Issuu

Serving Hardware, Home Center & Building Material Retailers

Her Turn to Lead Megan Menzer Takes the Helm of NRHA’s Board of Directors 60

Stop Losing Money: Avoid These Financial Pitfalls 44

VOLUME 213 • ISSUE 3 • SEPTEMBER 2017 • HARDWARERETAILING.COM

A Roadmap for Marketing to On-the-Go Customers 70

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Her Turn to Lead

“I have a high amount of respect for Orgill. I love the fact that they strive to make us better, more competitive retailers. They’re a really good teammate.” Shelly Wagler l A&R Supply of Indiana, Washington, Indiana l An Orgill customer since 1993 Family First

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Megan Menzer Takes the Helm of NRHA’s Board of Directors 60

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Customer Focus

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confidence knowing that Orgill is looking out for your

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For more information about how Orgill can help you grow your business, contact us today! 1-800-347-2860 ext. 373 • information@orgill.com • www.orgill.com • Orgill, Inc. P.O. Box 140, Memphis TN 38101-0140

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You are part of this industry. NRHA represents all independent home improvement retailers, regardless of wholesale affiliation. Our members have access to 35,000+ others who overcome the same challenges and celebrate the same successes as you do. Join now to offer your solutions and share your victories.

Make new connections. How can you get involved? NRHA offers topic-focused roundtables, educational conferences, events and retail management training programs. With dozens of options and ways to engage, you can explore what’s important to you. Learn what else is available at nrha.org/membership.

“NRHA is made up of people of who have the same values and are looking for the same things you are. The programs are geared toward our core values.”

VOLUME 213 • ISSUE 3 • SEPTEMBER 2017 • HARDWARERETAILING.CO

Adriane Naillon | Wilco | Member since 2008 JOIN US TODAY AT NRHA.ORG/MEMBERSHIP

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Stop Losing Money: Avoid These Financial Pitfalls 44

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A Roadmap for Marketing to On-the-Go Customers 70

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Serving Hardware, Home Center & Building Material Retailers

Her Turn to Lead Megan Menzer Takes the Helm of NRHA’s Board of Directors 60

Stop Losing Money: Avoid These Financial Pitfalls 44

VOLUME 213 • ISSUE 3 • SEPTEMBER 2017 • HARDWARERETAILING.COM

A Roadmap for Marketing to On-the-Go Customers 70

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Can You Count to 10?

he 10th issue of Hardware Retailing in 2017 celebrates all things 10. In the October issue, we deliver how-tos and need-to-knows to help you grow and improve your operation in lists of 10, making these articles a quick read over your morning coffee or a great lesson for a staff meeting. We continue the trend of 10 with our profile on 10th Street Hardware, a Philadelphia-based

operation that recognized its 10th anniversary this year and serves a varied customer base in just over 1,000 square feet with a 10-member team. Finally, the Category Spotlight in the October issue rewrites the playbook for the tailgating category, exploring all the products your customers are looking for when they set up before the big game.

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September 2017 | HARDWARE RETAILING

Headquarters Staff PUBLISHING EXECUTIVE VICE PRESIDENT AND PUBLISHER Dan Tratensek

SPECIAL PROJECTS EDITOR Liz Lichtenberger

NRHA’s Trainer’s Toolbox is a series of short, three- to five-minute lessons in operations, merchandising, selling skills and product knowledge. Best suited for employee meetings and quick check-ins, these exercises can be used to educate all levels of your staff.

FEATURES EDITOR Melanie Moul

OUR MOST POPULAR LESSONS

COMMUNICATIONS DIRECTOR OF COMMUNICATIONS Whitney Daulton

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

PROFILES EDITOR Renee Changnon ASSISTANT EDITORS Kate Klein Chad Husted Todd Taber SENIOR DESIGNER Lynnea Chom

COO Bob Cutter

GRAPHIC DESIGNERS Graeme Haase Kelsey Truex

DIRECTOR OF FINANCE AND BUSINESS SERVICES David Gowan

WEB DEVELOPER Kevin Trehan

MEMBER SERVICES

PRODUCTION SERVICES

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

PRODUCTION MANAGER Nancy A. Vondersaar

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

SALES AND PRODUCTION ASSISTANT Freda Creech

MEMBER SERVICES AND MEETING COORDINATOR Kamille Stokes, 317-275-9419, kstokes@nrha.org

CIRCULATION

PRESIDENT AND CEO Bill Lee

MEMBER GROWTH AND DEVELOPMENT MANAGER Marci Taschler, 317-275-9421, mtaschler@nrha.org EVENT MANAGER AND RETAIL SUPPORT Katie McHone-Jones, 317-275-9426, kmchone-jones@nrha.org

Lessons You Can’t Miss

CIRCULATION DIRECTOR Richard Jarrett

CIRCULATION/SUBSCRIPTION/ LIST RENTAL INQUIRIES

More than 45 videos, worksheets and presentations are available for free. Listed here are some retailer favorites.

Closing the Sale

Engaging the Customer and Starting the Sale

How to Build a Great Endcap

Installing and Maintaining Smoke Alarms

Keeping a Cleaner Store

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

RETAIL LEADERSHIP INSTITUTE

SALES/NRHA VENDOR PARTNER

EXECUTIVE DIRECTOR-RETAIL LEADERSHIP INSTITUTE Scott Wright, 317-275-9417, swright@nrha.org

NATIONAL SALES MANAGER Lowell Huffman

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

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

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

WEST/MIDWEST REGION MANAGER Chris Miller, 506 Citadel Circle, Westmont, IL 60559; 630-234-3272, Fax: 847-934-2494, chris@millermediainc.net

STATE AND REGIONAL ASSOCIATIONS

WEST ACCOUNT EXECUTIVE Tyler Norris, 136 N. Delaware St. #200, Indianapolis, IN 46204; 317-275-9420, Fax: 317-275-9403, tnorris@nrha.org

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

NORTHEAST REGION MANAGER Jason Harper, 136 N. Delaware St. #200, Indianapolis, IN 46204; 317-275-9414, Fax: 317-275-9403, jharper@nrha.org

PACIFIC NORTHWEST REGION Ronald F. Moore, 3857 Wolverine NE, Suite 20, Salem, OR 97305 (UPS, FedEx); P.O. Box 17819, Salem, OR 97305 (U.S. Mail); 503-375-9024; Fax: 503-375-7980; AK, ID, OR, WA

GREAT LAKES REGION MANAGER Bill Mancuso, 136 N. Delaware St. #200, Indianapolis, IN 46204; 317-275-9424, Fax: 317-275-9403, bmancuso@nrha.org

SOUTHWESTERN REGION Jeff Flora, 638 W. 39th St., Kansas City, MO 64111; P.O. Box 419264, Kansas City, MO 64141; 816-561-5323; Fax: 816-561-1249; AR, KS, LA, MO, NE, NM, TX

SOUTHEAST REGION MANAGER Nick O’Connor, 136 N. Delaware St. #200, Indianapolis, IN 46204; 317-275-9409, Fax: 317-275-9403, noconnor@nrha.org CANADA John Magner, 500 Queens Quay W., #101 W. Toronto, Ontario M5V 3K8; 416-598-0101 x220, Fax: 416-598-9191, jmagner@yorkmedia.net

NRHA MISSION

The North American Retail Hardware Association’s (NRHA) mission is to help independent hardware stores, home centers and lumberyards, regardless of wholesale affiliation, become better and more profitable retailers. NRHA BOARD OF DIRECTORS CHAIRMAN OF THE BOARD Megan Menzer, Newton’s True Value, Cherryvale, Kansas EXECUTIVE VICE CHAIRMAN T.J. Comstock, Northwest Hardware, LLC, Billings, Montana DIRECTORS Greg Schlecht, Greg’s True Value, St. Francis, Wisconsin Daniel Harris, Palos Ace Hardware, Palos Heights, Illinois; Lemont Ace Hardware, Lemont, Illinois Will Aubuchon, Aubuchon Hardware, Westminster, Massachusetts Jared Smith, Jared’s Ace Hardware, Bishopville, South Carolina

Hardware Retailing (ISSN0889-2989) is published monthly by the North American Retail Hardware Association, 136 N. Delaware St. #200, Indianapolis, IN 46204. Subscription rates: Hardware Retailing (Payable in advance): U.S. & possessions $50.00 year. Canada $75.00 year. All other countries $100.00 year. (Air Mail $60.00 year additional). Single copy $7.00. The Annual Report issue can be purchased for $30.00.

David Dishke, Grand River Home Hardware, Caledonia, Ontario

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

Steve Fusek, Fusek’s True Value, Indianapolis

POSTMASTER: Send address changes to Hardware Retailing, P.O. Box 16709, St. Louis, MO 63105-1209. All editorial contents copyrighted 2017 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.

Visit nrha.org/freetraining to download the lessons listed above and many more!

HARDWARE RETAILING | September 2017

SECRETARY-TREASURER Bill Lee, NRHA President and CEO IMMEDIATE PAST CHAIRMAN James Cabirac, Kief Hardware, Cut Off, Louisiana

Contents SEPTEMBER 2017 | VOLUME 213 | ISSUE 3

84 MARKETING

Strengthen Your Brand What lessons can you learn from CrossFit®? Find out how you can develop your own distinct brand and build a lifetime relationship with your customers by following a few simple brand-building guidelines.

Peru Machu Picchu,

92 PERSPECTIVE

CHAIRMAN PROFILE

Meet Megan Menzer

From running a successful independent home improvement business in Kansas to serving on the NRHA board of directors, Megan Menzer is committed to the independent channel. As the new chairman of the NRHA board, Menzer looks forward to the future of the industry, but doesn’t forget the lessons she’s learned.

Around the World With NRHA NRHA staffer Hilary Welter has spent the last year living abroad and working remotely. During her time away, Welter visited hardware stores and home improvement centers, and here she shares what she learned from international retailers to help you improve your own operation.

Departments

44 OPERATIONS

Getting the Numbers Straight It’s important to understand the facts and figures that build a successful retail operation. Learn from four retailers who’ve mastered pricing, inventory management, gross margin and other vital stats. Also, discover the North American Retail Hardware Association’s (NRHA) latest training program, Basic Retail Accounting.

70 CATEGORY SPOTLIGHT

On Land and By Sea Meeting your customers where they are takes on new meaning when they lead a nomadic lifestyle in recreational vehicles or make waves on the open water. Find out what these customers need and how to gain sales from the everyday customer who’s gearing up for a road trip. 4

HARDWARE RETAILING | September 2017

82 MARKETING

Take Advantage of Facebook Ads Social media is a must if you want to stay connected to your customer base. But have you considered investing some of your marketing budget in Facebook advertisements? This article gives an overview on the basics of what Facebook ads can do for your business and how to get started.

06 . . . . . . . . . . . . . . . . . On the Web 08 . . . . . . . . . Independent Thinking 10 . . . . . . . .Taking Care of Business 14 . . . . . . . . . . . . . . . . NRHA News 22 . . . . . . . . . . . . . . . . . . . . . Trends 24 . . . . . . . . . . . . . . . New Products 36 . . . . . . . . . . . . . . . . . . Checkouts 104 . . . . . . . .Newsmakers/Calendar 110 . . . . . . . . . . . . . . . . . Last Word

On the Cover Megan Menzer, co-owner and president of Newton’s Inc ., which operates Newton’s True Value in Cherryvale, Kansas, is the new chairman of the board of directors for the North American Retail Hardware Association . NRHA photo by Whitney Daulton

Knives that work hard. Just like you. New WKF2 Folding Utility Knife

• Ergonomically-designed dual-material grip • Solid die-cast zinc body • Quick-change blade system Comes with 11 black oxide blades, including two stored in the handle MORE HARD-WORKING KNIVES FROM WISS WKFP1 Folding Pocket Knife — Loaded with features for maximum cutting capability.

WKAR2 Auto-retract Safety Utility Knife — Automatically retracts the moment the cut is done.

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More Innovative Tools From

Lufkin Legacy Series ...a classic look ™

with high performance features

n Full 8-foot standout* for ease of use and time savings n Hi-Viz® Orange ribbed accent stripe for better grip L925

n Quad-riveted end hook* for long blade life n Matte finish nylon blade coating for no-glare durability n Also available in metric sizes *1-inch blade width models

www.lufkintool.com

On the Web FINANCIAL RESOURCES

Understanding Your Financial Statements If reading your financial statements sometimes feels like reading another language, don’t worry, you’re not alone. To help you understand your statements and how to use them to make more informed business decisions, consider using this list of training tools and articles at TheRedT.com/financial-tools. PRODUCT CHECKLIST

Do You Offer the Necessities? If you have an auto, RV and/or marine category, this checklist is for you. Retailers who specialize in these categories share what products they consider must-haves in these departments. Hardware Retailing has compiled a checklist at TheRedT.com/auto-rv-checklist for you to use to make sure you’re offering the essentials.

OPERATIONS

Using Numbers to Increase Profit With only 3,500 square feet to work with, Neal Aissa, operations manager at Tarzian Hardware in Brooklyn, New York, is on a mission to maximize his space and run a highly efficient salesfloor. Visit TheRedT.com/tarzian to learn how Aissa uses his financial statements to concentrate on boosting margins and inventory turns.

MARKETING RESOURCES

Facebook Ad Tips and Tricks If you want to get your brand in front of customers on social media, it’s time to start dedicating part of your budget to Facebook ads. If you’re not sure how to get started, or if you’re looking to learn more, check out a list of online resources at TheRedT.com/facebook-ad-tools.

TRAVEL BLOG

NRHA Abroad: Retail Lessons Around the World NRHA staffer Hilary Welter recently returned to the U.S. after traveling and working remotely for a year. Visit TheRedT.com/nrha-abroad to read about her retail experiences and home improvement store visits along the way. 6

HARDWARE RETAILING | September 2017

Here are three lessons from the Trainer’s Toolbox archives that will help your employees understand some basic operational concepts. Visit nrha.org/freetraining to download these lessons for free. • Introduction to the Inventory Cycle Use this video to help employees learn the basic elements of the inventory cycle. • Inventory Management: How You Can Help Use this presentation to review ways employees can help keep an accurate inventory count. • Basic Pricing This short video will explain the basics of cost, retail price and profit margin.

SOCIAL MEDIA LINKS

@hardwareretail facebook.com/HardwareRetailing

Independent Thinking

Build Your Bench

“Investing in the

development of people on your bench is key to attracting and retaining the people you want.

”

ou’re really not needed much, there are no fires to put out and you’re relatively relaxed at the end of the day. You take your family on a nice vacation at the beach, and you don’t have to call the store four times a day. Does this sound like your life? Or, maybe, chaos is a better word to describe your life. Some of us have lived with chaos for so long, we’d feel guilty if our lives got a little more relaxed. Chaos makes us feel really needed after all. But, if your life were a little less chaotic, what would you do? In your personal life, you might spend more time with your family, coach the Little League team, volunteer at your church or civic organization, or maybe just golf, fish or exercise a little more. In your professional life, you might spend time thinking about growing your business or building better management processes. You might have time to attend more shows, industry events or other retailers’ stores. You could spend more time thinking about the future and less time thinking about the fires you have to put out today. If you don’t have a strong bench, you can’t delegate because nobody has the skills. Someone quits and there’s nobody to fill the gap. You want to buy another store, but you don’t have another manager. You’re left dealing with all of the messes while sifting through the details of every problem. Develop a stronger bench and you’ll calm the chaos. The search for talent can be discouraging. Unemployment rates are low; there is strong competition for good people. Turnover in our industry is also a fact of life. These are even more reasons to invest in building your bench. Investing in the development of people on your bench is key to attracting and retaining the people you want. When people know they are being prepared for the next steps in their careers, they want to stay. When you need to replace someone who has decided to leave, someone is ready to take their place. If your management bench is deep, you’re able to delegate the details and work on your future. Make developing your bench strength an intentional part of what you do as a leader in your business. Here are a few ideas to get you started. No matter how large or small, develop a strategic plan and write it down. There are plenty of resources out there to help you with the planning process; it doesn’t have to be complicated. Just spend some time with your family and key employees thinking seriously about the direction you want to take your company. And give some thought to the culture and values you want to embody and share with your employees and customers. Once you get more clarity about your direction and values, you’ll understand more about the talents and skills your people will need to help you achieve your strategic goals. Look at every position in your company and evaluate how each person meets the job requirements of today and the needs of the next three years. If some of today’s employees need development, work with them on a specific written development plan. Does everyone have a backup either in place or being developed? Are there new positions that need to be added? Again, commit this plan to writing and discuss it with your managers. What remains is the commitment to a schedule and the financial resources to get it done. Remember, this is an ongoing investment. Put it in your budget and stick with it. A strong bench will transform your business and your life.

Bill Lee, President and CEO

blee@nrha.org

HARDWARE RETAILING | September 2017

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Taking Care of Business

Know Your Numbers, Part II

“Like it or not, basic

accounting and number crunching certainly fall into the list of job requirements for retail managers and owners.

