commercial sales division to serve the area’s shrimpers, shipyards, farmers and factories. Eventually, this division would help the small Kief Hardware double sales. In just five years, James had taken Kief Hardware’s sales from $400,000 to $1.2 million. He now owned the business and had doubled the size of the salesfloor and added three additional locations, including a new flagship location in Cut Off, Louisiana. During this time, Cabirac was also recognized as one of NRHA’s Young Retailers of the Year. A few years later, Cabirac would earn this award a second time, becoming the only retailer in the award’s 20-year history to do so.

This is where it all begins.

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“I think over the years, one of the things that has defined us is that, for good or bad, we are not scared to try things.” —James Cabirac, Kief Hardware He might not have realized then, but being honored as a Young Retailer of the Year marked another significant milestone in James’ career. It got him involved with NRHA. “The awards were definitely how I first got exposed to NRHA,” he says. “I saw it as an additional training opportunity for us, but over time, it turned into so much more.”

A Little Nonsense, Now and Then… With the early years behind him, James’ youthful exuberance began being colored by a fair bit of retail wisdom. After a flurry of store openings and expansions, James found himself reconsidering some of these decisions. “I think over the years, one of the things that has defined us is that, for good or bad, we are not scared to try things,” he says. “I have probably opened up ten different stores—closed some, sold some—but we’ve never been scared to try things.” Today, James does most of his retail experimentation from his single store in Cut Off. He has also launched a dollar store concept called Hi-5 where all products are priced between $1 and $5. But it’s the 30,000-square-foot hardware store that provides plenty of room for the master-retail tinkerer to try out ideas—from a full-service grocery store to guns and ammo and a milkshake machine to a selection of craft beers. Kief Hardware even added a virtual video arcade so younger visitors can come in and play games while their parents shop.

HARDWARE RETAILING | September 2016

James constantly introduces new services and goods in Kief Hardware, including a T-shirt printing service, a milk shake machine and more.

“We understand that the kids coming into our store today are going to be homeowners in a few short years, so we want to make sure they have good memories about shopping here,” he says. But when it comes to products, even James admits sometimes the Kief team may get a bit ahead of themselves. “We try so many different things sometimes I feel a little silly because we are actually ahead of the curve on stuff,” he says. “You know, we are like four or five years ahead of the trend.” As one example, James remembers adding a key cutting station that would accommodate chip keys long before most car dealers even offered the technology. “You just have to visit James’ store to realize that he is unlike a lot of retailers when it comes to his willingness to try things,” says Bill Lee, NRHA’s president and CEO. “It’s not just with the products; there is always something going on in his store that just lets you know it’s kind of different than any other store you might have been in before.” In addition to the array of unique products, another thing you’ll likely notice when shopping at Kief Hardware is the happy, engaged staff roaming the aisles. Some retailers talk about how they create

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a family atmosphere in their stores, and the team at Kief Hardware definitely fits this mold. The exuberance of the staff is evident when you see the way they work together and rally around the store. For evidence, just go to Kief Hardware’s Facebook page to watch one of the many fulllength music videos the staff has put together where they all play different roles, sing and dance through the aisles of the store. “Our employment application is like 15 pages long, and it is more about personality type than it is about experience or background,” says James. “There are a lot of long hours here and a lot of hard work, so we want to have people who are going to like working together and being around each other.” James admits that he’s often willing to sacrifice a little bit of retail productivity if it means fostering a positive atmosphere. “It might take us a little longer to set a display or something than your average store, but that’s okay. I’d rather have us having fun while we do it,” he says. James also goes to great lengths to tap into his employees’ creativity, encouraging them to try their ideas, no matter how “out there” they might seem. Example—Kief Hardware recently began opening its doors for Pokèmon Go events, inviting players into the store and sponsoring activities to attract Pokèmon Go characters. According to James, the staff was a huge part of making this a success. “We basically had our crew playing Pokèmon all day with our customers, but it was OK; they were having fun and creating advertising.”

A New Chapter From milkshakes to Pokèmon, the team at Kief Hardware undoubtedly has fun in their retail playground, but several years ago, James made the decision to get serious about helping other retailers. “There’s no doubt that I get so much out of my involvement with NRHA,” he says. “But it is also great knowing that by being on the board, you get to play a role in what NRHA is doing,

HARDWARE RETAILING | September 2016

The atmosphere of the team at Kief Hardware is full of fun personalities and laughter. James wants his employees to have fun working together and getting the job done, even if it takes a little longer.

and that means driving programs that really help other retailers.” James points to things like Hardware Retailing magazine and NRHA’s Retail Management Certification Program as tools NRHA offers that he feels can really help retailers searching for anything that might give them a leg up in this competitive industry. “I don’t think I even take enough advantage of the resources NRHA has to offer,” he says. “If you just look at Hardware Retailing, there is probably an article available that can help retailers with just about any project they are working on, and that’s because NRHA has researched it and written about it.” As chairman of the board, James says he looks forward to doing whatever he can to help NRHA make even more resources available to independent home improvement retailers everywhere and to encourage younger retailers to take the same chances he did. And with four children (Jack, 12; Julie, 11; Cate, 6; and Luke, 4 months) who James and Anna Marie hope will some day enter the business, James looks at time spent with NRHA as an investment in the future. “Even though I’m still trying things, at times I catch myself sounding like that older hardware guy and saying, ‘Oh, that won’t work; we already tried that.’ I have to be careful not to do that and to listen to the younger generation that’s out there now, doing new and exciting things we all can learn from.” Whatever direction James takes the NRHA board, there will be a dedication to helping retailers succeed—and possibly a bit of mischief as well.

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Revolutionizing Retail Using Technology to Build a Smarter Store

icture it: A customer walks into your store and receives an alert on his phone about a special on charcoal for his grill. He received the alert because he purchased a grill from you in the spring. He picks up the charcoal, talks with an employee about a few other items he needs, and works with the employee to pay right there in the plumbing aisle, without waiting in line, using his phone and a mobile payment app.

HARDWARE RETAILING | September 2016

The receipt is emailed to him, and it’s in his inbox before he reaches his car. Or how about this? Before you leave home, you take a look at your store’s work management app on your tablet. You notice some items your store manager added to the to-do list, which he has assigned to a few employees who will be working that day. You remember a couple more things that need to be taken care of, and you add them to that to-do list before you head out the door to get to work.

Loss Prevention

Employee Training

Digital has revolutionized the capabilities of camera security systems. The picture is clear and overlays with your POS system.

Instead of banning smartphones at work, let employees use them for training and to help customers.

Payment

Data Security

Mobile is the future of payment. Customers can now pay with apps, which are convenient and secure.

Keep your data safe by keeping it in the cloud. In the future, even your software will be stored and managed in the cloud.

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Operations

Store-specific apps and customer-specific marketing via beacon technology give retailers new tools for scoring sales.

There are more ways than ever to monitor the performance of your business. The more you know, the more you can do to increase sales.

September 2016 | HARDWARE RETAILING

By the time you walk in the doors of your store, your manager has assigned out those tasks, and several employees are hard at work completing each one (in between helping customers, of course). Two of your newer employees are spending any down time working on the next couple of modules in your training app, making sure they are up-to-date with product knowledge and store procedures. They’re using their phones to study these modules, allowing them to stay near the salesfloor and ready to help a customer at any moment. Do these sound like scenarios you’d like to replicate? With today’s smart technology, it’s entirely possible that these what-if situations can become a reality. Using smart home technology to make a home more efficient and secure is a popular topic with consumers right now (to learn more, see Page 78). In the same vein, there are many technologies available today that can make your store more efficient, more secure and more profitable. And now, you can use that technology to create a better customer experience and streamline your day-to-day operations.

On the following pages, we’ll look at how one forward-thinking retailer is using innovative technologies in multiple areas of his business, and we’ll talk with industry experts who are on the cutting edge of some of the tools available to retailers today. Visit TheRedT.com/smart-store-video to find a video that further details what you can do in each of the six different areas—loss prevention, payment, smart marketing, employee training, data security and operations—we discuss in this story. Keep in mind that you don’t have to be a larger retailer with multiple locations to incorporate these high-tech ideas, as many of them are scalable. Even trying an app to help all employees work together to manage and complete a daily to-do list can be a good start, and that requires no more than downloading the app (which is often free, or costs only a few dollars) and setting it up for your team to use. As technology changes the retail landscape, it’s important that you look for ways to bring technology into your own store so you stay relevant to your customers, and stay competitive in the years ahead.

Parker’s Building Supply uses technology for many administrative tasks, leaving staff more time to spend with customers.

