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Volume 226 • Issue 2 • February 2024 • hardwareretailing.com

Serving Hardware, Home Center & Building Material Retailers

Published by the North American Hardware and Paint Association

Service First New Board Chairman Ned Green Shares His Vision Page 44

Build Your Defenses Against Retail Shrink Page 28

Cultivate Success in Lawn & Garden Page 52

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Volume 226 • Issue 2 • February 2024 • hardwareretailing.com

Serving Hardware, Home Center & Building Material Retailers

Published by the North American Hardware and Paint Association

Service First New Board Chairman Ned Green Shares His Vision Page 44

Build Your Defenses Against Retail Shrink Page 28

Cultivate Success in Lawn & Garden Page 52

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CONNECTIONS

EXECUTIVE STAFF PRESIDENT & CEO Bob Cutter CHIEF OPERATING OFFICER & PUBLISHER Dan Tratensek CHIEF FINANCIAL OFFICER & EXECUTIVE VICE PRESIDENT, BUSINESS SERVICES David Gowan EXECUTIVE DIRECTOR, ADVANCED RETAIL EDUCATION PROGRAMS Scott Wright, swright@YourNHPA.org

1025 East 54th St. Indianapolis, Indiana 317-275-9400 NHPA@YourNHPA.org YourNHPA.org

EXECUTIVE DIRECTOR, MARKETING, SALES & PARTNERSHIPS Whitney Mancuso

CONTENT AND PRODUCTION OUR MISSION

The North American Hardware and Paint Association (NHPA) helps independent home improvement and paint and decorating retailers, regardless of affiliations, become better and more profitable retailers. NHPA BOARD OF DIRECTORS CHAIRMAN OF THE BOARD Ned Green, Weider’s Paint & Hardware, Rochester, New York EXECUTIVE VICE CHAIRMAN Scott Jerousek, Farm and Home Hardware, Wellington, Ohio DIRECTORS Alesia Anderson, Handy Ace Hardware, Tucker, Georgia Jay Donnelly, Flanagan Paint & Supply, Ellisville, Missouri Ash Ebbo, Clement’s Paint, Austin, Texas Joanne Lawrie, Annapolis Home Hardware Building Centre, Annapolis Royal, Nova Scotia Michelle Meny, Meny’s True Value, Jasper, Indiana Michael Sacks, FLC Holdings, LaGrange, Texas SECRETARY-TREASURER Bob Cutter, NHPA President and CEO

STATE & REGIONAL ASSOCIATIONS MIDWEST HARDWARE ASSOCIATION Jody Kohl, 201 Frontenac Ave., P.O. Box 8033 Stevens Point, WI 54481-8033 800-888-1817; Fax: 715-341-4080

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

CIRCULATION, SUBSCRIPTION & LIST RENTAL INQUIRIES CIRCULATION DIRECTOR Richard Jarrett, 314-432-7511, Fax: 314-432-7665

HARDWARE RETAILING | February 2024

Season-Proofing Your Business For many retailers in the independent channel, the changing of seasons brings unique challenges and opportunities to capitalize on additional sales. Next month, Hardware Retailing uncovers best practices for navigating the ebb and flow of the seasons, especially when the weather doesn’t blow your way, and how you can protect your operation against the negative effects of wild weather. Hardware Retailing (ISSN0889-2989) is published monthly by the North American Hardware and Paint Association, 1025 East 54th St., Indianapolis, IN 46220. Subscription rates: Hardware Retailing (Payable in advance): U.S. & possessions $50/year. Canada $75/year. All other countries $110/year. Single copy $7. The Annual Report issue can be purchased for $30. Periodical postage paid at Indianapolis, Indiana, and additional mailing offices. POSTMASTER: Send address changes to Hardware Retailing, P.O. Box 16709, St. Louis, MO 63105-1209.

317-275-9400, editorial@YourNHPA.org SENIOR CONTENT MANAGER Lindsey Thompson, lthompson@YourNHPA.org RESEARCH & ENTERPRISE CONTENT MANAGER Melanie Moul, mmoul@YourNHPA.org CONTENT COORDINATOR Jacob Musselman, jmusselman@YourNHPA.org GRAPHIC DESIGNER Autumn Ricketts GRAPHIC DESIGNER Olivia Shroyer PRODUCTION MANAGER Austin Vance PRODUCTION & DESIGN ASSISTANT Samantha Mitchell SALES & PRODUCTION ASSISTANT Freda Creech SPECIAL PROJECTS MANAGER Julie Leinwand MARKETING COORDINATOR Nathan Piper

SALES NORTHERN REGIONAL SALES DIRECTOR Karen Hopkinson khopkinson@YourNHPA.org | 419-345-3306 SOUTHERN REGIONAL SALES DIRECTOR Faith Zucker faith.zucker@YourNHPA.org | 216-316-8203

ASSOCIATION PROGRAMS

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

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

800-772-4424, NHPA@YourNHPA.org

DIRECTOR OF ORGANIZATIONAL DEVELOPMENT & CONSULTING Kim Peffley, kpeffley@YourNHPA.org TRAINING MANAGER & EDITOR Jesse Carleton, jcarleton@YourNHPA.org RETAIL ENGAGEMENT SPECIALIST Renee Changnon, rchangnon@YourNHPA.org

Volume 226 | Issue 2 | February 2024 CONTENTS

04 EDITORIALLY SPEAKING 06 TAKING CARE OF BUSINESS 16

TRENDS

NEW PRODUCTS

58 NEWSMAKERS 60 CALENDAR 62 LAST WORD

INDUSTRY VOICES 08 BUSINESS STRATEGY Protecting Yourself From Loss Dave Gowan

RETAIL OPERATIONS Understanding the Roots of Loss Jim Close

COVER STORY

A Living Legacy Newly elected NHPA chairman of the board Ned Green shares insights into the future of the industry and how his experiences owning a century-old operation will guide his tenure as board chair.

OPERATIONS

INDUSTRY EVENTS

RETAIL INNOVATION Technology With a Human Touch Adam Gunnett

MARKETING MINUTE Feedback Leads to Growth Austin Diehl

ASK KIM Lessons in Leadership Kim Peffley

CATEGORY SPOTLIGHT

Stop the Loss

Come Together

Planting Seeds

Concerns around growing retail shrink—and shrinking bottom lines—have been making headlines. Taking stock of the vulnerabilities in your business is the first step to mitigating loss and protecting your operation.

See what you can expect at the 2024 National Hardware Show, the event that brings together members of the home improvement industry from all over the world to discover the latest products, innovations and trends shaping the industry.

The senior buyer for a 13-store hardware collective shares her best practices for staying educated, stocking popular items and keeping up-to-date on trending products in the lawn and garden category.

February 2024 | HARDWARE RETAILING

CONNECTIONS

EDITORIALLY SPEAKING

Send Jesse a Message jcarleton@YourNHPA.org

FROM THE EDITOR

Training, Not Triage

“If you defer training, you may find yourself triaging bigger problems later on.”

S E V E R A L Y E A R S A G O I bought a home some of you might call a fixer-upper, others might call a teardown and rebuild. The 120-year-old house had suffered decades of deferred maintenance and abandonment. Deciding what to fix first was like doing triage in the emergency room. Most of the problems, I’m sure, started out small, but after years of neglect they had grown into major issues. It took many, many trips to my local hardware store to make it a comfortable place to live. We all, no doubt, understand the importance of preventative maintenance. Running a successful business means being able to spot potential problems and fix them quickly. Yet very often when I hear retailers talk about employee training, they say something like, “I know I need to do it, I just don’t have time.” I propose that employee training doesn’t just help you sell more, it should be part of your preventative maintenance plan. If you defer training, you may find yourself triaging bigger problems later on. As a case in point, this month, starting on Page 28, we’re focusing on what might be one of your daily challenges, the pesky problem of retail shrink. We don’t suggest you can stop every criminal from stealing from you. But whatever the shrink situation at your business, any move you take to keep from losing money is time well spent. Employees, or rather, well-trained employees, can help. I can think of at least three reasons why. Good customer service is a shoplifting deterrent. If employees have the knowledge to help customers, they’re more likely to provide that service. Employees who understand operational processes like inventory are in a better position to help you stop paper shrink and other related losses. Employees who are engaged and feel like you’re investing in them through training are less likely to steal from you. NHPA offers training specific to loss prevention, and a well-rounded training program is even better. A complete program includes product knowledge, selling skills, retail operations, leadership development and much more. You can find every educational opportunity NHPA offers at YourNHPA.org/academy. Like a home, it takes a proactive mindset to maintain business. I encourage you to make training a priority this year. And when you’re ready, we’re ready to help.

Jesse Carleton Training Manager & Editor

HARDWARE RETAILING | February 2024

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CONNECTIONS

Send Dan a Message TAKING CARE OF BUSINESS

dant@YourNHPA.org Dan Tratensek

F R O M T H E PU B L I S H E R

Dare to be Different

“Much like so many of the self-help gurus who emerged during the disco era, a lot of what we are seeing now with retail self-help is smoke and mirrors.”

A S A C H I L D O F T H E ‘ 7 0 s , I grew up smack in the middle of the era flanked on one side by the counterculture movement of the ‘60s and on the other by the “greed is good” generation of the ‘80s. Aside from giving birth to inarguably the best music, movies and television of any generation (I’ll debate this with anyone), the ‘70s also saw the concept of “self-help” start to come into its own. Now, I’m not going to go on about the EST movement or self-actualization, but I do want to opine a bit on the concept of self-help as it relates to a phenomenon we are seeing in the retail world. There is a general trend for retailers of all types to push much of the responsibility for curating, selecting, picking, scanning and paying for products back onto the customer. Today, a customer’s in-store journey is likely to include researching, locating and purchasing the product by themselves. All of these innovations can empower the shopper to get in and out of the retail location as quickly as possible. They can also create efficiencies for the retailer by helping reduce headcount, speeding up or eliminating employee training and driving traffic. Here’s the problem. Much like so many of the self-help gurus who emerged during the disco era, a lot of what we are seeing now with retail self-help is smoke and mirrors. Sure, some customers want to have a contactless experience when they shop in-store, but oftentimes, this contactless experience can quickly turn frustrating when a shopper can’t find the right item or figure out how to work the scanner at the self-checkout. The retailer is still forced to employ people to help with the transactions, answer questions or troubleshoot the tech problems, but now there is also a frustrated customer. I think this concern is amplified for independent retailers who have typically professed to offer greater service, hands-on help and a generally more personalized experience. I’m not suggesting that independents should eschew technological advancements that can drive efficiencies for their operations. I am just pleading that you all look for ways to differentiate your operations from the trends we are seeing develop at larger retailers. As many large retail operations are buying into some of these self-help fads, there is an opportunity for you, as an independent. You can differentiate what you are doing by creating efficiencies with technologies like electronic shelf labels, digital signage and even self-checkout options, but by not abandoning your commitment to personalized service and product knowledge.

Dan M. Tratensek Chief Operating Officer & Publisher

HARDWARE RETAILING | February 2024

CipherLab® (P.O.S.) Ordering System Invoice Look-Up

Order Check-In/Tracking

Profit Reports

Payment System

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Coming soon in early 2024!