”

’ve been writing columns for this magazine for nearly 15 years—that’s roughly 180 columns. If all works out, I will probably write another 180 or so columns before I retire. Given these numbers, I hope you might excuse me if, every so often, I get a sense of déjà vu about a particular topic, the overwhelming feeling that I have been here or done this before. Well, in this case I am going to come right out and say it … I have written this column before. But before you prepare to turn me into the principal for copying previously published work, please know that I am doing so with a purpose. There are simply some topics that are worth addressing more than once, and no, I haven’t actually written this exact same column. So here it goes … As a retailer, you are likely a people person. You probably didn’t get into this vocation because you love to pore over reams of data or sit in your office and crunch numbers. Like most careers though, you just don’t get to pick and choose which parts of it you engage in. You might be able to skew your time more toward the activities you enjoy, but there are still other tasks that require your attention. After all, that’s why they call it “work.” Like it or not, basic accounting and number crunching certainly fall into the list of job requirements for retail managers and owners. These aren’t just soft skills either. A basic understanding of how retail accounting works can be incredibly important for someone trying to guide a successful retail operation. The wealth of data that retailers can discover in their financial reports goes well beyond the two figures that most every business owner is familiar with: top line sales and net operating profit. In fact, the “other numbers” in the reports can give you keen insights into the health of your operation and even help create a pathway to greater profitability. In this month’s feature, titled “Hidden Figures” (starting on Page 44), we take a look at how a group of retailers analyzed their financial data, found areas that needed improvement and developed and worked a plan to improve these areas. Hopefully, you can learn a bit about how to identify and act on information revealed through financial and performance analysis from these retailers’ stories. Beyond that, however, we also want to provide you with some assistance with the basics of understanding retail accounting. That’s why we are introducing our new Basic Retail Accounting training program. This program is designed to help any level retail management employee gain a better understanding of how to read and understand income statements and balance sheets. This program provides you with the basic tools you will need to make even deeper dives into your financial performance and begin working these performance measurements into your business improvement plans. For more information on this program, please turn to page 16. So while you are busy brushing up on your retail accounting skills, I’ll just be flipping through old volumes of Hardware Retailing to see which columns are due for a comeback.

Dan M. Tratensek, Publisher

dant@nrha.org

HARDWARE RETAILING | September 2017

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NRHA News

First NRHA STIHL Foundations of Leadership Conference Focuses on Engagement

Retailers attending the NRHA STIHL Foundations of Leadership Conference participate in a collaborative exercise during a session focused on employee engagement. Here, conference participants discuss their own level of engagement with their employees.

he North American Retail Hardware Association (NRHA) and its Retail Leadership Institute hosted the first NRHA STIHL Foundations of Leadership Conference Aug. 1-3 at the association’s Indianapolis headquarters conference center. Conference attendees included current enrollees and graduates of the NRHA Retail Leadership Institute training programs, the Retail Management Certification Program and Foundations of Leadership Program; Young Retailer of the Year honorees; and other channel supporters. Wilbur R. “Wil” Davis, president of Ball State Innovation Corp., discussed in his keynote presentation “Why Values Matter” why retailers should ensure that their personal and professional values align and how to hire staff who also share those values. Bill Aubuchon, chairman of Aubuchon Hardware, spoke about encouraging and supporting change in an organization and developing the next generation into capable leaders. “One of the greatest things leaders of a company can do is leave it with management in place to take it to its future,” Aubuchon said in his presentation. In a retailer panel, Scott Jerousek, owner of Farm & Home Hardware in Wellington, Ohio; Ryan Ringer, owner of Gold Beach Lumber in Gold Beach, Oregon; Jonathan Miller, principal of Miller Hardware in Valdosta, Georgia; and Matt Woods, owner of Woods Hardware in Cincinnati,

HARDWARE RETAILING | September 2017

spoke about their successes and challenges growing their businesses within the last decade. “In our area, the next generation is coming back to the shop local movement,” Jerousek said. “They want to have a hardware store they can call their own. We need to be asking how we can improve their lives.” Other presenters included Jennifer Stone, sales training supervisor for STIHL, which sponsored the event; Rob Mathews, director of the John H. Schnatter Institute of Entrepreneurship and Free Enterprise at Ball State University; Mike Goldsby, chief entrepreneurship officer for Ball State University; Cardwell Do it Center owner Jeff Cardwell; and Roy West of The West Group. In addition to educational presentations and seminars, attendees enjoyed the opportunity to network with other independent home improvement retailers. “When you walk into the room here, everyone already has something in common,” Adriane Naillon, store manager of Wilco in Vancouver, Washington, says. “The engagement with others is the top reason we participate in these events.” For more information about the NRHA Retail Leadership Institute and the educational programs that are available, visit nrha.org/RLI or contact Retail Leadership Institute executive director Scott Wright at swright@nrha.org or 317-275-9417.

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NRHA News

A New, Easy Way to Understand Financial Statements

f you’re a little confused by all the numbers in the financial statements of your business, you’re not alone. Many retailers would rather be on the salesfloor helping customers than in the backroom poring over paperwork. Nonetheless, those financial statements contain valuable information about the health of your business. By identifying, for example, a lower than average transaction size, you can take steps to fix it and add thousands of dollars to your bottom line. If you want to run a successful business, it is critical you understand the story those numbers can tell you.

NRHA wants to make sure all retailers are well informed about the financial health of their business. That’s why your association is pleased to introduce the all-new training course in Basic Retail Accounting. This online course offers an introduction to the often-complicated topic of accounting by explaining the terms used in the two most common financial statements: the income statement and the balance sheet. The course also defines some of the most common basic financial ratios retailers can use to compare their operation against others in the industry. Basic Retail Accounting is ideal for business owners and any employees who are involved with financial management. “As we’ve talked with retailers, we’ve found there was a need for a course that explained how to read financial statements,” says Dave Gowan, NRHA’s director of finance and business services. “Anyone managing a retail operation needs to understand some of these basic accounting principles to make informed business decisions. The numbers are your best way of knowing if your business is doing well, if it’s not and where the opportunities for growth are. The course also explains many of the numbers in NRHA’s Cost of Doing Business Study, so retailers can better use this important tool.” The Basic Retail Accounting course includes four modules with easy-to-use navigation, narration, user interaction and a printable study guide. There is no test connected with this course, so users will not need to log on to NRHA’s LMS site. It is available on nrha.org to NRHA Training Members. To learn more about how to become an NRHA Training Member, contact Marci Taschler at 800-772-4424 or mtaschler@nrha.org.

A Detailed Look at What This Course Offers Introduction to the Income Statement and Balance Sheet. This module first tackles the question of why it’s important to understand financial statements and then offers a basic definition of each of the financial statements and the differences between them. It will also define the role each plays in helping you understand the financial health of your business. The Income Statement. This module explores the key terms you will find on the income statement, including net sales, cost of goods, gross profit, operating expenses, operating profit and net profit before taxes. By reading this statement, you will understand where you are spending your money and how much you are making.

HARDWARE RETAILING | September 2017

The Balance Sheet. In this module, you’ll learn more about the three key numbers found on the balance sheet, including assets, liabilities and net worth. This statement can tell you a lot about how well you are managing your business and the total value of profit you have in it. Financial Ratios. After you understand the raw numbers that make up your financial statements, it’s important to know how to use them to draw conclusions about your business. For example, how do you compare against similar businesses? How likely is a bank to loan you money? These ratios will help you develop a strategy for improving your operation.

Keep your customers from being left out in the cold.

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For more information on Safe Step products, call 913-344-9216 or visit safestepmelters.com.

NRHA News

he state of the industry, where it’s headed and your relationship with channel partners are three topics that have the ability to impact your business. NRHA is giving you the opportunity to join the conversation for free. On Dec. 7, retailers, manufacturers and distributors will gather in Chicago for the association’s third annual State of Independents Conference. The event will include research presentations, retailer panels and networking opportunities. Similar to previous years, NRHA will share new, proprietary research about the performance and direction of the home improvement market and discuss insights into the challenges and obstacles to growth that retailers face. Additionally, two new themes are being added to the conference agenda this year: technology in retail and next-generation leaders. Attending the conference is the perfect opportunity to share feedback and advice with manufacturers and distributors in order to build a foundation for the future of the industry. Registration is free for retailers. To sign up and for more information, visit soic.eventbrite.com, or contact Dan Tratensek at dant@nrha.org.

NRHA executive vice president and publisher Dan Tratensek presents exclusive research conducted by the association.

Women’s Leadership Roundtable Returns for Second Year

rior to the NRHA State of the Independents Conference, NRHA is hosting the second annual Women’s Leadership Roundtable on Dec. 6 in Chicago. This event provides an opportunity for women in leadership positions across the industry to share their take on current issues, discuss best practices and share new ideas. The roundtable is part of the NRHA Retail Leadership Institute’s commitment to providing places and opportunities for retailers from all affiliations and backgrounds to network and learn from each other and other channel partners. “My greatest takeaway from the event was meeting new people in the industry who are facing the same problems and getting some great ideas on how to fix them or at least make them better,” says Chrissy Busscher, 2016 roundtable attendee and owner of Picton Home Hardware in Picton, Ontario. “I gained great ideas to implement in our store to improve everyday operations.” For more information, contact Melanie Moul at mmoul@nrha.org or 317-275-9438.

September 2017 | HARDWARE RETAILING

NRHA News

NRHA Takes Retailers Out to the Ball Game

hat do you get when you mix peanuts, baseball and hardware retailers? A grand ol’ time! Over the summer, NRHA hosted home improvement business owners, staff and guests for baseball games in Seattle and Kansas City, Missouri. Retailers living in or near each area attended the games to meet and connect with fellow independent retailers and share a bit about their businesses with the association staff over food, drinks and baseball. NRHA board chairman and co-owner and president of Newton’s True Value Megan Menzer attended the Kansas City Royals game to meet other retailers in her area and strengthen community bonds while also learning more about how NRHA can further assist independent retailers in the future. “Events like the baseball outing have a very positive effect on our business and industry relationships,” says Aaron Hicks, store manager at Cottin’s Hardware & Rental in Lawrence, Kansas. “It’s great for our personal business because it’s a really great morale booster. You don’t always get to go do fun things with your employees, so any excuse to do that is a good one. It’s also great to give everyone a broader perspective of people involved in the industry. It’s always nice to hear other people’s points of view.”

Megan Hibbard (left) and Jon Hibbard (middle) of Webb Home Center in Abilene, Kansas, met NRHA staff at a Kansas City Royals game.

No matter the season, you’ve got a reason.

Tillers

Gas Log Splitters

Power Wheelbarrows

Snow Blowers

Interested in learning more and how to become an authorized retailer? Visit yardmax.com/dealers, email: info@yardmax.com, or call us at 877-YARDMAX ®

HARDWARE RETAILING | September 2017

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Trends Blaze Trails With Your Customers on the Road Your retail operation may stock the supplies that traveling vacationers need, but have you thought about marketing specific products to recreational vehicle owners? If your business is located near one or more of the thousands of campgrounds in North America, then you may benefit from better understanding the customers who are passing through your area in their RVs. Most of the 9 million RV owners in the U.S. take short trips three or more times every year, according to the Recreation Vehicle Industry Association. The association also reports that RV owners tend to range in age from 35 to 54, which means many of them are likely established in careers and have families they take with them on their travels. These vacationers could regularly turn to your business for the supplies they need while traveling, such as small propane tanks and charcoal for grills, motor oil for their RVs and camp chairs for gathering around the fire pit, as well as small impulse items you sell at your checkout counter, like car chargers for cellphones and snack foods.

Applied to Retail Attracting travelers to your store might require additional targeted marketing. Ask local campgrounds if you can post flyers near camping sites or advertise in campground maps. If you’re not familiar with the busy seasons for the campgrounds near your business, ask for local statistics from tourism bureaus or chambers of commerce. Stay in touch with those organizations to learn when special events may attract extra campers. Then, make your business traveler-friendly during those busy weeks or seasons by merchandising RV and camping products in easy-to-spot sections of your store. Create supply checklists for RV owners and post them in store windows or at the cash register. Doing so might go beyond attracting RV owners who need a specific item or two by reminding them of other supplies they want or forgot. To read more about selling products to RV owners, turn to Page 70.

The RV industry has a

A Closer Look at RV Owners

$50 BILLION

domestic economic impact.

35-54

The age range of most American RV owners.

More than

90 PERCENT The U.S. has more than

16,000 campgrounds nationwide.

of RV owners take three or more short vacations per year.

More than

9 MILLION U.S. households own recreational vehicles.

Source: Recreation Vehicle Industry Association

HARDWARE RETAILING | September 2017

Meet the folks at Cornish True Value. Left to right: Owners, Kim and Jim Ray, Lil Adinolfi, Dustin Dunnells, Luke Ray and their furry friends.

FREEDOM TO RUN THEIR COMPANY THEIR WAY WITHOUT INTERFERENCE

JIM IS HAPPY HE CAME HOME TO TRUE VALUE ® Jim Ray is a second generation retailer.

“The transition was easy, things went faster

He thinks independently and knows what

than we anticipated. Best of all, sales have

works best for his business and customers.

increased since we returned.

2017 YTD RESULTS

+3%

SALES INCREASE

+4%

MARGIN INCREASE

So, 41/2 years after his store left the co-op, Jim decided it was time to return home to

“In the future, our growth will be in the paint

True Value.

department. EasyCare® is a great product. The quality is consistent and we always know what

“We like being ourselves,” says Jim.

we’re getting—that wasn’t the case with our

We were tired of being molded into

past supplier. Paint is 30% of our business. It’s

a cookie-cutter store. Our customers

a big reason why we came back. It’s also nice

started to lump us in with other local stores

to know True Value owns the paint factory.

because we represented the same brand.” Jim and his wife Kim are thrilled their store

“I am proud of what we sell. Everyone feels

is now with True Value.

confident when we advise customers on what they should buy.” Welcome home Jim, Kim and Luke.

+4%

AVERAGE TICKET

+10% LAWN & GARDEN

Jim Ray proudly shares the business results achieved as a member of True Value. (Your individual results may vary.)

New Products

“Our customers buy the

Corkcicle Canteen because they enjoy the beautiful, subtle colors and reasonable price point.

”

—Andrew and Jim Wilkerson, Blackhawk Hardware

“The IntelliBulb line of

lightbulbs is unique in that, unlike other smart lightbulbs, these don't require an app on a smartphone.

”

—Adrianna Karp, Cole Hardware

1. Stainless Steel Bottle

2. Smart LED Lightbulb

The Canteen by Corkcicle allows users to enjoy their favorite cold or hot beverages on the go. The product has easy-grip flat sides and a nonslip bottom. The canteens are available in 9-, 16-, 25- and 60-ounce sizes and a range of colors in three finishes—gloss, brushed and matte. The container keeps cold beverages ice cold for 25 hours and maintains hot beverages for up to 12 hours.

The IntelliBulb Color Choice from Feit is one of five different IntelliBulb lighting solutions. Unlike other smart lightbulbs, IntelliBulbs have the intelligence built in, no smart home hardware, mobile apps or dimmers required. Lighting can be controlled with a motion detector or a light switch, providing the benefits of a smarter home. The Color Choice style offers three light color choices in just one bulb. Users can select soft white, cool white or daylight. The dimmable lights are available in A-19 or BR-30 bulbs.

Hewy Wine Chillers 866-780-0007 or corkcicle.com

Feit Electric 800-543-3348 or feit.com

HARDWARE RETAILING | September 2017

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

“Our customers love the

Pelican™ Elite Coolers because they are made in the U.S. and have a lifetime guarantee. —LaRae Carrasco, BES Supply Store

”

4 “Mrs. Meyers cleaning

products have taken off in the last year, so we started carrying every fragrance. Customers come in and say, ‘I can’t find this one anywhere! I really like trying the new ones.’

”

—Steve DeShong, 10th Street Hardware

3. Camouflage Cooler

4. Cleaning Gift Bucket

The 20-quart Pelican™ Elite Cooler holds up to 15 cans or four bottles of wine. It features a dual-wall exterior, extra-thick polyurethane foam core and freezer-grade O-ring. The cooler has a molded-in lock that keeps contents secured and acts as a built-in bottle opener. Additionally, the cooler has an ergonomic design that includes an easy-carry handle and grooved body, making it easy on users’ hands or legs. The Realtree® design brings the familiar camouflage pattern to the coolers.

The Mrs. Meyer’s Clean Day Lavender Cleaning Gift Bucket is an easy way to try earth-friendly household products made with plant-derived ingredients and essential oils. The set includes household cleaners and laundry supplies in a lavender scent, packed in a Mrs. Meyer’s Clean Day Bucket. Each bucket includes bar soap, liquid dish soap, multipurpose everyday cleaner and liquid hand soap.

Pelican Products 800-473-5422 or pelican.com

The Caldrea Co. 877-865-1508 or mrsmeyers.com

September 2017 | HARDWARE RETAILING

New Products

5. Smoker Pellets

6. Stainless Steel House Hydrant

DiamondKingSmoker’s BBQ Pellets are designed to create more heat to increase searing on meat while adding flavor in pellet grills. The pellets have a fiber base and are 100 percent natural hardwood, so there are no artificial flavors or binding agents. The pellets do not feature bark to increase positive flavor profiles. Flavors include maple, mesquite, oak, hickory, cherry and apple.