HARDWARE RETAILING | September 2016

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Loss Prevention You know it’s important to keep an eye on security at your store, whether you’re protecting against shrinkage or false customer claims. But smart store technologies can help you streamline your security. You can put in a full-store system, or you can get started quickly and inexpensively with one or two old smartphones. Chris Miller, president of Parker’s Building Supply, which has 24 locations in Texas and California, uses his security cameras to do more than prevent shrinkage. “We can also use them to keep an eye on what’s going on in the store and to counter false claims customers may raise.”

“You can watch the video and

connect the POS transaction to the video. This helps catch employee fraud and helps resolve a lot of issues.

”

—Sam Kirkland, Epicor Software Corporation

Security monitors mounted in Parker’s Building Supply make it easy to see what’s going on and reminds customers that the cameras are rolling.

HARDWARE RETAILING | September 2016

He says most of his business locations have camera systems, and he has an app on his phone that allows him to check any of the cameras. “Ten years ago, I don’t think we had a single camera. The initial purchase of our current system was expensive, but what we’ve been able to see in the store and how we’ve been able to use them has made them worth the investment,” Miller says. And the cameras do more than help prevent shrinkage. He says they’ve helped if a customer makes a claim about something that may or may not have happened at the store. “Unfortunately, there have been times when customers falsely accuse us of something. Now, we can go back and verify what happened. Those false claims would have cost us a lot of money had we not been able to prove otherwise. Our cameras have paid for themselves 10 times over.” Security cameras are becoming less costly and more effective, as prices drop and camera quality and storage capacity increases. “It’s a big win for everyone,” says Sam Kirkland, strategic relationship manager for Epicor Software Corporation. Wireless systems are easier to install, and the ability to check the camera feed from a smartphone or tablet means you can quickly check what’s going on in the store. That could be particularly convenient if, for example, the alarm system goes off and you need to check if the alarm is false or valid. If you don’t want to buy a camera, there is a way to modify an old smartphone so it becomes a security camera. Just download a security camera app—there are a variety available for both Apple and Android devices—and then mount the camera wherever you choose. When it comes to monitoring your store, also consider linking your POS system to your camera security system. This setup is useful in catching any potential employee fraud at the register. “A lot of retailers have a POS that can feed into the security system, so you can overlay what is happening visually at the cash station with the transaction that is being rung up at the POS,” Kirkland says. “You can watch the video and connect the POS transaction to the video. This helps catch employee fraud and helps resolve a lot of issues. “With the higher storage capacity, you can capture and save a lot more footage than before,” he says. “So where before you could only hold three or four days of security footage, now you can hold a month’s worth.”

Payment The future of payment can be summed up in one word: mobile. Whether it’s mobile payment or mobile checkout stations, as technology continues to develop, the checkout process should be faster, and lines should be shorter. With mobile payment, customers can use retailerspecific apps to pay for their purchases. One company making the most of their own app is one you may visit daily: Starbucks. Many Starbucks customers pay for their coffee and other drinks through the app, with no cash or credit card needed. They can use the app to pre-load money into their Starbucks account, and then scan their phone at the checkout counter. If you don’t have your own app, or don’t want to create one, no problem: You can use one like Apple Pay or Android Pay. Both allow customers to pay via their smartphones, simply by scanning their phones at checkout. Not sure if you are on board with the idea of mobile payments? The reality is that customers will soon be demanding it, even in the next year or two, says Kirkland. “When the consumer is educated on the security of mobile payments, they will demand it, and will drive changes in retail.” This method of payment is more secure than other types of credit card transactions and allows

more flexibility and protection to both retailers and customers. Mobile pay stations continue to be popular as well. There are a variety of apps—one of the most popular is Square—that allow customers to swipe their cards somewhere other than at the checkout counter. Many point of sale (POS) systems may come with a mobile pay station program, which allows you to provide mobile payments. Check with your POS vendor to see if it has one you may be able to use. Mobile pay stations can be particularly helpful in lumberyards, where customers want to load and then pay from their vehicles, or for customers in the lawn and garden department, who may have larger purchases to load. “This is all about customer service, too,” Kirkland says. “For that customer, the price of the bag of mulch isn’t as important as the fact that you’re loading it for them and they don’t have to leave their car.” Eventually, he says, POS systems could steer away from PCs and turn into docking stations for tablets. “Tablet technology is advancing such that the need for laptops is going down and tablet use is going up. You can use the tablet as a monitor, and it will give you the information you need.”

Tools You Can Use Apps and software have made consumers’ lives easier, and they can make your work life easier, too. Here are brief descriptions of some of the programs mentioned in this article. Apple Pay/Android Pay Smartphone users can enter their credit card information into the Wallet app. Then, when it’s time to pay, a user simply holds the phone near a reader at the retailer’s checkout counter while using their fingerprint to allow access to their card information. The card number isn’t transferred to the retailer; rather payment is made via a number that is unique for that specific purchase. This makes the payment secure. Apple Pay is for iOS users, Android Pay is Google’s version. Datto This is a cloud-based data backup system designed to keep your company’s information safe. If you are hit by a hacker or other disaster, Datto will allow you to keep running your business while it fixes the problem. It can

help even if your physical hardware has been destroyed. Datto also provides recovery services. Producteev This software helps you manage tasks through a variety of features that include organization, collaboration and tracking. For example, you can create a project with a task list, assign it to a group of employees to complete, then get notification when it is complete. Slack Slack is a messaging app designed to help teams communicate. Individuals can send messages to each other, or to specific groups. You can share files through the app, too. The goal is to get employees to collaborate more, and then be able to reference those conversations later. (The free version of Slack stores only the latest 10,000 messages a team has sent; a paid version allows for unlimited storage.)

September 2016 | HARDWARE RETAILING

Smart Marketing Websites are becoming less important as apps become more important, Kirkland says. “Yes, you still need a website, but websites aren’t enough anymore. In the future, an app—snippets of information that help to accomplish a specific task—is what a retailer needs to have.” As you consider looking for an app that will best serve your store’s needs, or perhaps even creating your own customized app, ask yourself: “What am I trying to accomplish?” If you want to build an app for your store, think about what you’d like to focus on. Maybe you’d like to offer coupons and other forms of savings, or make customers aware of specials. Perhaps you do quite a bit of online business and want to offer your customers a way to easily order online. Or maybe you simply want a quick reference guide to allow customers to find your contact information or get directions to your store. But when it comes to capturing the shoppers’ attention, beacons are the next big thing. A beacon is a small piece of hardware placed in strategic locations throughout the store. It connects directly to smartphones through Bluetooth. With beacon technology, you can send messages to customers via smartphone when they walk by a beacon’s location. For example, say you’re having a sale on small appliances. A small beacon near the housewares department would transmit messages to customers who went by, and they’d receive alerts on their phones letting them know about the sale. Alerts can also be customized based on shoppers’ previous purchases, so for example those who had previously purchased housewares from you might get messages from that department. Beacons may also be able to generate real-time data, including the areas of the store shoppers frequent the most. You can take this data and change store layouts as needed to better accommodate the flow of shoppers throughout the store.

“Now the groundwork

has been laid for businesses to find out how they can make augmented reality work for them.

”

—Steve Koenig, Consumer Technology Association 60

HARDWARE RETAILING | September 2016

One of the challenges of beacon technology is that consumers must opt in to receive these messages. “It cannot track you unless you allow it to,” Kirkland says. It’s also important to consider your average transaction size to make sure you will get your money’s worth if you invest in beacon technology. Beacon technology has only been around for a few years, but the price is dropping, making it more accessible to more retailers. In fact, Apple, PayPal and other big names have, or are in the process of, creating their own forms of this beacon technology. Another upcoming trend is augmented reality, where videos or graphics are overlaid on a realworld environment, such as the popular Pokémon Go, says Steve Koenig, senior director of market research for the Consumer Technology Association. In fact, Koenig references the Pokémon Go craze as a perfect example of the success of augmented reality. “Pokémon Go is arguably the first mass adopted augmented reality application, and it’s more than proven that the concept is a successful one among consumers.” He predicts different forms of augmented reality will become more popular in retail sectors, especially around the holidays. “It’s no surprise that the first successful example is a game, a form of entertainment, but now the groundwork has been laid for businesses to find out how they can make augmented reality work for them.” While you may not have the resources to create an augmented reality game, you can embrace what’s already on the market and find a way to use it to your advantage. A good example is retailers who have invited Pokémon Go players into their stores, boosting exposure to their businesses. (To learn more about one retailer who does this, see the story on Page 46.) “More and more brands are selling experiences, and that’s just what this is,” he says. Any way you can get the customer more involved and interacting with your products is helpful. One example, says Koenig, is a retailer who sells headphones, and may set up a POP display that connects to Bluetooth so customers can test the headphones with music from their library on their phone. Customer loyalty programs remain another effective way to market to a group of targeted customers by reaching out to them and offering sales and discounts based on past purchases. When done correctly, target marketing based on data derived from a loyalty program can drive many more customers into your store.

