Issuu

Publisher/Principal: Tom Chasteen tom@thehardwareconnection.com 305-852-6126

Editor/Principal: Chris Jensen chris@thehardwareconnection.com 317-514-8864

Marketing & Creative Director/Principal: Dan Akers dan@thehardwareconnection.com 317-797-6609

Senior Business Advisor: John Hammond jhammond@thehardwareconnection.com

& Great Lakes Sales: Greg Cole greg@thehardwareconnection.com 317-775-2206 Western Sales: Tom Ballard tballard@thehardwareconnection.com 317-938-9380 Contributing Writer: John Franklin john@thehardwareconnection.com

Exciting Changes to Announce

By Chris Jensen

Any retailer that has survived the big-box invasion knows that growth is imperative to survival.

The much–repeated quote, “If you don’t grow you die,” applies to any entrepreneur looking to establish a foothold in the market.

It seems like good advice to follow, so we’re excited to announce a number of growth-minded changes at The Hardware Connection. First, we are expanding to seven issues in 2012, up from the four we published last year. In addition to bimonthly frequency we will be producing a special National Hardware Show® edition in April.

One of the many great things about digital publications is the fact that you can measure readership and engagement in very direct ways. We know The Hardware Connection is “connecting” with our retail readers, because we see our numbers continue to rise sharply each issue.

Also, we have redesigned and enhanced our website, www.thehardwareconnection.com, to make it more useful for retailers. You will find new product reviews, archives of Digby’s Hardware cartoons

and Amazing Hardware Stories, links to handy websites and much more.

You can never have too many experienced hands on deck, so we’re delighted that John Hammond has joined us as senior business advisor. John retired at the end of 2008 after 38 years of distinguished service at NRHA. He served as editor and VP-publishing for Hardware Retailing and oversaw the association as managing director. Widely known and respected throughout the industry, John brings a great deal of experience and a sharp eye for business. John has kept busy doing consulting work for several industry firms, and now we get to benefit from his expertise.

John, along with Mark Parrott, took a chance on a 25-year-old kid who came out of grad school knowing nothing about the hardware industry. Not only did he teach me a lot about hardware retailing and magazine publishing, for which I will always be grateful, but he instilled in me the importance of paying attention to the bottom line. With John’s help we embark on taking our performance to the next level and will continue helping our retail readers boost their bottom-line performance as well. n

Jeff Punzel, Owner Punzel Ace Hardware

By Tom Chasteen

You Can Take My New Year’s Resolutions to the Bank

As we leave 2011 behind and enter 2012 I would like to wish each of you and your families a happy and, most importantly, healthy 2012. As I’ve gotten older (I will turn 56 in March) and have had to deal with health issues of my older family members and dear friends I’m becoming convinced that if you have good health, just about any obstacle we encounter as business owners is just that—another obstacle to deal with.

But our health and the health of those close to us is not easy to address when compared to business issues that we work through on a daily basis.

Like most people, I reflect back on the previous year and come up with some business and personal New Year’s resolutions. I try to stick to my New Year’s resolutions at least through the end of January or middle of February. Sometimes I make it to March, but not often.

Two years ago I was hospitalized with a severe case of pneumonia in both lungs for seven days and when I turned the corner and started feeling better I had several more days in the

Publisher Tom Chasteen is a third-generation hardware retailer who owns Tavernier Hardware in the Florida Keys.

hospital to think about that year’s resolutions. For the first time in my life, I have stuck with all four New Year’s resolutions and I’ve refused to budge on any of them.

The first one was that I was not going to allow any more “jerks” in my life. The second one was that the “jerks” who were in my life had to go. The third one was that I was not going to drink any more cheap rum, while the fourth resolution was that I was going to have more fun.

Two years later I’ve got to say I’m much happier without jerks in my life. I’ve gotten rid of almost all of the jerks that were in my life including problem customers and suppliers. I significantly improved the quality of rum I buy and, since I don’t drink much, that was an inexpensive but good change.

It’s amazing how much more fun you have when you eliminate the jerks in your life. I was spending so much time trying to accommodate the difficult customers and acquaintances that I had lost focus of the customers and

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THE WAY I SEE IT

people in my life that I really cared about. My father used to say to me, “Tom, don’t wrestle with pigs—you get mud on you and the pigs like it.” It’s funny but the older I get the smarter my father gets.

This year I only made one New Year’s resolution and I’m going to try to stick with it. If I can it will significantly improve my business and quality of life as well. So often we get caught up in the day-to-day operations of our businesses and our lives that we tend to lose focus of our longer-term objectives. It’s like trying to remember your objective was to drain the swamp when you’re surrounded by alligators.

So this year I’m going to try to spend a minimum of one hour a week doing nothing but reviewing how the “swamp draining” project is going or stepping back for a few minutes and trying to admire the “beauty of the forest.” If I’m not happy with the progress of the swamp draining or not happy with the view of the forest, then I need to re-evaluate my approach or my original objective. Sometimes we make a simple solution so complicated it seems impossible to make a change. I don’t miss those jerky customers one bit. And the time I was spending bending over backwards to try

and accommodate them? Well, I’m now able to spend that more productively with my good customers. I found some new customers who truly appreciate what I’m willing to do for them. Do I miss some of the dollars the jerks were spending with me? Maybe a little on my sales journal, but not on the profit and loss statement and I’m having way more fun without them in my life.

The biggest issue for me is sticking with change with minimal disruption to my daily activity. The old saying it takes 90 days to break a habit and 90 days to develop a new habit is definitely true for me. So I will try blocking out one hour in my office each week—early in the morning so I won’t be disturbed—and just try to evaluate the overall progress of my objectives. I don’t want to delve into the details of each project, because then I would be too close to see the forest. However, I want to look at the big picture like standing on a mountainside to get an overall view of the valley and surrounding area. You just can’t do that standing flat-footed on the ground in the valley.

The big question is can I force myself to stick with the process beyond March? Wish me luck, and from one retailer to another I hope you have a happy and healthy 2012. n

HARDWARE STORIES Amazing but TRUE

One of the more entertaining/frustrating items is kerosene heater wicks. As most of us know, you HAVE to have a brand name and model number to look one up. I love it when people say they can tell when they see it. Then I show them the wall of over 100 wicks. One that stands out the most is a gentleman that came in one day. We asked for his name and model number. He replied, “I have it right here!” He pulled out a piece of paper that said ‘CAUTION, DANGER.’ He said that was right on the front of the heater. He went home, called back and said, “I have it now!” He told us he was going to read it right off the front of the book that came with his heater. He said, “I can’t pronounce it, so I am going to spell it. M-A-N-U-A- L.”

Dusty Lee Stormer’s True Value, Knoxville, Tenn.

As a lumberyard we accumulate piles of wood pallets. A few years back we made a large sign out of an old sheet of 4x8 plywood. We painted on the plywood “FREE FIREWOOD” and put it in front of a pile of pallets and left it in front of our store overnight. Next morning all the pallets were still there but the plywood sign was gone.

IJoel Kessel

Lynn Lumber Co. True Value, Lynn, Mass.

Broadway Krown True Value, Brooklyn, N.Y. nounce it, so I am going to spell it. M-A-N-U-A- L.”

could ﬁll a book with the requests we’ve gotten over the years. We used to install all types of ﬂooring. We would give the customer a price and then explain that the price includes materials and installation. Then the customer would ask “OK, now how much if you laze it?” After getting that question a few times we started charging an extra $50 for lazing. Which shelf would you go to for some poly-urinate? That is one of many variations that we have gotten for polyurethane. How about getting some coleslaw for my pipes, (cold-solder). Right next to the blue painters tape we stock a whole line of masculine tape and the animal paint has a real nice shine to it.

Anthony Adipietro

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How’s Business?

NORTHEAST

How were holiday sales? We were very busy on Black Friday. In November, we were up 25 percent from the previous year. December was a lot quieter than expected. We’re up 7 percent, but we haven’t had the storms that we did last year.

We didn’t sell rock salt like we did last year.