The Aquor House Hydrant insulates and protects pipes from freezing when the temperature drops. This in-wall faucet system provides instant access to water outdoors. It has a stainless steel body with freeze protection up to minus 30 degrees Fahrenheit, plus a debris cover provides extra protection. Users simply plug the hose connector in and the water turns on. The patented design uses water pressure and high-tech O-rings to close the internal valve.

DiamondKingSmoker 612-900-2058 or diamondkingsmoker.com

Aquor Water Systems 800-458-1749 or aquorwatersystems.com

7 8

7. Baby Bottle Warmer The Cuisinart Baby® Bottle Warmer allows users to heat a baby’s drink. The warming chamber safely steam-heats small or large glass or plastic bottles to the right temperature. The product also includes a basket to warm baby food jars and a built-in night light for late-night feedings. Cuisinart 800-726-0190 or cuisinart.com

8. Cooking Shield The Frywall can be inserted into any pan to increase the height of the cooking item’s walls, keeping splatter and grease from landing on surrounding surfaces. It comes in two sizes, one working in pans ranging from 9 1/2 to 10 1/4 inches in diameter and another larger option working in pans from 11 1/2 to 12 1/4 inches. Gowanus Kitchen Lab 212-203-6081 or frywall.com

September 2017 | HARDWARE RETAILING

New Products

American Made & Profitable For Over 80 Years

9. Decorative Wine Stoppers Get It Right Bottle Stoppers allow tall vessels like wine bottles to remain upright in a refrigerator or lie flat in a wine cooler. Three silicone rings around each cork provide a tight seal for any size bottle. The stoppers come in three designs: solar spike, geo drip and fractal tower. Get It Right 650-877-2874 or gir.co

10. Spraying Mower Attachment

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

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

HARDWARE RETAILING | September 2017

Using the JRCO Mounting System, the Spot Sprayer can be attached to a mower for easy spraying. The six-gallon tank and momentary spray switch allow for an instant spray. It is available with or without an optional wand that allows spraying along edging or fence lines. JRCO 800-966-8442 or jrcoinc.com

11. USB-Charged Lighter The TekFire Fuel-Free Lighter is a compact product that allows for quick and easy fire starting. It is windproof, flameless, electronic and requires no butane fuel or adjustments for altitude. The lighter comes with a USB cord for easy recharging from any USB port. UST Brands 904-786-0033 or ustbrands.com

12. Portable Painting Kit The Wombat PortaPaint All-in-One Kit is a portable paint tray kit. The PortaPaint bucket contains magnets in the walls of the pail, a can-opener and a masking tape holder. The rim of the bucket can hold masking tape, screwdrivers, pencils, scrapers, a tape measure, painter’s putty and a wiping cloth. Magnets embedded in the sides hold two paintbrushes and a paint scraper in place. The kit includes three high-capacity, 6 1/2-inch mini-rollers, a 3-inch sash brush, a heavy-duty plastic dropcloth, a 30-yard roll of masking tape, a microfiber wiping cloth and a stir stick. Wombat Products 800-871-2583 or portapaint.com

THE ONE STOP SOURCE FOR ALL YOUR WINDOW & DOOR HARDWARE

Window Balances Wood Window Jambliners Window Replacement Hardware Architectural Hardware RV & Mobile Home Hardware Window Glazing Weatherstripping Swing Door Hardware Multipoint Locking Systems Screen Door Hardware

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For a Free Catalog Call Stephanie at

Mailbox Locks

800-352-0800 Ext. -109

Toilet Partition Hardware Commercial & Storefront Hardware

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September 2017 | HARDWARE RETAILING

Spring Product Preview

14 13. Shock-Absorbent Strap System ShockStraps are a shock-absorbing tie down made to keep tension on the strap and secure loads. The system stretches to act like a shock absorber and contracts with the load, keeping it secure. The ShockStrap is made of a urethane formula that is not affected by most chemicals, sunlight, oil, salt water, fungus or moisture. The hooks and buckle are rust resistant, lasting eight to 10 times longer than powder-coated metal. The system comes in multiple lengths and widths. ShockStrap 888-334-3456 or shockstrap.com

14. Multipurpose Sealant HurriBond™ is a one-component, modified silicone sealant and adhesive. When fully cured, it offers UV stability and adhesion to PVC, concrete, glass, aluminum, painted surfaces, wood, plywood, marble, metal and many other common substrates. It works well in all weather elements. HurriBond is able to fast cure, is noncorrosive and will not shrink or crack. The product is available in white and gray. Smart Vent Products 877-441-8368 or hurribond.com

HARDWARE RETAILING | September 2017

15. Vertical Outdoor Cooker The Barrel House Vertical Cooker uses a combination of hooks, grates and accessories to suspend meat over charcoal to cook a wide variety of foods. The vertical cooker is designed and assembled in the U.S. with steel components and hardware and an integrated heat shield, and the barrel is porcelain-enameled inside and out. The cooker creates convective airflow currents that even out hot spots and provide a uniform temperature. Barrel House Cooker Co. 844-508-2665 or barrelhousecooker.com

16. Fastening Tool The STINGER® CH38-2 Cap Hammer is designed for fastening roofing underlayment, house wraps and rolling insulation. The nonpneumatic cap fastener eliminates the need for hoses and compressors, improving safety. It has the holding power of a 1-inch cap.

It’s what’s on the inside that counts. Toter’s Powerfresh™ odor eliminators and cart liners curb the smell of trash day every day from the inside out. You could be saving over 100 million households from stinky, messy trash carts. To learn more, visit try.toter.com/odorcontrol

National Nail 800-746-5659 or stingerworld.com

September 2017 | HARDWARE RETAILING

New Products

17 17. Generator Canopy The GenTent Safety Canopies product line allows the running of portable and inverter generators safely in wet weather. The canopies are resistant to high winds, heavy rains and blizzard-force precipitation. This helps prevent electrical shock by keeping sensitive areas dry. The universal cover size fits most generators 3000W and over. No tools are required to set up the safety canopies, and it takes just three steps to complete. GenTent Safety Canopies 781-334-8368 or gentent.com

Wood Condidoner &.Protectant • Protect your wooden windowsills, doors, and outdoor wood furniture

• Helps prevent drying and deterioration • Helps maintain the natural beauty and depth of grain

• Easy to apply with a gel-like consistency • Polishes outdoor furniture to a soft luster and protects with a coating of beeswax and Brazilian carnauba wax

• Does not contain silicone or linseed oil

- Direct Wholesale Avilable - 4 Case Minimum For Wholesale Pcing Call Howard Products, Inc. 800.266.9545 Or Visit Our Website www.HowardProducts.com 32

HARDWARE RETAILING | September 2017

19 18 18. Wine Aerator

19. Floating Beach Cup

The Pocket Wine Aerator is a product designed to enhance the flavor and finish of wine. It has an aerating motor, which creates tiny air bubbles, rapidly introducing oxygen into the wine and freeing its tertiary aroma, enriching the flavor of the wine. It has three aeration settings for white, red and port wine. The aerator is small enough to store in a pocket and can aerate a glass in 15 seconds.

The Beach Glass® features a ball and stem design that holds the glass upright in sand, grass and snow while also staying upright and floating in water. The glass is made of durable, BPA-free acrylic and is a reusable alternative to disposable cups.

Eparé 347-682-5121 or epare.com

Beachware 631-726-0830 or thebeachglass.com

Mike Kimball, CEO - Ian Williams, COO Fresno Ag Hardware, Fresno, California

“Our philosophy as a company is to always be an asset to our community. That means it’s up to us to make sure we’re working with suppliers that best serves our customer’s and client’s needs. Midwest Fastener continues to exceed expectations by providing an amazing product selection, competitive pricing and quality customer service that you can’t find anywhere else.” – Mike Kimball, CEO

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

800.444.7313

fastenerconnection.com

Checkouts EVENTS

Butterfly Enthusiasts Flutter Into Hood’s

he travels of a monarch butterfly are not easy. Using multiple spawnings along the way, the small, colorful creatures move across North America, heading north in the warm months before returning to Mexico for winter. Given the difficult journey they endure, it only seems right that someone give them a boost. That’s exactly what Hood’s Do it Best Hardware in Wyandotte, Michigan, has done. Sitting within the candle aisle in the gifts section of the store is a converted clothes hamper that now houses butterflies in different stages of their lifecycle. The brainchild of owner Patti Christie, who raises monarch and black swallowtail butterflies, the enclosure provides shelter and food for the butterflies while also putting on a display for customers. “I really have a passion for butterflies, and this was a great way to both help their numbers grow while engaging new people with their beauty,” says Christie, who also operates

Waystation 6989 in the Monarch Waystation Program. “If you tried to raise them in your garden, it’s about a 5 percent chance they emerge. In this habitat, it’s more like 95 percent.” The black swallowtails feed on herbs like dill and parsley before forming a chrysalis and emerging in adult form, while the monarchs feed on milkweed, which Christie harvests each day. When ready to be released, Christie makes sure to put out a notice for her fellow butterfly enthusiasts so they can gather at the store for the event. “We hold on to them for a few hours after they emerge, but they tend to get feisty in the habitat if they’re in there too long,” Christie says. “It’s great to see kids and even adults become fascinated when we let them release the butterflies.” Hood’s Do it Best Hardware also holds an annual Pollinator Day for education on bees, birds, butterflies and other pollinating insects. For more information about monarch butterflies, visit monarchwatch.org.

The butterfly habitat at Hood’s Do it Best Hardware in Wyandotte, Michigan, takes monarch and black swallowtail butterflies from their early caterpillar stage (top left) to full maturation (bottom left). Employee Lisa Rodgers (left) and owner Patti Christie help care for the butterflies.

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 Jesse Carleton at jcarleton@nrha.org to have your story considered for publication.

HARDWARE RETAILING | September 2017

NORTH AMERICAN MADE

PERF RMANCE THE PREMIUM GRILL OF CHOICE

There’s a reason why you can get excited about selling Broil King®. You can finally offer an extensive lineup of premium North American made grills across all price points. When you show your customer a feature by feature comparison with other premium brands, you will be confident knowing that you are providing the best in quality, performance and durability. You simply get more with Broil King®. Contact Ken Hempen khempen@omcbbq.com for more details.

Checkouts

The laser engraver at Kabelin Ace Hardware sits in a kiosk and is easy for customers to use. The machine will engrave the item while the customer shops.

UNIQUE NICHES

It’s Getting Personal at Kabelin Ace Hardware

t Kabelin Ace Hardware, customers can get a gift that is truly one of a kind. A new laser engraver allows customers to put their own messages or images on a variety of gift items, including picture frames, mugs, cutting boards, pens and even dog tags. Kabelin Ace includes seven locations in northern Indiana. Two of those locations, in La Porte West and Michigan City, have extensive gift departments with a wide selection of items from a variety of vendors, including Hallmark. They’ve become a destination for customers searching for gift products. The laser engraver, which was supplied by giftware vendor P. Graham Dunn, has boosted the department’s popularity up another notch. It is set up in a self-serve kiosk with inviting signage and easy-to-read instructions. Customers choose the product they

HARDWARE RETAILING | September 2017

want to engrave, set the machine to work and can leave with their creation in just a few minutes. Janet McCoy, a member of the Kabelin’s management team, says currently the engraver can only be used on items from P. Graham Dunn sold in the store. That means the store gets a good margin on the sale of gift items as well as the use of the engraving service. “What is great about this machine is that customers make the designs themselves,” says McCoy. “We live in a small town, and there’s nothing in this area that even comes close in giving customers the ability to do this. One of our best-selling items is our wooden frames. People can personalize them by putting graduation or wedding dates, for example, on the frame and make it their own. The vendor, P. Graham Dunn, gave us a beautiful setup that is very hands-on for the customer.”

The Better Bird Feeder! Y

Saving American jobs one feeder at a time. A superior line of feeders sold only to independents.

tube feeders have the amazing

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Checkouts

CUSTOMER RELATIONS

Fishing for a (Reel) Good Time

n northern Montana, there’s little excuse to not take an interest in fishing. In order to ensure that no one would be limited in their pursuit of trout, Montana Fish, Wildlife and Parks instituted a program that allows locations around the state to loan out fishing equipment for anyone who wants to use it. Plentywood Hardware in Plentywood, Montana, is one such location. James Maus, store manager at Plentywood Hardware, says the program was a no-brainer for the store, especially since all costs go through the state organization. The display takes up just a few feet of the salesfloor and attracts a wide array of people who know this program is available in the store. “It’s nice because you get a lot of younger kids who use it. It can be either visiting grandkids with their grandparents looking to fish or parents who aren’t sure that their kids will end up sticking with it,” Maus says. Users can sign out rods and reels and have access to basic tackle like hooks, sinkers and bobbers.

HARDWARE RETAILING | September 2017

Anglers can check out a rod and reel as well as basic equipment for free at Plentywood Hardware in Plentywood, Montana.

MERCHANDISING

Jukebox a Chart-Topping Hit With Customers

isitors to the paint department at Charlie’s Hardware & Rental in Mosinee, Wisconsin, will find something not often found in hardware stores: a vintage jukebox. Owner Jeff Kyhos says showcasing the retro device, which he calls “a great conversation piece,” came about when a customer was moving and mentioned it was in his basement. “He said he didn’t know how to get rid of it or if he even wanted to move it, so we bought it from him and picked it up from his house,” Kyhos says. The jukebox was placed in the store’s paint department. “That department is one where there’s sometimes a lull or a customer has a few extra minutes,” says Kyhos. “It made sense to put it there. Even if you’re selling them a few extra products, there might be a bit of a break while they wait for their paint to be mixed.” The jukebox has been in the store for about six months and has proven to be a hit with customers, he says. As soon as they learn it’s functional, they’re quick to look through the selection of vinyl records and choose a song they’d like to hear. (Kyhos has it set on free play mode, so customers can select any song they like but don’t have to pay.) Now, he hears it playing on and off throughout each day. “It’s not just providing the customer with the product they need,” Kyhos says. “It’s also about providing them with a unique and memorable shopping experience.”

The fully functional jukebox at Charlie’s Hardware & Rental in Mosinee, Wisconsin, is strategically placed in the paint department to entertain customers who are waiting on a service.

for more information about the TWP family of products

call: (800) 969-4811 or visit: www.amteco.com

September 2017 | HARDWARE RETAILING

DEPTH OF INVENTORY Immediate availability of millions of plumbing products from 12 strategically located distribution centers

MERCHANDISING OEM-branded packaging, tri-lingual instructions, color coding, finder boards, custom plan-o-grams, maximum SKU density, custom bin labels, POP aids and store setup assistance

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Hidden Figures 5 Ways Your Business Could Be Losing Money … and How to Get It Back

ower your costs and increase your revenue. Just about every retailer would agree that’s a great formula for success. But how do you make it happen? There’s no single, one-size-fits-all solution. Sometimes you need to make major changes; other times the path to greater profitability is paved with a series of micro adjustments to your business. The first clue to finding the answers might just lie in your financial statements. If you’re watching your numbers closely, you can usually tell when something is amiss. You can also use tools such as the North American Retail Hardware Association’s (NRHA) annual Cost of Doing Business Study, which allows you to compare your financial information with others in the home improvement industry. Doing this comparison can give you another clue that you may be missing opportunities for growth.

HARDWARE RETAILING | September 2017

If you find areas for improvement, rest assured that you’re likely not the first. Hardware Retailing spoke with five retailers who have found places where their businesses could be driving more profits. Four of those retailers will share their stories on the following pages, and you can find the fifth online at TheRedT.com/tarzian. Each of these retailers will share suggestions for how to make long-term changes to the way you do business. Each story will focus on different areas, including inventory value, pricing, salesfloor efficiency, labor costs and gross margin. We’ll also identify some of the specific financial performance numbers that will help you review that particular topic. If you need a refresher on how to read the valuable information contained in your financial statements, turn to Page 16 to learn about a new online training course from NRHA.

September 2017 | HARDWARE RETAILING

Inflated Inventory Value

At Burns Do it Center, a standardized system for ordering and receiving has improved the accuracy of the inventory records.

Numbers to Watch Inventory Turnover Sales to Inventory GMROI The Challenge George Hazelbaker had only been working as a manager at the Burns Do it Center in Clovis, New Mexico, for a few years before he started seeing the ghosts. “I started noticing a lot of discrepancies in the inventory, or what I call ‘ghost items,’” says Hazelbaker. “There were items that were not correctly accounted for in the POS system.” Items were appearing on the store’s inventory records that were not actually on the shelves. Most of them had appeared during the company’s recent acquisition of another hardware store in town. Burns Do it Center includes three locations in New Mexico, in Clovis, Raton and Tucumcari, and one in Texline, Texas. In 2012, just before Hazelbaker took a job with the company, the owners acquired an existing hardware store in Clovis. The change was major. The Clovis Burns Do it Center, formerly a 10,000-square-foot store, relocated to the 20,000-square-foot sales space that previously housed the newly acquired business. The owners also purchased the store’s existing inventory. To complicate matters, inventory records were

HARDWARE RETAILING | September 2017

stored on a POS system that was different than the one Burns Do it Center used. “That’s when the problems arose, when we started merging the inventory,” says Hazelbaker. “A lot of the inventory in the store we purchased wasn’t properly accounted for.” Integrating the numbers from two different POS systems meant the details associated with each item, such as the unit of measure, needed to match up with the new system. Much of the time, that integration process worked—other times, it didn’t. By the time the dust had cleared and the merger was complete, the value of the inventory at Burns Do it Center increased by 250 percent. The increase might seem expected, given that the business had doubled its footprint. Total inventory numbers were still in line with overall industry averages. But not everything was as it seemed. Hazelbaker began noticing discrepancies, often in the units of measure the POS used to record an item. “For example, some of the wire we sell by the foot, but some of that wire was in our system as if we were selling it by the spool,” he says. “So according to our records, we had 250 spools of wire in our store!” It’s important to have an accurate record of what’s in the store, but for Hazelbaker, overvaluing the inventory held another more significant threat. A large increase in inventory meant a larger tax bill. “When you have an increase in the valuation of your business, the government sees that as income.” The store’s tax bill was thousands of dollars more than it should have been.