**Please talk to your salesperson for more information.** House-Hasson Hardware Company: Knoxville, TN | www.househasson.com

RESEARCH

The Industry’s Benchmarking Tool BUSINESS STRATEGY

Don’t miss your chance to access the industry’s key resource to benchmark your business. Buy your copy of the 2023 Cost of Doing Business Study at YourNHPA.org/codb.

E XPE RT I N S I G H T S

Meet Dave Before joining the North American Hardware and Paint Association (NHPA) over a decade ago, Dave owned and operated one of the largest Wendy’s restaurant chains in Indiana. His experiences as a small business operator inform his decisions and leadership strategies as chief financial officer and executive vice president of business services for NHPA. One key deliverable of his role today is leading the development of the annual Cost of Doing Business Study, a comprehensive benchmarking tool the association has been publishing for over 100 years.

CONNECT Email dgowan@YourNHPA.org LinkedIn Dave Gowan

Protecting Yourself From Loss

f you watch the national news on a regular basis, you’re more than likely to see a litany of coverage as it relates to retail theft and how it’s on the rise. While some experts are now disputing these stories, the NHPA 2023 Cost of Doing Business Study (CODB) has shown an actual reduction in shrink expense for home improvement retailers every year since 2018 (2.3%) before flattening in 2022 (1.6%). The increase in news coverage is likely the result of more brazen activity, as well as an increase in larger ticket items being stolen. Statistics from the National Retail Federation (NRF) show internal theft costs retailers roughly $50 billion annually, which accounts for nearly one-third of retail theft. External theft costs nearly double to $95 billion each year, according to NRF. We’re starting to see large retailers like Walmart considering removing self-checkout from states like Maine and Massachusetts after testing removing them at a handful of locations in New Mexico. This strategy is in response to data that suggests companies with self-checkout lanes have a loss rate of about 4%—twice the industry average. Retail shrinkage is such a hot topic and is so costly that NHPA updated its loss prevention series of courses in 2023. Let’s face it, there are steps you can take to prevent retail loss, and better employee training can be your best defense against issues that have a direct impact on the bottom line. NHPA’s Internal Theft Prevention course covers why employees steal, the financial impact of employee theft, methods of internal theft, how to confront various situations and most importantly, how to prevent employee theft. NHPA’s External Theft Prevention course will address how to recognize shoplifters, common shoplifting tactics, the most common categories shoplifted, how to deter shoplifting and how to confront a shoplifter. This course is a good reminder that the single most effective way to deter a shoplifter is to provide good customer service. Finally, NHPA’s Store Safety course assists retailers in creating a safer store environment by helping employees understand how to prevent accidents, what to do in emergency situations and how to report an accident. Since safety is everyone’s responsibility, this course is sure to help reduce costs related to insurance and workers comp claims. NHPA’s loss prevention courses are available for Premier Members. Reach out to us at nhpa@YourNHPA.org to determine your membership status so you can review these courses with your employees and take the necessary steps to prevent retail loss.

Dave Gowan

Chief Financial Officer and Executive Vice President, Business Services North American Hardware and Paint Association

HARDWARE RETAILING | February 2024

TRAINING

Loss Prevention Basics RETAIL OPERATIONS

Give your team the tools to protect your operation with NHPA Basic Training. Learn more at YourNHPA.org/academy or email us at nhpa@YourNHPA.org to determine your membership status.

E XPE RT I N S I G H T S

Meet Jim Jim Close is a loss prevention professional with 24 years of experience working with independent home improvement retailers. Prior to working in loss prevention, Jim was an investigator with a major metropolitan law enforcement agency. He also teaches loss prevention in NHPA’s Retail Management Certification Program, and he helped develop NHPA’s Loss Prevention online training program.

CONNECT Email jim@rmslp.com LinkedIn Jim Close

Understanding the Roots of Loss

’m sure you have all heard about recent trends that are driving record high shrinkage rates for retailers. I know many of you have felt the pain in your stores. The reality of the situation is that independents do not have the same resources available as a big box to combat shrink. You face the same challenges but your approach needs to be different and more cost effective. Since entering the loss prevention field in 2000, I have seen the financial impact of both internal and external theft change dramatically. In 2000, retailers reported losing $33 billion to shrink, based on the University of Florida National Retail Security Survey. In its annual Retail Security Survey, published in September 2023, the National Retail Federation (NRF) reported that retailers lost over $112 billion to shrink in 2022. For years, the largest driver in a store’s shrink number has been employee theft. Survey after survey reported that employees were responsible for losses at a higher rate than shoplifting. But for the past several years, shoplifting has outpaced employee theft. The 2022 NRF Retail Security Survey shows that shoplifting accounts for 37% of loss versus internal theft coming in at 28.5%. In 2010, shoplifting accounted for 33% and employee theft came in at 43%. One reason shoplifting is outpacing employee theft is the sharp rise in organized retail crime (ORC), which comprises two or more individuals shoplifting as a team. For years this type of shoplifter didn’t focus on independent home improvement retailers. This is no longer the case. More retailers are reporting ORC activity in their stores, ranging from brazen small groups entering stores and running out with merchandise to sophisticated counterfeit barcode schemes and refund scams. One possible reason for the increase is that the pandemic opened the door for people staying at home to supplement their incomes by shoplifting. As an independent home improvement retailer, your business was deemed essential, and since you were open for business while other retailers weren’t, the path for thieves led to your door. The other school of thought is that due to law enforcement departments needing to reallocate funds and local laws reducing the penalties for theft, retail crime has become a lower priority for police. I believe the answer falls somewhere in the middle. In future columns, I will take a deeper dive into shoplifting and ORC and discuss what techniques retailers find effective in deterring external losses and how you can implement them in your business to reduce losses to shoplifting.

Jim Close

Managing Partner Risk Management Services Loss Prevention

February 2024 | HARDWARE RETAILING

RESOURCES

Tech Smart RETAIL INNOVATION

Browse NHPA’s technology resources for best practices, insights, guides and more at YourNHPA.org/tools-and-guides/technology.

Meet Adam Adam Gunnett embarked on his journey with Busy Beaver Building Centers in 2015, starting as an IT specialist and holding the roles of director of IT and then director of IT & marketing, where he skillfully merged the technical aspects of IT with the creative demands of marketing. Most recently, Adam’s career trajectory took another turn as he was promoted to director of IT & business intelligence. In this latest role, he seamlessly integrates IT solutions with insightful business intelligence strategies, aiming to optimize both operational efficiency and market impact. Throughout his tenure with Busy Beaver, Adam has been pivotal in fostering a technology-driven environment. His unique approach ensures the company’s associates are equipped with cutting-edge tools, enabling them to focus on delivering legendary customer service while reducing the time spent on manual, repetitive tasks. This evolution in Adam’s career at Busy Beaver highlights his adaptability, technical prowess and visionary leadership in the ever-evolving landscape of IT and business intelligence.

CONNECT Email agunnett@busybeaver.com LinkedIn Adam Gunnett

R E TA I L E R I N S I G H T S

Technology With a Human Touch

t Busy Beaver Building Centers Inc. we’ve adopted a distinctive approach to retail technology, focusing not on reducing headcount and expenses but on empowering our employees to provide exceptional customer service. This philosophy sets us apart in an industry increasingly inclined towards automation—such as self-checkouts—which diminish the human touch. Our strategy uses technology to enhance our employees’ efficiency and engagement, ensuring the preservation of the invaluable human element in customer interactions. Central to our strategy is our partnership with 4R Systems for automated replenishment and forecast planning. Utilizing advanced analytics and machine learning, 4R proficiently manages our inventory, ensuring shelves are consistently stocked with the right items. This partnership allows our team to shift focus from inventory management to fostering vendor relationships and exploring innovative products. It helps secure favorable deals and brings new, exciting products to our customers, keeping us up to date with market trends and unique offerings. Badger Technologies’ autonomous robots have been a game changer in our stores. These robots efficiently patrol aisles, identifying out-of-stock items quickly and accurately. We often joke that these robots are handling the dirty work–those essential but mundane tasks that are crucial to our operation, yet not exactly the most sought-after jobs among our staff. These robots taking care of such tasks allow our team to focus on more engaging and customer-oriented aspects of our work. Implementing Pricer electronic shelf labels (ESLs) has transformed how we manage price changes, eliminating the need for manual updates per our store personnel. This innovation guarantees accurate and consistent pricing throughout our stores, greatly improving operational efficiency and bolstering customer trust. Additionally, the Instant Flash technology integrated within these ESLs has drastically reduced the time required to stock shelves and expedited the picking of online orders, streamlining both in-store processes and online order fulfillment. These technological implementations mark a strategic shift in how we conduct retail at Busy Beaver. By automating routine tasks, we empower our employees to excel in providing knowledgeable, friendly and exceptional customer service. While the trend in retail often leans towards reducing human interaction, we believe our associates are our most significant competitive advantage. Our use of retail technologies at Busy Beaver reflects our belief that technology should augment, not replace, the human element in customer service. By equipping ourselves with these advanced tools, we’re not only modernizing our operations but also reiterating our commitment to a customer-centric retail experience.

Adam Gunnett

Director of IT and Business Intelligence Busy Beaver Building Centers Inc.

HARDWARE RETAILING | February 2024

RESOURCES

Marketing That Works MARKETING MINUTE

Discover marketing insights and resources to get the word out about your operation at YourNHPA.org/marketing-guides.

R E TA I L E R I N S I G H T S

Meet Austin With an authentic and contagious enthusiasm and unrivaled data knowledge, Austin Diehl leads the team at Randy’s Do it Best Hardware as their director of retail operations. He was promoted to this position after serving as a store manager for nearly three years. Though the operation experienced a major store fire in 2022, Austin found ways to keep the employees staffed at other stores, lead the rebuild of the store in a new location and found efficient ways to operate the store.

CONNECT Email austin@randyshardware.com

Feedback Leads to Growth

ou did it! You jumped into the e-commerce world and built your own website. Or maybe you have a website you have spent the time and money to overhaul. Everything is great, except you aren’t seeing the expected web traffic. Recently, I was on a call being pitched a communication software when I was shocked to find out that even though we have a higher Google review score, a competitor could still show up first in the Google search ranking system based on the number of reviews they have. Even though your website could have all the keywords, be extremely user-friendly and be completely functional, people still may not find it due to a low Google search ranking. Google’s focus is to ensure that the first recommendation it makes to a user delivers what that user is looking for. There are many different factors that go into consideration when trying to lead Google users to the best result the first time. One of the factors is a combination of your overall review score, how many reviews you have and how often people write reviews for your business. Improving your search ranking can be a complicated process with many different roads you can travel down, but all great journeys begin with the first step. One thing you can do right now is to create a plan to increase your total number of reviews. Set a goal of how many new reviews you want to achieve by a specific date. Communicate these goals openly with team members, making sure to explain how consistently positive reviews drive customers to the website and can also drive them into the store. Create a sign you can post at the exits and registers that says, “Leave us a review on Google.” You can even add your website or social media accounts to the sign to help drive traffic to those channels. Once you start getting reviews, make sure to reply to them from your store’s account. Replying to both positive and negative reviews is also a factor in determining your search ranking. While at the NHPA Independents Conference last year I heard a statement that has stuck with me—feedback is a gift. Sure, some reviews are purely written from anger, but consumers have learned to see through those. Reviews can help us spot areas of opportunity we may have become blind to over time. If growth and improvement is the goal, increasing the number of reviews you consistently receive is a great place to start.