But we’re not really comparing apples to apples here because we reopened this past Mother’s Day after adopting Destination True Value format. It’s been tremendous since that reopening. We’ve been up 15 percent or more. What led to that increase? We added a lot of new merchandise. We have 12 feet of entry locksets and house locksets. We doubled our plumbing and faucets to eight feet. Lever locksets are very popular now. Customers who have arthritis are looking for those kinds of locksets. Also, our nuts and bolts have greatly expanded.

What items sold well during holidays? We put out a Black Friday flier and most of the items in the flier did well. Jump-starters for cars were popular and crock pots also did very well.

Store initiatives planned for 2012? We’re already thinking about

how we’re going to remerchandise for next Christmas. We’re looking to have some great-looking endcaps. Those help the store look so much nicer and it gives us much more traffic.

Do you see signs of economy recovering in your area? We don’t have a lot of contractor business; most of our customers are do-it-yourselfers. They’re still doing small repairs, not major projects. For us, the economy is moving fairly slowly, but I guess it’s going in the right direction.

Bob Williams Jr. Williams True Value Hardware Poultney, Vt.

How were holiday sales? What sold well? Sales were a little flat compared to last year. Clothing was one of our best movers. We sell Carhartt clothing and Chippewa boots. We’re in a cold part of the country, so long underwear and sweatshirts make for practical gifts. Those sold well, too.

Store initiatives planned for 2012? We’ll reassess the entire store and probably reset some departments. We’ll look through the store and see what isn’t selling anymore. Because January to March is a slow time, it’s a prime opportunity to spruce up the

store, find dead inventory and get ready for spring. We have noticed alarm clock sales are slowing down and we’re looking to increase our PEX product line.

Do you see signs of economy recovering in your area? We’re starting to see small signs. A couple of contractors are having houses go up and painters are planning for more spring jobs than last year. That’s just a small segment and it may be too early to tell.

How have you tightened your belt? Like everyone else, we’re watching our overall expenses and tightening down, reducing inventory and trying to increase the turns. We did a big re-lamping renovation a while back and we’re still reaping benefits from that.

Glenn Dion Rand’s Do

Best Hardware Plymouth, N.H.

MIDWEST

How were holiday sales? In November, we were up 8 to 10 percent over the previous year. December was down 30 percent and it was all snow-related. We hardly sold a bag of ice melt. Last year was an extreme bump. However, we are up about 10 percent over the December two years ago. The seasonal items are way down because of weather. The good news is that I didn’t have to spend $30,000 on snowplowing this year.

What was selling well? We actually did well with electrical — the best it’s been in three or four years, particularly with extension cords. Because of the mild weather and lack of snow, I think more people were decorating. Our plumbing and core categories were up.

Store initiatives planned for 2012? We’re marking our 25th anniversary and are planning a lot of events throughout the year. We’ll have an antique car show in the parking lot, and the fire department will bring in hook and ladders one day. We’ll increase our direct mail.

Do you see signs of economy recovering in your area? I think it’s pretty flat. We have a little bit of growth. Everyone here has home values going down. We’re in a rural area and we seem to be getting hit hard. Contractor business is down. One good thing, though, is that we’re selling a lot of fishing bait and tackle to all the contractors who aren’t working.

Tom Lane

Lane True Value Hardware Champlin, Minn.

Courtney Hoffman with baby Rockford, Tom Lane, Maggie Lane and Dewey Lane.

How’s Business?

How were holiday sales? What was selling well? Compared to the previous year, holiday sales were probably about the same. There were not hot items, nothing selling particularly well this season.

Store initiatives planned for 2012? We’re looking to add some other departments, possibly rental as another revenue generator. It seems like people are holding back on buying tools, especially those they’ll use only a few times. So, rental seems like a good avenue to go.

Do you see signs of economy recovering in your area? No. It’s leveled off and I don’t see it getting any better at this point. We’re about 95 percent do-it-yourselfer, and most of the projects they’re doing are home repair projects, such as painting, plumbing or electrical repair. No one seems to be doing any additions or other big projects. The market in our area has changed. The pie is the same size, but the slices seem to be getting smaller. Grocery stores are carrying hardware items. The only thing we can do is keep prices the same or better. It seems like we’re in a project-oriented business. Customers come here looking for

their project needs, not necessarily to shop.

Brian Berta Berta Do it Best Hardware Dwight, Ill.

WEST

How were holiday sales? I was surprised, but it was very positive. One of our stores was up over 13 percent for November and December. Another was up 4 percent in November and 8 percent in December. It was much better than what I thought it would be. What sold well? Impulse items. In October, we went to the Ace show and had someone specifically buy impulse items. Not ornaments and wreaths, but other items such as stuffed animals that make sounds and stocking stuffers for under three dollars. We went through box after box and had to reorder. That really made a big difference. Bird feeders and chimes also did well.

Store initiatives planned for 2012? We opened our third store in July and it’s doing extremely well. We’re looking to expand that store by 30 percent, including putting in a much larger garden department.

Do you see signs of economy recovering in your area? Looking at sales numbers, one store is up on the year 7.3 percent and the other is up 3.7 percent. This is the first year we’ve had a positive since 2007. We finished out the year really strong. The last two months we’ve been doing so well that I couldn’t believe the numbers. We were seeing increases of 13 percent. I checked it three times because I couldn’t

SOUTH

How were holiday sales? What sold well? We’re up about 20 percent over the previous year. Canning jars and Radio Flyer wagons were selling really well.

Do you see signs of economy recovering in your area? It does seem to be improving. People are starting to buy again. I’ve felt this before but been disappointed. People seem to be a tiny bit more optimistic. However, we did have quite a lot of home builder customers and none of that has come back.

How have you adapted to the tougher economy? We have changed our product mix, tinkering to find the right niches. Before 2008, we carried Carhartt clothing, but that’s something we haven’t continued. We’re

believe it. The contractor business has not recovered. They’re doing a lot of home repair stuff but none of the bigger jobs.

Rodney Hoffer Westside Ace Hardware

Santa Cruz, Calif.

expanding our plumbing, fasteners and basic hardware lines.

How has your advertising strategy changed in recent years? We are concentrating on doing more local advertising. We advertise in the local Smyrna paper and use Facebook.

Susan Harlan Vickery Hardware

Smryna, Ga.

How’s Business?

SOUTHWEST

How were holiday sales? What sold well?

Christmas was up over last year about 2 to 3 percent. The only thing that stands out as far as good-selling items is electric heaters. Here in Houston, heat’s not a main priority. It was colder, so they bought space heaters this year.

Store initiatives planned for 2012? Right now, 70 percent of our business is plumbing, and we’re looking to expand that even further. We also want to cultivate commercial accounts. Because we’re located near a channel, we have a steady

stream of marine supplies. We would like to expand that.

Do you see signs of economy recovering in your area? In this area, we’re not seeing a whole lot of new building. Before the crash, we saw a lot of younger homeowners refurbishing older homes. We don’t see that as much. Do-it-yourselfers seem to be doing more regular maintenance and emergency repairs.

Cyndi Martini-Kreckman Martini Hardware Co., Houston, Texas

From Tom’s Shop HARDWARE PRODUCTS

REVIEW

By Tom Chasteen

Tom Chasteen reviews 3-5 hardware products from “Tom’s Shop” in each issue of The Hardware Connection.

PRODUCT #1: THE SAW-MAX™ | DREMEL

Dremel has done it again with another product that is sure to sell well in the two-step hardware channel. The Saw-Max™ is every bit as functional as the Dremel MultiMax™ that was launched a couple of years ago.

The Dremel Saw-Max is a very compact power saw that is lightweight, easy to handle and has more than enough “guts” to cut through ¾” plywood, ¾” concrete driveway pavers, ceramic tile and aluminum diamond plate sheeting. I’m sure there are many other materials as well, but those are the ones we tested the Saw-Max on for this review.