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Employee Training Offering employees high-quality training experiences can be the difference in their ability to offer good customer service, or to offer great customer service. Again, mobile devices are powerful tools. Remember those scenarios we discussed earlier, and how one included some new employees working on modules on a training app? While employees can work at computer workstations as they do their training, another option is to allow them to access training from a smartphone or tablet. The advantage here is that they take a closer look at products on the shelves as they boost their product knowledge, or walk to different displays throughout the store as they learn about the importance of strong merchandising. Many customers get information online about products or projects before they come in to your store. It’s a good idea to have information from some of your biggest brands and best-selling products at the ready. “Customers can watch YouTube videos and learn how to do something, but I think the customer expectation, when they come in to the store, is that

the retailer should have even more information,” says Koenig. “There may be opportunities to use training apps from manufacturers of the brands you sell in your store.” “You can curate for your staff five or so training apps from manufacturers, and assign them the responsibility of going through them and familiarizing themselves with them,” he says. “Then, when the customer has a question, it’s easy for the employee to answer right away, or to find the answer in the app.” Rather than see smartphones as a distraction, think of them as tools that help employees become better at their jobs and help customers find the products and knowledge they are looking for. If you don’t want your employees to keep their phones on them during their shifts, you might consider purchasing some work-only tablets and have them available at the store to be used for training. By having that mobile technology, employees can open up their YouTube app and show a customer a how-to video, or visit a manufacturer’s website to pull up product information, right there in the aisle as they look at the product with the customer.

Buchheit Develops Proprietary Training Software Retailer Tim Buchheit, along with a team of software developers, has spent the past several years developing a proprietary software program called Snapshot. Snapshot offers a way to organize all the data involved in running a business and has tools for both management and employees. It’s a way for Buchheit to enhance communication and efficiency among his eight stores in Illinois and Missouri, and it covers training and operations management. One of the features with the widest use is an employee training function. Here are some of its highlights: Shorter, Mobile Training Sessions Snapshot is a vehicle through which Buchheit can organize his training, then offer it in small doses every day, rather than having employees tackle a large amount at once. “They are short and sweet segments employees can get on the floor throughout the week, so you don’t always have to pull people off the floor to train,” he says. Standard Operating Procedures Snapshot includes tasks that each position in the store is responsible for, as well as checklists about the details of these tasks. Many of the checklists even come with photos.

HARDWARE RETAILING | September 2016

Each task has a notes section where employees can communicate with each other via a type of community message board. This allows them to ask each other questions and share information. Community Input There’s a lot of value in that information sharing, especially when it comes to training. Instead of repeating all of those conversations with the new employee, they can read them. “When a new person starts, we can hand them the past six months of conversations (about a particular task) and have them read that,” says Buchheit. “They can then be that much further ahead.” Collect Data to Save Time At its core, Snapshot is about collecting the diverse and vast amount of data that helps the company run smoothly. It saves time that might otherwise be needed for a supervisor to train an employee on a particular task. “If we have someone starting today, they can learn to do something that used to take several months to train them on,” Buchheit says. “That’s the idea behind Snapshot. This program takes a lot of data and makes it useful.”

Data Security With these advances in technology comes the necessity of keeping your data safe. “It’s not the most exciting investment for a business to make, but obviously people care about their personal information and the privacy surrounding it,” Koenig says. “People don’t even think about it sometimes, but we are generating and collecting more data than ever before. Keeping your customers safe should be a priority—make sure you are up to industry standards and have the necessary best practices in place.” It’s a best practice to make regular backups of your server and keep a copy of your data offsite as

“You don’t know how

much stuff you have on your computer until you lose it all.

”

—Chris Miller, Parker’s Building Supply

GOT PESTS... get

well as onsite. But cloud technology has made data protection much easier today than in years past. After hackers compromised his company database—during the middle of an audit—Miller implemented a cloud backup site so that it was easy to restore his data if he was ever hacked again (and he was). “We used to have a server at a corporate office where data from all of the stores would go, but now we’ve moved that to a third-party facility in a very secure location, that’s backed up regularly and safe from hurricanes or other natural disasters that are frequent in this area,” says Miller. “We have a lot more at stake if a server goes out; it could take out the data for multiple stores,” he says. “You don’t know how much stuff you have on your computer until you lose it all.” Some of the more popular cloud storage systems include Google Drive, Amazon Cloud Drive, Datto, Dropbox and Box. Most of these systems come with different tiers—the more storage you require, the more you pay per month. There’s usually a free version with a limited amount of storage that you

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can start with, which offers you an opportunity to try out the system and see if it’s right for you. Most cloud systems come with smartphone and tablet apps as well to make it easy for you to manage your storage on the go. And operating from the cloud also means the software you currently use, such as your POS or accounting programs, is stored in the cloud rather than on your local computer or device, so it’s quicker and easier to make any updates, which can be done automatically. “There are a lot of benefits to operating on a cloud-based system,” says. Kirkland. “One is that IT requirements can be lessened, because there is no software in your store. If it’s time to make a change in the software, those updates can be made instantly. There’s no waiting until the store is closed, and no taking a disk to all of the computers after hours and waiting for updates. The cloud has made the update process easier.” It’s also easier to fix any problems that may arise with cloud-based storage, Kirkland says. Many hosting systems have a full IT department on staff, which means they usually fix problems quickly, resulting in less down time than there would be if you were trying to fix the problem yourself.

If you have wireless Internet in your store, for either yourself or your employees, it’s important to make sure that connection is secure with a strong firewall that is updated often.

September 2016 | HARDWARE RETAILING

Operations One of the best ways to ensure an operation runs smoothly and employees manage their time efficiently is through good communication. And using smart technology can help. Again, apps are an easy way to use technology to quickly and efficiently accomplish a specific task. There are plenty of apps available that help employees communicate and share information. Slack and Trello are two examples of apps with this function. If you’re looking for an app to use, look for one that allows employees to communicate well (even across locations) and coordinate to-do lists. You can also look for apps that offer more specialized functions. For example, the Shyft app allows employees to swap work shifts as needed. Want to make it easier to receive inventory each week when your truck arrives? Some brands have begun labeling merchandise with HFID tags, which works with sensors you can install in your warehouse, Koenig says. The two work together to automatically scan product as it is physically moved into your warehouse or back room, saving your employees the time of manually scanning everything.

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The catch? You must have the sensors installed in your store, and your vendors must have the compatible tags. Check with some of your popular brands and see if they offer this technology. “Some brands have started using this technology as they work with big-box stores, and would most likely be able to use the same technology with independent retailers,” Koenig says. There are also many ways to use technology to monitor and enhance the performance of your business. Miller relies on a Compass dashboard, which is a function of his POS system and allows him to track key performance indicators all in one place. He has the dashboard on his phone so he can quickly see what’s happening at any of his stores. “My manager dashboard has 30 different KPIs (key performance indicator) that we track,” says Miller. “These are easy to read and have those key indicators that we preset and easily show where a store needs work.” Many POS systems can perform functions like these. Talk with your POS provider and see if they have a setup that meets your needs.

“If I’m in the store and

see something that needs to be addressed, I can take a photo of it, then task the manager with fixing the problem.

”

—Chris Miller, Parker’s Building Supply Miller says the technology allows everyone across the company to share best practices. “For example, if the company manager who manages shrink sees something at one store that needs fixed, he can send it to everyone else so they can check it in their store as well,” he says. Miller and his management team currently use an app called Producteev on their phones. This task management app allows Miller or any managers to glance at a variety of data—anything from the store’s past productivity numbers to a list of tasks that need to be done. “If I’m in the store and see something that needs to be addressed, I can take a photo of it, then task

the manager with fixing the problem,” he says. “The next time I’m in the store, I can bring up the list and check off each one to be sure they’re done.” The Producteev app is for the company’s district managers, to keep everyone on the same page, Miller says. For example, if a district manager gives a store manager a task to do in his store, he can forward it to other stores as well. “It’s a tool to share good ideas and create more consistency within the locations,” Miller says. They’re currently developing a new customized app, which will be a store audit tool as they walk the store. “It’s an easy checklist with a to-do list for each store manager,” Miller says. “Parker’s Building Supply has a minimum standard for customer experience, and this allows the district manager to monitor that, to monitor the health of the store.” Finally, he’s installing fingerprint scanners to replace the current time clock software. “The fingerprint method will make it faster for employees to clock in and out, and it keeps them honest,” he says. “The new system will be costly to implement, but the long-term savings will outweigh the cost.”

Hardware Retailing staffers Liz Lichtenberger and Jesse Carleton contributed to this article.