Austin Diehl

Director of Retail Operations Randy’s Do it Best Hardware

February 2024 | HARDWARE RETAILING

EDUCATION

Expand Your Leadership Potential ASK KIM

Grow as a leader through NHPA’s Retail Management Certification Program. Learn more at YourNHPA.org/rmcp.

Meet Kim Kim Peffley is the director of organizational development and consulting with the North American Hardware and Paint Association (NHPA). With 30 years of retail experience, her management and leadership knowledge enables her to offer professional training covering many aspects related to effectively leading a team in a home improvement retailing environment. Peffley leads retailers through comprehensive organizational change to improve internal communications and create stronger teams.

CONNECT Email kpeffley@YourNHPA.org LinkedIn Kim Peffley To submit a question to Kim, scan the QR code below

E XPE RT I N S I G H T S

Lessons in Leadership

e have two questions this month about leadership. Both questions are near and dear to my heart as I am passionate about leadership development and mentoring leaders. Being a leader is undeniably the most fulfilling aspect of my career.

What is the No. 1 quality you look for when promoting someone to a management position? —Ian Williams, Fresno Ag Hardware, Fresno, California In my experience, the No. 1 quality I look for in a management candidate is their willingness to learn new things. If a leader is willing to learn new things, they are mindful that they don’t know everything, which is true about all of us. Unfortunately, many people in leadership positions believe or act like they know everything, which can be detrimental to the business and the team they lead. If we pretend we know everything, it puts leadership on a pedestal that others won’t strive to achieve or worse, won’t connect with for support. Leaders who create a culture that values ongoing learning, fuels personal growth and humanizes leadership make that culture more relatable and less intimidating. Embracing a humble approach, acknowledging mistakes and showcasing how these experiences shape learning moments nurture authentic connections with the team. This genuine leadership style cultivates an environment where team members feel empowered to explore fresh ideas and evolve confidently. Ultimately, it establishes a leader as approachable, genuine and empathetic, fostering a team culture rooted in curiosity and progress. Sometimes, our employees become less engaged in the business. How do you re-engage these employees? —Dalton Meny, Meny’s True Value, southern Indiana Employee engagement is the heartbeat of a thriving workplace. When it dwindles, recognizing the individuality of each team member becomes essential to reigniting that spark. While standardized solutions might yield some success, they often fall short of addressing the diverse needs of your team. As leaders, our responsibility to those we lead goes beyond the surface; it requires a deep dive into understanding the distinct qualities of each team member. It is crucial to identify what motivates them, causes stress and the specific support they need. Direct, one-on-one interactions serve as a powerful means to uncover these insights. Investing time in these conversations reveals their engagement status and unveils the tools needed for their success. In our demanding schedules, allocating time to connect with our team members is a non-negotiable investment. Their satisfaction and engagement directly impact our collective success—they are the backbone of our achievements. As leaders, our commitment lies in understanding their individualities and delivering tailored support, creating an environment where each team member feels valued and empowered. What questions do you have? Email Kim at AskKim@YourNHPA.org.

Kim Peffley

Director of Organizational Development & Consulting North American Hardware and Paint Association

HARDWARE RETAILING | February 2024

PA R T N E R CO L U M N Sponsored by

s a long-time loss prevention vendor for the independent hardware industry, we have met thousands of hardware retailers who have shared their personal stories of loss due to both employee and customer theft. Unfortunately, many retailers don’t implement loss prevention solutions until after they experience loss. Fortunately, there are many loss prevention solutions available to deter theft in a retail store that fit into any budget. Here are five solutions to help you protect your operation. 1. Install surveillance systems. Keep a constant eye on operations, even when you are not in the store, via your phone or a computer. You can now take advantage of upgraded software features available for surveillance systems: POS integration, after-hours motion and real-time suspicious behavior and shoplifting alerts. 2. Stop employee theft before it starts. Many store owners do not want to acknowledge how common employee theft is, and how quickly the losses can add up. If an employee steals just $20 per day, that loss can escalate to $7,300 annually. The majority of employee theft happens at POS through voided sales and fraudulent returns. Consider surveillance software that sends an alert to phones and computers with a screenshot showing the details of every return, along with a snapshot of the camera view at the respective register to ensure there is a customer at the register and the product matches up to what is on the screen. This feature allows you to spot fraudulent employee activity immediately and address it.

“Unfortunately, many retailers don’t implement loss prevention solutions until after they experience loss.” 3. Deter time theft. If you use delivery vehicles, adding a GPS tracker ensures employees are not using company vehicles for personal use and also offers a layer of customer service because store employees can see when products will arrive at the customer’s destination. A GPS tracker can also send alerts for speeding or going out of delivery range, and you can use the software to view where vehicles are in real-time. 4. Carefully track cash. Implementing cash-handling solutions not only saves time and payroll costs with shift changes and close-of-day, but gives you a 100% accurate cash count. Currently, available cash-counting machines can count down a drawer within about 60 seconds by weight, even coins. Counterfeit detection scanners can identify suspicious bills within seconds. 5. Monitor high-traffic, high-value areas. To help deter shoplifting, public view monitors at the front entrance and in high-ticket item aisles are a successful option. When customers are aware they are being recorded, they may think twice about stealing. Another recommended visible deterrent is the use of Sensormatic EAS towers for customer exits. Customers who try to exit with any products with hard or soft tags that have not been deactivated at the POS will trigger the towers, alerting staff to potential theft. There are also self-alarming tag options that allow you to keep product displayed for customers to demo (such as power tools), but will alarm in the event of tampering. Using this type of solution versus locking up product can increase sales while still protecting your inventory. Regardless of the size of your business or your loss prevention budget, we can assist any retailer with customized loss prevention options. Stop by our booths at upcoming spring shows or send us your store layout for free recommendations. We look forward to assisting you in protecting your store assets from theft.

Laura Freeman

Watcher Total Protection

HARDWARE RETAILING | February 2024

Watcher Total Protection is located in Illinois and specializes in custom design and installation management of loss prevention products, including video surveillance, electronic article surveillance cash handling and GPS tracking for commercial customers worldwide. We are pleased to have continued our valuable vendor relationships with Ace Hardware, True Value, Do It Best, Orgill, United Hardware, House-Hasson Hardware and Lumbermens Merchandising Corporation. We are able to offer discounted equipment pricing and nationwide installation for the independent hardware channel. Join over 4,500 customers who have chosen Watcher Total Protection for loss prevention needs.

Scan the QR code to learn more about Watcher Total Protection

CONNECT Visit watcherprotect.com today to better your operation

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RESEARCH

Help the Independent Channel TRENDS

Visit YourNHPA.org/research or scan the QR code to join the NHPA Retailer Research Panel and contribute to exclusive industry research.

ACTIONS TO TAKE TO IMPROVE KPIs

E V E R Y Q U A R T E R , the Independent Retailer Index asks retailers to share key performance data from the previous quarter to measure year-over-year changes. See highlights from Q3 2023 here, along with some action items you can offer your team to help boost these KPIs in your own operation. Head to YourNHPA.org/retailer-index to download the report from Q4 2023.

Inventory Investment

Over one-third of respondents said their inventory investment greatly decreased in Q3, while 44% said it increased somewhat. Respondents were evenly split between no additional investment and a small investment planned for Q1 2024.

Transaction Count and Size

Over half of respondents reported transaction counts were down year-over-year. The same percentage of respondents (41%) said transaction size increased or stayed the same.

Gross Profit Margin

In Q3, the same percentage (42%) of retailers reported gross profit margin staying the same or greatly increasing.

Take Action Take Action Encourage your staff to greet each customer within a few seconds upon entering and ask open-ended questions about their projects.

Take Action Staying on top of cycle counts and rotating high-impact merchandising displays can help move inventory more quickly and make room for new items.

Price-shop your local competitors—both locally and online—and revisit your price-matching policy. Don’t pass up margin opportunities.

About 1/2 About 3/4

About 1/4 Source: Independent Retailer Index, Q3 2023, NHPA and The Farnsworth Group

HARDWARE RETAILING | February 2024

Amount of Gross Margin Increase Respondents Attributed to Inflation (Q3 2023)

None

S P O N S O R E D

C O N T E N T

How to Optimize Your Margins and Grow Your Retail Business s an independent retailer, you may think the only way to compete with big-box retailers is to match their prices. But this may not be feasible or profitable for you, as you have lower volumes and higher costs. So, how can you attract and retain customers without sacrificing your margins? The answer is to manage your margins effectively by setting optimal prices that balance customer satisfaction, revenue growth and profit retention.

Why Margins Matter

Margins are the difference between the price you charge for your products or services and the cost of providing them. They are a key indicator of your profitability and efficiency. By optimizing your margins, you can:

Everyday Low Pricing: This is where you offer consistent and competitive prices on all or most of your products or services. Customers rely on you to get the best deals without waiting for sales or discounts. Full Price Plus Heavy Promotions: This is where you offer higher prices on quality brands and products or services, but also run frequent and generous promotions and discounts to create a sense of urgency and value. By changing customers’ price perceptions using one of the above scenarios, you can differentiate yourself from the big-box retailers and gain market share.

• Grow your revenues by increasing the value of each sale • Maintain your profits by reducing your expenses • Keep loyal customers by offering them competitive prices and great service

How to Change Customers’ Price Perception

One of the challenges that independent retailers face is that customers may perceive them as having higher prices than big-box retailers, which can affect their buying decisions and loyalty. To overcome this challenge, you need to change their price perception and show them you offer more than just low prices. There are two types of perceived pricing scenarios you can utilize to change customers’ price perceptions:

Scan the QR Code to Learn How to Combine Pricing Strategies and More. For more information, contact retail@epicor.com

February 2024 | HARDWARE RETAILING

PRODUCTS

Retailer Recommendations NEW PRODUCTS

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

Work Socks Steely Micro Crew Midweight Work Socks feature a performance fit and a cushioned toe box designed to integrate with steel toe boots and deliver extra comfort and warmth. DARN TOUGH VERMONT darntough.com

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Tool Holster The Spider Pro Holster system is the only self-locking holstering system for cordless power tools. It provides an ergonomic way to holster and carry tools while enabling one-handed access. Clip it on your belt and carry your nailer, tape measure and drill without the fear of dropping and breaking your tools. SPIDER TOOL HOLSTER | spiderholster.com

HARDWARE RETAILING | February 2024

Carry Knife The Razor VX line of knives from Outdoor Edge features the company’s patented RazorSafe™ system. This system allows you to change blades quickly, easily and safely with the push of a button, ensuring your everyday carry knife will never have a dull blade. OUTDOOR EDGE | outdooredge.com or 888-249-6942

“With the market for flipping furniture so popular, this product is a must-have. The roller provides a smooth finish, the paintbrush gets into all the nooks and crannies and the box turns into a paint liner.” —Ashley Peterson, Blue Mist Paint and Flooring