There are several other features that make this tool a pleasure to use. It’s very easy to change the blades, as the button on the top locks the blade shaft so you can loosen and tighten the various blades that come with the Saw-Max. You can also lock

the trigger down if you are doing a lot of cutting or working at an awkward angle. Another neat feature is that it comes with a flush-cut blade, which makes it perfect for trim work.

I could easily see a finish carpenter or a DIYer using the Saw-Max for quick trim work or punch list work versus unloading the power miter saw or circular saw to do quick light work. I could also see a novice DIYer buying the Saw-Max to handle most small cutting jobs around the house. Make sure you go by and look over the Dremel Saw-Max for yourself at the next show you attend. I think you will agree that this is a tool we can sell in our stores and our customers will be glad we do.

Here is a video of the product in action: http://www.youtube.com/ watch?v=VpJUv0SL25g

From Tom’s Shop

HARDWARE PRODUCTS REVIEW

PRODUCT #2: RUST STAIN REMOVER

W. M. BARR COMPANY

Goof Off® has come out with a Rust Stain Remover and it is just fantastic. If you have rust stain issues in your marketplace—which most of us do—this is a must-stock product to have in your store. It will literally remove rust stains from concrete, fiberglass, plaster, nylon rope, canvas, plaster and even wood. But the best part is that it just dissolves the rust away. There is no scrubbing or rubbing involved!

Anyone who has ever owned a fiberglass boat knows how difficult it is to remove rust stains around stainless screws, rail fittings, cleats and hinges. I’m always reminded that stainless steel is “stain-less not stain proof” depending on the grade of stainless steel. All you do is use a sponge brush or small spray bottle and apply the Goof Off Rust Stain Remover and walk away. In most cases, when you come back in just a few minutes the stain is gone. Now you just rinse the surface with water and you’re finished! It’s that easy. In cases of real deep dark rust stains you may have to brush or spray on one or two more applications, but I’ve never found a rust stain this product wouldn’t remove. It works equally as well on automotive rust stains on pavers or concrete driveways using the

same technique—simply brush or spray it on and walk away. It’s also terrific at removing the rust stains sprinklers leave on the sides of houses.

I even tried it on some canvas sails and a nylon anchor line that the stainless shackle had rusted. It took several applications because it was a very deep, dark blood red stain, but sure enough, the Goof Off Rust Stain Remover took it out.

As a hardware retailer, the other thing I really like is that chemicals like Goof Off’s Rust Stain Remover are consumables that lead to multiple sales, not just one. The product label and merchandising of all the Goof Off products is very well done and the Rust Stain Remover is no exception. At your next wholesaler show stop by the Goof Off booth and you’ll see what I mean.

If you have rust stain issues in your marketplace, then this is a product you will want on your shelves. Once your customers know how good it works, they will be back for more.

For more information, go to www. goofoffstainremover.com/cleaning/ how-remove-outdoor-rust-stains.

PRODUCT #3:

One2flush DUAL FLUSH VALVE

One2products

Help customers save water and stop flushing cash down the drain with One2flush’s Dual Flush Valve. Easy to use and install, One2flush is a permanent solution to wasting thousands of gallons of water at the toilet. On average, the one2flush will save 30 gallons of water a day for a family of four and will save your customers as much as 20-30% in utility bills.

The One2flush Dual Flush Valve is simple to operate. The handle will install vertically or horizontally. Swing the handle one way for liquids and the other way for solids. The One2flush uses a combination of head pressure in the tank and piston technology to not only use less water, but to give the water you do use more force to complete the job.

The One2flush will fit most standard 2-piece toilets built in the last 75 years, including tanks as low as 8-1/2" high and wall-hung tanks.

Installation is a snap when following the easy-to-read instructions included in the package. Simply remove your old flapper and handle, then install the Dual

Flush Valve and handle and you’re ready to save money. I installed ours back in early December. Performance has been great and the water savings was better than expected with a total of 35% cheaper utility bills after installation.

Suggested retail price for the Dual Flush Conversion Kit is about $34.99. For more information go to www.one2products.com.

Percentage of consumers who use coupons when holiday shopping 2011: 37% 2007: 22%

Source: NIELSEN

By Chris Jensen

Digital age in the Advertising

With customers being bombarded with messages from all directions how do retailers make sure their ad pitch breaks through the clutter? With smartphones, tablets, QR codes and Facebook pages all the rage, what sort of advertising strategy will boost traffic and sales?

Fo R some R etaile R s, all they had to do in the past was sign up for their wholesaler’s circular program and let the wholesaler do the heavy lifting. t hose days are over, but that doesn’t mean dealers should abandon circulars. Circulars and fliers remain cost-effective ways to reach new and existing customers, but these days retailers need to adopt multi-pronged advertising strategies that embrace the latest technologies. Circulars can now be emailed to customers and

The staff at Westside Ace Hardware in Santa Cruz, Calif., shows off a week’s worth of coupons the store generated.

Upper: Sunshine Ace Hardware has significantly boosted endcap sales with in-store advertising from product videos.

Lower: Sunshine Ace Hardware continues to rely on traditional advertising methods such as fliers and circulars.

posted on Facebook pages and websites, providing bonus exposure at little or no extra cost.

Michael Wynn, president of six-store Sunshine Ace Hardware in Naples, Fla., still puts a lot of emphasis on traditional methods of advertising such as fliers, circulars and newspaper ads.

“We’ve tried Groupon and Facebook ads and we’re starting to use QR

codes. But in terms of ROI (return on investment) and strategy, these new technologies are a relatively small part of our advertising strategy. We’ve actually increased our distribution of fliers and circulars,” he says.

The biggest change at Sunshine Ace has been with in-store advertising. When Sunshine Ace’s main store was remodeled in late 2010, Wynn installed ten 32" flat-screen TVs on feature endcaps and began playing product videos on a loop. “We’ve seen strong ROI from that investment, especially since we reduced clutter from our in-store print signage. We’re better able to engage customers with digital signage. We’ve seen 100 percent or greater increases in gross profit dollars with these endcaps compared to traditional signed endcaps,” says Wynn, who plans to roll out the flat-screen TVs to the rest of his stores.

“How often can you get true ROI with advertising?” Wynn asks. “That’s possible with in-store digital signage with product videos.” He typically changes out the endcaps and videos once a month and also uses the screens to promote community events.

In-store digital signage helps increase sales once a customer is in the store, but you still have to find ways to drive footsteps. Wynn found the response to their Groupon promotion overwhelming. “We targeted $20,000 in sales and we sold over $50,000, which was

pleasantly surprising. It attracted a lot of eyeballs,” he says.

Sunshine Ace is active in social media, but Wynn is careful not to use Facebook to promote products. “We focus on tips and community events,” he says.

QR codes are used in traditional media ads as a call to action or to provide a demo video, he adds. Sunshine Ace also maintains an email list of customers and sends out monthly email promotions.

GENERATE A BUZZ

Traditional product and price promotions play a role, but that alone will not ensure healthy sales and profits. Independent retailers need to give customers reasons to come into their stores NOW! Otherwise you are just waiting for them to run out of light bulbs or need to repair their toilet.

ADVERTISING STRATEGIES

Jack’s Home Improvement Center in Wiggins, Miss., ran a creative promotion throughout February. Customers could bring in a photo on their phone of them posing with one of the Shop@ Jack’s signs that are posted throughout the county or upload the picture to the store’s Facebook wall and receive a 25 percent discount. Jack’s also conducts Tool Close-out Tuesdays. Customers can sign up for an email newsletter to learn about the weekly tool specials.

Dave Warren leaves no stone unturned when it comes to promoting his two stores in Milton and Evansville, Wis., and it helps that Dave’s Ace has more than 4,700 Facebook fans.

About a dozen customers took advantage of a special “Corduroy Day Sale at the Milton store at 11:11 a.m. on November 11th (11-11-11), receiving a 22.22 percent discount by showing up dressed in corduroy. The sale continued the rest of the day with 11.11 percent savings on most items.