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The Solution It was time to rid the store of its ghost inventory. In addition to the challenges with merging POS records, the company also lacked a standard for purchasing and receiving, which also contributed to the inventory issues, says Hazelbaker. Rather than start by conducting a full inventory of the store, Hazelbaker decided to look first for those problems he could resolve quickly. “We started by running reports from the POS system for any items with excessive costs,” he says. “We looked for anything that seemed out of the ordinary. If you see $2,000 worth of wire nuts on the report, for example, you know something is wrong. We were looking for that low-hanging fruit that would be easy to spot and take care of.” He also generated reports that showed all items without a location code in the store, items not sold

in the past year and items not counted in over a year. Those particular reports were useful, as Hazelbaker says he found they offered the fastest way to indicate something was off. If, for example, an item hadn’t sold in a year, he should check to see if it was actually on the shelf. After identifying suspicious items in the report, Hazelbaker or another store manager walked the salesfloor to physically confirm whether those items were indeed in stock. The results came quickly. Within a few weeks, Hazelbaker had identified $72,000 in ghost inventory. Considering the estimated 34 percent tax on inventory, that was the equivalent of a $20,000 savings, just by keeping more accurate inventory records. By correcting his inventory, he raised his gross margin return on inventory (GMROI) from 132 percent to 148 percent.

Pointers for Success

Do a Physical Inventory A few months after rooting out his $72,000 in ghost items, Hazelbaker completed a full store inventory. “It had been a long time since our last physical inventory,” he says. “Just doing that corrected a lot of issues, too.” He also continues to review store reports on a weekly basis to make sure there are no lingering issues and that the new procedures for tracking inventory are working. Doing a full store inventory is like hitting the reset button, he says, especially if you suspect there are issues with your records. “Many people these days do mostly cycle counts, but that is something you should do more for maintenance. But if you haven’t done one in a while, you might want to start with a front-to-back inventory of your store.”

Have a System for Ordering In a smaller operation, there may be one person who does all of the ordering, but some retailers may have several managers doing that task. Communication is essential. “There has to be some oversight. If you have several people ordering, and no communication between them, it can get out of hand really fast,” says Hazelbaker. Avoid mistakes by establishing a standardized system for entering orders into the POS system. “Always get a confirmation slip from your vendor on what you receive. They are critical for maintaining your books,” he says. They also allow you to verify the accuracy of other fees such as freight charges.

3 48

Train Cashiers Cashiers also can contribute to inventory discrepancies if they are not trained properly. The biggest issues usually arise with incorrectly scanning an item. Case quantities are frequent culprits. “Make sure cashiers are not charging for a single item when they’re actually selling a case,” Hazelbaker says. In addition, if an item code has been incorrectly entered into the POS system, an alert cashier should be able to recognize that the product they just rang up doesn’t match what’s on the screen. Train cashiers to be attentive to what they are scanning and to have a working knowledge of the products in the store. These skills will help them quickly recognize when something is incorrect.

HARDWARE RETAILING | September 2017

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Regular Pricing Review

Matthew Payzant found opportunities to increase margin by taking a more disciplined approach to pricing.

Numbers to Watch Cost of Goods Gross Margin The Challenge If you don’t regularly review your retail prices, you are likely missing margin opportunities. That’s what Matthew Payzant realized when he started looking at special orders and noncommodity building materials. Payzant is general manager of the family business, Payzant Home Hardware Building Centre, with five locations in Nova Scotia, Canada. The business carries core hardware, along with a full breadth of lumber and building materials. For many items, his wholesaler helps him by updating the recommended retail prices so he maintains a healthy margin above the wholesale cost. But there is another group of items he buys either directly from the manufacturer or through various building material suppliers. Members of Payzant’s purchasing team are responsible for setting the pricing on those items, and that’s where opportunities can arise. When manufacturers increase their prices, it’s easy to miss out on increasing retail prices in response. The cost-of-goods increases are often gradual and occasional, so sometimes they don’t get noticed, but they erode retailers’ overall margin. “There are items where the prices have continued to creep up, but we hadn’t always taken the time to check the retails and adjust accordingly,” he says.

HARDWARE RETAILING | September 2017

Payzant’s special-order process presented similar opportunities. There was not enough consistency in pricing special-order items. “If you went into one of our stores to place a special order and asked five different sales employees the price of a custom door, you might get five different answers,” he says. Besides confusing customers, it also meant the business was losing margin. A few missing margin points here and there eventually add up to a lot of missed profits. Payzant needed a way to keep a closer watch on prices, especially in a larger operation where multiple staff members are handling special-order transactions every day. While Payzant runs a lumber business, his strategy for dealing with pricing is applicable to retailers of any size and product mix. A disciplined approach to pricing means you will be making the most of the profit opportunities available to your business.

The Solution Payzant needed to address noncommodity building material items and special orders. Noncommodity building material items are less price-sensitive than commodity items and can provide more margin opportunity. In this category, there were some slow-moving items where retail pricing hadn’t changed in a long time, even if his cost had gone up. To keep his retails at the appropriate level on these noncommodity items, Payzant instituted a systematic approach to reviewing prices twice a year. He creates a list of all of the items he wants to review and breaks them

down into inventory classes. Then he creates a schedule where he can tackle one category per week during the slower times of the year. With help from his staff, he uses price history reports from his POS system to review current prices and margins on each item with those of the past. “We look at how long it’s been since the last retail price change. Some of the prices we found hadn’t been updated for a couple of years,” he says. If the cost has risen but the retail hasn’t, Payzant can make that adjustment. Checking prices twice a year is generally frequent enough to catch any changes that may have occurred. Of course, commodity items are regularly checked using weekly competitive price checks by telephone and online sources. “Doing these price checks has enabled us to better protect our margins. There are items where you are making a 35 percent margin, and maybe that looks good,” he says, “but if you used to make a 45 percent margin on that same item, you are losing.” The second part of Payzant’s pricing challenge revolved around special orders. Staff in the sales

department are responsible for giving estimates on special-order items, and sometimes would have a different approach for calculating the price. “People often get comfortable just using a standard multiplier to come up with a selling price and apply the same multiplier to all categories all the time,” he says. The solution was to create a standardized approach everyone would use. First, Payzant created a price matrix that included all the special-order categories, taking into account margins and appropriate discounts. If a customer is buying vinyl siding, for example, the employee creating the price quote could use the specific multiplier for that item. Payzant also gave his employees extra training on the importance of margin and the impact it has on overall profitability. It may be too early to measure the impact of this standardized pricing strategy on his overall sales numbers, but Payzant is confident that a more systematic approach to margin management in even a small portion of his store will boost overall profits.

Pointers for Success

Make Price Shopping a Habit Every week, someone at Payzant Home Hardware Building Centre is price shopping. “We have a bucket of 50 hot items, and every week we take 15 of them and do a price check with our competitors,” Payzant says.

Educate Staff on Margin Get employees to understand the difference between margin and markup. The two terms might seem similar—markup is the difference between the wholesale and retail price; margin is that same difference expressed as a percentage of sales. Margin is a better way of understanding profit, but many staff who use the calculation for a markup instead of the one for the margin can end up costing money. Teach staff that profit is not a bad thing, Payzant says. “People get excited about sales when the number is big,” he says. “But you have to ask, ‘What is the margin on that number?’” The small number may have a better margin than the larger one, making that a more profitable sale. “Get employees as excited about increasing the margin on a sale as they are about a large sales number.”

Review Prices on Special-Order Items If you offer special orders, check to see how you are pricing those items. Prices set by your distributor likely have good margins. But if the catalog you are using requires you to calculate your own, make sure you have a systematic way of calculating them so each person offers a consistent price. Also encourage them to round up. Even a small increase in margin can add more dollars to the bottom line. Payzant encourages his staff who set prices on special orders to round up the price after they use his pricing matrix.

While Payzant uses price checking for commodities in the lumber and building department, there are benefits from doing the same with price-sensitive items in core hardlines categories. Begin by price shopping your most price-sensitive items on a regular basis. Choose a manageable number of items to price shop each week, and then assign an employee to the task. Use competitors’ websites or personal visits to the store.

September 2017 | HARDWARE RETAILING

Trim Labor Costs

The plan for reducing labor costs at Thomas Home Center True Value included cross-training employees so they could be more versatile on the salesfloor.

Numbers to Watch Payroll Expenses The Challenge One of the tools Lee Rector at Thomas Home Center True Value in McKinleyville, California, uses to keep a close watch on the overall financial health of his business is NRHA’s Cost of Doing Business Study (CODB). By comparing the numbers on his financial statements to the averages for the industry, he’s found several areas where he could improve his business. A few years ago, labor costs were at the top of the list. There were a couple of warning signs. His cost of labor as a percentage of sales was a few points higher than the industry average. In addition, as he took a closer look at what was happening on the salesfloor, Rector observed staffing levels were high during points in the day when customer traffic was low. But lowering labor costs is fraught with challenges. It’s tempting to assume that when you cut labor, your customer service levels will drop and you’ll have to cut employees. Rector did neither, and it turned out to be a win-win for both his business and his employees.

The Solution To bring down labor costs, Rector says it was obvious he had to lower staffing levels. But what he needed to eliminate first was his preconceived notions about staffing in his store.

HARDWARE RETAILING | September 2017

“As retailers, we tend to box ourselves into the mindset that we need X number of people for our store to run, even if that means our percentage of labor to sales number is higher than it should be,” he says. “What I found was that most of the time that number can be trimmed. Sometimes it is difficult to achieve, but the labor percentage on NRHA’s CODB is realistic.” As he tackled a problem, Rector says it was imperative that customer service and sales didn’t suffer. He began cutting back staffing hours during the slower times of the day. At the same time, he made sure his schedule allowed him to help on the salesfloor if necessary. At the end of every week, he took a look at his sales and payroll numbers to see if he was getting closer to his goal, or if he still needed to make adjustments. “I spent a lot of time listening and watching on the salesfloor, looking where it might make sense to trim staff hours, looking at the sales numbers I wanted to hit and deciding how much I would allow myself to spend on labor,” he says. Fortunately, trimming labor meant rearranging schedules, not reducing staff. Rector didn’t have to lay off any employees to reduce his labor costs. Instead, he discovered that there were some employees who wanted to work a few less hours. Sometimes it was a college student who was happy to cut back or an older employee who was already hoping they could work one fewer day a week. Rather than make a general announcement that he was going to be cutting hours, Rector had conversations with individual employees and was able to create schedules

that worked better than before for each employee while reducing the total amount of money he was spending on payroll. He also focused on cross-training employees and expanding their skillsets. Besides giving him more flexibility when it comes to scheduling workers, Rector says cross-training also improves customer

service and opens up the possibility of some employees even earning more money when they’re able to work a different position in the store. “I haven’t had to lay anyone off as I’ve been reducing payroll costs,” he says. “I’ve been able to look after my numbers and also take care of my employees. It’s a win-win for everyone.”

Lee Rector uses NRHA’s Cost of Doing Business Study to compare the performance of his store against others in the industry and then identify opportunities for growth.

Pointers for Success

Be More Creative Than the Problem When faced with something in the store you want to change, “you need to be more creative than the problem,” says Rector. It’s important to question assumptions you may have about the way you run your business. Be willing to look for creative solutions that lie outside the normal way you operate.

Try Cross-Training Employees Look for employees who are willing to learn new skills. Cross-training your cashier, for example, means he will be able to take shifts in other parts of the store to replace hours you may need to cut at the checkout counter. This could eliminate the need to hire additional part-time employees if you only need them for a small number of hours. Give more opportunities to the staff you have before hiring more.

Lower Labor Costs by Raising Sales If labor cost as a percentage of sales is higher than it should be, first make sure you are making the most efficient use of your employees’ schedules so you aren’t overstaffed during the slow times. Then, focus on raising sales. Give employees product knowledge training so they are more confident about selling, and then teach them about add-on selling so you can raise the average transaction size. Look for ways to build the morale of your staff so they will be more excited about working for you. An enthusiastic and engaged staff will sell more and pay for themselves.

HARDWARE RETAILING | September 2017

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Improve Gross Margin Numbers to Watch Gross Margin The Challenge

Adam Barden (left) does pricing changes as often as necessary, even if it’s every week for some items.

One look at NRHA’s Cost of Doing Business Study last year told Adam Barden he had work to do. “We knew from looking at that study that our gross margins were below where they really should be for our type of store,” says Barden, who owns Vassar True Value Hardware, with two locations in Vassar and Frankenmuth, Michigan. “At that point, we set some very specific goals about where we wanted those numbers to be and then talked about the different ways we could get there.” His two stores have quite a bit in common. Both are in rural markets, with each home to about 3,000 people. Both markets include independent stores as competitors, and both are about 30 minutes from the big boxes. Both also see a customer mix of about 70 percent DIYers and 30 percent contractor and industrial business. In both stores, lawn and garden is the top-selling department, and paint is second. Even with the commonalities, Barden had his work cut out for him. He quickly determined that a thorough review of pricing in both stores would provide the biggest impact and the fastest way to see some movement in gross margin numbers.

Pointers for Success

Look Past Pricing Misconceptions “For a long time, we thought we had to be the best price on every single item in our store,” Barden says. “You really can’t do that, because then your margins erode to the point that you can’t operate your business. You need to find areas to be competitive and others where people are willing to pay more for a convenience or a service that’s being provided.”

Change Prices As Often As Necessary Barden says the new pricing profile is constantly being tweaked. “You can’t just set a plan and say, ‘OK, that’s it,’” he says. “You have to stay on top of things; you have to keep up with your plan, or your margins will erode over time. We do price changes every single week now.”

Know Your Competitors Going forward, Barden plans to develop a process to make himself and his team a little smarter about how to shop competitively and how to set prices relative to his stores’ local competitors. “Right now, we check prices on high-velocity items, but we don’t check as many of the slower-moving items,” he says. “My plan is to develop a process to check every month on slower-moving items so we can get a competitive environment around those as well. We want to make money, but we don’t want our customer to come in and have an experience that, pricingwise, is way out of line.”

HARDWARE RETAILING | September 2017

The Solution The first thing Barden did was reach out to his co-op to ask for assistance. The co-op helped complete a pricing study of the marketplace, and from there, Barden and his team came up with a pricing profile. He spent most of February updating pricing across the board at both locations. It was a big task, but February was an ideal time to do it since business was a little slower. “We did the pricing study for both of our stores,” Barden says, “Then we went through and made pricing changes throughout each location.” Now, the team regularly updates and improves the pricing throughout the store. “We may have some areas where we can be more competitive and others where we’re giving away too much margin. We’re continuing to find opportunities for improvement.” Barden focused heavily on pricing in his top-selling department, lawn and garden. “There are a lot of lower-margin items, like yard goods— mulches and soils and things like that—where, if you can make a small change, you can see quite a difference in your margins,” he says.

When building a pricing profile, Barden chose to look at prices under two different lenses. “We found some of the suggested retail pricing from our co-op was too aggressive—it would make our margins too low,” he says. “But one level of variable pricing was too high, especially on highly visible and high-dollar items. So we came up with a customized system between the two.” He says they now try to be more competitive on items above $25 or items that are highly visible, including anything customers might frequently price shop. For items below $25 or those that aren’t highly visible and are less likely to be price shopped, the prices might be a little higher. Another step for Barden and his team was to look at the commodity items they sell, such as water softener, birdseed and dog food. “We had to make some decisions to either raise prices or discontinue certain items and bring in others in their place,” he says. Barden saw small results right away, and about six months later, he was seeing more differences month to month. “We’re two or three margin points up over last year, which tells me we’re moving the needle in the right direction,” he says.

Training Resources Go Back to the Basics In addition to articles on financial management found in the pages of Hardware Retailing, NRHA offers a variety of training materials that take you back to the basics. These online courses are designed for anyone who needs a better understanding of the fundamentals of accounting. Basic Retail Accounting NRHA recently released its training course in Basic Retail Accounting to offer an introduction to some of the key financial metrics that are foundational to your business. Once you have a firm grasp of these principles, you’ll be able to understand how to make changes that can improve your business. The course in Basic Retail Accounting is an online training course available on demand for NRHA Training Members. It consists of four brief modules that introduce two financial statements and common financial ratios. For more information, see Page 16.