Coffee Grinder The Hand Coffee Grinder features a 32- to 40-gram holding capacity, which ensures you can make plenty of coffee, whether you’re in the great outdoors or at home. The Camp Coffee Hand Grinder features an adjusting gasket, allowing you to grind your way from bold espresso shots to smooth pour-overs. PLANETARY DESIGNS planetarydesign.com

Paint Project Kit The Wooster Brush Co. Renew Project Kit is great for touching up scuff marks, chips and missed spots or applying paint samples. The 1 ½-inch short-handled, angled brush is easy to control and the compact 3-inch roller can get into small areas. The package can also be converted to a paint tray. WOOSTER BRUSH CO. woosterbrush.com

February 2024 | HARDWARE RETAILING

NEW PRODUCTS

Moving Straps ShoulderDolly Moving Straps are the proven way to move big, bulky items safely, easily and more efficiently over terrain where traditional wheeled moving can’t go. Move heavy furniture and appliances faster, keeping your arms free when you need them and preventing damage to property while moving. SHOULDERDOLLY | shoulderdolly.com

Countertop Finish This food-grade beeswax countertop finish is made from pure Canadian beeswax, organic carnauba wax and natural mineral oil. It gives your countertops a shiny finish and is suitable for stoneware, earthenware and porcelain. Similar to a ceramic glaze, the countertop finish protects the stone from water and makes it shine. CLAPHAM’S | claphams.com

HARDWARE RETAILING | February 2024

NEW PRODUCTS

Pocket Jig The solid aluminum construction of the Milescraft PocketJig400™ ensures accurate pocket holes and a long product life. Hardened steel bushings, dust extraction and sleek design will make this a go-to for pocket hole joints. A convenient storage drawer contains markings for all common board thicknesses to make setting the depth stop simple and easy. For mobile or repair jobs, the clamping wall of the PocketJig400™ is removable, turning it into a hand-held jig that fits almost anywhere. MILESCRAFT | milescraft.com

Stepladder The NXT1A Fiberglass single-sided stepladder features a duty rating of 300 pounds and a LOCKTOP® that provides maximum storage capacity for the most frequently used tools and components. WERNER CO. | wernerco.com

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HARDWARE RETAILING | February 2024

NEW PRODUCTS

Yard Trimmer The Trimyxs offers a superior approach to traditional weed trimming and edging. It is a universal push lawn mower attachment that allows consumers to mow their lawn and trim at the same time with just the push of a trigger. TRIMYXS | trimyxs.com

HARDWARE RETAILING | February 2024

Fuel Carry Tank Easily designed to fit in the bed of a pickup truck, this low-profile 40-gallon gasoline and diesel fuel carry tank features rugged linear polyethylene construction and a fuel level gauge. It can deliver fuel at 10 gallons per minute. These carry tanks can be loaded in and out of truck beds with a forklift with integrated pockets when full and molded handles when empty. JOHNDOW INDUSTRIES | johndow.com

February 2024 | HARDWARE RETAILING

Tie Down Pouch The Ratchet Wrangler is a simple organizer for ratchet straps. Available in packs of three, the pouch features an open top for easy access. RATCHET WRANGLER | ratchetwrangler.com

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HARDWARE RETAILING | February 2024

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February 2024 | HARDWARE RETAILING

EDUCATION

Stay Safe Online Shut down scammers with NHPA’s free training course—How to Protect Yourself Against Phishing Attacks—available at YourNHPA.org/training-store.

O P E R A T I O N S

LOSS PATROL A Top to Bottom Look at Protecting Your Operation Against Retail Shrink

JES S E

CA R L ETON

ike a dull headache, shrink has always been an unfortunate reality of running a retail business. But for some retailers lately, that ache has grown into a splitting migraine. Anecdotal evidence suggests shoplifters in some areas are growing bolder, sometimes violent, and local laws often make it harder to prosecute them. Cybercriminals threaten online data, posing yet another threat to businesses. Regardless of what specific threats are impacting your operation, retail shrink is a drain on your profits and left unchecked, can grow to a larger problem. Hardware Retailing interviewed loss prevention consultants and independent retailers for insights on the trends in retail loss and how to address them. While some of the tried and true methods of deterring criminals may still work, now is a good time to review the effectiveness of the tools in your loss prevention arsenal. By understanding your operation’s vulnerabilities, you can effectively create the best practices for facing these new threats.

Cybersecurity

Now, more than ever, retailers must contend with keeping their online data safe. Hacks, ransomware, e-commerce fraud and even customers who get their credit cards stolen can be costly to retailers. Nearly 60% of retailers responding to the National Retail Federation’s (NRF) 2023 Retail Security Survey said loss from e-commerce fraud was more of a concern than it was one year ago.

HARDWARE RETAILING | February 2024

STOCK CHECK Tightening inventory controls in the receiving and stocking areas at West Side Decorating Center have helped store manager Maverick Spoke reduce loss due to reporting errors.

February 2024 | HARDWARE RETAILING

Employee Theft

According to numbers taken from the Annual Retail Theft Survey, compiled by Jack L. Hayes International, a loss prevention consulting company, recovery dollars from employee thefts increased in four of the last five years. “Some of the issues contributing to the employee theft issues include more opportunities due to less management and staff and sales associate burnout resulting in them rationalizing their thefts,” says Mark Doyle, president of Jack L. Hayes International. “Dishonest employees also exploit promotional and reward programs, and when they see shoplifters getting away with theft, they think they can too.”

Shoplifting

Shoplifting now consistently eclipses employee theft as the No. 1 loss. NRF’s 2023 National Retail Security Survey reports that external theft accounts for 36% of a typical retailer’s loss, while internal shrink is 29%. “In the home improvement industry, I’ve always spent most of my time helping retailers detect and prevent employee theft,” says Jim Close, managing partner at Risk Management Services Loss Prevention. “Rates of employee theft have always been higher than shoplifting. But for the first time in a long time, shoplifting has become a bigger concern.” Shoplifting incidents and dollars lost to theft have increased over the past few years. According to the most recent Annual Retail Theft Survey from Jack L. Hayes International, the average shoplifting case value increased from $301.97 in 2018 to $802.01 in 2022.

Organized Retail Crime

While it’s not new, organized retail crime (ORC) is a concern for the independent sector. These professional criminals steal merchandise with the intent to sell it later. Independent home improvement retailers are prime targets for professional thieves because they have highly desirable and valuable items and are typically less likely to have comprehensive theft prevention systems. The 2023 National Retail Security Survey from NRF listed batteries, mechanic tools, household chemicals, wire, plumbing, tools and kitchen accessories among the items most frequently targeted by ORC groups. Also in the same survey, 78% of retailers said ORC ranked higher in priority than one year ago.

Trends in Theft Deterrent

Some independent retailers may see an increase in shoplifting because they’re not keeping up with deterrent measures. If big-box retailers make it more difficult to steal by using technology such as electronic article surveillance (EAS) or radio frequency identification (RFID) chips in

HARDWARE RETAILING | February 2024

“Thieves are looking for easy targets, and many of these are professionals rather than opportunists.” —Jim Close, Risk Management Services Loss Prevention power tools that disable them until they’re purchased, and their independent counterparts are not, thieves will choose the easier target, Close says. Retailers should evaluate what security measures their competition uses and consider if it’s feasible for their operations. It provides one less incentive for shoplifters looking for a place to steal. “Thieves are looking for easy targets, and many of these are professionals rather than opportunists,” Close says. “From the anecdotal evidence I’ve seen, these thieves are coming into the store ahead of time, pre-shopping the store and coming back with the intent to steal. They’re also becoming a lot more brazen. They’ll grab and run, cutting security cables that might be on merchandise and run out the door.” When shoplifters hit a store, rather than call 911, retailers tend to delay their reporting of the incident. “I’m seeing a lot more post-incident documentation,” Close says. “Employees are more likely to document the incident first and then contact law enforcement later, a big change in the way retailers used to approach theft. In some areas, law enforcement won’t even respond to theft if it’s not over a certain dollar amount, so shoplifting incidents often go unreported. Retailers also have real concerns that local prosecutors won’t take their cases seriously.” In response to higher shoplifting rates, camera systems and EAS remain the most cost-effective and preferable ways for retailers to protect their merchandise. Where those fail to deter criminals, retailers resort to placing more merchandise behind lock and key. Anecdotal evidence suggests that retailers are preferring locks and chains over expensive new technologies. “I’ve seen retailers who would have never locked up their products are now encasing entire aisles in glass,” Close says. “It’s not just city retailers, either. It’s spreading to suburban operations.”

NLOA DA

SA LES

Does an employee greet each customer within 10 seconds of entering the store?

Are high-theft items either locked up or behind the sales counter?

Are all areas of the store brightly lit?

Do all employees have access to keys for locked merchandise?

Have you eliminated as many blind spots as possible?

OFFI CE

CASHI ER

Do you have camera coverage throughout the store?

Are cashiers processing all returns, defective items and adjustments through the POS? Are cashiers scanning each item, checking the shopping cart to make sure it’s empty and double-checking manual entries?

Are you regularly scanning for out-of-stock inventory? Do you have a shoplifter response policy so employees know how to handle a shoplifting incident? Do you have a code of conduct that addresses employee theft and other unethical behavior?

BACKROOM

ONLINE

Does your insurance policy cover cyberattacks? Do you regularly make software and OS updates? Do you utilize a password manager? Have all employees taken cybersecurity training?

Are employees asking for a receipt and ID before delivering customers’ online orders? Are employees double-checking order quantity and SKUs against purchase orders for deliveries? Is backroom access limited only to authorized personnel?

O RES URCE

How well do you know the vulnerabilities of your business? Take this short self-audit to look at some of the key areas around your operation where you may be the most susceptible to retail loss. While you will need to tailor your own audit to the particular risks and needs of your business, this guide can get you started. Download a PDF version of the self-audit checklist at YourNHPA.org/operations.

Loss Prevention Store Audit

Are all employees trained in loss prevention policies and procedures?

Do you regularly run and review exception reports to check for irregularities in transactions? Do you conduct regular, unannounced cash drawer audits?

Are you conducting background checks on all new hires? Do you have an inventory control system to track stock levels?

Are you backing up all POS data to a cloud server? Is antivirus software installed on every company computer? Does each employee only have the minimum level of access they need to do their job?

Are you checking invoices to make sure you’re not billed for items you may not stock? Are you keeping a log of incoming and outgoing shipments?

February 2024 | HARDWARE RETAILING

Loss Prevention Basics 3 Course Outlines From NHPA's Online Training Program Training employees how to identify, prevent and respond to theft remains an effective way to deal with shoplifters. And it’s an helpful way to address other areas of retail loss, such as store safety. NHPA has three online courses designed to train on loss prevention.

External Theft Prevention This course exposes common methods shoplifters use, how to deter theft and what to do when you see a crime taking place.

Internal Theft Prevention This course helps you understand why employees steal, either from the cash register or salesfloor, common methods they use and the most effective techniques for prevention and detection.

Store Safety Everyone has a role in keeping the store safe for both customers and employees. This course covers how to reduce the likelihood of an accident and what to do when one happens. All courses are available with your NHPA Premier Membership. If you’re not a member, go to YourNHPA.org/membership to learn more.