Warren’s Facebook fans discover a new contest or promotion just about every week, and sometimes it’s a heartfelt endorsement of a community event or a plea to promote all the local businesses in the area. He takes photos of everything and posts on his store’s Facebook page, which helps his customers feel a stronger connection to his store. There is a constant buzz about Dave’s Ace, and the result is a

Dave’s Ace in Wisconsin is trying a scratchoff ticket promotion to drive traffic.

DEALER QUESTION: How has your advertising strategy changed in recent years?

My strategy is to continue with what I’ve been doing as we move into our 66th year. We do mostly fliers and radio ads. As far as anything new, we’ve been working on our Facebook page.—Bob Williams Jr., Williams True Value Hardware, Poultney, Vt.

It really hasn’t changed a whole lot. We’re doing a little more on Facebook and a little with email. For us, print still works. If we put a coupon in the local PennySaver, customers come flying in. We’re in a smaller town, where the people read the local paper to see what’s happening in the community.—Glenn Dion, Rand’s Do it Best Hardware, Plymouth, N.H.

This store does really good with print advertising, so we do it a lot. It seems to be a better strategy to have ads with fewer items but hotter prices, which brings in a lot of first-time customers. When we went with a larger number of items in ads it never seems to bring in as many customers and we’re left with inventory that never sells.—Tom Lane, Lane True Value Hardware, Champlin, Minn.

With our advertising we’re trying to target our market more specifically. We used to do a lot of mass direct mail, but now we cut down and targeted the ZIP

codes close to us. We also have in-store drawings to gather names and addresses. We’re really trying to zone in on our market. We do local print and direct mail circulars, but we’re going to try some radio advertising. The problem is that we’re in a rural market and not sure if the radio ads will be enough to draw people to us.—Brian Berta, Berta Do it Best Hardware, Dwight, Ill.

I’ve always loved coupons. The last nine months we’ve been super-heavy with coupons and they’ve done very well. Right now, I have a foot-high stack of coupons from the last couple weeks’ ads. Other than coupons, we do the normal Ace circular that goes to 55,000 in our area. We run a coupon on Thursday and it’ll only be good through Sunday. That way, we get response right now.—Rodney Hoffer, Westside Ace Hardware, Santa Cruz, Calif.

We’re trying to do more on the Internet and Facebook. We’re collecting emails to start up an e-newsletter. We’re looking to get our name out in different formats than just print and the Yellow Pages. We do a print circular 10 months of the year. We also participate in some of the True Value national ads and Black Friday ads. —Cyndi MartiniKreckman, Martini Hardware Co., Houston, Texas

ADVERTISING STRATEGIES

steady stream of customers who view the store as their first choice for hardware products.

A STRATEGY FOR THE HOLIDAYS

Glenn Dion, who operates Rand’s Do it Best Hardware in Plymouth, N.H., felt it was a losing battle to stand out from the crowd of chain retailers on Black Friday. So he holds his own Black Friday/Weekend a week later kicked off by a bucket and bag sale.

“This has been very effective for increasing the sales during this time. I feel most customers are going for the ‘big’ stuff such as computers or TVs and are headed out of town to the mall or big-box retailers no matter how much I advertised,” he says. “The following week and every day we get closer to Christmas people slow down and want to be done shopping, making my local destination far more attractive.”

Dion runs the 12 coupons of Christmas starting on Dec 13th and ending on the 24th. “These have worked out great and over the years we have tweaked them to the coupons or offers that really drive traffic. Once again using the theory of the closer to Christmas the less traveling people are willing to do and the more they look at our offerings and ads,” he says.

Blackhawk Hardware in Charlotte, N.C., which targets women with

Jack’s Home Improvement Center in Wiggins, Miss., posted signs throughout the county, with customers able to get a 25% discount by posing for a picture with the sign.

its boutique hardware assortment, devised a series of racy TV ads to drive traffic this past holiday season. One ad advised guys how to pick “gifts that don’t suck” with a sultry voice in the background stating, “If she’s happy now…You’ll be happy later.”

The ads got people talking—a lot— and attracted extensive coverage from the local media. More importantly, the ads worked—Blackhawk Hardware had the best sales month in the store’s 33-year history. Learn more about the ad campaign here: http://tinyurl. com/8xcy3sw.

Build your presence through social media and use circulars, fliers, coupons and bag sales on a regular basis to build a solid base. Then it’s up to you and your employees to deliver a compelling shopping experience that makes customers want to return. Even in the digital age, the details of retail have not changed. n

Customers Attract&Retain HOW TO

By John Hammond

John Hammond spent 38 years at NRHA, serving as VP-publishing and managing director. He is senior business advisor at The Hardware Connection. Contact him at jhammond@thehardwareconnection.com

WHEN A BODY IS LEAKING BLOOD,

it needs a transfusion.

Unfortunately, independent hardware stores and home centers are always “leaking” customers and the rate of loss is about to increase. That’s why new customers are referred to as the lifeblood of a business.

Enhancing gross margins is fine. Improving turnover is great. Using loyalty programs and the Internet to sell more to existing customers and get them to return more frequently is well and good. Despite those efforts, every store is constantly losing existing customers for a variety of reasons and

Gertens in Inver Grove Heights, Minn., holds special events for ladies.

unless they are replaced, the business will eventually die.

DEFINING THE PROBLEM

Independent home improvement retailers will lose customers much faster in the decade ahead, as baby boomers retire and move to maintenance-free communities. Others just move away, become ill and die or simply spend less on home improvement, maintenance and repair. Worse yet, this distended segment of the population is by far the most loyal segment to these independent merchants.

Young consumers are less likely to shop independents and are predisposed to favor big boxes and other mass

ADVERTISING STRATEGIES

merchants. As if all that wasn’t enough of a concern, Internet-only retailers continue to capture an increasing share.

While existing sales dollars are constantly leaving and must be replaced, lost sales and lost customers are two important but separate issues. While replacing lost sales with greater sales to existing customers solves the problem in the short run, it also masks the customer loss that must be addressed over time.

Attracting new customers is one of the top challenges these stores will face in the decade ahead.

A sophisticated plan to attract new customers begins with understanding that there is no silver bullet and no steps one, two and three that will

ensure success. Rather, it begins with a look at what customers want from home improvement stores. It follows with an understanding of what triggers people to try a new store and then sets about targeting specific groups of potential new customers.

WHAT CUSTOMERS WANT

It’s always much easier to sell people what they want to buy and industry research over many years has clearly shown what customers want to buy. Emphasize these attributes in all advertising and other communication. Speak to them specifically and constantly. Independent retailers hold the high ground on most of these issues.

Keim Lumber in Charm, Ohio, brings in kids and their families when it hosts the Soap Box Derby races.

1. Save me money—It tops the list of what customers say they want. It doesn’t mean always being the lowest priced, but it does require maintaining a competitive price image always.

2. Save me time—This translates to convenience and that means location, parking, in-store signing, in-stock position and quick checkout. It’s important to both consumers and pros.

3. Teach me something—Yes, a store staffed with knowledgeable people in all departments every day. Consumers usually come in to solve problems or do a project, rather than to just buy a specific item. Knowledge sells! Pros always appreciate having a new product or application explained that will save them time or cost on the job.

4. Treat me like an individual— Friendly, helpful employees make the difference. Hire for attitude, train for execution and rid the store of people that don’t get the message.

5. Offer us unique products and services—Offer categories that make the store a destination, meaning if the customer wants it there’s nowhere else to get it. The same holds true with

ADVERTISING STRATEGIES

services, whether it’s rescreening, small engine repair or wild-bird feeding.

In short, retailers need to provide a shopping experience that exceeds expectations by under-promising and over-delivering. The shopping experience must also be memorable.

WHY NEW CUSTOMERS COME IN

Word of mouth is the number one reason a person tries a new store and it is more powerful than any ad appearing in any media. As a corollary, the Internet is the new word of mouth. It multiplies the communication of good or bad shopping experiences exponentially.