Our Three Pennies of Profit Understanding basic accounting principles isn’t just for managers and owners—employees need it too. They may not need to know every nuance of your finances, but it helps if every employee on your salesfloor has a basic understanding of profit. One of the most popular ways to teach them has been NRHA’s “Our Three Pennies of Profit”

HARDWARE RETAILING | September 2017

training video. This 15-minute video shows, in story form, the fundamentals of retail profit and loss. It explains how every employee has a key part to play in helping a business stay profitable, which benefits everyone. To see the “Our Three Pennies of Profit” training video, visit nrha.org/ThreePennies.

Raised in

Retail

NRHA Chairman Megan Menzer Never Doubted Where Her Career Path Would Lead By Dan Tratensek, dant@nrha.org

f you could ask 10-year-old Megan Menzer what she wanted to be when she grew up, you might be surprised by her answer. She wouldn’t rattle off the typical vocations like doctor, astronaut or veterinarian. No, even at 10 years old, little Megan knew her career would lie in hardware retailing. She had seen generations of women before her who were actively involved in the family’s hardware business, and in between her playtime and homework, Megan would dream of the day when she would add her name to the list of strong women who sat at the helm of Newton’s True Value, the family business based in Cherryvale, Kansas. Menzer, who is now co-owner and president of the two-store operation, was so confident about her career path that while other kids were playing video games, she would head to the store’s back office to practice her 10-key skills. “I wasn’t necessarily like the other kids,” Menzer recalls. “I liked to go in the office and practice on the 10-key just to see how fast I could get. Most other kids didn’t even know

HARDWARE RETAILING | September 2017

what a 10-key was, but I would practice using it with both my left hand and right hand.” So when her father, Joe, came home from work one summer afternoon and found Megan playing in the front yard, she was thrilled when he asked the question she had been waiting years to hear: “Would you like to start working at the store?” “I remember it like it was yesterday,” Menzer says. “I remember him getting out of his truck, walking up to me and asking if I would like to start working at the store two days a week. I was in fifth grade at the time, and I just couldn’t have been more excited.” Today, more than three decades after Menzer accepted her first job with Newton’s True Value, she has made quite a career out of running the business that was founded by her great-grandparents and later run by her great-grandmother, Grace Newton. Despite the business being nearly 100 years old, Menzer has overseen the operation during some of its most dramatic changes, including complete resets, product additions and an expansion into a second location in nearby Independence, Kansas.

September 2017 | HARDWARE RETAILING

During this time, she has also taken an active role in helping other retailers succeed, working with shop-local organizations, serving on her co-op’s marketing advisory group, and in one of her most prominent roles, as chairman of the board of directors for the North American Retail Hardware Association (NRHA). “I love this industry, and I am so blessed to have made my career in it,” Menzer says. “I think NRHA is such a great representation of the industry as a whole, because it’s about retailers helping one another. It’s not about True Value or Orgill or Ace or Do it Best. It’s about all of us being independent small business owners and learning from each other to make our operations and communities stronger.” The editors at Hardware Retailing recently had the opportunity to sit down with Menzer and learn a little about her history, her business and her thoughts on the future of independent home improvement retailing.

A Focus on Family Since the business was founded in 1924 by Menzer’s great-grandparents, Grace and Earl Newton, the operation has been a family affair. Eventually, Grace and Earl passed the business down to their daughter Nellie, who worked in the business with her husband, Albert. During these early years, Newton’s True Value was primarily focused on plumbing, electrical and heating supplies. It wasn’t until 1976, when Menzer’s father, Joe Long, entered the business, that hardware began to take a more prominent role in the store’s offering. Like most small business owners, running Newton’s True Value was always a family affair. Both Joe and his wife Barbara are still active in the business and, in addition to Megan, both her sisters, Cari and Tessie, worked the aisles of

HARDWARE RETAILING | September 2017

Left: Though her husband, Jeff Menzer, isn't involved in the day-to-day operations at Newton's True Value, Megan Menzer says his support for her and the business has been a big part of their overall success. Above: Megan Menzer credits her father, Joe Long, as one of the key influences in her retail development.

Newton’s at some point. But Joe always knew that Menzer had a particular passion for the operation. “Megan just loved being part of Newton’s,” Joe says. “Her sisters aren’t involved today, but Megan just took to it, and she’s really a natural. Whenever she’s in the store, she has customers running up to her and giving her hugs.” Even during her early years at the store, Menzer says she has nothing but fond memories of working with both her immediate family and her extended family, which included employees and customers. “The employees were just always so kind to us,” she says. “I remember Gary Simpson, who had worked at the store for a long time, and how he would put up with us three girls running around. I even remember locking him in the paint room one day and thinking it was so funny. He didn’t find it quite as funny, but he took it all in stride. It was like a big family.” Menzer also says she cherishes the opportunity she had to work with her grandmother, Nellie. “My grandmother and I would work together on the bookkeeping. We would spread everything out on the dining room table, and I would help organize things for the invoices, and then I would get to lick all the envelopes,” she says.

A Budding Career After working summers and vacations at the store during high school, Menzer went on to college, where she earned her degree in business management and marketing, always with the intent of returning to Cherryvale. Immediately after graduation, she came back to the family business and set to work learning the management ropes from her father. For the father-daughter team, there was an urgency in getting her up to speed on every aspect of the operation. “My grandfather passed away unexpectedly when he was 59 years old, so my dad, at the age of 32, had to take over running every part of the business,” Menzer recalls. “Because we knew how difficult that was, we wanted to make sure we were prepared should anything ever occur.” This intensive training quickly gave Menzer the insight she needed on operations, and in short order, she became an integral part of running the business. “Megan was very quickly more of a partner than an employee,” Joe says. After returning to the business, however, the partnership almost dissolved. Menzer recalls a brief period where she thought about branching out from Cherryvale and the potential decision to pursue a different career path.

HARDWARE RETAILING | September 2017

From its origins as a supplier of plumbing, heating and electrical items, Newton's True Value has evolved to meet the needs of a more diverse customer base and today has two locations offering full selections of hardlines.

Menzer was called in to a job interview with what was, at the time, a relatively new company called Amazon. When she showed up for the meeting, she found out she would be interviewing for a job as an assistant to the president and CEO. For someone with a college degree and experience working in a family business, Menzer says this opportunity held little appeal. “My dad and I joke about it now,” she says. “Kind of like ‘What might have been?’ I went in for the interview, and they actually brought in Jeff Bezos [the founder of Amazon], but when

Menzer’s freedom to make changes and decisions undoubtedly helped the business prosper, and in 2005 ... she was selected as one of the NRHA’s Young Retailer of the Year Award winners. I found out it was to be his assistant, I was like, ‘No way, I have a college degree. I don’t want to be someone’s assistant.’ After that, I was pretty sure I wanted to stay in the family business.” So instead of having Jeff Bezos as a mentor, Menzer returned to Cherryvale, where she continued to learn from her father. And from her perspective, she couldn’t have asked for a better role model. “We work very well together,” she says. “It was never, ‘You can’t do that;’ it was always, ‘Let’s try it, and if it doesn’t work, how do we learn from it?’ I have been very blessed to have such a great mentor.” Menzer’s freedom to make changes and decisions undoubtedly helped the business prosper, and in 2005, her hard work and dedication were recognized when she was selected as one of the NRHA’s Young Retailer of the Year Award winners. Since winning the award, she has continually focused on improving Newton’s True Value.

HARDWARE RETAILING | September 2017

From becoming early adopters for in-store and online technologies to opening a second location, Menzer and the Newton’s team continue to look for ways to better meet customers’ needs. And though she had grown up coming to NRHA and True Value conventions, the award was what really spurred her relationship with the association and served as a catalyst to get her more involved.

We’re Stronger Together When she first joined the NRHA board of directors in 2009, Menzer didn’t have to learn about the value of giving back to the industry. For years, she watched her father’s relationship grow with both True Value and NRHA. “I was raised in an era when you belonged to things,” says Joe. “You wanted to be a part of a community that was bigger than the four walls of your store, and I remember my grandmother talking about the value of being part of the association.” Joe says his involvement with hardware associations helped him broaden his view of the industry. “I remember Marvin Franks, who was a representative with the hardware association, who would call on us. I remember being at a True Value convention and Marvin asking if I wanted to go to dinner with him. I had never thought of leaving the convention to go out to dinner, but we did. And from that point, it really broadened my horizons.” Given this firsthand exposure to the value of associations, when Menzer was elected to the board of directors, she wanted to make sure her involvement would count.

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“As I got more involved in NRHA and realized I had a voice in the direction of the association, and I fully understood that NRHA was about helping all independent home improvement dealers. I really saw the value,” Megan says. “I wanted to share my own experiences with others and let them know that even though they are independents, they don’t have to face their challenges alone. The association is here to help.” Menzer says she can point to multiple occasions since joining the NRHA board where her network of peers have proven to be valuable allies. “When we opened our second store, I had other NRHA members offering to help me, share information, send me documents, even come down to help. The support I got was truly overwhelming.” During her time on the board of directors, some of the accomplishments Menzer is most proud of involve expanding the reach of NRHA’s peer relationships with programs like the Retail Management Certification Program, Retail Roundtable groups and the State of Independents Conference. “Megan has been a fantastic contributor to our board throughout the years,” says Bob Cutter,

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NRHA’s chief operating officer. “Even prior to joining the board, Megan was always active at NRHA events and has been a big cheerleader for everything we do.” Of all the programs she has been involved in during her tenure, Menzer has a hard time naming just one that she takes particular pride in, but she feels that playing a role in the acquisition and opening of the new NRHA headquarters and conference center would certainly be among them. “The building is a huge accomplishment and a big step forward for the association, and to have some small part in that is incredibly gratifying,” Megan says. “That’s honestly how I feel about my entire experience on the board. I have grown so much businesswise and personally through the organization, and you get exposed to so many people who you might not ever know. To be some part of launching programs or meeting other retailers, when you sit back and think about it, it is truly humbling.”

In addition to her involvement in the family business, Megan Menzer has also taken on roles within the industry advocating for independent business owners.

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KEEP IT MOVING

Opportunities Abound With Consumers on the Go

hen a customer ties up his boat at Summerland Hardware’s dock in Summerland Key, Florida, it’s not usually for a casual stroll through the aisles. There’s sun to soak up in the idyllic South Florida seas, but there are a few items he needs before he can shove off and take to the water. All the better that Summerland Hardware is set up to get boaters, homeowners, and visitors supplied and back to the fun. Whether it’s catering to seasonal visitors or expanding the selection of the actual wheels and oils that move consumers through the world, home improvement retailers are becoming more focused on the mobile lifestyle.

HARDWARE RETAILING | September 2017

For a closer look at retail operations that thrive in the auto, recreational vehicle (RV) and marine categories, Hardware Retailing spoke with three retailers. While these examples show some retailers heavily devoted to niche customers, their tips of the trade can aid businesses whether they stock four or 40 feet in these categories. We tagged along with Greg Forsythe, owner of Westmart Building Center in West Yellowstone, Montana, for RV expertise. We came aboard with Jeff Price, owner of Summerland Hardware, for a look at marine supply sales. Finally, we took a ride with Root River Hardware owner Mike Steien to learn about his two auto-centric stores in Minnesota.

Must-Have Products Want a breakdown of the “must haves” in the auto, RV and marine category? Check out our checklist for essential items for each department at TheRedT.com/auto-rv-checklist.

September 2017 | HARDWARE RETAILING

Recreational Vehicle

ecreational vehicle enthusiasts are all about transporting their comfort. They want to see the world while always having home close by, making RVs their ideal mode of transportation. For Greg Forsythe and Westmart Building Center, serving these travelers and consumers is all about providing comfort-giving items such as home accessories and outdoor entertainment pieces, while also stocking niche items needed to supply a life on the road. The business is located in one of several hubs of activity surrounding Yellowstone National Park. Sitting just outside the western edge of the expansive park, West Yellowstone, Montana, shrinks to around 1,000 residents in the winter months and balloons to around 11,000 during the summer. This doesn’t count visitors who stay in the dozens of hotels, campgrounds and RV parks outside the town’s borders. These area housing options serve vacationers looking to have fun in the famous park and surrounding wilderness. However, part-time residents and seasonal visitors aren’t Westmart Building Center’s sole customer base. Because of its lumber department and wide array of paint offerings, the store does a large amount of business with local contractors

and carpenters. Yet planning for the busy summer selling season is a huge factor to Westmart Building Center employees, a group Forsythe credits with the business’s success.

Home, Home on the Move In the past 10 years, Forsythe says his RV-oriented shelf space has expanded from 12 feet to more than 40 feet, bringing in new products each year based on customer demand and sales records from previous years. Some items will remain a staple for an RV-dwelling customer—such as lightbulbs for small appliances and sanitation products, Forsythe says. However, some small items are less obvious and take research and knowledge of the complexities of mobile living. With different organizations and companies running the area campgrounds and RV parks, the number of electrical connections and other offerings like internet, cable and satellite entertainment can change. Westmart carries hookups for 30- and 50-amp connections. He also sells electrically heated hoses, a necessary item when temperatures drop. “Our seasonal customers come to our area to enjoy the outdoors,” Forsythe says. “We have their

Westmart Building Center is located in prime territory for seasonal travelers and campers. Sitting in West Yellowstone, Montana, the retail business serves year-round residents as well as visitors to nearby Yellowstone National Park.

HARDWARE RETAILING | September 2017

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Owner Greg Forsythe says he’s expanded the RV-related items stocked at Westmart Building Center based on feedback from his seasonal customers.

needs covered. You need to make sure you have everything to keep them comfortable outdoors— heaters, outside carpet, doormats and bug supplies.” Given the investment that a fully equipped RV setup entails, these customers are usually particular about upkeep and cleanliness. So, while Forsythe says he wants to supply items for fun, he also stocks plenty of items for cleanup. “RVers put a lot of money into their wheeled vehicle, and they want to take care of it. They need all of the cleaning supplies of a car wash, along with supplies that keep a home and an outdoor space clean. If you want their business, you have to help them keep it tidy,” he says.

HARDWARE RETAILING | September 2017

Given the remote nature of Westmart Building Center, Forsythe says he’s made goals to earn his customers’ trust while supplying enough products to keep residents and visitors from venturing to surrounding communities looking for supplies. “We’ve really worked hard to discourage competition from coming into town. We know, as generations change, people can look up pricing and products anywhere. So we aim to provide the best business and service experience possible, and the hotels, RV parks and locals have been very loyal to us,” Forsythe says. Knowing there isn’t a full RV store and repair shop for miles outside of his area, and a big-box hardware retailer requires an even longer drive, Westmart Building Center regularly partners with a small repair company during the summer months. While full repairs can’t be accomplished on site, customers at the store looking for repair work are directed to the repair company. In exchange, the repair crew often uses Westmart for supplies. Forsythe keeps Westmart in the public eye by advertising on local maps and pamphlets as well, increasing the store’s reach. “It really comes down to letting customers know where you are and what you’ve got. This is a market that thrives on service, supplying specific demands and being a one-stop shop from the moment they walk through the door,” he says.

Marine

ne could be forgiven for assuming a hardware store in the Florida Keys would focus on the “fun in the sun” products for vacationers. Yet Summerland Hardware boasts not only a thriving hardware business that serves local rental properties, hotels, residents and contractors, but also a substantial marine department highlighted by the 100 feet of dock space for boaters right outside the store. The store owner, Jeff Price, emphasizes on making the most out of the 2,000 square feet of sales space that Summerland Hardware occupies. While the store strives to cater to home repairs as well as the many items needed to keep a vessel seaworthy, it becomes a game of logistics and supply, he says. “We have to pick and choose the products we carry, but that’s the nature of having the kind of salesfloor we have. We’ll still make sure you can get the job done,” Price says.

Catching the Wind Price’s philosophy when adding marine products is to keep it simple, supplied and safe. There are items that every boat absolutely must have to be certified to leave port, including life jackets, flares and additional safety equipment. There are also plenty of items that regularly break and must be repaired or replaced. Being able

to offer a service, such as making a new battery cable that has been burned up, can also go a long way with a customer who is looking to get out on the water and enjoy themselves. “The necessities are anything that make the boat go and make it safe on the water. Those are the items that people on boats can’t live without. You’d be amazed at how often a boat will come in and have none of its safety equipment in working order,” Price says. With space at a premium, he often has to toe the line between remaining well stocked and not crowding his store with bulky items. That has led to the kind of delivery turnaround Price believes has helped his business remain a go-to destination. Summerland Hardware receives two trucks each week from its hardware co-op and daily deliveries from its three marine distributors. The store even puts out a personalized catalog through one distributor that consumers can take and have on hand to place orders. “For visiting customers, you only get one chance, because they’re here for a short time and they need something this minute. I might have a product that has five different sizes, so there will be two of each size on one peg. So, if someone comes in and grabs four of those, we’re in trouble,” Price says. “You have to be able to keep up.”

Safety equipment, such as flares and first-aid kits, are important for marine sales at Summerland Hardware.