HARDWARE RETAILING | February 2024

Other tactics include only displaying a sample product and keeping sellable inventory in the backroom, an approach that works well with power tools. Other retailers place high-theft items behind the counter so they’re highly visible but harder to steal. While the lockdown approach is effective, retailers must make provisions for the ensuing customer service challenges. Locking items up can frustrate customers, especially if staff are slow to respond to a request for help. Close recommends that as many employees as possible have keys to access locked cases, and that there be enough staff on the floor to help everyone. If you’re going to lock up merchandise, follow through by walking the product up to the counter. “That’s the part that sometimes gets left out,” Close says. “Skip that step and you could be just handing a shoplifter what they’re looking for.” Overall, customer service remains one of the best tools independent retailers have to combat theft. More eyes on the salesfloor mean fewer opportunities for thieves to do their work. If you must lock up merchandise, outstanding service will help make the best out of a potentially frustrating situation for the customer.

Paper Shrink

The retail loss landscape isn’t only populated by criminal activity. The supply chain disruptions and staff shortages of 2020 brought with it other lingering issues. In 2015, NRF’s National Retail Security Survey reported that retail losses from paper shrink made up 16.5% of all losses reported. The 2022 edition of the same NRF study reported that number jumped to 27%. What has traditionally been called paper shrink, or losses due to discrepancies between actual inventory and what’s recorded on the books, is typically due to reporting error and seems like it would be the most preventable of all losses. Doyle says there are several factors impacting why paper shrink isn’t as preventable as it seems it should be. “Prior to the pandemic, retailers were getting a pretty good handle on paper, or operational, shrink,” Doyle says. “Better systems and controls of operational losses were paying dividends, but on reopening after shutdowns in 2020 with less staff and more focus on external theft, paper losses have started to increase.” The increase of customer services such as curbside pickup and buy online, pick up in store have also increased retailers’ vulnerability. “With each new way of moving, picking and delivering merchandise, there comes a new set of opportunities for paper and operational loss,” Doyle says. “Retailers have

to establish and maintain control points in each new procedure to reduce their vulnerability to loss. Limiting multiple tasks where the same associate picks, prepares and delivers merchandise and requiring second-person verification are key components to reducing theft and paper shrink.”

Effect on Consumers

Theft doesn’t just affect profits. Increased crime negatively affects customers and a retailer’s brand perception. According to a survey by Coresight Research, 73% of consumers were concerned that retailers would raise prices to cover the cost of theft, and 25% said they would do more shopping online if their local stores began using theft prevention methods such as locking up merchandise. Some shoppers may even be afraid to

shop at stores that have frequent shoplifting incidents, particularly when they become violent. All of these factors can devalue a retailer’s brand if they don’t take steps to control them.

Legislators’ Response

Retailers have appealed to local and national legislators to respond to the increase in crime. In 2022, Congress passed the bipartisan INFORM Consumers Act, which requires online marketplaces to verify the identity of high-volume, third-party merchants. This increase in transparency will make it more difficult to sell stolen goods online. The NRF is currently advocating for passage of the Combating Organized Retail Crime Act (CORCA), which will increase the coordination between federal, state and local law enforcement to fight retail crime.

Sources of Loss

27%

36%

Process, control failures and errors

External theft

1.6% The average shrink expense as a percent of sales

$47,580 29% Internal theft Source: 2023 National Retail Security Survey, National Retail Federation

1% 6% Unknown

Other

The amount the typical hardware store loses every year due to retail shrinkage (based on the average loss of 1.6%)

Source: 2023 Cost of Doing Business Study, NHPA

February 2024 | HARDWARE RETAILING

OPERATIONS

Reduce Your Risk Find a list of loss prevention best practices, with separate lists for owners, managers and sales associates at YourNHPA.org/operations.

Discouraging Shoplifters at Whitmore Ace Hardware Over the past five years, David Cripe, the owner of Whitmore Ace Hardware with 13 locations in northeastern Illinois, has noticed a spike in the number of shoplifting incidents in his operation. “Shoplifting used to be smaller thefts. We’d find an opened package in a corner of the store, it wasn’t blatant,” he says. “Now, thieves will come into the store, grab an armload of products from the shelf and run out the front door, sometimes smiling at the cashier as they go.” Rather than locking down all the merchandise, Cripe has found more subtle ways to make the store more of a deterrent for thieves. As part of a recent remodel to one location, he moved the high-theft items away from the front door and closer to the service desk in the middle of the floor. He placed cameras closer to eye level in areas such as the outdoor power equipment aisle so he can get a better view of people’s faces in that area. He also repositioned some of the outdoor cameras to take pictures of license plates of cars leaving the lot. Cripe has also responded to the increase in crime by putting more emphasis on training and customer service so employees are better equipped to prevent an incident but also know how to respond when one happens.

Some of the art of effective customer service lies in knowing how to engage a customer when you suspect they may be stealing from you. Cripe advises his employees that if they see someone they think is shoplifting to approach them and ask questions that will make it appear like they are just helping the customer make the right purchase. If they’re trying to steal, they’ll be very uncomfortable. Cripe hired a loss prevention consultant to train his staff on how to respond to an active shoplifter and has invested in technology that makes it easier for him to gather the necessary information to report an incident to the police. Communication is critical when dealing with a shoplifter. With 13 locations in a tight geographical area, Cripe says once one store gets hit with a shoplifting incident, other locations can expect it too. Staff share information as soon as a theft happens so employees at other locations can be on the alert. “We want all associates to know it is a very big deal when someone steals from us,” he says. “We don’t want them to be complacent and think this is business as usual. We broadcast every theft to all key employees across all locations. This lets them know we are monitoring what happens here and will take every theft seriously.”

Place high-theft items in highly visible areas where staff can easily monitor them.

Best Practices to Address Shoplifting

Greet each customer as they enter the store.

Always be mindful of where customers are in the store and continually engage with them.

Make sure employees understand company policy for what to do during a shoplifting incident.

Have a camera system covering the salesfloor and parking lot so you can document shoplifting incidents.

34 HARDWARE RETAILING | February 2024

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Managing Delinquent Payments at West Side Decorating Center Some of the retail shrink you write off at the end of the year may be easier to fix than stopping shoplifters. Discrepancies in inventory reporting and issues in accounts receivable can often be fixed by implementing tighter controls. At West Side Decorating Center in Saginaw, Michigan, manager Maverick Spoke says the operation minimizes inventory reporting issues by having its employees double-check their work or having redundancies in place. “A lot of the inventory discrepancies we had were when one person was receiving a shipment,” he says. “So we started having two people do it—one to check the order quantity and the other to mark it off on the PO.” However, one of the biggest sources of loss in recent years has come from the accounts receivable department. Installed sales of flooring, window treatments and countertops are a major part of the business, and they’ve recently had a more difficult time collecting payment from customers. “Before the pandemic, most of our shrink was due to inventory errors; we didn’t have a big problem with

shoplifting,” Spoke says. “But in the past couple of years, as people are unsure about the economy, more people are having buyer’s remorse and not paying their bills.” An unpaid bill—another form of theft—can leave the West Side team spending more time with calls to the customer asking for payment. They’ll hire a collection agency for larger bills, but even then, collectors aren’t always able to recover the funds, leaving the company to write off the loss. Up to this point, the staff has only collected a deposit of half the invoice for custom installations, with the balance due upon completion of the job. That system is changing. Store policy now requires payment in full several days before the installation can begin. “We’ve had a little pushback from some of our customers, but most people understand that this is how most retailers operate these days,” Spoke says. “We are working with a lawyer to come up with contracts specific to the different products we sell. It’s important to clearly communicate payment terms upfront so customers know what to expect.”

Double check quantity and SKUs on packing slips against purchase orders.

Best Practices To Avoid Paper Shrink

Have two people involved in the receiving process.

Never process a return, defective or adjustment without first recording it through the POS.

Do regular inventory cycle counts, not just once a year.

Shoot the outs, or scan for out of stock inventory, weekly.

HARDWARE RETAILING | February 2024

Dealing With Internal Theft at Damariscotta Hardware Perhaps the most difficult type of theft to deal with is when it comes from your own employees. It’s a betrayal, potentially by someone high in the ranks of leadership. When it does happen, it’s important not to overreact and destroy any culture of trust you have already built with the rest of your staff. In 2018, Rob Gardiner, owner of Damariscotta Hardware in Damariscotta, Maine, discovered that a manager had stolen several thousand dollars of merchandise from the business. And that was despite rigorous accountability measures Gardiner already had in place. “We were doing everything we could do to create accountability, but at some point, you just have to trust your staff,” he says. “We didn’t change much after the incident because we didn’t want to penalize the next person in that position. I don’t think the staff felt we started clamping down harder just because one bad thing happened.” For Gardiner, it was an isolated incident that hasn’t happened again. Accountability and leading by example are both key in preventing theft, whether it’s internal or external. “The best thing to do is trust but verify,” he says. “Make sure employees know store loss prevention policies and procedures and follow up by holding everyone accountable to those standards.”

“When employees see you care, they’re going to care too and will be mindful of those red flags that signal something could be wrong.” —Rob Gardiner, Damariscotta Hardware

For example, if you emphasize the importance of customer service in deterring shoplifting, then lead by example and spend some time on the salefloor with customers. “Staff will usually replicate what they see you doing. When employees see you care, they’re going to care too and will be mindful of those red flags that signal something could be wrong,” he says. “Remind everyone that if they see something suspicious, say something.”

Use exception-based monitoring to catch theft at the point of sale.

Best Practices to Deter Employee Theft

Limit who can take out the trash and use clear trash bags.

Rotate cashiers and change their cash drawer assignments regularly to deter collusion.

Conduct unannounced cash drawer audits.

Build a positive company culture so all employees feel they are a valued part of the team.

HARDWARE RETAILING | February 2024

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OPERATIONS

Cool Retail Shrink See how one operation implemented heat maps to mitigate theft issues at hardwareretailing.com/theft-heat-maps.

Battling Cybercrime and Other Scams at Island Lumber Even though it is on an island in the Pacific Northwest, Island Home Center and Lumber in Vashon, Washington, isn’t isolated from the threat of crime. Shrinkage and theft issues still threaten the business, and like many single-store operations, there’s no dedicated loss prevention team. However it does have an advantage when it comes to securing the store’s online integrity. Manager Rob Hord draws on his background in IT and cybersecurity to create robust protective measures for the store to reduce the likelihood of suffering a cyberattack. One of the keys to effective cyber protection is having the proper policies in place to govern employee’s use of company email and data systems. He uses the “least privilege” security model, a common security practice that gives employees the lowest level of access to computer systems they need to do their job. This includes managers and owners, who may not need continual access to admin rights. “Users can run basic point-of-sale applications and browse the web, but they cannot make changes to the system or install applications,” Hord says. “This protects our staff from accidentally installing malware. The key is restricting the business owner and IT team to also using regular accounts in their daily routines. It’s unfortunately very common that many

business owners insist on having full administrator privileges on the network, and as a result, the owner is often the culprit who clicked on something they should not have.” Another safeguard is a data backup plan. Hord recommends a cloud-based daily backup system with version history and a system like Office 365 where employees can back up documents to the cloud. “Migrating to the cloud offloads the hardware risk from our local business and significantly reduces our responsibility to the threat surface area,” Hord says. “Version history is critical because if our backups also get infected, which can happen if a backup happens before we catch the infection, then we can retrieve a prior ‘clean’ backup.” If your store’s computers get hacked, it’s important to have an insurance policy that will give you complete coverage and some peace of mind. “If an event happened to us tomorrow, we’d call the insurance company and put it in their hands, move to handwritten receipts for our daily transactions and trust that our inventory levels could carry us through the remediation process until we’re back online,” Hord says. For more of Hord’s suggestions on preventing a cyberattack, go to hardwareretailing.com/island-lumber.