While the Internet facilitates word-ofmouth referrals, social media sites such as Facebook and Twitter and the store’s own website are not likely to be followed by people who have not come into the store. E-fliers are a little better at bringing in new business if the addresses of noncustomers are available. Sites such as Groupon or Living Social can be used to put out an aggressive coupon that might attract new and younger non-customers.

Direct mail circulars, newspaper, radio and TV all still work and reach non-customers. Research from Kubias Prime Media, in a 2011 major market retail report, revealed that 85 percent of consumers use fliers and 56 percent use both print and e-fliers. Only 6 percent use e-fliers exclusively, so don’t run a business on e-fliers alone.

“I created Hardlines Digest in 1996 as a way for my fellow retailers to swap tips about the nitty-gritty of running an independent hardware store. Today, it’s grown to a community of thousands of independent hardware store owners just like you. I hope you’ll join today and start sharing your own expertise.”

John Fix Owner, Cornell’s

Hardware Eastchester, NY

Bryant True Value in Oakhurst, Calif., hosts an annual Clutter Community Parking Lot Sale that attracts a crowd.

Curb appeal matters as potential customers drive past the store. Do they see products and signage out front that might bring them into the store? How about special events? Well-publicized events will draw new people. Some examples follow later in this article.

It’s important to remember that doing nothing also delivers a message.

TARGET SPECIFIC GROUPS

Efforts to attract new customers should be aimed at specific groups. Shoot a rifle and not a shotgun.

New arrivals to the area can be attracted by giving coupons to realtors. Use postal packets, track new home sales and send an introductory coupon.

Established non-customers are best lured by special events and unique destination categories. A bird lover may try the store for the first time because advertising made them aware of this special department filled with unique products and knowledgeable people. The same holds true for other specialty departments and special events.

Target the young through ball team sponsorships and support of other

ADVERTISING STRATEGIES

youth activities, along with Internet and mobile phone promotions.

Only about one-third of all families are traditional nuclear families. Target female heads of households with special events such as ‘Ladies Night,” howto clinics and promos on categories of special interest, such as live goods.

Hispanics can be reached with ads pointing out the store is bilingual and that you have products and services that cater to their interests. Consider advertising in Spanish-language newspapers or on Hispanic TV and radio stations.

The takeaway message is that guests won’t come if you don’t invite them.

What follows are a series of actual promotions shared by retailers who participate in the Hardlines Digest blog (www.hardlinesdigest.com) and have been collected over the past year or so. It is a rich source for idea starters.

BIG BIRDING WORKSHOP

Held in conjunction with a local park’s annual bird count, a local birding group runs seminars. Staff dresses as exaggerated bird watchers and “Big Bird” stands in front of the store with a sign that says “birdseed…cheep… cheep…cheep.”

LADIES DIY NIGHT

Only women are invited and seminars are held on small home repair

projects. Refreshments are served and specials on products and categories of interest are offered.

HALLOWEEN SAFETY PROMO

Parents are invited to bring children to the store for a free trick or treat bag, which contains treats for the kids. A coupon for future use is also put into the bag and contains the store’s logo, contact info and website address. Adhesive-backed reflective strips for costumes and bags with the store name are also given out.

OCTOBER SAFETY MONTH

Invite fire, rescue and police to the parking lot and set up tents with ambulances, fire trucks and a food stand. Bicycle helmets are given away and car seat safety inspections are performed. Sign-up sheets for first-aid and CPR courses are available and safety-related products are displayed. A clown does face painting and hands out balloons.

MULTI-MEDIA PROMO

Obtain an e-mail list from Chamber of Commerce or tourism bureau and use to send out a $5 off coupon on any non-sale purchase of $25 or more for Mother’s Day (good idea for any holiday). Support the promo with an item/price print promo and radio ads. The radio station sends out e-coupon text blasts to everyone who texts the station to support the radio ads.

D-I-Y clinics are an excellent way to build loyalty with female customers.

A FEW MORE IDEAS

n Lawn and garden power equipment demos with garden tractor obstacle course.

n Spring garden clinic on local planting with experts from a university or county agriculture departments.

n Hold a boat and/or fishing show in the parking lot with local boat retailers showing off their models.

n Host a free craft fair or community garage sale in the parking lot.

n Write a weekly “help” column in the local paper.

n Install a photo kiosk with a price competitive to Walmart. It’s a good idea for a small town.

To quote a successful hardware industry salesperson, “We had better be feeding new customers into the top of the hopper, because the old ones are falling out the bottom as we sit here.” n

Old-Fashioned Appeal Blending With

CThe potbellied stove

huck Nutter’s lifelong dream was to leave the corporate world behind and open a hardware store. He first started down that path by launching a handyman business in 2005. In August 2011 he opened Nutter Hardware in the Upper Arlington area of Columbus, Ohio. “I wanted to re-create the classic hardware store that marries the best of modern technology with old-fashioned customer service,” he says. Customers are greeted by a fully restored 1948 Ford F150 pickup truck on the salesfloor.

Wholesaler: Ace Hardware

Salesfloor square footage: 8,500

Number of employees: 18 plus 11 full-time and 2-3 part-time employees for handyman service. Top core categories: Paint and hardware. Most successful niches: Full-service outdoor power equipment and handyman service with 5 vans, 3 trucks and 2,000 customers.

Chuck Nutter opened Nutter Hardware in Columbus, Ohio, this past August.

provides nostalgic appeal and is designed to help Nutter Hardware serve as a gathering place for the community.

Modern

Touches

Chuck Nutter • Nutter Hardware • Columbus, Ohio

Chuck Nutter has fulfilled his vision of opening an old-fashioned hardware store with modern touches.

What made you decide to open a hardware store? I’m the third oldest of nine kids. We never saw a repair man come to our house. I have fond memories of going to the hardware store with my dad and the guys at the store all knew him and knew what to tell him about his projects. We’ve lost that type of familiarity in our society. Also, I was tired of running around to several different stores to get all the products I needed for my handyman business. This community needed a good, local hardware store that offers knowledgeable advice.

What are some of the store’s modern touches? We spent a lot of money on skylights, which have been awesome. We also have

Upper Left: Community residents have embraced the opportunity to buy local for their hardware needs.

Lower Left: Nutter wants his employees to offer the knowledgeable advice he remembers from his childhood visits to the hardware store with his father.

motion-activated lights. The best indication is we’ll see payback within three years.

Where did the 1948 truck come from? I was cleaning the gutters for a customer and saw the truck sitting in the garage. I asked him about it and he said he didn’t have anyone in the family who wanted it, so I bought it from him. He had gotten it right off the line in 1948.

What handyman services do you tackle? We will do anything to repair or maintain a home. All our guys are clean-cut and no job is too small for us. Having a hardware store and handyman service works perfect together. We anticipate getting a lot of referrals from the hardware store and this is the busiest we’ve ever been.

How has business been so far? We’re very pleased. Every day we have someone thank us for opening a hardware store in the area. Traffic is fine but we need to find ways to get $3 more per transaction.

How do you get your customer service to stand out? We want to treat our customers wonderful. By

DEALER PROFILE

Upper Right: The tool department prominently features Craftsman tools.

Left: Creative merchandising is used to showcase winter products.

Lower Right: Paint is the one of the top-selling departments.

the second time a customer comes in I hope we’d remember them. By the third time we should remember their name and be able to ask about the projects they were working on. We want our hardware store to be like a favorite barbershop. We’ve got a potbellied stove, because we want to serve as a community gathering place.

How do you get customers to buy local? This community is very supportive of local businesses. They get it. This last recession has driven people to stay local. We try to get the community involved by hosting ladies nights, men’s nights and having kids’ workshops where they build a birdhouse.

Can an old-fashioned store attract younger customers? We have candy by the checkout like an old-fashioned store and offer free popcorn because we know we have to get kids involved. My greatest fear is that the next generation of customers doesn’t know what an old-fashioned hardware store looks like or what

great customer service is really like. There are real generation gaps where people aren’t teaching their kids how to do home projects. Customers of all ages will keep coming back if we treat them right.