September 2017 | HARDWARE RETAILING

Marine Remember: They’re on Vacation Price has devised several other programs that serve the kind of vacationers he sees in the Keys. The Summerland Key community leans toward long-term rentals, with most houses needing to be rented for at least 30 days at a time.

“People on vacation are

out of their comfort zones, so anything we can do to make them feel at ease and welcome goes a long way. —Jeff Price, Summerland Hardware

”

The area doesn’t have a live aboard (full-time boat resident) community, as there is no mooring basin near the store, but the fact that customers can sail up to Summerland, tie up their boats and start repairs right there is a big factor for the store’s reputation. Price also credits his online presence through his co-op, which allows boaters to order supplies from their boat and sail in to pick them up. “People on vacation are out of their comfort zones, so anything we can do to make them feel at ease and welcome goes a long way,” Price says. Summerland Hardware provides a tool rental service that gives vacationers the ability to make repairs they need without buying a tool they already have back home. Also, Price is looking to add package shipping to his line of store services. Many customers already place orders through the store’s co-op’s website and those products are waiting for their arrival in the Keys, but Price says he is seeing increased demand for the ability to ship things back north prior to the visitor’s departure.

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Summerland Hardware features a docking area at the store so customers can arrive by land or by sea. Owner Jeff Price says he’ll often have customers shop for needed items and then begin repairs right at the store.

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Auto

ot every mobile lifestyle means traveling far and wide and maintaining a moving residence throughout the year. Most consumers across the country maintain their own version of a mobile lifestyle every day. Outside of major cities, public transit can be hard to come by, and personal vehicles still rule the road. Perhaps more so than any other type of product, auto parts keep consumers on the road and able to make their work and personal obligations. This sector of the category ties in well with the hardware and home improvement industry in delivering vital products close to home. It was with that idea in mind that Mike Steien decided to add on to his two NAPA Auto Parts franchise locations. In 2011, after seeing two local hardware stores close their doors, Steien added hardware to his franchise locations to create Root River Hardware with locations in Chatfield and Preston, Minnesota.

Supplying a Need Steien saw the vacuum for a local hardware store in two communities he was already serving with NAPA franchises, but he says he didn’t want to just move the previous inventories from the closed stores into his own shops. Finding a solid mix of the home improvement products along with his already-present collection of auto parts was the key to making the combination stores work. “We tend to stick with the true hardware stuff, the nuts and bolts, plumbing supplies and PVC supplies that are always in demand,” Steien says, adding that while Root River sells paint and sundries, it doesn’t currently offer paint mixing.

Root River Hardware owner Mike Steien expanded his NAPA Auto Parts franchises into hardware sales in 2011.

Auto “We didn’t want to get that deep into paint,” he says. “We saw what the former hardware stores were doing in paint, and that overhead really hurt them. We try to focus on the forgotten items that people might need if they’ve gotten paint elsewhere but come home and realize they don’t have something they need, like paint rollers.” Similar to Summerland Hardware and its marine department, Root River Hardware must make do with small spaces in its stores. This means educating employees and having proactive service for customers, since there’s less likelihood that a customer will be able to find the items they are looking for without assistance. Another need fulfilled by Root River Hardware’s presence is camping and RV. In addition to the auto supplies needed to maintain an RV, a large number of local campgrounds and RV parks rely on his two stores for basic necessities, like camping gear or electrical adaptors and sewer hoses. Businesses serving an area with large

campgrounds and outdoor attractions would benefit from an expanded auto department to draw in customers looking to maintain those vehicles as well.

Stock the Shops To Steien, the opportunity to expand his business came out of a newly formed need for local hardware stores. For hardware retailers looking to expand their automotive offerings, he suggests exploring their surrounding markets. While teaming up with a franchise like NAPA Auto Parts might not be the right path for every business, it has worked well for Root River Hardware. Even without a franchise attachment, Steien says many auto parts and supplies can be found through hardware distributors for similar or lower costs than through auto parts distributors. One way to find a niche in the auto supply market is to work with local repair shops and mechanics,

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which make up a significant portion of Root River Hardware’s auto business. “Those shops are always looking for the best way to buy consumables. There are always traveling salesmen who sell just that, so you’ll have to beat those prices, but you can be very competitive in things like brake cleaner, gasket cleaner, oil and antifreeze,” Steien says. His stores provide certain automotive services, such as turning brake drums and rotors in vehicles. The stores also offer to build hydraulic hoses, something Steien believes any hardware business should offer, especially if it serves a rural community like his do. “There’s no reason a store can’t build hydraulic hoses for farm equipment, and farmers break hoses on their equipment every day,” he says. “The trick is finding a need and supplying it. If your area doesn’t have a dedicated auto parts dealer, it can be a viable department in the hardware business.”

Root River Hardware has two locations in Minnesota, with both Chatfield and Preston locations offering auto parts as well as hardware.

September 2017 | HARDWARE RETAILING

By Hilary Welter, hwelter@nrha.org

What More Can Facebook Offer Your Business? Why You Need to Advertise on Facebook and How to Get Started

rab your smartphone, open the Facebook app and start scrolling. Within a few seconds, you’ll see multiple advertisements from companies you likely have some connection with. Maybe you visited their website recently. Or perhaps you searched Facebook or Google for the product or service the advertising company offers. Have you ever wondered what the impact would be for your business if customers saw your company’s ads on Facebook? Advertising on the world’s largest social media platform may seem intimidating, but in reality, it’s an easy-to-use tool for reaching your customers. The following information scratches the surface on why you should consider Facebook advertising for your business and the simple steps to get started.

HARDWARE RETAILING | September 2017

For more information and guidance on this topic, visit TheRedT.com/facebook-ad-tools. First, consider the reasons why Facebook advertising should be part of your marketing strategy.

People spend a lot of time on Facebook. As of March 2017, there are 1.3 billion active users on Facebook per day, according to Facebook Business, which is the arm of Facebook that helps companies use the social media platform for marketing. A 2016 study from Mediakix, an influencer marketing media agency, says the average person spends approximately 35 minutes on Facebook per day. The average time spent increases to 50 minutes if you include time spent on Instagram and Messenger, social media apps also owned by Facebook.

These platforms are where your current and future customers are hanging out, and to reach them, you need to be there, too.

5 Steps to Setting up a Facebook Campaign

Simple Facebook posts don’t cut it. If you’ve been tracking how many people engage with your company’s posts, you may realize it’s a very small percentage of people who are actually following your page. This is because simple posts on your company’s Facebook page don’t reach your customers as frequently because their feeds are full of paid content or advertisements. If you want your brand to be more visible on Facebook, it’s going to cost you. The good news is, ads can be affordable and effective.

Facebook offers some of the best advertising technology available. Dedicating a portion of your marketing budget to Facebook advertising can result in a high return on investment because, for a low dollar amount, you have the ability to serve high-quality ads to the audience of your choice. Additionally, Facebook offers several customization options to best highlight your business and product offerings. Unlike other forms of advertising, Facebook allows you to select who sees each ad, choose from a variety of different ad types and even advertise across multiple social media platforms. Plus, its user-friendly interface makes it simple to set up tailored campaigns, allowing you to position relevant, timely messages directly in front of your customers. Getting Started According to Facebook Business, there are a few questions you should ask yourself before creating a Facebook ad campaign. • What are you trying to achieve? Are you trying to grow the number of likes on your page, drive people to your e-commerce website or promote an in-store sale? • Who are you trying to reach? Do you want to engage with customers who visit your website, are you trying to get your brand in front of millennials or do you want to find new customers? • How much are you willing to spend? Consider what percentage of your marketing and advertising budget you’re willing to dedicate to Facebook ads. • Do you have a strong photo or video? You could repurpose what you’ve used for previous print or online ads, have a staff member take a photo in your store or design a graphic.

Once you’ve answered the initial questions, you’re ready to create your campaign at facebook.com/business/products/ads. Facebook Business breaks this down into five steps.

Choose your objective.

1 Your goal will determine the best type of ad for your business. Maybe you’re trying to collect email addresses for your newsletter, find new customers or spread the word about your annual sale. You can use Facebook to communicate that clearly and concisely.

Select your audience.

2 Do you want to target a certain age range or gender for a sales promotion? Facebook has options for that kind of targeting. You can also reach your current customers by uploading your email list. Or you can use information about your existing customers to target similar people on Facebook who may be interested in your business.

Decide where to run ads.

3 This is when you decide whether to run your ads on Facebook, Instagram, on partner apps or across all three. Additionally, you determine whether you want to run ads on devices like smartphones or tablets. Or you can let Facebook place your ads most effectively.

Set your budget.

4 Whether you want to spend only a dollar a day or hundreds each week, Facebook gives you total control over setting your budget. The platform will guide you on how to get the most exposure for your money. During this stage of setup, you also determine when your ad will run. You can set it to start immediately or schedule it strategically for certain dates around sales, events or holidays.

Pick a format.

5 This is where you and your team can really shine. Facebook offers versatile formats, allowing you to create an ad that best fits your objective. Your ad can be as simple or as complex as you wish. You can run a single photo to highlight a new store reset, an in-store event or a promotion, for example. You can choose a slideshow of photos and videos to promote new products or showcase your team completing a DIY project. Whatever your preferred format, Facebook’s ad platform allows you to preview your ad before launching the campaign.

September 2017 | HARDWARE RETAILING

How STRONG Is Your BRAND? By Whitney Daulton, wdaulton@nrha.org

HARDWARE RETAILING | September 2017

Build a Better Relationship With Your Customers by Strengthening Your Story

ave you ever heard of CrossFit®? With more than 7,000 gyms in the U.S. and 13,000 worldwide, you probably know at least one person who participates in this group-focused fitness method, which has attracted a massive following of loyal members and has become an official sport. These athletes, called CrossFitters, are very vocal about how workouts are challenging, effective and best completed as a group, so, even if you don’t belong to the CrossFit community,

you can quickly recognize that CrossFitters are loyal fans and cheerleaders for this brand. Every one of these 13,000 gyms, or boxes according to CrossFit terminology, is unique. The staff at each box is licensed to train members using the CrossFit method, but that’s where the similarities end. Boxes are independently owned and run by different people in different towns with different customers, giving these businesses an opportunity to brand themselves to fit in with their communities.

September 2017 | HARDWARE RETAILING

As an independent home improvement retailer, there are a few lessons you can take away from CrossFit boxes. First, when people have a positive experience with your business, they become a loyal fan and will happily tell stories about their experiences to others. Second, even though the overall method and business model of each box is the same, they are all unique, which increases their brand loyalty with customers. If you operate under a co-op, this concept is likely very familiar to you. While your co-op is part of your identity, having a brand that’s completely unique to your business is important to create loyal customers. “Brand” has become a word that means something different to everyone. What does it mean to have a brand? For some retailers, it means a store logo and a Facebook page. Others may take advantage of their wholesaler’s branding efforts. Both can be part of the equation, but building a strong brand for your business is about creating a story and an experience your customers want to engage with. On the following pages, Hardware Retailing breaks down the fundamentals of establishing a brand and how the concept has changed. We also discuss why building relationships is a vital part of having a strong brand. Finally, we’ll help you define and design a brand that makes sense for your business.

The Inception of CrossFit CrossFit was an answer to a problem its creator saw in the fitness industry. Founder Greg Glassman wanted to find a better way to conduct training and exercise, which were sometimes considered ineffective, incorrect and even dangerous. His unique approach was built on concepts found in gymnastics, powerlifting, calisthenics and competitiveness. He coined the term WOD (Workout of the Day), which takes a group of people through a workout based on time or how many repetitions athletes can get through, which adds a competitive edge. After CrossFit was born, Glassman offered it to those who wanted to learn this training method and effectively train others. The brand strategy is unconventional, but simple. WODs are posted for free on the CrossFit website, making it widely available for anyone to try. The majority of the revenue comes from licensing fees all affiliates pay to run a CrossFit box and from seminars that better explain and teach the CrossFit method and philosophy. Glassman protects the CrossFit brand at all costs. He’s turned down multiple offers to get involved in other healthy lifestyle products because he believes CrossFit is purely about its specific training style, and Glassman wants to keep it that way.

HARDWARE RETAILING | September 2017

What is a brand? • A brand is part object. According to the American Marketing Association, a brand is a “name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers.” With this description in mind, a brand is a concept that is applied to a company’s product or service. For example, the CrossFit brand is identified by its fitness method’s unique name, and at Starbucks, the brand is the logo you see on every cup. • A brand is part experience. Beyond its basic definition, branding started to expand from being object-based to encompassing an entire customer experience. At CrossFit, members don’t come in and individually hit the treadmill or weights like a regular gym. Instead, they are actively engaged with others as they workout with a trainer and a team, and there is a corresponding lesson with the day’s workout. All of these elements have become part of the CrossFit brand. At Starbucks, customers are not only drawn to the coffee and treats the retailer serves, but also to the casual atmosphere which encourages relaxing in an arm chair and reading a book while sipping a $7 latte. • A brand is part relationship. Today, elements of a strong brand are moving beyond customer experience to something deeper. What was previously only a transactional relationship between a brand and a customer has become an emotional tie. CrossFit boxes aren’t just gyms offering memberships. The space supports a coach and athlete relationship, where the customer feels an emotional connection and loyalty to the business. Each box uses the CrossFit method, but also serves as a gathering place for people who share the same core values. CrossFitters aren’t just exercising; they are building relationships with other customers, the business and the brand all at once. The Starbucks brand has achieved a similar status. Instead of speedy transactions similar to what a customer might receive at a fast-food restaurant, purchasing a coffee at Starbucks comes with a social and emotional element. Loyal customers who start every day at their local Starbucks likely have developed relationships with baristas. And on any given day, you’re likely to find book clubs and business meetings in the cafe because Starbucks has positioned itself as a dependable community hub. The experiences customers have at a CrossFit box or Starbucks reflect each business’s unique core values, mission and promises the companies make that customers can buy into.

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Why should you build your brand as a relationship? As an independent home improvement retailer, you can build stronger relationships with customers by concentrating on your core values, which are ultimately what make you different from your competitors. Here are a few elements to consider when developing your brand. • Truly put your customers first. Even though you can’t ignore the bottom line, try to focus initially on your customers and their impressions of your business. If you can create a positive and consistent experience for your customers with all aspects of your brand in mind, including your store, website and staff, you will ultimately see more customer loyalty resulting in additional revenue for your business. • Don’t go overboard. There is something to be said about keeping things simple. Creating a better customer experience with your brand doesn’t mean you should host more events, add a coffee bar, popcorn machine and a Mexican restaurant to your business. It’s better to be great at one thing than average at many things. Determine what you do exceptionally well and build your brand message around it.

• Stick to your mission. CrossFit’s two main sources of revenue are core to their mission: education and licensing fees. The company runs thousands of seminars each year at local boxes, and future box owners or trainers can be certified to teach the CrossFit method. While it may seem that adding supplements and other healthy lifestyle products to the brand could be profitable, founder Greg Glassman turned down these opportunities to keep the core mission of the brand intact.

How can you start building your brand? Now that we have introduced the elements that make up a strong brand and how recognizable companies maintain theirs, it’s time to develop your own plans to build a stronger brand. Complete the exercises on the following pages to help develop the basics for your brand. These exercises can be completed with your staff, your customers and your community. After all, they are all crucial to your brand. On the next few pages, discover a list of questions that can help you develop your brand mission, dive into the specific elements that make up a brand and finally read a few tips to strengthen your relationship with customers.

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HARDWARE RETAILING | September 2017

EXERCISE 1: How Do You DEFINE Your Brand? After learning more about how a strong brand can help set your business apart, it’s time to plan how you can get started. Consider some of these questions when determining what story you want your brand to tell.

Why did you start the company? Why do you exist? It’s probably something you know, but do your employees or customers know?

How did you start? Share your company history. In addition to thinking about why you started, consider how you began.

What are your failures and successes? When you are thinking about your brand, it’s important to list your strengths and weaknesses, your wins and losses.

Who are key players in your company? People know and trust other people. Tell the story of your staff or family who play an important role in the business.

What’s your mission as a company? You probably didn’t get into the business to sell products. Why are you passionate about your company?

How are you growing? Your operation probably isn’t sitting still. Explain all the different ways your business has grown and its plans for the future. Source: Content Marketing Institute

September 2017 | HARDWARE RETAILING

EXERCISE 2: How Do You SHOW Your Brand? As you begin to develop your brand’s story, it’s important to look at all of the physical elements—your interior and exterior store signage, logos and other visual messaging—that convey your company to your customers and the community.

Voice. If your brand were a person, what would they say? How would they say it? Your tone and voice should be consistent in all of your marketing.

Fonts. A good rule of thumb when creating consistency is to pick two to three fonts: a sans serif font, a serif font and a font that adds uniqueness.

Motto. Once you’ve considered the values that make your business unique, create a short sentence or phrase that you and your staff can follow every day.

Colors. Choose a few colors to use as part of your branding. In addition to your logo, use these colors on all of your promotional and marketing materials.

Imagery/Style. Be consistent across your marketing and branding materials. If you study any strong brand, you’ll notice their imagery follows a certain look and feel.

Logo. This is the most visible part of your business, and you put it on everything. Keep it simple so it can be applied to things like signage, apparel, emails and stationery.