Train employees to detect phishing, vishing and other scams.

Best Practices To Defeat Cybercriminals

Keep all software updated.

Store data on the cloud.

Have a cyber rider on your insurance policy.

Use a password manager.

40 HARDWARE RETAILING | February 2024

HIT THE GROUND

RUNNING

As the new year unfolds, Hardlines Distribution Alliance is committed to leveraging their network of 65 member distributors, hundreds of vendor partners and thousands of independent retailers across the nation to meet the challenges of the hardlines marketplace and thrive. In reviewing what works and what doesn’t, HDA offers a variety of accounting, marketing, and merchandising services that propel growth. Additionally, HDA is committed to streamlining the programs available, making them more efficient and impactful for all members and partners. These services, combined with interactive events and robust communication tools, mean the team at HDA is hitting the ground running to drive success in 2024. Join our network by contacting Katie Westervelt, Advertising & Communications Manager, at 303.792.3000 or katie.westervelt@hdaworks.com Find us online at www.hdaworks.com HDA Vendor Partners

LOOKING TO NETWORK ONE-ON-ONE WITH DOZENS OF THE LARGEST DISTRIBUTORS IN THE INDUSTRY? Join us at the Group Merchandising Conference May 6-9 in Indianapolis, IN Contact Michele Simes at michele.simes@hdaworks.com for details.

RESOURCES

Answers Are Here COVER STORY

Find solutions to grow your business by downloading the NHPA Academy Catalog at YourNHPA.org/catalog.

1900s

Legacy Lives A

NHPA BOARD CHAIR NED GREEN COMMITS TO CUSTOMERS

LI ND SEY

or the past 145 years, the Weider’s name has been synonymous with top-tier customer service. In 1879, John A. Weider opened his horse and harness supply business to serve customers in Rochester, New York, adding hardware in the early 1900s. The legacy he started is still seen in the operation over a century later. Ned Green and his wife Lisa, current owners of Weider’s Paint & Hardware, along with their children Mitch and Mikayla, have taken up the banner for the Weider family

44 HARDWARE RETAILING | February 2024

TH OMPSON

name. John’s same commitment to “give them what they want” can be seen across all three locations in Brighton, Honeoye Falls and Perinton, New York. Ned, newly elected board chairman for the North American Hardware and Paint Association (NHPA), has been a part of Weider’s and the home improvement industry for over 40 years. He brings a wealth of experience in the independent channel and a commitment to serving customers to his role as board chair.

SERVICE WITH A SMILE Ned Green (left), Athan Marzen (middle) and Lisa Green lead the team at Weider’s Paint & Hardware, focusing on service. Photos by Olivia Shroyer | NHPA

Joining the Family

The owners of Weider’s Paint & Hardware were family friends of the Greens, so Ned started his career at Weider’s in the early 1980s, spending time in the store as a teenager. He earned an official position in 1982 when Greg Lull, son of the owner and Ned’s future brother-in-law, left for college and left a position open. “I was able to be a support for the company when Greg left for college, and I enjoyed it,” Ned says. “What caught me and kept me there was the combination of helping people solve problems and selling hardware products. I really enjoyed connecting with people.” Several years after starting at Weider’s, Ned also went away to college and after graduation, he worked for two years for another local hardware operation. Through that time, he still had a role at Weider’s in some capacity. “It became very clear early on there were some challenges in the industry. The reality is we need people to step up, take responsibility and do the hard work to make the changes to keep these businesses continuing into the future,” Ned says. “Early on, I thought making these changes in the industry was something I could do and would enjoy.” In 1991, Ned and Greg purchased the business from Greg’s parents, Robert and Joanne Lull, and they ran Weider’s Paint & Hardware together until 2004 when

Ned became sole owner. Over the next 15 years, the original location closed, several new locations opened and the company transitioned to Ace Hardware and Emery Jensen as its wholesalers with Ned at the helm. “The business has been an evolution; there have been a bunch of smaller stepping stones to get us where we are now,” Ned says. “There is a lot of history here, and it’s an honor for me to be a part of that legacy. I love it when customers bring in newspaper articles or memorabilia from the last 140-some years, and we even have a couple of employees who are distant relatives of the previous owners.” The operation’s evolution hasn’t been easy. When Ned took over, the business was facing some challenges, which Ned says he overcame by maintaining relationships, keeping employees happy and selling the products and services customers needed and wanted. He purchased the business on a handshake and after taking over, adopted a slower timeline to revitalize and rebuild the company in a way that respected all the parties involved. “I’m proud of the fact we were able to transition the company into something that can still exist in this day and age. It’s on track to be left in a much better position than when I got here,” Ned says. “Righting the ship while still placing a focus on maintaining relationships was key to getting us where we are now.”

February 2024 | HARDWARE RETAILING

OPERATIONS

Set Your Business Apart See six ways to integrate unique store services into your operation to elevate your offerings at hardwareretailing.com/store-services.

Building on Success

THE EXTRA MILE With a focus on store services and solving customer problems, Weider’s Paint & Hardware differentiates itself from its competition.

46 HARDWARE RETAILING | February 2024

During his time leading Weider’s, Ned says he has placed a heavy focus on the services the operation offers and pushed the boundaries of service offerings. These services include automotive chip keys, B2B sales, rentals, handyman services, repairs, sharpening, paint matching, window and screen repair, lamp repair and more. “I believe service work carries our industry over the ups and downs of the merchandise and keeps us from being vending machines,” Ned says. “Services give us a unique position in our communities. It’s hard to put in service work—in fact it is the hardest thing we do—but it’s the area we can incorporate into our businesses that makes a huge difference.” B2B sales is one area of services that has had a major influence on the products the stores carry, Ned says. B2B sales have made up between 20% and 30% of sales over the last 10 years. “The B2B department has drawn our main store into having deeper categories and having deeper categories has fueled our B2B business,” Ned says. “No matter what services you offer, it’s about pushing the boundaries for that service and offering customers something extra.” Along with helpful services and depth of product selection, dedicated team members have contributed to the success of Weider’s. Each of the 75 employees at Weider’s share Ned’s enthusiasm for problem-solving, walking customers through projects and providing a high level of customer service. Ned says he also has numerous employees who champion specific departments and take ownership of those areas of the stores. “It’s not the actions of one person on any given day, but it’s the strength of the entire team that makes everything come together,” Ned says. Ned and Lisa have made a concerted effort to provide quality training to employees and have been focused on implementing policies and processes that systemize standard operating procedures, allowing each employee the time and space to better serve customers. Recently, the Greens promoted Athan Marzen to operations manager. Athan works closely with Ned and his family to help oversee a consistent level of training and service across all three locations. Ned says he is also aware of the reality of the current job market, including high turnover and a shortage of invested employees. “I heard an analogy that the labor market is like a city bus where the riders are only on the bus for a period of time,” Ned says. “We have been asking ourselves what we are doing to accommodate a dynamic, changing workforce and be more successful despite the challenges in the labor market. We’ve been coming up with ways to meet employees where they are, no matter how long they are with us.”

“Being out in the aisle every day and being able to wait on a customer and build those relationships is the best part of my job.” —Ned Green, Weider’s Paint & Hardware

A Love for the Community

When looking at the reasons why Weider’s Paint & Hardware has been so successful for over a century, you’d be remiss to leave out the company’s commitment to its community and industry partnerships. Personally, Ned stays involved with the community as a trustee of his church, volunteer with the Greater Rochester Soap Box Derby Club and member of the Brighton Rotary Club, where he has served as president, treasurer and district finance committee member. As a local business, Weider’s Paint & Hardware gives generously to local organizations through donations. Community connections have also been built thanks to the operation’s B2B relationships with fellow local business owners.

At Weider’s Paint & Hardware, employees enjoy helping customers solve their problems, whether it’s finding the right product or suggesting a service.

2024 48 HARDWARE RETAILING | February 2024

“So many different partnerships have been created in the industry and outside it to support our business,” Ned says. “From our suppliers and vendors to our customers and investors to industry partners like NHPA, we couldn’t be successful without the support of our community.” Those relationships have become one of the best parts of the job, Ned says. He also enjoys being a resource for the communities the operation serves, seeing his associates find enjoyment in their different in-store departments and getting to spend time on the salesfloor himself. “My kids always joke that if they can’t find me, I’m probably in the fastener aisle, which is one of my favorite parts of the store,” Ned says. “If I were at the desk all day long, that wouldn’t be satisfying. Being out in the aisle every day and being able to wait on a customer and build those relationships is the best part of my job.”

Independent Opportunities

From his vantage point as a business owner and board chair, Ned sees several opportunities the independent channel can take advantage of in the future. One of those opportunities is the use of technology to help retailers become more profitable and efficient. In an effort to streamline processes and improve the human resource experience for both employer and employee, Ned and Lisa phased out some of the programs they were using for employee management and switched to Paycor for payroll, scheduling and employee timekeeping. “We realized we had so many pieces—from logins to apps—to onboard a new employee,” Ned says. “The HR platform we switched to simplifies the process, so we’re not overwhelming ourselves on the administrative side, especially with the turnover we’re seeing. It’s removed a couple of steps for every person and saved us so much time and energy.” Other opportunities Ned sees for the channel include focusing on employee engagement and taking an omnichannel approach to serving customers. During his tenure as board chairman, Ned says he is looking forward to helping the industry come together for education, training and networking through all the programs NHPA offers. He wants to continue fostering a welcoming environment for independent retailers and see the organization’s vision come together to unite the industry. “NHPA is the organization at the center of the industry that brings the distributors and manufacturers together with the retailers all with the mission to make independent retailers more profitable,” Ned says. “From the education programs to the communication pieces the association puts out, NHPA is really an asset for the industry. I want to continue to help raise awareness and build those relationships among retailers.”

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What 2024 National Hardware Show Where Las Vegas Convention Center, Las Vegas When March 26-28

Products, Insights, Connections Grow Your Business at the 2024 National Hardware Show BY

JUL I E

re you ready to revolutionize your business? Registration is now open for the National Hardware Show (NHS), taking place March 26-28 in Las Vegas. Representatives of the home improvement industry from all over the world—including independent retailers, online retailers, distributors and wholesalers—attend NHS to discover the latest products, innovations and trends shaping the future of the home

L E I NWAND

improvement and DIY industry and network with fellow attendees. “Beyond access to thousands of new products and trends, the 2024 National Hardware Show has so much value to offer attendees,” says Beth Casson, NHS event vice president. “Our goal this year was to elevate the Show experience so attendees can make the most of their time in Las Vegas and go home with new insights and connections to help grow their businesses.”