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BREACHED

Small Businesses and the Threat of Data Theft

ou’ve read the stories about data breaches, but are the numbers too big to hit home? In September 2014, Home Depot confirmed that hackers used malware, or software designed to steal digitally stored information, to access payment card information from more than 40 million customers. The discovery of the breach began a rapid reaction from the retailer’s IT team, and launched a project costing hundreds of millions of dollars to find the breach, increase security and recover from the damage. “The Company’s IT security team has been working around the clock with leading IT security firms, its banking partners and the Secret Service to rapidly gather facts, resolve the problem and provide information to customers,” Home Depot reported two weeks after discovering the data breach.

HARDWARE RETAILING | September 2016

This breach hit a massive retailer and garnered extensive media coverage, but data theft is a threat to every retailer. And when small companies are the targets, the damage can quickly put them out of business because they don’t have access to around-the-clock teams to help them recover. The following numbers should be more revealing of your retail operation’s data security risks. In 2015, 30 percent of data breaches occurred in the retail sector, and 43 percent of those attacks were against businesses with 250 employees or fewer, according to research from Symantec, a data security company. The danger to small businesses is growing as massive companies, such as Home Depot, invest millions of dollars to beef up their data security. Small businesses like yours, then, remain more accessible, and become more appealing targets, to cybercriminals.

These data thieves can use methods such as hacking, sending malware via email or data skimming from devices physically attached to credit card readers. Hardware Retailing spoke with experts from organizations that work with retailers to guard against data theft. Our goal is to provide you with information on the risks you face and practical steps you can take to protect your customers and company. These experts include Tom Litchford, vice president of retail technologies for the National Retail Federation; Donna Embry, chief payments adviser for the payment processing company Payment Alliance International; and Donald Smith, director of the office of entrepreneurship education at the U.S. Small Business Administration. Visit TheRedT.com/data-security-qa to read onlineonly Q&As with Scott Reynolds, CEO of Member Insurance, and James C. Trainor, assistant director of the FBI Cyber Division, on ways to help businesses recover from cybercrimes. For additional resources on securing your business’ data, visit TheRedT.com/security-resources.

Tom Litchford National Retail Federation Litchford has more than 30 years of experience in systems engineering, sales, product management and marketing of technology business solutions.

Donna Embry Payment Alliance International Donna Embry has 50 years of experience in the payments industry and currently serves in a Strategic Development capacity for Payment Alliance International.

Donald Smith U.S. Small Business Administration Smith is responsible for the development and dissemination of entrepreneurial information, education, resources and tools to help U.S. small businesses succeed.

Glossary of Terms Cybercrime: Illegal activity done electronically. Cybersecurity: Measures, such as use of protective software, taken to protect data that is stored electronically on computers or networks. Cyber Risks: The dangers of damage to a person, business or other organization due to cybercrime. Cyber Threats: Potential electronic attacks and intrusions.

Malware: Malicious software, such as computer viruses, designed to impede the way a computer works or to access sensitive information. Phishing: Data stealing that is often done via emails made to look like they come from legitimate people or companies. The emails solicit private information, such as credit card and social security numbers.

Data Breach: Unauthorized access to information kept on computer hardware, software, websites and in other digital storage.

Ransomware: Malware that allows cybercriminals to access an operating system and block authorized users from using the information stored in that system. Criminals then threaten to delete the data unless they are given money in exchange for releasing the information back to the owners.

P2P Encryption: The conversion of sensitive data into code to store the information in a format that cannot be decoded easily by criminals.

Skimming: Attaching a device to a physical credit card reader to capture payment card information from consumers at the point of sale.

Firewall: Software created to prevent unauthorized users from accessing or damaging computer systems.

Threat Surface: Areas vulnerable to exposure, such as credit card and social security numbers.

Hacker: A person who invades computer systems and networks in order to steal information or cause other harm.

Tokenization: Replacing credit card numbers in a computer system with meaningless letters or numbers.

HARDWARE RETAILING | September 2016

Tom Litchford: I think as long as you have an internet connection, these guys are going to be looking to get in. I think all businesses are being targeted.

mobile device, small business owners should think of systems and multiple access points when considering cyber security. Many initial hack attempts are still delivered via simple attempts like phishing scams, instant messaging, phony websites and the like.

HR: What information should retailers carefully guard against data theft?

HR: Why would a hacker or other data thieves target small businesses?

Litchford: I think when you look at the retail industry right now, the primary data that the bad actors (cybercriminals) want is your credit card data, because they can take that data and easily monetize it in terms of selling those numbers, creating counterfeit credit cards, using them to buy merchandise. In retail right now, the big target is point-of-sale systems. I will say, too, the other thing I would be extremely careful with is something called Locky ransomware. What these guys are doing now is embedding their malware in Microsoft Office documents such as Word documents and sending you what we call a phishing email. They get you to bite on this phishing email. You open the Word document, and then next thing you know, you have Locky ransomware, which then basically encrypts all of your system, even network attachments that it can find, and then asks you to pay for them to give you the unlock key.

Embry: The hacker may feel that smaller businesses aren’t on the radar. If a data thief can go to an area and find 10 small businesses that are easy targets under the radar and aren’t paying attention, he or she may choose to hit several small businesses instead of one big company. If a criminal is putting a skimmer on a machine, they’re doing so because they feel that they can get away with it. Additionally, the press picks up on larger hacks based on the size and scope of the compromise, which leads to increased measures of implemented security features. It really depends on what the criminal is looking for. If they see a way through your business to get to a larger entity such as a processor, they may target you. These crooks are very smart; they do their homework.

Hardware Retailing: Is cybercrime always a constant threat to businesses?

Donna Embry: Protecting sensitive credit card or debit card data is paramount. If a retailer is doing e-commerce, it’s critical to install firewalls and anti-virus software to protect from hacking or skimming the payment information. In addition to payment card data, any personal data such as social security numbers, passwords or even employment history is vulnerable to use in identity theft schemes. It is important to review website addresses to ensure that false links have not been inserted, so that customers go to the real website and not a pseudo-site. If the retailer uses cellphones for mobile payment, protecting that information is equally important. There are also the back office vulnerabilities that sometimes get overlooked because of the focus on POS or payment data. If a retailer has a personal computer in the back office that’s used for email, financial data or personal information, you’ll want to make sure that it is properly protected. Donald Smith: POS systems are a main concern, and with migration to mobile payments, customer communications and facility access managed via

HARDWARE RETAILING | September 2016

Litchford: Large retailers are encrypting data now from the time a card’s swiped to the time it gets to their processor for approval. So the [criminals] can steal that data all they want, but if it’s encrypted, they won’t be able to use it. The other half of that is something called tokenization. Once the processor has the data for approval, they send it back to the retailer in something we call tokenized form so that 16-digit credit card

“A cybercrime can

compromise business continuity, customer trust and financial resources— all impacting a business’ current operations and the future viability of the business.

”

—Donald Smith, U.S. Small Business Administration

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number is no longer there in the open. When retailers store credit card data, for example, to use for later returns and refunds, they are no longer storing that data in its normal format. They’re storing it in what’s called a token. So, these are the things bigger guys are doing to remove that threat surface, which then kind of is putting the bull’s-eye on smaller retailers because the [criminals] will go where the grass is greener, where it’s easier to do their fraud. And obviously if something’s encrypted, it makes it harder for them to get that number.

system administrators, etc. A business may need to temporarily pull some services offline, limit staff access to PCs, and check with its banking partners to see if a crime has resulted in unauthorized transactions.

HR: What are some key identifiers that a business is susceptible to a cyberattack? Embry: If your payment process involved a clerk going into a backroom to process a payment and the consumer isn’t in full control of the card, that’s always a signal that the business would be an easy target for card skimming or unauthorized gathering of data. If you have self-service checkouts, you have to be careful that there are not ways for malware to be put on those systems or skimmers to be added to the devices. Criminals are very good at being able to immediately hack into your systems, so you have to be very careful about how payments are done and how consumers are authenticated.

HR: What damage can cybercrimes cause to businesses? Smith: A cybercrime can compromise business continuity, customer trust and financial resources—all impacting a business’ current operations and the future viability of the business. Take stock of the situation immediately to assess what recognizable actions should be taken, while consulting with additional resources like law enforcement,

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HR: How does cybersecurity work? Embry: The easiest way for me to describe it would be the process of protecting data through any conduit that can be compromised and then turned around to financially destroy or hurt companies and/or individuals. Some examples of that would be email servers, point-of-sale systems and e-commerce programs. But, primarily it’s focused on protecting every aspect of the physical hardware, software and networks that you utilize, whether it’s a computer or a mobile phone or a POS terminal, and the software that resides in those devices, including mobile apps, shopping carts, back-office PCs or the POS systems, and all the associated networks that interconnect to make them work.

HR: How can a small business protect itself from data stealing at the point of sale? Litchford: Again, when you look at the Targets and Home Depots and down to even some of your midtier smaller guys, they’re putting in P2P (point-to-point) encryption. Small guys can do that, too. It’s not something only a large retailer can do. It’s just an

expense that they would have to take on. So when the smaller retailers are negotiating with their payment processors, our recommendation would be that they also look at encryption and back-end tokenization.