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HARDWARE RETAILING | September 2017

EXERCISE 3: How Do You BUILD Relationships? Once you have defined and designed your brand, use these additional tips to strengthen your branding efforts and better connect with your customers. Involve Your Employees Talk to your staff about your established brand messaging and strategy. Your employees are the face of your business, and it will be up to them to deliver your company’s brand to customers. If your motto involves treating customers like family, train your staff to reflect that in their conversations and connections with customers. If you are trying to position yourself as a family-friendly establishment, but your employees are grouchy and don’t like to interact with children, customers’ experiences won’t live up to your brand promise.

Go the Extra Mile Many independent retailers will say customer service is what differentiates them from big-box competitors. Use every opportunity to prove it. If a customer purchases a new power tool or appliance, follow up with a phone call after a week to ask if they’re happy with their purchase. If a customer gives your business a bad review online, reach out directly to see what you can do to fix the situation. Reward customers with significant annual or semi-annual events, coupons or promotions to make them feel like they really matter to your business.

Create Loyalty What your customers say about your company will either enhance or destroy your branding efforts. If their in-store experience lives up to your company’s promise, your customers will speak favorably about your store in the community. Give them even more reasons to spread positive awareness about your business and increase their loyalty to your brand by offering perks and promotions. Give free t-shirts with the store logo to customers who spend a certain amount of money or offer a discount to customers who refer others to your loyalty program.

Insert Your Brand Into the Community You fill a specific need for your customers, unlike Crossfit and Starbucks, which are non-necessities that fit into their customers’ lifestyles and daily habits. Because of this, you may need to work a little harder at ingraining your brand into your community and customers’ lives in a way that makes them feel emotionally connected. Become a presence by sponsoring sports teams, having a booth at community events, participating in holiday parades, launching a local DIY club or anything else you think would be a good fit for your customer base and amplify your brand.

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NRHA Abroad Retail Happenings Outside North America

y name is Hilary Welter, and I just finished living out of a suitcase for 12 months. Over the past year, I had the opportunity to do some pretty amazing activities like riding a camel in Morocco, skydiving in Croatia and skiing in Switzerland. Throughout my travels, I also learned unique retail lessons and met impressive home improvement retailers across Europe. It started in July 2016, when I boarded a plane to Lisbon, Portugal, to begin my one-year journey with a program called Remote Year. Remote Year is a company that brings together groups of 50 to 80 professionals from industries like technology, marketing and retail to see the world during a year of professional and personal growth. I was selected to participate in the program’s sixth group of travelers. I spent one year living in and exploring a different city

HARDWARE RETAILING | September 2017

and country each month while working remotely full time for the North American Retail Hardware Association (NRHA). I worked out of co-working spaces, cafes, hotels and rental apartments. My job at NRHA is to let you know about the resources that are available to you as an NRHA member and to help create some of those tools. I do so by delivering content via social media, email, Hardware Retailing’s website and magazine. I also work with other NRHA staffers to create downloadable resources and relevant industry research studies. Throughout the year, Hardware Retailing published a handful of blog posts where I shared stories about home improvement stores I visited and reflected on my retail experiences in various cities. The following pages provide a snapshot of what I learned while traveling. To read the full posts and more blogs about retail across the world, visit TheRedT.com/nrha-abroad.

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September 2017 | HARDWARE RETAILING

Customer Service: A Worldwide Retail Trend

uring my travels, I stayed in a variety of settings and experienced life in countries where culture and daily routines differed from what I was used to in the Midwestern United States. Here are some things all independent retailers can learn from the retail environment overseas.

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Experiencing Customer Service in Portugal and Morocco Language and cultural differences are the two most important things to adapt to when traveling to a different country. Prior to embarking on Remote Year, I had a grand plan to do a self-guided tour and iPhone photoshoot of home improvement stores in each country I visit. Turns out, that’s not as easy as it sounds. The way things work in other countries is just, well, different. However, there was one aspect of the independent retailing channel that I’ve learned spans across borders—superior customer service. Lisbon, Portugal After an hour of Google searching for independent hardware stores in Lisbon, Portugal, I put on my walking shoes to visit two stores within a 30-minute walk of my apartment.

HARDWARE RETAILING | September 2017

When I arrived at store No. 1, I was quickly disappointed when I realized that it wasn’t open, despite the hours listed online. Lesson one: You can’t always trust the internet when it comes to information on small Portuguese businesses. So, I walked another 20 minutes to check out another hardware store. In Portugal, many people spoke English, so I confidently walked into the small store and asked the elderly gentleman at the counter if he was the owner. With a questioning look on his face, he began to speak in Portuguese and motioned for his wife, who also worked in the store, to come over. I realized quickly that they didn’t speak any English. So, I did my best to use makeshift sign language to ask if I could look around and take a few photos. This “conversation” ended in the store owner going back and forth to the back room attempting to find the product or products he thought I was asking for. After he tried several times to bring me a product, and I tried repeatedly to explain that I simply wanted to take a few pictures, the visit ended with the owners drawing me a map to the nearest camera store. As I exited the store, I felt discouraged by my lack of success in getting photos to share with retailers back home. But, even more so, I also felt overwhelmingly touched. It would have been easy for these store owners to shoo me away from their store. Instead, they took nearly 30 minutes out of their busy day and diligently tried to help me find what I was looking for, despite the language barrier. They refused to let me leave their store without providing me an answer to the question they thought I was asking. I take pride in my work for NRHA because I believe so greatly in the power of the independent industry and what a strong role independent business owners play in the lives of their customers and communities. It was amazing to see the personalities of the local businesses I know and love back home, echoed across the world. Rabat, Morocco In Rabat, Morocco, most of the locals did their shopping at the “Medina of Rabat,” which we referred to as “the Medina” for short. To read the continuation of this post, visit TheRedT.com/portugal-morocco.

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Learning From Each Other, Regardless of Where We’re From

pon arriving in a new place, I could always count on discovering a retail quirk unique to that specific city or country. The longer I stayed in each location, the more I understood how retail practices unfamiliar to me were so well suited for their communities, and how certain lessons from these businesses could be applied to North American stores.

Small Stores, Big Business “Oh, that bag of chips looks good. I think I’m in the mood for something salty. Maybe I should grab a water bottle, too.” If you’re doing impulse right, these are the same thoughts running through your customers’ minds while they’re waiting in line at the checkout counter of your store. In Sofia, Bulgaria, there are businesses that thrive on consumer impulses. These types of shops sell snacks, soda, alcohol, water and cigarettes,

and exist at busy intersections and on popular streets throughout the city as freestanding booths, among a row of retail establishments or underground with a small, drive-thru-like window facing the street. During my five-week stay in Sofia, I found myself at these little shops on more than one occasion. Once, I stopped to buy a snack on my way to a walking tour to hold me over until lunch because I thought I might get hungry. Another time, I was walking home from dinner with a friend who wanted a pack of cigarettes. And on yet another visit, I saw an interesting looking candy bar in the window and had to try it for myself. As a consumer, these stores annoyed me because I’m not the kind of person who stops at a store for a candy bar. But as a professional in the independent retail industry, I was intrigued by the way these retailers had mastered the art of running a successful small business in a city hub and tapping into impulse buying habits.

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They’re Conveniently Located When someone approaches one of these stores, it’s because they see something they want. All of the products offered at the business are clearly shown either through window displays or photos labeled with prices on the exterior of the shop. You can adopt this practice by keeping your window displays interesting. Maybe you display your top seasonal items to remind customers of things they may not realize they need. They’re Quick, Dependable and Well-Organized The customer experience at these shops is fast and painless. The customer approaches the counter and tells the employee working at the booth or shop exactly what they want. The worker grabs the item, then the customer pays cash and goes on their way in a matter of minutes. To read the continuation of this post and to see additional photos of the Bulgarian shops, visit TheRedT.com/sofia.

Sofia, Bulgari

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September 2017 | HARDWARE RETAILING

Stumbling Upon an Amsterdam Hardware Store Because I work for NRHA, I can’t help but feel excited when I come across a local home improvement store in a foreign city. In November, my family met me in Amsterdam to celebrate Thanksgiving. As we hurriedly walked down the stone streets lining the city canals in a rush to our afternoon tour, I spotted a hardware store called Gunters & Meuser. Understanding my connection to hardware stores, my family patiently waited as I walked in and gave myself a tour. While there are always staple departments and physical elements to every hardware store, the most exciting part is discovering what makes each unique. Gunters & Meuser’s unmissable quirk was its cool window displays. On each side of the store’s front door were large windows. In the right window was a display with antiques and hardware relics likely collected throughout the history of the business. Also in the window was a sign that read “190 Jaar,” or 190 years. To read the continuation of this post, visit TheRedT.com/amsterdam.

Netherland Amsterdam,

Handmade Merchandisers in Portugal As my traveling companions and I roamed the stone streets of LxFactory, a historical industrial complex full of artsy retailers and restaurants in Lisbon, Portugal, our tour guide said, “Check out this art supply shop.” Upon walking into the shop called Ponto das Artes, my eyes bounced around the room—paints, papers, easels, adhesives. I’m assuming this store would be any artist’s dream. But what truly captured my attention were the beautifully handmade wooden merchandisers displaying products within the modern space. Unfortunately, I do not speak Portuguese so there was a communication barrier between the salesclerk and me. However, with a little bit of makeshift sign language and Google Translate, I did manage to confirm that all displays were handmade by someone associated with the store. Wood Pallets Turned Mobile Displays In the center of the store stood two displays made of painted wood pallets with wheels. For read the continuation of this post and to see photos, visit TheRedT.com/portugal.

HARDWARE RETAILING | September 2017

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Store Visits in Europe: Takeaways From Leading Hardware Retailers

ne really wonderful aspect of NRHA is that our executive leadership team is connected to the home improvement industry on an international level. While in Europe, I was able to connect with a few of NRHA’s friends to learn about what the industry is like on the other side of the pond. In January, I traveled to Stockholm, Sweden, and Aix-en-Provence, France, to meet with store owners and industry professionals.

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Innovative Thinking at Quincaillerie Aixoise What does it take to be the largest, most successful retailer in Southern France? I visited Quincaillerie Aixoise to find out. Quincaillerie Aixoise is a multistore operation headquartered in Aix-en-Provence, France, with five locations in Aix-en-Provence and the surrounding cities. The company’s primary clientele are professionals, with the occasional walk-in DIY customer. Owner and CEO Jean-Francois Dubost has grown the company from a one-store to a five-store operation and has achieved great success in his 20 years in the business. In that time, he’s also increased total sales from approximately $7 million to more than $36 million. He keeps his business ahead of the curve with his creativity, leadership and eye for business opportunities.

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I toured four Quincaillerie Aixoise locations during my visit and saw elements in each that stood out as contributors to the company’s success. Well-Executed Store-Within-a-Store Concept Inside the main 53,000-square-foot store, customers shopping for new drawer knobs, a drill and work boots will have a completely unique experience in each department. Dubost has made it a point to give several departments within the store a defined space with a unique store-within-a-store concept. Customers may feel as if they’re in a jewelry store while picking out a new door handle. As they walk into the next section of the store, they find several spaces dedicated to different power and hand tool brands. Look further, and they find themselves in what feels like a clothing and shoe boutique, complete with dressing rooms. The neat aspect about the store-within-a-store concept at Quincaillerie Aixose is that it makes wandering through the business fun for customers. Instead of walking down a few aisles to find the next item on the list, customers walk through a series of differently designed and merchandised rooms throughout their shopping experience. Is there a way you could improve customers’ experiences through new merchandising or layout improvements? Filling a Hole in the Market With Textiles In addition to offering the main categories available in most hardware stores, Dubost recently started offering a unique niche: textiles. Dubost worked with several clients in the restaurant and health care industries and realized that he could become their main supplier for uniforms and workwear in addition to providing them with their hardware and building materials. He quickly became the No. 1 seller of textiles in the area and continues to hold that distinction. The operation offers a range of technical services to building professionals and local petrochemical and steel companies. Additionally, Dubost sells textiles to health care clients including hospitals, clinics and doctors’ and dentists’ offices. Other clients include hotels, restaurants and chefs. How do you fulfill your customers’ unique needs? To read the continuation of this post and see photos, visit TheRedT.com/france.

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Lessons From Swedish Retailers When I was living in Valencia, Spain, with Remote Year, I visited Byggmaterialhandlarna, the association serving the home improvement industry in Sweden. During my time in Sweden, Göran Sundström, former retailer and president of the Swedish Hardware Heritage Association, showed me around several independent hardware stores, each with something different to share.

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Store Signage at XL-BYGG XL-BYGG has nearly 100 store locations across Sweden that cater to professional and DIY customers. In addition to a wide range of products, XL-BYGG offers many services, and the company makes sure customers are aware of what it sells. In the front foyer of the Vasteras, Sweden, store, customers see a floor-to-ceiling list of the services offered. As soon as they walk in, customers know exactly what the store offers that big-box retailers may not.

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Does your store offer services that your customers need to know about? Use simple, clear signage to let them know. New Products Display at Flinks Jarn Flinks Jarn is a business-to-business home improvement company with five store locations throughout Sweden. The location I visited maintains a display in the center of the salesfloor featuring the latest items so customers always know what’s new. This display is consistently updated, and customers know to look there for current and interesting products. Are customers missing out on what’s new in your store? Consider dedicating an endcap or some easy-to-find shelf space to new products. Extra Parks at Fredells Byggvaruhus In business since 1903, Fredells is an independent retail giant that provides its customers with building materials and construction services.

Fredells knows that when customers are in the store for an extended amount of time, it’s important to make them feel as comfortable as possible. In order to do that, the company offers a kids’ corner with games, toys and a television. While you may not have the space to dedicate an entire room, you can offer entertainment for youngsters in other ways by providing coloring books or games. Fredells takes an extra step to please customers by offering an in-store restaurant. This allows customers to relax and grab a bite after shopping, and it also encourages restaurant patrons to explore the store after their meals. While opening a restaurant may not be feasible for most retailers, all store owners can make customers’ experiences a little more comfortable by offering snacks, such as popcorn, or beverages like coffee and water. To see additional photos of Swedish independent hardware stores, visit TheRedT.com/sweden.

September 2017 | HARDWARE RETAILING

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Newsmakers Upcoming Events September 3-5 Spoga+Gafa Cologne, Germany

8-10 Horizon Distribution Annual Conference & Trade Show Yakima, Washington

8-10 HDW 2017 Fall Dealer Market Shreveport, Louisiana

15-16

PRO Group Recognizes Outstanding Retailers

usiness acumen, creativity, innovation, passion and service are just a few words that could be used to describe three home improvement businesses recognized by Denver-based PRO Group this year. For achieving retail success and upholding the principles and ideals of effective hardware retailing, PRO Group awarded its annual Paul L. Cosgrave Memorial Award, which is named after PRO Hardware founder Paul L. Cosgrave, to Yates Home PRO. PRO Group also recognized BDK Feed & Supply and PRO Hardware as the 2017 Paul L. Cosgrave Memorial Award Finalist. Additionally, both companies and Grandview Lumber PRO Home Center were named 2016 PRO Retailers of the Year. “These three companies represent the best of PRO dealers,” says Shari Kalbach, vice president of PRO Group. “In selecting the winners, we consider sales, operations, management, merchandising, PRO identification and more, and these retailers are at the top in those areas. We’re proud of these businesses and are so pleased to honor them this year.”

Blish-Mize Fall Buying Market Overland Park, Kansas

PRO Hardware Retailer of the Year

21-23

Grandview Lumber PRO Home Center in Grandview, Washington, is the 2016 PRO Hardware Retailer of the Year for Horizon Distribution Inc. “Grandview Lumber was awarded 2016 PRO Hardware Retailer of the Year because they are an outstanding supporter of all PRO Group programs,” says Mike Dawson, sales manager for Horizon Distribution. “They continuously show strong sales and growth, and they are dedicated to serving their community.” The store prides itself on being able to provide supplies for any kind of building project. Grandview Lumber is considered the strongest source for lumber and building materials in its area and is also known for its robust paint department. Owner Cliff Lewis has built an operation supporting local contractors and serious DIY customers. In 2016, the company proved its commitment to the community by building and opening a brand new facility. Lewis and his staff look forward to serving Grandview for years to come.

The Bostwick-Braun Co. 2017 Fall Dealer Market Toledo, Ohio

23-26 Home Hardware Fall Dealer Market St. Jacobs, Ontario

25-27 True Value Fall Reunion Chicago

Grandview Lumber PRO Home Center Grandview, Washington

October 11-13 Wallace Hardware Co., Inc., Fall Dealer Market Pigeon Forge, Tennessee

13-16 Do it Best Fall Market Indianapolis 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.

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HARDWARE RETAILING | September 2017

Owner Cliff Lewis stands outside Grandview Lumber PRO Home Center in Grandview, Washington. His store is the largest supplier for lumber and building materials in his area.