What oddball items have been successful? I’m surprised by all the little impulse items that sell like back scratchers. We’re selling quite a few 4-foot Manplow snow pushers that do better than a snowblower. Rickle’s Pickles out of Indiana has been a great product for us. It’s important to offer unique brands you can’t get anywhere else.

Any family involved in business? My wife, Kathy, and I have three kids. My wife and daughter design all the chalkboards and my wife also helps a lot with merchandising.

Future plans? We’re working hard to get designated as the local post office, which is a great way to boost traffic. There’s space available next to us, and we’d also expand into outdoor living and tool rental. n

8Questions for Lyle Heidemann

Lyle Heidemann has served as president and CEO of True Value Company since 2005, following a 36-year career at Sear, Roebuck & Co. His major initiative with the co-op has been the development of the Destination True Value format.

1With the recent introduction of a small-store format for Destination True Value, explain how your DTV strategy has evolved.

Heidemann: Our new 5,200-squarefoot model shows that we can create a relevant store in a small space, where customers can find everything they need for a basic maintenance or repair project. The smaller DTV format also means we can now help even more of our stores, particularly those located in the Northeast and in small towns across the country.

The small store features approximately $40 of inventory per square foot, innovative sliding bypass panels that can add as much as 40 percent of additional lineal feet, and 79 new assortments created especially for the small-store format. The small store includes nearly 13,000 SKUs and in total, retains 68 percent of the SKUs from the original DTV floor model that we debuted at our annual Spring Market in 2007 in Atlanta, but in half the lineal space.

How many members have adopted the Destination True Value format to date and how many do you expect will eventually convert?

Heidemann: Over the past 12 months, we have added more than 1 million square feet of new Destination True Value store space. To date, 230 of our retailers have remodeled, expanded, relocated, opened a new store or converted their store from another distributor to the DTV format, accounting

for more than 3 million square feet. Retailers who have converted to the new store format have, on average, increased their sales by 8 to 10 percent.

3 What are the highlights of your financial performance in 2011, and what are your projections for 2012?

Heidemann: While we haven’t closed our books for 2011, we expect to have both a net income and patronage dividend comparable with last year and comparable co-op sales increase between 3 and 4 percent. Retail sales have been fairly strong since June, with only five weeks of negative growth. Over the past six months we have seen wholesale comp-store sales increase by 1.7 percent and total retail sales grow 4.8 percent. Some of that growth was driven by the threat of a hurricane in the Northeast, as well as a very early snow in October. Every one of our departments saw sales increases, with core categories like hardware, plumbing, electrical and paint all trending upward. We would be very pleased to see between a 2 and 3 percent sales growth in 2012.

4 What are True Value’s key initiatives for 2012?

Heidemann: We will continue to assist our retailers in growth with attractive loan packages for DTV, including conversions, remodels and new stores. We are also analyzing our retail assortments and will be resetting our corporate store

WHOLESALING

during the latter part of the year, optimizing space through adjustments to lineal footage and inventory levels by department and class of merchandise, with the goal to help our retailers to improve their space productivity going forward.

We’re also rolling out a farm and ranch category that will help current and potential new retailers to improve their competitiveness, and looking at other categories that may make our format more compelling. And during the second quarter, we’ll introduce a new national advertising campaign focused on our retailers and what they do best.

5 How pleased are you with the ship-to-store program and what feedback are you getting from members?

Heidemann: Extremely pleased. Almost all True Value core hardware stores now have a website and are part of our digital marketing efforts. In the past 12 months, more than 2,000 stores have signed up to be a ship-to-store location, and nearly 1,800 have completed the certification process. Giving shoppers the ability to research products and purchase online is a must these days, and with truevalue.com offering a ship-to-store option, we have remained competitive in today’s digital marketplace. Feedback from retailers has been positive.

The launch of the True Value gift card in August was also a success. Almost 1,500 stores are now participating.

WHOLESALING

What are you learning from the corporate store in Mt. Prospect, Ill.?

Heidemann: The Mt. Prospect store allows our corporate associates the chance to live retail a few days a week. The store is a learning lab for us, and we have at least two associates work in the store three days a week for 12-week rotations.

We’re learning more about how to take cost out for our retailers from determining the best ways to receive and put away merchandise, to setting up and maintaining endcaps, to the benefits of location codes as a way to reduce operating costs.

We’re receiving firsthand customer input on out-of-stock regular or promotional goods, customer service issues and responses, as well as learning what products may need to be added to assortments. We’re also using the data from the store to help us measure sales, gross margin, GMROI and unit velocity by lineal foot and planogram for other stores, to improve the productivity of our retail assortment recommendations.

7 What role does social media play in your national advertising strategy and how important is it for members on a local level?

Heidemann: Social media is an important component of our marketing strategy, especially to reach a younger demographic. We have had a lot of

success with our DIY Blog Squad, and our Facebook page. We also introduced Twitter this year.

Many of our retailers are engaged in social media. We feel this is an effective way to stay connected with both their female and younger shoppers to keep True Value top of mind.

How does the Home & Garden Showplace brand benefit the entire co-op and how has True Value Gardens program been received?

Heidemann: Home & Garden Showplace is a profitable niche business as well as the right answer to any independent garden center, providing a variety of advantages and opportunities. Our retailers benefit from having access to many of the nation’s top growers that partner with us. These growers provide competitive terms and pricing and quality live goods, which helps our retailers stay ahead of the big-box stores in their marketplace.

In addition, we provide programs, products, training and customer service on a very specialized level. Our ability to provide core products and react to trends benefits our members by maintaining consumer relevancy, and benefits the co-op by maintaining the membership.

Home & Garden Showplace formed an alliance in July 2011 with Master Nursery Garden Centers, a garden

center buying co-op, to strengthen the independent garden center community. The continued growth for the independent garden center is what makes this unique business partnership continue to thrive in the industry.

Our True Value Gardens program continues to grow as it gains more awareness with the True Value hardware stores. The participants benefit,

as they have access to many of the nation’s top growers. These growers have been selected for their ability to partner with our garden centers, helping them select the right live goods, at the right time for their region. The personal attention these retailers receive from our Home and Garden Showplace team is much needed as they enter a side of the business which may not be second nature to them. In fact, the three-step True Value Gardens program is designed to take the retailer from a small, seasonal set up all the way to year-round live goods sales. n

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John Fix started the Hardlines Digest in January 1996 and continues to run the servers out of his hardware store in Eastchester, N.Y. There are currently more than 2,500 subscribers to Hardlines Digest. Go to www.hardlinesdigest.com.

HOW TO HANDLE TWO CUSTOMER IssuesTricky W

By John Fix III

inter has not really arrived in most of the country, meaning stores are a bit quiet after the holiday. Quiet stores mean more time for posting to Hardlines, so activity has been brisk.

DISPUTED INVOICES

J.C. Warren of Stars Ferry Building Supplies in Burley, Idaho, wondered how other retailers handle disputed invoices. As he explains, “We had a customer that charged on an account. The account’s bookkeeper calls us and they don’t recognize the signature. The clerk wasn’t sure who the person was. Do you just write it

off or try to come to some other resolution? It was only about $100.”

Gary Clayton from Jamesburg Hardware & Appliance in Jamesburg, N.J., had some ideas for solving the situation. “Check the signature to other people who have charged on the account and you may find similarities. When this has happened to us in the past it’s usually my employees who assigned it to the wrong account. Is there a different account with a similar name? What are the account names that come up on the POS when you search for the account in question? Check those account signatures for comparison. Talk to the employee to see if they remember any details of the transaction and talk to the bookkeeper about the item that was purchased and what it is used for. Sometimes that may jog their memory as to what they

Nutter Hardware’s return policy is spelled out clearly by the checkout.

were working on at the time. I don’t think we’ve ever lost out on one of these transactions.”

Dick Beal had some procedural ideas for handling house accounts. “I’d have all my house accounts set up with either a list of those names approved to purchase on the account and/or purchase order required. It is then up to your cashier to either identify the purchaser from the approved list or to accept a purchase order with no other options.”