HR: How can a retailer and employees be cautious about external emails when they’re working with outside vendors and customers? Litchford: That’s what makes it so hard, right? Because a lot of these phishing schemes now fake being an invoice or something like that. As an accounts receivable person, you naturally click on it and see what it is. You have to just not click on stuff via muscle memory, but really pause and think through, “OK, is this an invoice I was expecting? Does it look like one of the vendors I do business with?” Pick up the phone and call. I was getting emails from American Express fraud. “Please call us right away,” and it gave a number to call. I pull out my credit card and call the number on the back. And American Express says, “No. We’re not trying to contact you at all.” I think you just have to be very suspicious in this day and age.

HR: How do most business owners find out when a data breach has occurred? Litchford: I would say, most of the time they don’t find out themselves; they find out from other parties—either the FBI or the Secret Service calling them, or Visa calling them. Typically what will happen, from a credit card perspective, is Visa’s fraud alert system

“I’d say it’s critical to have a

written data security policy. It should include your policy for password changes; how you share the data, how you store the data, what kind of firewall you have.

”

—Donna Embry, Payment Alliance International

will indicate there’s an issue. What they do is triangulate back with their bad cards and say, “OK. It looks to us like all of these fraudulent card activities now seem to originate from a certain date at a certain vendor or a certain retailer.”

HR: How should business owners respond if they learn they are the victims of cybercrimes? Smith: To start, a business owner should file a report with their local police to create an incident report and contact their local U.S. Secret Service branch’s electronic crimes unit. If the crime involves identity theft, the Federal Trade Commission (identitytheft.gov) should also be contacted. Local authorities will also advise of specific actions that may include contacting the Social Security Administration if a social security number has been compromised or even the Department of Motor Vehicles regarding vehicle/ fleet registration or ID info.

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Litchford: Currently 48 states, plus the District of Columbia, have different laws about how you have to notify your customers. Make sure you have general counsel there for advice on how to do that.

HR: What are some best practices that a business owner should follow to protect data, prevent an attack and be prepared if one occurs? Embry: Make sure you have anti-virus software on the computers that operate your business. These might not even necessarily be associated with the payment process. Install and maintain firewalls within your system to prevent hackers from getting into data when it is either coming in or going out of your system. It’s also always important to back up your systems so you aren’t vulnerable from having all of your data in one place all the time. A lot of companies require employee passwords or PINs to be unique, change frequently and never be shared. Above all, training and awareness

are probably most important. Train clerks to look for suspicious activity. Even while standing in your checkout lane, cybercriminals can be very good at shoulder surfing and gathering information. Being aware of your surroundings and what’s going on can help a lot. I’d say it’s critical to have a written data security policy. It should include your policy for password changes; how you change your password, how you share the data, how to store the data, what kind of firewall you have, when and where you back up the system. Litchford: My opinion is they should have relationships with either the FBI or the Secret Service. That would be at a local level. Those would be the two groups I would go after. Their job is to prevent cybercrime and help you recover from cybercrime. And the FBI has the added job of prosecuting them. This article was written by Hardware Retailing editors Kate Klein and Hilary Welter.

Be an Early Adopter

eet David and Liz. Why Smart They just purchased a new home. They also Home Technology just purchased a new smart thermostat for that home, which Needs a Place means they can control their home’s in Your Store temperature from their smartphones.

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HARDWARE RETAILING | September 2016

Now, they’re considering the purchase of a smart smoke/carbon monoxide detector that’s compatible with their thermostat to make sure their new home is safe for their family. Maybe you don’t know David and Liz personally, but you likely have a lot of customers just like them. More homeowners of all ages are opening their wallets for smart home devices. They are looking for the security, energy savings and overall life enhancements these items offer. It’s undeniable smart homes are entering the mainstream.

So what are you doing about it? While David and Liz are happy with their new smart thermostat, the sad part of the story is that when they shopped at their favorite local independent home improvement store, they couldn’t find the product they wanted on the shelf. They had to make their final purchase from a big-box retailer. Smart home products are here to stay. By becoming an early adopter of these items and getting them into your store, you have the opportunity to cash in on their large sales potential and get repeat customers. In case the category is still a mystery to you, we’ll explain consumers’ current attitudes toward these products; help you understand the basic products that make up a smart home; and then give you the information you need to start selling them.

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What Is a Smart Home? Before exploring the products in this category and how you can sell them, there’s a whole new set of product knowledge to learn. By general definition, a smart home is a home that has multiple electronic devices, such as a thermostat, security system or an appliance, all controlled remotely by a computer or device, such as a smartphone or tablet. But these aren’t just souped-up remote-controlled devices. They are “smart” because they can learn your habits and connect to information from outside sources to make important decisions about controlling some of the functions of your home. It’s also important to understand how devices can work together. Similar to the way your smartphone or laptop operates, most smart home devices operate on either an iOS or Android operating system, or both. You can look on the packaging of many of those devices to identify which operating systems they are compatible with. Products from different manufacturers may be compatible with similar operating systems. Ideally, these devices are connected with each other in what is known as an “ecosystem.” In an ecosystem, all of the devices are compatible with the same operating system, can be controlled from a single device, and share information with each other. They are all connected by a network, such as through Bluetooth, Wi-Fi or special wiring

in the home. They also can connect to information outside of the home, such as weather forecasts, to help your devices make decisions. Each smart device often has its own app that allows you to control that device, but a better solution is having a way to control all of those devices with a single app. One great example is Apple’s HomeKit. HomeKit allows you to control multiple devices from a single app, as long as they are all compatible with the iOS operating system. When the devices work together, they share information and may even cause each other to perform tasks. For example, another well-known ecosystem is Nest. First known for its smart thermostat, Nest now includes multiple items that work together. For example, let’s assume your home has a smart smoke/carbon monoxide detector, a smart thermostat and smart lighting. If the detector senses an unsafe level of carbon monoxide in the home, it sends a signal to the thermostat to shut off the gas furnace. In addition to sounding an alarm, the smoke/carbon monoxide detector also sends a signal to the smart lighting wired into the system to flash on and off to get your attention and let you know something is wrong. It will also send an alert to your smartphone or other device so you are aware of what is happening at home if you are away.

Smart Home Device Ownership U.S. Smart Home Device Market Still has Room to Grow Recent research shows what percentage of U.S. households with broadband Internet service own a smart home device. The market for these items is still new, posing an opportunity for retailers.

Smart Smoke Detectors

10%

Networked Cameras Smart Thermostats

Smart Garage Door Openers

Smart Door Locks

Smart Lighting (bulbs, switches, plugs) Source: Parks Associates

HARDWARE RETAILING | September 2016

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Current Consumer Attitudes Just a few years ago, smart home devices may have been the stuff of futuristic movies. Today, however, manufacturers are making smart devices for nearly every area of the home. Sales of smart home devices will continue to grow to reach 9.5 million units sold in 2016, a 29-percent increase over the previous year, according to data released by the Consumer Technology Association (CTA). The good news for independent home improvement retailers is that the market still has a lot of room to grow. A recent study by Coldwell Banker Real Estate surveyed U.S. adults and found that nearly half of them either own smart home technology or plan to invest in it in 2016. Those interested in purchasing the technology were not doing it just because they wanted to be on the cutting edge, either. In fact, more than one in three of the survey respondents said they didn’t consider themselves to be early adopters of technology. This is another indication smart home technology is gaining broader acceptance among consumers. In addition, consumers who want these devices are very likely to purchase them from a national or local retailer, compared to other retailers, like online retailers, according to a study by Parks Associates, a market research and consulting company specializing in consumer technology. Once they’ve purchased one smart home device, they are highly likely to purchase another one soon thereafter. Big-box and discount retailers have already caught on. Walk into any Home Depot, Lowe’s or Menards, and you’re sure to see several feet of shelf space dedicated to the category. This past year, Target introduced its Open House, a 3,500-squarefoot concept home designed as a showcase for how devices in a home can connect to each other. Consumers who purchase a device at one of these retailers are likely to return for subsequent purchases. Stores that are early adopters are the ones that will earn the repeat business of customers for smart home products, as well as other home improvement items. Ian Williams, department head of hardware and customer relations for Fresno Ag Hardware in Fresno, California, has been selling smart home devices for about three years. He says now is the time for independent retailers to adopt this technology. “This is just the beginning of the smart home age,” he says. “As it catches on with more people, it will grow. Once it gets past the early adopter stage and to the majority stage, you want to already be established as the retailer with these products as the category takes off.”

HARDWARE RETAILING | September 2016

A Closer Look Recent surveys show consumers are warming up to smart home technology, and there’s a big opportunity for home improvement retailers.

45% of all Americans either own or plan to invest in smart home technology in 2016.