Paul L. Cosgrave Memorial Award Winner and PRO Hardware Retailer of the Year Yates Home PRO Tellico Plains, Tennessee What do you get when you mix a full line of products, superior customer service and strong community ties? Yates Home PRO. In 2011, Overia Yates Russell and her husband J.R. took over her family’s business. Proud to offer the same one-stop shop service Russell’s father began in 1967, the Russells have positioned Yates Home PRO as a top home improvement business in its marketplace today. They attribute a great deal of their success to their relationship with and loyalty to PRO Group and Wallace Hardware Co., which began at Yates Home PRO’s inception. “As a family-owned and -oriented business, we are proud to provide services and products to our community, including a full line of hardware, clothing, hunting and sporting goods, automotive supplies and much more,” Overia Russell says. “We take customer service very seriously. At Yates, we not only strive to achieve customer satisfaction, we guarantee it.” With several big-box competitors nearby, Yates Home PRO goes above and beyond to win customers’ loyalty. All employees complete extensive online product knowledge training through the North American Retail Hardware Association (NRHA) and are conditioned to always welcome customers with a smile and greet them by name whenever possible. “The most unique aspect about Yates is its personality and how closely knit it is to the community it serves,” says Richard Snowden, senior vice president of marketing for Wallace Hardware Co. “Customers are viewed as friends and treated with respect at Yates. The company has been serving its market for 50 years.” The company strengthens its bond with customers by treating them to annual events like customer appreciation days with food and entertainment and Santa visits during the holidays. Yates Home PRO proved its dedication even more by installing a hitching post and watering station for

Mennonite customers’ horses and installing a pay phone on store property for their use. In addition to home improvement needs, the Tellico Plains community counts on Yates for niche products such as camping gear, fishing equipment, guns, knives and pool supplies. Other categories offered include housewares, home appliances, lumber supplies and all materials needed to complete an interior remodel. The community also counts on Yates Home PRO for services like key cutting, tire installation and custom paint mixing. To keep customers informed, Yates Home PRO uses marketing tools, including circulars, monthly promotions, mobile texting specials and a variety of other advertising methods. The company further supports its community by sponsoring local sports teams, fire and police departments, colleges and other civic organizations.

Top: J.R. and Overia Yates pose with their daughter Samantha (far left). The family business motto is, “From Our Home to Yours With Quality Since 1967.” Bottom: A current photo of Yates Home PRO after many expansions, warehouse additions and a rebuild.

September 2017 | HARDWARE RETAILING

105

Newsmakers

Left: Owner Darrell Kingsland (middle) stands with his sons Jason (left) and Eric Kingsland (right) at the service desk of the family business. Right: BDK Feed & Supply is located in Blanchester, Ohio, and serves customers’ pet, livestock and home improvement needs.

Paul L. Cosgrave Memorial Award Finalist and PRO Hardware Retailer of the Year BDK Feed & Supply and PRO Hardware Blanchester, Ohio A favorite among pets, livestock and two-legged customers alike, BDK Feed & Supply and PRO Hardware has developed strong ties to its community by continually meeting customer needs and supporting its town in countless ways. When it comes to pets and livestock or home improvement, the staff at the 10,000-square-foot store is ready to provide Blanchester residents with whatever products they need and is committed to delivering top-notch service. “For BDK, the customer always comes first,” says Ben Obee, sales representative for The Bostwick-Braun Co. “It’s a very hands-on store that’s deeply involved in the community. Whenever a customer comes in with questions about a project, they’ll research what the customer needs.” Owner Darrell Kingsland makes sure his team is able to provide customer service by holding weekly meetings with his staff and setting weekly goals. Additionally, several times per year, he hosts an extensive meeting where the staff reviews

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HARDWARE RETAILING | September 2017

new products, discusses the upcoming season and makes merchandising decisions. For Kingsland, it’s important that BDK Feed & Supply is always clear, easy to shop and attractive to customers. He rotates endcaps monthly based on seasonal needs and sales trends. For example, in the spring, the store sells 1,500 to 2,000 chickens. During that season, endcaps house products for feeding and caring for chicks. “What’s impressive is that Darrell is always looking to grow, but he never bites off more than he can chew,” says Damian Nicholson, regional sales manager for The Bostwick-Braun Co. “Darrell has always responded to what the community needs and has grown steadily based on those demands.” Kingsland knows his DIY and professional customers well and is always looking to grow his inventory. He always considers customer requests and typically introduces 30 to 50 new items each week. The store also gives back to its community. It sponsors scholarships for high school students and contributes to fundraising efforts for local high school sports teams, 4-H students, Boy and Girl Scout troops and more.

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.

2017 Paul L. Cosgrave Memorial Award Winner ATING

R CELEB

50RS!

YEA

Yates Home PRO

Tellico Plains, Tennessee J.R. & Overia Russell - Owners PRO Hardware Retailer of the Year PRO Distributor: Wallace Hardware Co.

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

PRO Hardware Retailer of the Year: Grandview Lumber & PRO Home Center

Blanchester, Ohio Darrell Kingsland Owner PRO Hardware Retailer of the Year PRO Distributor: The Bostwick-Braun 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

Grandview, Washington Cliﬀ Lewis - Owner PRO Distributor: Horizon Distribution, Inc.

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

Newsmakers True Value CEO Discusses Earnings, Sale Rumors

Exec: Ace Creates ‘Potent Combination’ With Big-Box Hires

In an exclusive interview with Hardware Retailing, True Value CEO John Hartmann talks about the co-op’s strategic plan. TheRedT.com/true-value-exclusive

Ace Hardware’s recent high-level hires came from three public companies that compete with Ace stores—an advantage, according to the co-op. TheRedT.com/big-box-hires

Ace to Open Customer Care Center in Florida Ace Hardware Corp. will open a customer care center in Florida as part of its three-year strategic plan to grow and transform its customer care division. TheRedT.com/ace-customer-care

Sears to Sell Smart Appliances on Amazon Sears announced it would begin selling Kenmore appliances on Amazon featuring Amazon’s smart home assistant Alexa. TheRedT.com/sears-amazon

Home Depot Buys Power Equipment Company for $265M The Home Depot announced an agreement to purchase Compact Power Equipment Inc., a national provider of equipment rental and maintenance services, for $265 million. TheRedT.com/home-depot-power

Department of Labor Reconsiders Overtime Pay Increase The Department of Labor is requesting feedback from the Office of Management and Budget on a

proposed policy that would make millions more Americans eligible for overtime pay. TheRedT.com/overtime-pay

Amazon Builds Up Commercial, Industrial Sales Amazon has invaded the commercial and industrial marketplace where many independent home improvement businesses and industrial suppliers, such as Grainger, excel. TheRedT.com/amazon-business

Fred Whyte, Former President of STIHL Inc., Dies at 70 Fred Whyte, power tool icon and former president of STIHL Inc., died on July 7 surrounded by family and friends at his home in Virginia Beach, Virginia. He was 70 years old. TheRedT.com/fred-whyte

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

House-Hasson Hardware Company ........................ 49 www.househasson.com; 800-333-0520

Phifer Inc. ................................................................ 11 www.phifer.com; 800-841-9473

Allway Tools .............................................................. 3 www.allwaytools.com; 800-422-5592

Howard Products..................................................... 32 www.howardproducts.com; 800-266-9545

PRO Hardware ...................................................... 107 www.prohardware.com; 303-792-3000

Amteco/TWP. .......................................................... 41 www.amteco.com; 800-969-4811

HSI........................................................................ 15 www.hardwaresuppliers.com; 800-334-5625

Quikrete..................................................................... 3 www.quikrete.com; 404-634-9100

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

Hy-Ko ..................................................................... 103 www.hy-ko.com; 800-896-7890

Red Devil ................................................................. 59 www.reddevil.com; 800-423-3845

Benjamin Moore..................................................... BC www.benjaminmoore.com; 855-724-6802

IPG........................................................................... 90 www.itape.com; 888-898-7834

Rust Patrol ............................................................ 47 www.rustpatrol.com; 713-400-3100

Big Green Egg ......................................................... 99 www.biggreenegg.com; 800-793-2292

Jeske Company Inc. ................................................ 80 www.jeskecompany.com; 800-677-3383

Safety Works Inc. .................................................... 95 www.safetyworks.com; 800-969-7562

Bonide ..................................................................... 77 www.bonide.com; 315-736-8231

Legacy ..................................................................... 91 www.flexzilla.com; 800-645-8258

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

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

Lifetime ..................................................................... 7 www.lifetime.com; 800-424-3865

Sears Hometown Hardware.................................. 40 www.ownasearsstore.com

Cole’s Wild Bird .................................................... 39 www.coleswildbird.com; 877-426-8882

Lincoln Products................................................. 42-43 www.lincolnproducts.com; 844-223-4770

Simon Rack........................................................... 97 www.simonrackusa.com; +1 585 5687904

Compass Minerals ................................................ 17 www.safestepmelters.com; 913-344-9216

Magna Industries Inc............................................... 65 www.magna-insto.com; 800-969-3334

SKM Industries Inc. ............................................ 102 www.skmproducts.com; 800-851-8464

DAP....................................................................... 18 www.touch-n-foam.com; 800-325-6180

Master Magnetics Inc. .......................................... 68 www.magnetsource.com; 888-293-9190

Starrett.................................................................. 78 www.starrett.com; 888-674-7443

Do it Best Corp. ............................................... 12-13 www.independentsdoitbest.com; 888-364-8237

Metaltech Scaffolding ........................................... 19 www.metaltech.co; 800-363-7587

Strybuc Industries................................................. 29 www.strybuc.com; 800-352-0800

Dutton-Lainson Company.................................... 109 www.dutton-lainson.com; 402-462-4141

Midwest Fastener............................................ 34-35 www.fastenerconnection.com; 800-444-7313

Sun Gro Horticulture ............................................. 26 www.sungro.com; 800-732-8667

ECI RockSolid ......................................................... 9 www.ecirocksolid.com; 800-588-5128

Mr. Longarm............................................................ 30 www.mrlongarm.com; 800-821-3508

Sunnyside Corporation ............................................ 88 www.sunnysidecorp.com; 800-323-8611

Fiskars Brands Inc................................................. 65 www.fiskars.com; 866-348-5661

MTD Products Inc............................................................ 73 www.troybilt.com; 800-828-5500

True Value....................................................... 23, 67 www.truevaluecompany.com; 888-291-7229

Flair-It.................................................................... 79 www.flairit.com; 800-842-2543

NRHA Membership.................................................101 www.nrha.org/membership

TRUSOLV a Div. of The Plastics Group Inc. .................... 81 www.trusolvproducts.com; 888-449-3326

Flame Engineering ................................................ 89 www.reddragontorch.com; 800-255-2469

NRHA State of Independence Conference.................. 111 www.SOIC.EVENTBRITE.com

UGL ......................................................................... 21 www.ugl.com; 800-845-5227

Franmar................................................................. 96 www.franmar.com; 800-538-5069

Old Masters .......................................................... 69 www.myoldmasters.com; 800-747-3436

U.S. Wire & Cable Corp. ....................................... 53 www.uswireandcable.com; 800-327-4673

Hardware Retailing Newsletter...............................102 www.hardwareretailing.com/subscribe

Oneida Air Systems .............................................. 27 www.routerhood.com; 800-732-4065

Wallace Hardware Co.............................................. 87 www.wallacehardware.com; 800-776-0976

Hero Products Group ............................................ 76 www.hero.ca; 604-522-6543

Onward Mfg. Co. .................................................. 37 www.omcbbq.com; 800-265-2150

Wastequip ............................................................... 31 www.toter.com; 800-424-0422

Hestra JOB.............................................................. 33 www.hestrajobusa.com; 888-939-9969

Orgill Inc. ......................................................112-IBC www.orgill.com; 800-347-2860

Wooster Brush Company ........................................ 57 www.woosterbrush.com; 800-392-7246

Hillman..................................................................... 63 www.hillmangroup.com; 800-800-4900

Paladin Data Corporation ......................................... 55 www.paladinpointofsale.com; 541-803-6060

Yardmax................................................................... 20 www.yardmax.com; 877-YARDMAX

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

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House-Hasson Market Brings in New Vendors, Younger Faces The House-Hasson Summer Dealer Market drew new vendors and younger retailers. TheRedT.com/house-hasson-market

Lowe’s Launches DIY Home Improvement Training Program Lowe’s launched a program called The UpSkill Project that has employees train consumers on DIY project skills. TheRedT.com/lowes-diy

CANADA Kent Recognized for Its Business Practices Kent Building Supplies has been named a Champion for Change by the not-for-profit Adventure Group

in recognition of business practices supporting the advancement of Prince Edward Island women in the workplace. The honor comes at the conclusion of a three-year project partially funded by Status of Women Canada.

Fastway Group to Purchase North American Lumber

Customer Product Testing to Enhance Online Reviews

Jim Caldwell Departs Lowe’s Canada, Reno-Depot’s Guy Beaumier Steps In

Mill Street & Co., a Toronto-based diversified investment company, entered into a purchase agreement to acquire the business operations of Winnipeg-based North American Lumber Ltd.

Canadian Tire commissioned a survey showing online ratings and reviews influence 80 percent of Canadian consumers’ purchasing decisions. That same percentage is also looking for truthful product reviews written by real people. This research supports a big investment by Canadian Tire in its “Tested for Life in Canada” program, which uses a sample of customers across the country who try out new products at home and give feedback on them.

Jim Caldwell, executive vice president of the Lowe’s big-box business for Lowe’s Canada, left the company. In his place, Lowe’s Canada has appointed Guy Beaumier, executive vice president for the retailer’s Reno-Depot and procontractor businesses, as interim head of the Lowe’s brand. Caldwell helped convert certain RONA big boxes to the Lowe’s Canada banner. For the full story of each of these briefs, visit hardlines.ca/hardwareretailing.

What’s more dependable ® than products?

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Fuel Tank Filers

Ag-Industrial Jacks

Fence Stretchers

...Our commitment to helping you increase proﬁts! For outstanding value and performance, dependable D-L products can’t be beat. We don’t stop here. Dutton-Lainson Company has sales and merchandising programs to increase proﬁts – including competitive pricing, attractive margins, smart packaging and more.

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Dependable Products for Over a Century September 2017 | HARDWARE RETAILING

109

Last Word

Retail Stories, Advice and a Chance Encounter With Amazon

s a successful independent retailer and the North American Retail Hardware Association’s (NRHA) chairman of the board, Megan Menzer is a busy person. She values time with family, at church and helping other retailers through her work with NRHA. Hardware Retailing sat down with Menzer to learn more about her, from funny retail stories to turning down an offer to work for Amazon founder, Jeff Bezos. Read this Q&A for a few highlights from Menzer. To learn Menzer’s backstory, flip to Page 60 in the magazine to read the feature on her role with the association, her history and more. Hardware Retailing (HR): What’s the weirdest product you never thought you’d have success selling? Megan Menzer (MM): The weirdest product we’ve done well with was lingerie! We have a gift store, so I’m always looking for unique and different products. Camouflage is huge in our area, and I found camouflage lingerie. I had a Valentine’s Day window display. People were stopping traffic looking at it. The lingerie sold out. HR: Is it true you almost worked for Amazon? How do you think retailers can compete with them now? MM: In 1998, Amazon opened a distribution center in our area. I went through the whole interview process, and they called me into the office. They asked me if I was interested in being Jeff Bezos’ personal assistant. At that time, being 21 and not really understanding the extent of an assistant, I told them no. Nobody knew Amazon back then. But as a retailer going up against Amazon today, it’s tough. As retailers, we don’t want to share what we do because we don’t want to brag. But we need to start doing that. All the money spent in the community can’t continue if customers shop online or with big boxes. It ends that support. HR: What has it been like as a female leader in a male-dominated industry? MM: I get asked that question a lot, and it’s funny because I never thought of myself as a woman in a man’s world until the first person who asked me that. My situation is a little different because my great-grandmother started our business. Our store has always had more women than men. For women in the industry, I say don’t be afraid, educate yourselves and know what you’re talking about. You gain so much respect when you can join in on the conversation. Educate yourself and don’t be afraid to ask questions.

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What do customers expect online from retailers? The 2017 NRHA State of Independents Conference will address how technology is impacting the industry, and what it means to be an independent retailer in an Amazon world. Join us to hear current proprietary research on the topic.

Shelly Wagler A&R Supply Indiana

“I have a high amount of respect for Orgill. I love the fact that they strive to make us better, more competitive retailers. They’re a really good teammate.”

Good Teammates! Orgill Works With You to Make Your Business a Success!

Family First

Maximizing Your Profit

“Everyone from Orgill who has worked with A&R Supply

“Another big benefit from working with Orgill is access to

has shown us they care about our success and our people.

the many programs that help us run the business. From

Orgill has supported our business model ever since helping

Orgill’s Profitable Retail Enhancement Packages (PREP)

my dad get started when he branched out into hardware.”

to its Market Driven Retailing Studies, they help us stay informed about the market.”

Knowledgeable Distributor “Orgill understands our product needs at A&R Supply. Not

Customer Focus

only do they offer us an extensive range of hardware and

“As an Orgill customer, you will have complete

other products, they also help with many other aspects of

confidence knowing that Orgill is looking out for your

running the business.”

business’ best interests.”

When you join the Benjamin Moore retailer network, it’s your store, not a franchise. Which means no franchise fee, and 100% of your investment goes into your own store. Go to benjaminmoore.com/newdealers to learn more.