Learn more at nationalhardwareshow.com.

HARDWARE RETAILING | February 2024

INDUSTRY EVENTS

Retailers Attend Free INDUSTRY EVENTS

Registration is now open for the 2024 National Hardware Show. Visit nhs-24.com/NHPA and enter promo code NHPA for free attendee registration.

What’s new in 2024? A new and improved exhibit hall layout will make it easier than ever to navigate the Show and explore exhibitor booths. New product categories include hobby, gift and specialty, sport and outdoor recreation, paint and decor and more. Retailers will also have the opportunity to gain insights and make connections at the new Independent Retail Center. “We are excited to offer sessions on succession planning, ensuring a prosperous future for your retail venture,” Casson says. The Independent Retail Center will provide a space for retailers to network with their

peers and connect with industry professionals, with topic-focused roundtables led by the North American Hardware and Paint Association (NHPA). “The Independent Retail Center offers a unique opportunity for members of the independent home improvement industry to come together to discuss important topics and engage in idea sharing and networking,” says Dan Tratensek, NHPA chief operating officer. “In addition to facilitating conversations between attendees, we’re pleased to offer roundtable discussions centered around driving sales, leadership and succession planning.”

Why Attend? VIP Treatment New for 2024, all independent retailers will enjoy VIP status with exclusive hotel accommodations and access to the VIP lounge. Networking Forge meaningful connections at networking events and within the NHS exclusive lounges. Be sure to visit the Global Resource Center, where you can connect with international sellers, distributors and industry experts to learn more about shopping global and selling local. Retail Insights Access Colleqt post-Show data to stay ahead of trends, understand what inﬂuencers are scanning and make informed decisions on what to stock in your stores. Plus, don’t miss the NHPA Retailers’ Choice Awards to see what products stand out on the Show ﬂoor. Education Attend roundtables on driving sales, leadership and succession planning at the Independent Retail Center. Come, learn, network and take new ideas and information back to your business.

Want to learn more? Scan the QR code for the latest 2024 NHS event information and to register today. Use promo code NHPA for free registration.

Hands-on Learning NHPA’s Foundations of Merchandising Management Live! event is back at 2024 NHS. Visit YourNHPA.org/foundationslive to learn more.

February 2024 | HARDWARE RETAILING

OPERATIONS

Grow in a Limited Selling Space CATEGORY SPOTLIGHT

A small space doesn’t have to equal small sales. Learn merchandising and customer service tips to maximize your lawn and garden section at hardwareretailing.com/small-spaces.

Planting T HE S E E D

3 B E ST PR AC T I C E S T O G R OW YO U R L AWN A N D G A R D E N D E PA RT M E N T BY

JACO B

fter spending extended time at home in the last few years, consumers are entranced with their lawns and gardens now more than ever. According to a 2023 study from the Home Improvement Research Institute (HIRI), homeowners believe taking care of their lawns and gardens is just as important as regular home maintenance. A large portion of the surveyed homeowners, around 45%, also said they enjoy working outdoors and are confident about completing these types of projects. According to the HIRI study, lawn and garden tools, equipment and supplies sales were down around $2.8 billion in 2023, but are expected to

HARDWARE RETAILING | February 2024

M US S E LM AN

rise steadily between now and 2027. As sales in the lawn and garden category rebound, stocking your shelves with trending products and staying educated on the products you sell is crucial to keep that department blooming. Hardware Retailing spoke with Willa Reddy, senior buyer for A Few Cool Hardware Stores, a collective of 13 locally owned Ace Hardware stores and garden centers in Washington, D.C., Maryland and Virginia. She shares her tips for cultivating a more profitable lawn and garden section and how she’s blossomed in her role procuring new and exciting products for a diverse customer group.

Stay on Top of What’s Hot

With social media providing DIY ideas and introducing customers to new hobbies, Reddy says retailers should be cognizant of trending items that customers will be coming to their stores to purchase. One example is what Reddy calls the “Instagram plant.” “These are trendy, funky-looking plants that customers see online,” Reddy says. “Usually when you first start seeing interesting plants online the cost is very high, but we try to bring some in if we can find them. We’re always keeping an eye on what’s trending and balancing when we can bring in new, unique plants for the stores.” Instagram plants come in all skill levels and price points. Reddy says plants that are easy to grow are popular because people just getting into the hobby want something they can learn how to take care of before moving on to a more advanced and expensive plant. In 2023, Reddy says a popular plant was the Monstera Thai constellation, a tropical, broad-leafed plant with long holes and white stripes on its leaves. “Last year, we finally found a vendor who had it,” Reddy says. “It was pretty expensive—$85 for a four-inch pot—but at the time people were selling cuttings of it online for over $100, so that was a pretty good deal for our customers. We had customers come from as far as Connecticut and Rhode Island.” A customer posted on social media about the store carrying the sought-after plant, which brought more customers to the store. Pricing the plant at $85 didn’t achieve the operation’s optimal profit margin for a product, but Reddy says it’s always a balance stocking interesting items that will sell and still covering their basic costs. “Once you start seeing those rare plants being circulated in stores like ours, you know they’re becoming more available as more people are getting cuttings and growing their own. It’s going to be easier for growers to grow them, and the price will go down,” Reddy says. “There’s a thin line when you see a plant that’s new and exciting and wanting to bring it in, and knowing that there’ll be a more affordable price in the future.” Stocking what your customers need for day-to-day purchases is what drives most stores’ business, but being able to offer trendy products can be an extra incentive for customers to visit your store. “We’re always trying to gauge the best time to bring in a cool, unique plant to the store,” Reddy says.

See It for Yourself Check out these industry events and trade shows offering opportunities to see the latest products and trends in the lawn and garden space.

spoga+gafa March 23-25 Cologne, Germany National Hardware Show March 26-28 Las Vegas, Nevada International Floriculture Expo May 31-June 2 Fort Lauderdale, Florida The Garden Center Show August 6-7, 2024 Rosemont, Illinois

February 2024 | HARDWARE RETAILING

Blooming With Ideas As you consider new ways to educate and connect with your customers, look at partnering with a local botanical garden, many of which offer a variety of free programs for residents. One example of a botanical garden with a robust outreach program is the Lady Bird Johnson Wildflower Center in Austin, Texas, which has been offering seed grants since 2008. The Lady Bird Johnson Wildflower Center’s seed grant program provides wildflower seeds to K-12 schools in Texas to create or maintain outdoor areas to facilitate learning on their campuses, says director of education Demekia Biscue. Partnering with organizations like a local botanical garden to offer seed grants or other educational programs can be an excellent way to bring people into your store, educate your employees and give back to your community. Other ways you can educate and engage customers on lawn and garden topics include organizing in-store informational sessions, sponsoring outdoor education classes and volunteering to sponsor projects at outdoor education facilities.

According to the U.S. Chamber of Commerce,

91%

of surveyed small business owners believe businesses should give back to their local communities.

54 HARDWARE RETAILING | February 2024

Expand Your Knowledge

Reddy began her career with A Few Cool Hardware Stores at Old Takoma Ace Hardware in Tacoma Park, Maryland, nearly 10 years ago. She started as a general associate, working with plants in that store’s lawn and garden department. Reddy was soon promoted to assistant manager and then assistant buyer. Once the senior buyer she worked under retired, Reddy took over that role. When Reddy started, she says YouTube was integral to her lawn and garden education. If a customer came to her with a question and she didn’t know the answer, finding a video that explained the question was useful as she learned more about the products the store carried. “I think it helped that I started with the company taking care of plants and working in the lawn and garden department,” Reddy says. “I also tend to grow a lot of plants in my spare time.” Reddy says following content creators who produce content in the space you’re working in is helpful, as is reading articles and attending conferences. “Going to trade shows is an important part of the job,” Reddy says. “At trade shows you are able to meet with a variety of vendors in the lawn and garden space, plus see merchandising ideas to use in your own space.” Joining and participating in online forums is another way to stay connected with other industry professionals, find ideas and ask a variety of questions to members with expertise in those areas. The National Gardening Association hosts a multitude of forums related to gardening and plants, with region-specific forums for those interested in contacting others in their area.

“At trade shows you are able to meet with a variety of vendors in the lawn and garden space, plus see merchandising ideas to use in your own space.” —Willa Reddy, A Few Cool Hardware Stores

A GREEN INFLUENCE A Few Cool Hardware Stores senior buyer Willa Reddy follows local content creators to stay up to date on lawn and garden trends.

Simplify. Get Paladin.

Think of the things you can do with Paladin Point of Sale. Call 800.725.2346 or visit paladinpointofsale.com to learn more and get ready to tell your employees you’re going fishin’.

February 2024 | HARDWARE RETAILING

BEST OF 2023 BEST OF 2023 BEST OF 2023 BEST OF 2023 With a mix of urban and suburban locations, A Few Cool Hardware Stores strives to offer a wide mix of lawn and garden products.

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HARDWARE RETAILING | February 2024

Embrace Alternative Options

You can also find success in the lawn and garden department by thinking beyond traditional products, including promoting native plants. In 2022, one in four people specifically purchased native plants, according to data from the National Gardening Survey, which was commissioned by the National Wildlife Federation in conjunction with the National Gardening Association. The number of people desiring native plants was an increase from 17% in 2020. “There is a movement around the country of people wanting to understand native plants, embrace the concept of farm-to-table eating and know the plants in their area that will help the environment,” Reddy says.

When purchasing native wildflowers to stock at your store, check the U.S. Department of Agriculture Plant Database to see what flowers, shrubs and plants are native to your area. Share the plant database with your customers to educate them on what naturally grows in that area. Regardless of what alternate options you pursue, stay educated on your offerings. “Whether you bring in the hottest plants, move toward native options or stick with traditional products, you want to know what you’re standing behind,” Reddy says. “Finding products you’re passionate about will make them easier to sell to customers because you have that passion behind the product.”

February 2024 | HARDWARE RETAILING

ASSOCIATION

Nominate an Outstanding Young Retailer NEWSMAKERS

Learn more about NHPA’s Young Retailer of the Year program at YourNHPA.org/yroty. Nominations are due on Feb 28.

What You Need to Know in February Holiday Spending Up 3% Over Last Year Retail holiday spending during the 2023 holiday season rose just over 3% year over year, according to Mastercard SpendingPulse.

Kelly-Moore Paints Ceasing All Operations

As it begins to cease operations immediately, Kelly-Moore Paints will continue to fulfill previously placed orders from its existing inventory at its distribution facility in Union City, California. All other company operations will be permanently closed.

Healthcare Transparency Legislation Passes The U.S. House of Representatives passed the Lower Costs, More Transparency Act by a vote of 320 to 71, forcing pharmacy benefit managers and hospitals to meet price transparency standards.

NHS Offering Free Exhibit Hall Passes to Retailers

Retailers can receive a free exhibit hall pass for the National Hardware Show, taking place March 26-28 in Las Vegas. This event unites members of the home improvement industry to discover the latest products, innovations and trends shaping the future of the home improvement and DIY industry.

Import Cargo Enters Winter Lull

With the holiday season over, inbound cargo volume at the nation’s major container ports will gradually slow during the first quarter of 2024.