70% of those with smart home technology said buying their first smart home product made them more likely to buy another one.

30% of consumers look to a national or local retailer to purchase smart home products, rather than an online retailer or other source.

Those who own smart home technology are... Millennials

Between 35-54

55 or older

43% 33% 24%

Sources: 2016 Smart Home Marketplace Survey, Coldwell Banker Real Estate; Smart Home Ecosystem: IoT and Consumers, 2014 Study by Parks Associates and the Consumer Electronics Association

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What’s in a Smart Home? Smart home products cover a variety of categories, including lighting, safety, entertainment, appliances, security and heating and cooling. Here are some of the more common items on the market today and some of their distinguishing features.

Lighting Systems

Window Coverings

Door Bells

Door Locks

Sprinkler Systems

Window Coverings

Sprinkler Systems

Automated window coverings allow you to set when you would like your blinds to open and close, then adjust that schedule as the seasons and sunrise/sunset schedules shift. You can also control them remotely.

These solve the problem of lawn sprinkler systems that turn on during a rainstorm, wasting water. They adjust your watering schedule according to the weather forecast. You can also program them to customize a watering schedule based on zones in the yard, sun exposure, soil and plant types. If there are watering restrictions in your area, they adjust your watering schedule accordingly.

Door Bells These door bells alert your smartphone when a visitor rings. Via a built-in camera, the bell allows you to see who’s at the front door and talk with them via a smartphone, even if you’re not home.

Lighting Systems Door Locks Manage the exterior lock to your home with a smartphone. These locks have keyless entry or a keypad. Besides making it easier to open your door, the locks enhance security because they can track who comes in and out of your house, since each user has a customized code. You can also unlock the door from a remote location if you need to let someone in when you’re not home.

HARDWARE RETAILING | September 2016

Using your smartphone to control the LED lighting in your home, you can dim, brighten, change the color or even synchronize the lights to music. No need for timers; you can set the schedule for your home’s lighting from your smartphone or device. Some lighting systems change their brightness based on the time of day or whether or not the room is occupied.

Thermostats CO/Smoke Detectors

Water Leak Detectors

Security Cameras

Garage Door Openers

Thermostats

Water Leak Detectors

These products allow you to adjust the thermostat remotely from a smartphone or other device, but they can also use a combination of sensors and algorithms to learn your schedule and adjust the temperature throughout the day accordingly. The big benefit is helping you save energy. They give you a complete energy usage report so you can see how much money you are saving.

These detect water leaks early and some even report elevated levels of moisture and temperature, which could also damage homes. The detector sends an alert to your phone and can often be integrated with other home security systems.

CO/Smoke Detectors Built for safety and peace of mind, these detect smoke and carbon monoxide, and some even monitor air quality. They minimize false alarms and send an alert to your smartphone or other device when there is an emergency. Some can work with other systems in your home, such as the thermostat, to turn off the furnace if there’s a gas leak.

Security Cameras Wi-Fi security cameras allow you to see what’s going on inside or outside the home from a computer, tablet or smartphone. The camera sends you an alert when it senses something suspicious. Some have built-in microphones so you can send a message through the camera via a phone.

Garage Door Openers Using your smartphone, you can control and check the open/close status of your garage door, from anywhere. It is typically an add-on to an existing garage door opener.

September 2016 | HARDWARE RETAILING

How to Sell It Selling smart home devices requires many of the same skills required to sell any category in the store—good merchandising and product knowledge. But it’s important to know some of the specific needs customers have in this category.

Show, Don’t Just Tell There’s an easy answer to why most consumers these days buy smart home devices from brick-and-mortar retailers: They want to see them and ask sales staff a lot of questions. This is another reason independent home improvement retailers have the opportunity to outsell big-box retailers in this category. Your store can have the experts shoppers want.

“It’s also important that employees

understand not only how the individual product works, but also how that product interconnects with other products in the system. —Ian Williams, Fresno Ag Hardware

HARDWARE RETAILING | September 2016

”

The more customers interact with a product, and the more they hear about the experiences of others who have tried the product themselves, the more likely they are to purchase it. That’s the driving principle behind Target’s Open House concept. By showing smart home products in the context of real-life situations, the company hopes to demystify the connected home and inspire consumers to buy. You can carry this concept into your own store by using working displays to show how smart home products work. If, for example, you’re selling smart locks, let your employees install the app that controls the lock on their smartphones so they can show customers how the lock operates. In addition, the idea of installing a high-tech device in the home may not seem like an easy DIY project to some. However, most products are easy to install. Make sure this is a part of the sales conversation, even if a customer doesn’t directly express hesitation about the installation process.

Try it Before You Sell it Williams has several smart home products in his home, many of which are now in Fresno Ag Hardware. He also encourages employees to try

the devices on their own. Giving a customer a personal referral about a product he has used in his own home carries a lot of weight, he says. Especially as this technology is still new, consumers still feel a bit skeptical about smart home technology. They might have questions such as, “What is the life span of the product?” or “If technology is advancing so quickly, won’t this item soon be irrelevant?” Those are the types of questions you will need to answer. Firsthand experience and an enthusiastic recommendation will go a long way toward alleviating shoppers’ concerns. You can also use social media to tell customers about products you’ve installed in your own home and how they are working.

One of the most-sold smart home devices at Fresno Ag Hardware is a doorbell, and a manufacturer video helps explain the different ways it can be used.

Focus on a Single Ecosystem Similar to stocking the complete line from a popular brand elsewhere in the store, it’s best to sell smart products from the same ecosystem, or same family of products. While all products don’t need to be from the same manufacturer, it’s helpful if they are compatible with the same operating system. “We do sell a few standalone products,” says Williams, “but we try to keep our selection of smart home items small, so everything you buy here connects to the same system. It’s also important that employees understand not only how the individual product works, but also how that product interconnects with other products in the system. Be prepared to answer questions like, “Will this item work with my iPhone?” Finally, rather than merchandising products in their respective departments throughout the store (such as putting the locks with builders’ hardware and the smoke detectors in heating and cooling), it’s better to group smart home products together in a single display. This will help customers understand how that ecosystem functions and create more of a statement to shoppers that you are indeed a destination for these products.

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September 2016 | HARDWARE RETAILING

“It’s more than just having a display; you must have a retail staff that can answer questions, and that communication takes a bit of time. —Chris Ely, Consumer Technology Association

”

smart home products. The retail price for a smart smoke and carbon monoxide detector might be $99 and a smart thermostat might be $250. “This is still a nascent category, so the average consumer doesn’t automatically understand the benefits of paying a higher price,” says Chris Ely, senior manager of industry analysis at the Consumer Technology Association (CTA). “It’s more than just having a display; you must have a retail staff that can answer questions, and that communication takes a bit of time.” It should be no surprise that purchasing a smart home device is not an impulse purchase for most consumers. The Parks study revealed that more than 60 percent of current smart device or system owners spent more than a day shopping for them. Be prepared to spend some time up front explaining these products to shoppers. Then once shoppers understand how the device or ecosystem works, they are likely to need less time for subsequent purchases.

Look for Opportunities With Builders More sophisticated smart homes require structured wiring, or specialized wiring and cables to support a wholehouse network of home automation. This is one category you can offer to builders looking to install structured wiring in new construction. “This is a great opportunity for retailers to create partnerships with architects, builders and handymen,” says Ely. “If you help them in the design phase, they will in turn send their customer, the end-user, to your store to purchase the devices.”

Focus on Safety, Then Savings Consumers who buy smart home products have several motives, all practical, but safety tops the list. “Security use has been the driver behind smart home adoption,” says Brad Russell, research analyst with Parks Associates. “You can think of a hierarchy of use cases leading with security, followed by safety, peace of mind, energy savings and life enhancement.” He says manufacturers who offer devices with multiple uses in addition to safety will get the most traction with consumers.

HARDWARE RETAILING | September 2016

But many products offer significant energy savings by monitoring energy usage and controlling systems in the home, such as the heating and cooling system or the watering system. While there are currently no federal rebates for smart home devices, you should search for any rebates state or local governments or energy companies may offer for energyefficient purchases. Communicate these to customers as you help overcome any price objections they may have to the purchase.

Rather than scattering smart home products throughout the store, it’s best to group them together in a single display and offer them as a single category.

Experiment With Your Product Mix A doorbell with a built-in security camera is one of the best-selling smart home devices at Fresno Ag, says Williams. In the three years he’s been selling smart home products, the selection has grown to include a keyless entry system, a thermostat, a CO and smoke detector, a security camera and some light bulbs. Not every product he tries is a hit—there’s a bit of trial and error as it is with any category. He sources from his co-op’s market, the National Hardware Show® and customer requests. “Our product mix is a 50/50 split between items we thought we’d like to sell and products our customers asked for directly,” he says. He’s learned to try a product even if he’s not convinced it will sell. “We brought in a Roomba (robot vacuum cleaner) and I was skeptical at first, but then I bought one for my home and I love it. Most importantly, don’t be afraid to take a chance on a product to see if it will sell.”