HARDLINES DIGEST

the old question arises: Do you have a camera system watching the registers? We review the video for the day in question, we review signatures around the sort search for that customer and we try to get that customer to give us a list of names allowed to charge. If customer does not give a list of names, we put a note in Name Screen in MCR for the clerk to key in the name message. Just do not write off that $100.”

Beal added, “I recall more than one occasion when somebody (approved to make purchases) got fired and headed for my store that same day. Usually employers remove them, but they are expected to pay if we were not notified — it then becomes a matter for the sheriff. Could’ve been an honest mistake like your cashier brought up wrong account for a known customer to sign. I’ve had that more than once, particularly when a business has multiple accounts. I’d have your cashier checking other invoices with an eye to matching signatures.”

Rick Schwartz from Schwartz Hardware in Fall River, Mass., suggested checking the video if available. “Ah,

Frank Trippi from Williams Lumber & Home Center in upstate New York echoed the video idea. “We line it up with our security camera feed to verify who made the purchase.”

RETURN POLICIES

Returns are a part of retailing…just not one of the better parts. Brandon Buckalew of Hardware Hank in East Grand Forks, Minn., related this story. “I know we’ve talked about this before on here but a customer brought up a point. He had bought a bolt cutter two days ago. You could tell it had been used and he wanted to return it. My cashier and manager both said no, so he wanted to speak to me. Right away he asked if he could see my return policy. On our second cash register we have a sign posted saying no returns on bolt cutters, water

heater element wrenches and most hand tools. But that wasn’t the register he bought the product from.”

It got Brandon to thinking, “Do I need to have this posted at every register? Do I need it posted in the aisles? Do I need to have it posted every 4-foot section of our hand tools? Do I need to have it posted at all?”

Brandon says they are generally pretty relaxed on their return policy. “I am just curious to know how everyone else posts their policies. I was thinking I should be nice and just take them back until he said, ‘I would have bought them somewhere else if I had known I couldn’t return them here.’ My cashier and manager had to bite their

tongues to keep from laughing until this ‘customer’ walked out the door.” Brandon’s story generated a lot of discussion. John Kidd of C&S Supply in Mankato, Minn., had a suggestion about return policies. “We have signs at the register and they are pretty worthless. We started having the return policy printed on the bottom of the receipt. It does use quite a bit of paper but our problems have been reduced by a large margin. Epicor has a place to add a lot of information to the end of the receipt.”

Vicki Davison of Bloomington

Hardware in Indiana adds a popup message to her POS. “In the Epicor system you can have certain

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Hardware Hank dealer Brandon Buckalew sought advice from fellow retailers on how to handle a customer returning bolt cutters.

items with a pop-up for the cashiers, or even to print on the receipt that say things like tube sand not returnable, axe head and handle sold separately, cut items not returnable, bolt cutters not returnable or the one I will be ‘building and attaching’ that will say/spin something to the effect of ‘No you can’t use the Christmas lights and return them after Christmas.’ I had the same feeling of disgust as you...come on man, really? The guy in line behind this lady just about fell over. He could not believe someone would have the nerve.

Larry Perry of Woodstock Home & Hardware in Vermont suggested a modified store return policy. “How about ‘Returns for refunds and exchanges are at the discretion of store management’ and then be as accommodating as you possibly can.

Susan Miller pointed out that there may be legal requirements about return policies. “Here in the Garden State we are required to have the policy posted at the point of sale, which is the cash register. So we have a large sign behind the checkout. We do make exceptions

HARDLINES DIGEST

at our discretion. We try not to have too many negatives, but if something gets to be a real problem that keeps occurring we add it to the sign. We do say that tools must be in brand-new condition with no signs of wear. Customers who are intent on abusing a return policy will argue with you no matter what you have posted on your sign.”

Thomas Bow from EazyPower pointed out you might be able to promote rental via return policies. “If there are certain items that tend to be used once and then returned, why not identify those and tag the item as available for rental, and non-returnable if purchased and used?”

Tim Kuhn of Los Molinos Ace Hardware in Los Molinos, Calif., suggested labels on some products, but admitted exceptions still need to be made. “We have stickers from Ace that say: Non-Refundable for exchange or refund due to the nature of this product! We also have certain items such as bolt cutters, drain augers, cut lengths of rope, wire, etc., that we have pre-loaded to print on our receipts on these products. Some customers think they can just have free rental on certain products. That said, we still cave in sometimes for certain folks depending on attitude.”

These are just two of the topics discussed during the past few months on Hardlines Digest. To read more or subscribe go to www.hardlinesdigest.com. Hope to see you on the list! n

PAINT & DECORATING TRENDS

Interior Paint Sales

(Independent Hardware Channel) 12 Months % Change vs. Year Ago Interior Paint: Units

Interior Paint: Dollars

Source: Vista Information Services, div. of Epicor Software Corp.

Unit Sales Breakdown in Interior Paint

Total of 3,858 Items with Sales

5 Items % of Unit Sales

Top 10 Items % of Unit Sales

20 Items % of Unit Sales

Source:

and

Paint brushes are being developed with better paint capacity and higher release percentage, increasing productivity for paint contractors and homeowners.

Wood finishing products are seeing increased demand as more homeowners look to repurpose old furniture.

PAINT & DECORATING BUYING UPDATE

n Consumers continue to show high interest in products that combine paint and primer into one .

n The 2012 paint palette will draw heavily upon the natural colors in the American landscape, according to Debbie Zimmer, color expert at the Paint Quality Institute . “Native plants and flowers, oceans and lakes, and rocks and minerals are the sources of

inspiration for the paint colors that will be ‘in,’” says Zimmer .

n Blues gained popularity in 2011 and will remain hot in 2012 . “From sparkling sea-glass blue to colonial blue-grey, blues are suitable for all living spaces,” Zimmer says .

n Homeowners are staying put in their current homes, but they are looking to create elegant living spaces by using bold colors and unique color combinations .

n Zimmer predicts patterned paint will take center stage in 2012, with increased interest in hound’stooth finishes, lacy designs and bold color blocking techniques . “In some cases, pattern will be the main decorating feature in a room,” she says .

n Classic combination of black and white will be incorporated in all sorts of settings to freshen an interior .

n On the home exterior, shutter colors will shift away from the traditional look to a more monochromatic palette . “You’ll see more shutters that are painted just a shade darker than the siding,” says Zimmer .

n “Top quality 100% acrylic latex paint will continue to provide the best performance and best value to budget-conscious homeowners,” adds Zimmer . n

By Fred Fischer

Inventory The Importance of Managing Your

Fred Fischer is president of Ganymede Technologies Corp. in Bucyrus, Ohio, which markets the J3 Point-of-Sale retail inventory management system. Please send comments to fred@j3pos.biz.

For most of us, December 31st is year-end. It is time to do inventory, meet with the accountant and dust off those financial statements. Specifically, it’s time to look at the balance sheet and profit/loss statement (P&L). When it comes to the P&L, there is little that you really have any say about. We don’t get discounts on taxes, insurance, utilities, and in the big picture there is not a lot that we can do to make a significant change in those numbers.

As we examine the balance sheet, there are three sections: assets on the top, liabilities in the middle and net worth at the bottom. And hopefully, that net worth is a positive number. Usually one of the bigger numbers on the balance sheet is inventory asset. In the big

picture, the two things you really have a say in are your inventory and labor.

If you know what is going on with your inventory and you and your staff members are working smart, most likely the profit is good and net worth is a good positive number. It is amazing the number of hardware stores and lumberyards that are still using hand-written invoices and maybe a cash register. Even more amazing are the stores that have a point-of-sale system and are not taking advantage of the many features their software offers. Do you take a good physical inventory every year or throughout the year? Are you updating your prices every week? Can you identify what items are not selling in your store? How much profit (not gross dollars) do you

make on each item or for the day in your store?

How do you manage your inventory? There are a couple of tried and true methods. Do you identify your slow movers by whether you can write your name in the dust on the package? Are the edges of your price tags curled up (meaning the adhesive is old and dried up) so that they fall off if you touch them?