To read these news stories and other news, visit hardwareretailing.com/industry-news.

HARDWARE RETAILING | February 2024

ASSOCIATION

Be in the Know Receive industry news, trends and product information directly to your inbox with Hardware Retailing newsletters. Sign up at YourNHPA.org/subscribe.

$743 Billion in Merchandise Returned in 2023 Retailers have been focused on efforts to mitigate returns, as total returns for the industry amounted to $743 billion in 2023, a return rate of 14.5%, according to a report released by the National Retail Federation and Appriss Retail.

Return fraud contributed to

$101 billion

in losses for retailers in 2023 Source: 2023 Consumer Returns in the Retail Industry, NRF

“Retailers continue to test and implement new ways to minimize losses from returns, particularly those that are fraudulent, while at the same time optimizing the shopping experience for their customers.” —Mark Mathews, National Retail Federation

Types of Return Fraud In the NRF’s 2023 Consumer Returns in the Retail Industry report, retailers shared what types of return fraud they experienced.

49%

37%

44%

20%

returns of used, non-defective merchandise, also known as wardrobing.

returns of shoplifted or stolen merchandise.

returns of merchandise purchased on fraudulent or stolen tender.

return fraud from organized retail crime groups.

February 2024 | HARDWARE RETAILING

NETWORK

Make a Plan CALENDAR

Visit YourNHPA.org/cal to find more industry events online.

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

2024 Independent Home Improvement Conference .........BC ihiconference.org Benjamin Moore .......................................................................................................35 benjaminmoore.com Do it Best...........................................................................................................................13 doitbestonline.com Epcior ................................................................................................................................... 17 epicor.com

2024 Lancaster Buying Show February 2-3 | ORLANDO, FL

True Value Spring Reunion February 2-4 | NEW ORLEANS, LA

United Hardware Spring Buyer Market February 15-16 | ST. CLOUD, MN

Monroe Hardware Spring Market February 16-18 | MYRTLE BEACH, SC

Orgill Spring Dealer Market

Great Northern Equipment Dist................................................................ 37 gnedi.com Hardlines Distribution Alliance ..........................................................42-43 hdaworks.com The Hillman Group ..................................................................................................41 shop.hillmangroup.com House-Hasson .........................................................................................................5, 7 househasson.com Kness Manufacturing Co. ............................................................................... 26 kness.com/ketch-all

February 22-24 | ORLANDO, FL

Knox Fertilizer ...........................................................................................................24 knoxfert.com/schultz

NAHB International Builders’ Show

Lighthouse for the Blind ................................................................................. 56 tearmender.com

February 27-29 | LAS VEGAS, NV

Kitchen & Bath Industry Show February 27-29 | LAS VEGAS, NV

Mars ....................................................................................................................................49 coastair-ac.com Midwest Fastener Corp. .............................................................................IFC-1 fastenerconnection.com

Ace Hardware Spring Convention March 12-14 | DALLAS, TX

Emery Jensen Edge March 12-13 | DALLAS, TX

The Inspired Home Show March 16-19 | CHICAGO, IL

Blish-Mize Spring Buying Market March 21-23 | OVERLAND PARK, KS

Do it Best Spring Market March 23-25 | HOUSTON, TX

National Hardware Show March 26-28 | LAS VEGAS, NV

Foundations of Merchandising Management Live! at NHS

NHPA Foundations of Merchandising Management Live! ....61 YourNHPA.org/foundationslive NHPA Retail Marketplace ...........................................................................................63 YourNHPA.org/marketplace Orgill Inc. .............................................................................................................64-IBC orgill.com Package Pavement Co. .................................................................................... 27 packagepavement.com Paladin Data Corp. ................................................................................................ 55 paladinpointofsale.com Rodda Paint ..................................................................................................................25 roddapaint.com Sakrete ..............................................................................................................................23 sakrete.com/dealer U-C Coatings ................................................................................................................ 57 uccoatings.com

March 26-27 | LAS VEGAS, NV

U.S. Wire & Cable .......................................................................................................21 uswireandcable.com

Wallace Spring Dealer Market

Wallace Hardware ................................................................................................. 39 wallacehardware.com

March 27-28 | SEVIERVILLE, TN

*Events are current as of press day.

To add your event to the industry calendar, send an email to editorial@YourNHPA.org.

60 HARDWARE RETAILING | February 2024

Watcher Total Protection ........................................................................ 14-15 watcherprotect.com Wooster Brush Co. ..............................................................................................47 woosterbrush.com

CALL FOR 2024 NOMINATIONS

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

• 20

Nominations are now open for the 2024 Young Retailer of the Year awards!

Youn Reta g iler Year

NHPA

North American Hardware and Paint Association

of th e

28TH Do you know an inspiring young retailer? Submit your nomination by February 28, 2024. Learn more at YourNHPA.org/yroty.

N G R E TA U O Y IL

L A

WARDS PR

ASSOCIATION

Become an Industry Beacon Want to learn more about how to become an ambassador? Reach out to Renee Changnon at rchangnon@YourNHPA.org.

LAST WORD

N H PA A M B A S S A D O R

COMMUNITY CONNECTIONS

Cody Goeppner Thrives on Serving Customers and His Community What is your proudest moment as part of the independent channel? Growing up in the independent channel, I’ve had a lot of proud moments, including working as the seventh generation of the family business at our hometown hardware store. My proudest moment is when I mentored six employees through NHPA’s Retail Management Certification Program (RMCP) over a four-year time period.

AM B AS S A OR

What is your favorite part of your job? Since my first day working in the hardware store, connecting with the customers has been my absolute favorite part of the job. Throughout my career, it’s been a joy to anchor myself to the customer’s experience when I’m working through challenges with employees, company policies and procedures and everything else that comes with running operations within the independent home improvement channel.

What is the best piece of professional advice you’ve ever been given? When I was going through RMCP in 2017, Wil Davis led a purpose-driven discussion with the entire class that became a turning point for my personal life and my career. He addressed the fact that often times in the independent channel, a manager’s purpose is tied to the purpose of the company. We had an exercise where we developed our own personal purpose and out of this exercise, I developed my personal purpose: To create, inspire and stand for excellence for generations to come. How do you stay involved in the community? When I moved to Washington, I quickly became involved in the local chamber of commerce serving as president for two years. This opportunity created networking opportunities where I was introduced to people who benefited the business and myself. Today, I work closely with several community organizations, I sit on advisory boards for the local school districts and I’m involved in the local community theater

CODY GOEPPNER Store Valley Wide Cooperative Location Grandview, Washington

as a board member and director for their main stage shows. It’s a passion of mine to connect the world of theater with other parts of the community since the arts created so many opportunities for me in my professional life. What did you want to be when you grew up? As a child, I truly believed people when they told me, “You can be anything you want to be.” I took that to heart and dreamed of becoming a surgeon, (solely because of “Grey’s Anatomy”), a Broadway star or president of the U.S. To read the rest of the interview, visit

hardwareretailing.com/cody-goeppner.

About the Program The North American Hardware and Paint Association (NHPA) is excited to introduce the newly formed Ambassador Program for 2024. The program brings together a small group of NHPA members from across the industry who are passionate about the independent home improvement channel and have a deep involvement with the association. NHPA Ambassadors help connect their retailer networks to NHPA, encouraging retailers to become more involved with the association’s offerings, like online training, consulting, college-level courses and more.

HARDWARE RETAILING | February 2024

The industry’s marketplace for buying and selling independent home improvement businesses and posting jobs. BUSINESS FOR SALE

BUSINESS FOR SALE

Northwest Farm & Home Supply Co.

Home Improvement Supply Store Location: Missouri Gross Revenue: $1.04 million

Location: Lemmon, SD Gross Revenue: $3.21 million The main building is a total 27,213 sq. ft. of retail and warehouse space on 4 acres. The main bldg. was constructed in 1994 with additions constructed in 2002 and 2004. Single story with 22’ clear height in 11,459 sq. ft. of lumber warehouse, three grade level doors and two dock height doors. BUSINESS FOR SALE

This historic home improvement and hardware store is a staple of its community and operates from its headquarters in the Kansas City Metropolitan Area of Missouri. The Company is a long-standing retailer and installer of consumer and commercial improvement products.

BUSINESS FOR SALE

Hoosick True Value

Albrights Hardware & Garden Center

Location: Hoosick Falls, NY Gross Revenue: $1.26 million Price: $1.875 million This opportunity offers a turnkey sale of a general hardware business located in northeastern Rensselaer Co., New York. The business serves five towns and southwestern Bennington Co., Vermont, and 25 miles east of Troy, New York.

Location: Allentown, PA Gross Revenue: $1.9 million Price: $1 million

BUSINESS FOR SALE

Central Vermont Paint, Flooring and Decorating Business Location: Vermont Gross Revenue: $2.82 million Price: $1.1 million

Full-service decorating store providing flooring, paint, window treatments, kitchen/bathroom remodeling, cabinetry product offerings, design assistance, specialized service, and professional installation. BUSINESS FOR SALE

Private Business

Location: Alabama Gross Revenue: $2.21 million Price: $649,000

Albrights Hardware is an established hardware store with strong neighborhood ties and has been a Lehigh Valley staple for over 50 years. The current owners have owned the store since 1992. Albrights serves its loyal customer base by providing quality products and exceptional customer service.

BUSINESS FOR SALE

SEEKING BUSINESSES

For our next acquisition, we are looking for:

We are looking for:

The Aubuchon Company

• • • •

Single-store and multi-store hardware operations Located in northeast and southeast United States Store size of 5,000-30,000 ft2 At least $3 million in average store sales

Bolster Hardware • • • • •

Private Business

Location: Pennsylvania Gross Revenue: $1.6 million

Gold Beach Lumber Yard

Geography agnostic With or without real estate Store revenues of $1.5M+ We prefer to honor the family name and heritage in the local community by not changing the name We prefer to keep all employees as part of the acquisition

• • •

Single-store and multi-store hardware operations Located in the Pacific Northwest Store size of 5,000 ft2-30,000 ft2

Now Offering Business Valuations Post a Job | Sell Your Business | Buy a Store | Public and Private Listings Available To see full listings, visit YourNHPA.org/marketplace or email marketplace@yournhpa.org

2024

DEALER MARKET & Spring Online Buying Event

Score the best buys of the year! Register now for our in-person Dealer Market, happening Feb. 22 – 24 in Orlando, Fla. There you’ll see our industry’s newest products, talk to vendors, attend workshops and clinics, network with other dealers, and experience two concept stores – a pro store and a traditional hardware store. And don’t miss our red-hot Flash Deals. Plus, our Spring Online Buying Event, which runs Feb. 19 – March 3, is your chance to round out your spring buys with online-only deals, offers, and more.

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2024

DEALER MARKET & Spring Online Buying Event

Get Ready, It ’ s Coming!

INDEPENDENT HOME IMPROVEMENT CONFERENCE

Together for the Industry AUGUST 27-29 | MARCO ISLAND, FL Two respected industry events—the NHPA Independents Conference and The Hardware Conference—will come together to form the 2024 Independent Home Improvement Conference. Join retailers from across the industry and gain actionable solutions for today’s toughest retail challenges. Visit ihiconference.org to sign up for news, updates and offers.