Compete on Knowledge, Not Price A big-box electronics’ store is Williams’ closest competitor in the smart home category, and competition isn’t on price. “Most of these products are not price sensitive because they use MAP (minimum advertised price) pricing set by the manufacturer. Everyone is selling the product for the same price,” he says. “We have to promote our customer service and the fact that we are a local business putting money back into the community.”

September 2016 | HARDWARE RETAILING

More Engaged Homeowners Dive Into Project Research

ver the past nine years, homeowners have seen extensive changes to home values as the market worked its way through the Great Recession. Recent research, however, suggests that consumers are once again investing in their homes. Market research firm Consumer Specialists (consumerspecialists.com) conducted a recent study on homeowners’ home improvement habits and discovered that 61 percent of them did a project or had work done on their houses in the past year. The average amount they spent on home improvement products and projects was $3,597, or about even with the average spending pre-recession. And the consumers surveyed are more interested in getting product and project information now compared to homeowners before the recession. The research contrasts data collected in 2015 with numbers from a similar 2006 study. The new study shows that homeowners overall are more interested now than in 2006 in researching topics such as project costs, the availability of products, the appropriate materials for projects and the length of time needed to complete projects. Current homeowners are also more likely to look for style ideas and

HARDWARE RETAILING | September 2016

learn how projects will impact their home values.

A Closer Look at the Numbers The 2015 study also shows that nearly 58 percent of homeowners have local hardware stores located near enough to shop at them, and these consumers approach projects differently than shoppers who don’t have access to local stores. For example, the people who are near local stores tend to do more research on their home projects than shoppers who don’t have close access to a local hardware store, according to the survey. They are also more engaged in project planning, and are more likely to rely on store personnel and in-store displays for product and project information than nonhardware store shoppers. Because they’re doing more research, these homeowners who have access to local stores also tend more often to get home improvement information online, from their friends and family members and from professional contractors and home improvement stores. The following pages lay out some of Consumer Specialists’ data. The first chart shows the topics that homeowners are most interested in researching. The second chart compares where two types of homeowners prefer to get their information for projects.

September 2016 | HARDWARE RETAILING

Research Topics of Greatest Interest to Homeowners 7.76

Determining if a Contractor is Needed

7.42

7.79

Length of Time Needed to Complete the Project

7.46

7.81

Learning About Appropriate Materials

7.64

8.06

Availability of the Materials Needed

7.99

8.62

Estimating Costs

8.49

2015 2006

2 4 6 8 Ranked in Importance on a Scale of 1 to 10, With 10 Being Extremely Important

Source: Changing Approaches to Home Improvement, Consumer Specialists

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HARDWARE RETAILING | September 2016

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Who Is More Likely to Use These Resources? Customers With Access to Local Hardware Stores

34% In Store Displays

23%

Others

38% Store Personnel

27%

51%

Contractors/ Professionals

39%

55%

Friends/ Relatives

45%

58%

Online/ Internet

51% 0

Respondents could select more than one of the options Source: Changing Approaches to Home Improvement, Consumer Specialists

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September 2016 | HARDWARE RETAILING

Newsmakers

PRO Group Honors PRO Hardware Retailers With Annual Award

unning an effective hardware business takes skill, dedication and love for customers and the industry. And for their success, three retailers are being honored by Denver-based PRO Group, Inc. This year, PRO Group awarded its Paul L. Cosgrave Memorial Award to Debbie Supply PRO Hardware. The annual award is presented to a PRO Hardware retailer who’s greatly dedicated to the principles and ideals of effective hardware merchandising that PRO Group founder Paul L. Cosgrave developed. Also honored were Fayetteville PRO Lumber & Supply and Zillah PRO Hardware. For the full story, head to TheRedT.com/PRO-awards-2016.

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

Debbie Supply PRO Hardware, East Rochester, New York Paul L. Cosgrave Memorial Award Winner PRO Retailer of the Year, The Bostwick-Braun Company With a varied product assortment, excellent customer service, a friendly environment and community service, Debbie Supply PRO Hardware has mastered the recipe for success. Store owner Mark Barbero is committed to stocking the store to fit his customers’ every need, including hard-to-find items. He continuously adds new items to the store’s assortment, and makes it a priority to provide personal service to everyone who walks through the door.

Fayetteville PRO Lumber & Supply, Fayetteville, Tennesee Paul L. Cosgrave Memorial Award Finalist PRO Retailer of the Year, Wallace Hardware Company “To provide the customer with excellent service, convenient shopping hours and competitive pricing.” That’s the mission statement at Fayetteville PRO Lumber & Supply, and the ownership and staff at the company strive to deliver it each day. Fayetteville PRO takes pride in its ability to stock or special order all products required to build a home from the ground up, and provides great service to keep their customers coming back.

Zillah PRO Hardware, Zillah, Washington PRO Retailer of the Year, Horizon Distribution, Inc. Zillah PRO Hardware is a company that has found success both in business and in its community. The 25-year-old company has built strong plumbing and electrical categories over the years., Store owner Ken Waymire continues to improve the store inventory based on the wants and needs of his customers. The store has a strong reputation in the community, and is known to open at any hour to help a customer with an emergency.

HARDWARE RETAILING | September 2016

15-17 Blish-Mize 2016 Fall Buying Market Overland Park, Kansas

16-18 Monroe Hardware Fall 2016 Dealer Market Myrtle Beach, SC

16-18 True Value Fall Reunion Denver

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

22-24 Bostwick-Braun Co. 2016 Fall Dealer Market Toledo, Ohio

October 7-10 Do it Best Fall Market Indianapolis

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

Find more details about these events and others online at TheRedT.com/calendar. To have your event added, contact Kate Klein at kklein@nrha.org.

AWARD WINNING

RETAILERS

Paul L. Cosgrave founded PRO Hardware in 1953. The annual award that bears his name goes to our top PRO Hardware retailer nationwide; based on sales, merchandising, inventory management, PRO key supplier support, PRO advertising, PRO store identification and financial performance.

2016 Paul L. Cosgrave Memorial Award Winner Debbie Supply PRO Hardware

East Rochester, New York Mark Barbero - Owner PRO Hardware Retailer of the Year PRO Distributor: The Bostwick-Braun Co.

ARS 54 YSE A

A ! STORE O R P

BUILDING THE SUCCESS OF AMERICA’S INDEPENDENT HARDWARE RETAILER FOR OVER 60 YEARS Paul L. Cosgrave Memorial Award Finalist: Fayetteville PRO Lumber & Supply

PRO Hardware Retailer of the Year: Zillah PRO Hardware

Fayetteville, Tennessee Tommy Eslick General Manager PRO Hardware Retailer of the Year PRO Distributor: Wallace Hardware Co.

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

Zillah, Washington Ken Waymire - Owner PRO Distributor: Horizon Distribution, Inc.

Learn more about the PRO Hardware program by contacting Shari Kalbach, Managing Director, at 303.792.3000 or shari.kalbach@pro-group.com. Find us online at www.prohardware.com

Newsmakers

Lowe’s App to Offer 3-D Planning Aids via Phone

Hardware Stores Support Officers After Dallas Shooting

Do it Best Surpasses $3 Billion in Sales

When consumers head to Lowe’s in the future, they’ll have a better chance of mapping out their homes and making sure products they buy fit just right. Through Lowe’s Vision, an app using Google’s 3-D smartphone platform Tango, users will be able to see how items like appliances and furniture look inside their homes. TheRedT.com/lowes-tango

When a sniper shot 12 police officers, killing five, at a protest July 7 in Dallas, the community’s reaction was horror. And solidarity. Independent home improvement stores are among the local businesses that have helped people in the surrounding areas find tangible ways to express their support of the fallen officers’ families, as well as the police officers still on duty. TheRedT.com/dallas-sniping

Do it Best Corp. announced it surpassed $3 billion in total sales for its 2016 fiscal year. These numbers reflect a year of strong member growth and expansion, supported by retail performance programs and new product introductions. TheRedT.com/dib-2016

Orgill to Grow With Idaho Distribution Center Orgill Inc. announced plans to expand upon its network of distribution facilities with the addition of an approximately half-million-square-foot distribution center located in Post Falls, Idaho. The facility will be Orgill’s seventh full-service distribution center. TheRedT.com/orgill-idaho

True Value Reports Growing Sales in Second Quarter True Value Company announced its second quarter results for fiscal 2016, with gross billings of $585.1 million, up 2 percent or $11.4 million from the same period a year ago. TheRedT.com/true-value-q2

Like Home Depot, Lowe’s to Open Direct Fulfillment Center Here’s a change for Lowe’s: The company is opening a direct fulfillment facility to ship products straight to consumers in an effort to expand its online sales and speed up deliveries. Rival Home Depot already operates three direct fulfillment centers that support its growing online business. TheRedT.com/lowes-fulfillment

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HARDWARE RETAILING | September 2016

Moving Forward With World and Main Market The 2016 World and Main Fall Market, which ran July 28-30, presented retailers with opportunities to connect with each other, meet with vendors and buy products at special prices. The buying show, which is World and Main’s first Houston market since retiring the Handy Hardware name and branding it in January, had a different focus. TheRedT.com/world-main-2016

Walmart Buys Online Retailer for $3 Billion Wal-Mart Stores, Inc. announced it has entered into a definitive agreement to acquire online retailer Jet for $3 billion in cash. In addition, $300 million of Walmart shares will be paid over time as part of the transaction. The purchase highlights Walmart’s drive to boost its online business. TheRedT.com/walmart-jet

AD INDEX

CANADA Summertime Means Store Openings for Home Hardware Home Hardware has been actively working with its dealer-members to expand and open new stores, with a number coming on throughout the summer months.

Federated Co-op Helps Bring the Color Back to Fort Mac The effort to help Fort McMurray, Alberta, residents rebuild received help from Federated Co-operatives Limited. FCL donated 400 cans of paint to restore buildings that are being rebuilt in the aftermath of the recent wildfire.

Addition of BMR Makes ILDC Canada’s Biggest Buying Group Groupe BMR has joined the Independent Lumber Dealers Co-operative (ILDC).

Already one of the country’s largest buying groups, the addition of BMR will give ILDC combined sales of about $4.3 billion through just 22 members and put it firmly in place as Canada’s largest home improvement buying group.

Peavey and TSC: A Match Made in Farm Hardware Heaven In a move that unites two of Canada’s largest farm hardware retailers, Peavey Industries LP has acquired a controlling interest in TSC Stores LP from Birch Hill Equity Partners. The union marks a natural fit between two privately held retail chains that share a similar retail model, while being distinct geographically. For the full story of each of these briefs, visit hardlines.ca/hardwareretailing.

Hardware Retailing eNewsletter................................. 99 www.hardwareretailing.com/subscribe

Permatex .................................................................76 www.fastorangelaundry.com; 877-376-2839

Ajax Wire Specialty Co.............................................26 www.ajaxwire.com; 855-966-2529

Home Products International......................................40 www.homzproducts.com; 800-457-9881

Phifer Inc. ...................................................................17 www.phifer.com; 800-841-9473

Allway Tools Inc. ........................................................43 www.allwaytools.com; 800-422-5592

House-Hasson Hardware Co. .....................................35 www.househasson.com; 800-333-0520

PRO Hardware ...........................................................95 www.prohardware.com; 303-792-3000

Anderson Metals Corporation Inc. ...........................11 www.andersonmetals.com; 816-471-2600

Howard Products Inc. ..............................................65 www.howardproducts.com; 800-266-9545

Red Devil Inc. .............................................................71 www.reddevil.com; 800-423-3845

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

HSI...........................................................................81 www.hardwaresuppliers.com; 800-334-5625

Red Lion ..................................................................31 www.redlionproducts.com; 844-250-4981

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

IPG..............................................................................83 www.itape.com; 888-898-7834

Sashco ................................................................... IFC www.sashco.com; 800-767-5656

Big Green Egg ............................................................63 www.biggreenegg.com; 770-934-5300

Lincoln Products.........................................................19 www.lincolnproducts.com; 844-223-4770

Sears Hometown Store .............................................7 www.ownasearsstore.com

Bonide ........................................................................64 www.bonide.com; 315-736-8231

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

Simpson Strong-Tie Co. Inc. ....................................73 www.strongtie.com; 800-999-5099

Caterpillar............................................................12-13 www.cat.com; 888-614-4328

Kindling Cracker .......................................................26 www.gnedi.com/kc; 800-822-0295

Starrett.....................................................................15 www.starrett.com; 888-674-7443

Centurion ....................................................................18 www.centurion-inc.com; 800-323-2193

Marklin Inc. ................................................................75 www.lgb.com; +49 7161 608-0

Stump Chunks .........................................................30 www.stumpchunks.com; 603-935-5405

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

Master Magnetics Inc. ...............................................66 www.magnetsource.com; 888-293-9190

Sun Gro Horticulture ................................................29 www.blackgold.bz; 800-732-8667

Coast Products Inc. ....................................................28 www.coastportland.com; 800-426-5858

Maverick .....................................................................16 www.maverickhousewares.com; 732-417-9666

Sunnyside Corporation.............................................93 www.sunnysidecorp.com; 800-323-8611

Cole’s Wild Bird Products Co...................................61 www.coleswildbird.com; 877-426-8882

Maxim......................................................................76 www.maximmfg.com/hrm; 800-621-2789

True Value Company...........................................20-21 www.truevaluecompany.com; 888-291-7229

Compass Minerals ...................................................... 37 www.compassminerals.com; 913-344-9216

Midwest Fastener...............................................44-45 www.fastenerconnection.com; 800-444-7313

UGL ............................................................................87 www.ugl.com; 800-845-5227

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

Motorola .....................................................................39 www.acsradios.com; 800-248-5391

USP Structural Connectors/MiTek ...........................57 www.USPconnectors.com; 800-328-5934

Dutton-Lainson Company...........................................74 www.dutton-lainson.com; 402-462-4141

Mr. Longarm...............................................................89 www.mrlongarm.com; 800-821-3508

U.S. Wire & Cable....................................................23 www.uswireandcable.com; 800-327-4673

ECI Software Solutions ..............................................51 www.ecisolutions.com; 800-588-5128

National Hardware......................................................53 www.natman.com; 800-346-9445

Viance .........................................................................67 www.treatedwood.com; 800-421-8661

Epicor Software Corp. ................................................27 www.epicor.com; 888-463-4700

NRHA Training Resources .......................................... 96 www.nrha.org/freetraining; 800-772-4424

Wallace Hardware Co. .............................................42 www.wallacehardware.com; 800-776-0976

Fish Tales ...................................................................92 www.bubbablade.com; 844-486-7265

Old Masters .............................................................77 www.myoldmasters.com; 800-747-3436

Wayne Water Systems ..............................................41 www.waynepumps.com; 800-237-0987

Flame Engineering Inc................................................88 www.RedDragonTorch.com; 800-255-2469

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

Woodland Scenics......................................................32 www.pinecar.com; 573-346-5555

Franmar ......................................................................34 www.franmar.com; 800-538-5069

Pacsoft.....................................................................86 www.pacsoft.com; 800-554-6166

Woods WiOn ...........................................................79 www.woods.com

General Pipe Cleaners, Div. of General Wire Spring Co..........33 www.drainbrain.com; 800-245-6200

Paladin Data Corp. ...................................................69 www.paladinpointofsale.com; 800-725-2346

Wooster Brush Co......................................................49 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.

September 2016 | HARDWARE RETAILING

Last Word

Timeline to Technology

hile the idea of conducting business without technology seems nearly impossible, it wasn’t that long ago that computers were still a new invention retailers had to decide whether or not to adopt in their stores.

Hardware Retailing has been advising retailers over the years on evolving resources, helping them harness the power of the latest technological advances. Check out this timeline to see how the hardware industry has changed over the years.

1968 1974 Six years after the initial report on the computer age, Hardware Retailing dives into the subject again, looking at advancements. POS systems are a big topic in this issue, and distributor Moore-Handley utilizes POS terminals in all 42 company-owned stores. This allows cashiers to categorize products at the checkout, store the information and transmit it to another computer later.

1983 Hardware Retailing helps retailers determine what kind of computer retailers should introduce to their stores. A “Retail Computer Checklist” is included, asking questions like, “Do I need a computer?” and “Do I need additional control over accounts receivable?” as well as, “Are there some that would be better off not computerized?”

2012 At this point, the internet has become an important part of the industry, and now retailers are looking at mobile opportunities. As smartphones and tablets are more mainstream, Hardware Retailing looks at how retailers are staying on trend. A QR code is featured on the cover.

HARDWARE RETAILING | September 2016

The magazine publishes “The Computer Age in Merchandising,”a 68-page overview of computers and their role in marketing and distribution. Writers explore the ways manufacturers, retailers and wholesalers use them, and predict their future uses.

1980 This issue includes a 24-page feature that again focuses on the future of computers. It contains case studies and digs deeper into electronic data processing (EDP).

2000 In the April 2000 issue of the magazine, the article “Bricks and Clicks: Building a Stronger Store With the Web,” recommends retailers use the Internet to complement, rather than clash with, their brick-andmortar businesses.

2016 This current issue of the magazine is jam-packed with the latest ways technology is now incorporated into homes and home improvement stores. Consumers and retailers alike are looking for high-tech tools to make their lives easier.

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