When you take inventory do you use the calculator method? It works this way. You get a few calculators that have memory keys. Going down each side of a gondola, you enter the quantity times the retail. At the end of the gondola you have an adding machine tape with a total retail value. When you are done taking inventory you add up all those tapes, which gives you a grand total of the inventory at retail.

Then there is the famous meeting with the accountant. As you sit down with the accountant, he multiplies the gross retail value by some percentage of profit you think you are making. Then the negotiating with your accountant starts. The trick is finding some balance between how much inventory you have and how much profit you made. The COGS account is the catchall for this adjustment. The goal: keep the bank happy and don’t pay too much in taxes. The bottom line is that you really don’t know what is going on with your business.

Recently, one of our customers did some analysis of his plumbing department. He discovered that 14.2 percent of his plumbing SKUs were generating 80 percent of his sales. What upset him was the realization that 85.8 percent of his plumbing inventory was only generating 20 percent of his sales. The old 80/20 rule is true!

As you analyze your inventory you will find many items are only selling 2 or 3 tenths of an item daily. Do you have a way to identify those items? If you have the data, you will be shocked at how infrequently some items really sell.

So how can you and your staff work smart? You have to have inventory and sales information. First is ORDERING. Knowing what to order, how much and when so that it’s not a guess or gut feel. Do you or your staff spend three to eight or more hours a week ordering merchandise? If you had the data to auto order, could that time be better used identifying what is and is not selling?

Do you track your items coming in the backdoor? Are you sure what you are ordering is what you are getting? If you have a POS system, is it going to scan when the product gets to the front counter? Is there accountability that your staff is doing their job?

Then there is the issue of theft. Of all small businesses that fail, 30 percent fail because of theft and half of that theft is internal. Do you have the

TECHNOLOGY UPDATE

information and data to know what you are ordering and receiving is what is going out the front door?

Price updates are probably the biggest loss of profit in our industry. If you are hand-writing invoices and using a cash register, those price updates and price tags are probably somewhere in a big stack. With a POS system, do you download price updates weekly, apply the updates and then get all the bin tags changed?

What is it costing you to not do price updates? If you update prices from invoices, you are selling at the low cost and then replacing that inventory at

the high cost. If we can agree that inflation is an average of 3 percent over the course of a year, you are losing $4,000 per $100,000 of retail sales on items that prices have changed. ($100,000 times 3% plus markup.) Can you afford to lose $4,000 per $100,000 of replacement inventory?

Managing inventory is much more that just counting items or checking profit margins. It is a complete package of managing information and data that is the difference between just making a living and the opportunity to get a fair return on your investment in your business. n

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IN THE NEWS

NEW STORES:

■ Annie Stom is opening Annie’s Ace Hardware in Washington, D.C., on Feb. 7.

■ Matt Risk and Jerry Freier are the new owners of Matt’s Welcome Hardware in Welcome, Minn.

■ Ivan and Brenda Hackman are opening Hackman Town & Country in Roberts, Wis., this spring.

■ Keith Payne opened North Meridian Hardware in Indianapolis.

■ Parr Lumber opened a new store in Marysville, Wash.

■ Donna Fisher is opening Stuls Ace Hardware in Pittsburgh.

■ MAC’s Hardware opened its 12th store in Dickinson, N.D.

■ Chuck and Dawn Kempker have purchased Burlington True Value in Burlington, Iowa.

■ Winﬁeld Muffett is opening an Ace Hardware store in Seaside, Ore., in March.

■ Hughes Lumber has moved to a new location in Fairland, Okla.

■ Michelle and Jeff Leopold opened Marin Ace in San Rafael, Calif.

■ Dave and Candy Gutierrez, along with sons Scott and Jeff, opened Penn Valley True Value in Penn Valley, Calif.

■ E&H Hardware Group is opening its 8th Ace Hardware store in Rocky River, Ohio, in February.

■ Andy Grant opened his fourth Ace Hardware store in Rocky Hill, Conn.

KUDOS TO:

■ Piedmont Hardware in Maiden, N.C., celebrated its 100th anniversary in December. Read a proﬁle from the Charlotte Observer: http://tinyurl. com/7u5c2fd

■ John Fix III and Cornell’s True Value won Google and American Express’ “My Business Story” video

contest. See the winning video at www.cornells.com

■ Crown Ace Hardware was honored with the 2011 Family Owned Business Award by the Orange County Business Journal. Read more: http://tinyurl. com/75lemtz

■ Mohler’s True Value in North Canton, Ohio, celebrated its 100th anniversary with a twoday event in October.

■ Shore True Value, owned by Paul Giunta and Alison Dannehower in Somers Point, N.J., was recognized for being the ﬁrst local business to implement solar power.

■ Heights Hardware in Cleveland Heights, Ohio, owned by Thomas Gathy, celebrated its 100th anniversary in 2011.

■ L.I. Hardware, owned by Jerry O’Shea in Bohemia, N.Y., was named “Best Hardware Store on Long Island” by readers of the Long Island Press.

■ Jim Roberts, owner of Ace Hardware of Grand Ledge (Mich.), was honored as “Businessperson of the Year” by the Grand Ledge Area Chamber of Commerce.

■ Howard Brothers Hardware, owned by brothers John and Doug Howard in Duluth, Ga., edged out 200 other nominated businesses to win Independent We Stand’s “Indie Award.”

PEOPLE ON THE MOVE:

■ John Venhuizen John Venhuizen has been named chief operating ofﬁcer at Ace Hardware Corp. A 20-year veteran of the co-op, he most recently served as executive vice president of supply chain, information technology and international.

■ Rich Lynch Do it Best Corp. named Rich Lynch retail marketing director, Scott Liggett application development manager and Steve Rose safety director in human resources.

■ Ben Battle was named chief technology ofﬁcer at ECi Software Solutions.

■ Blake Fohl has joined True Value Co. as VP-marketing and chief customer ofﬁcer.

■ Robert Marchbank was named CEO of ProBuild.

WHOLESALERS IN THE NEWS:

■ Do it Best Corp. announced that COO

Houston Lumber in Las Vegas.

■ Old Tyme Hardware & Lumber in Counce, Tenn., has reopened after suffering major damage in a tornado last April.

■ Central Network Retail Group has acquired NFL Building Center in Daphne, Ala., and Morrison-Terrebone Lumber Center in Houma, La.

■ Triangle Ace Hardware is merging with Burns Do it center in Clovis, N.M.

IN MEMORY:

■ Sears Holdings has spun off Orchard Supply Hardware into an independent, publicly traded business.

■ John “Jack” McRae, owner of McRae True Value in Ashland, Wis., passed away Dec. 4 at the age of 79.

Dave Deitz Dave Haist and VP-Finance Dave Deitz will retire in June. Dan Starr, formerly vice presidenthuman resources and general counsel, has been promoted to COO. Doug Roth, formerly director of ﬁnancial reporting, has been promoted to VP-ﬁnance.

OTHER NEWS:

■ Desert Lumber has acquired A.C.

■ HPM Building Supply has acquired Kauai Lumber in Lawai, Hawaii.

■ Emmett Francis McCoy, who founded McCoy Supply Co. in the 1950s, passed away January 7 at the age of 88. By the time he retired in 1997 he and his family had grown McCoy’s Building Supply into a 90-store, $400 million business. Read more here: http://tinyurl. com/72h94ol

Dave Haist

Dan Starr

Doug Roth

IN THE NEWS

GET THE FULL STORY:

■ Elwood Adams Hardware is believed to be the oldest hardware store in the U.S., dating back to 1782. Learn how it’s changed with the times: http://tinyurl.com/6qhazmh

Elwood Adams Hardware Store in Worcester, Mass.

■ Switch to energy-efﬁcient light bulbs has been delayed: http://tinyurl. com/87q39t2

■ National Association of Realtors admits home sales data has been overstated since 2007: http://tinyurl.com/7syf678

■ Sears Holdings unveils a new prototype for a Sears Hardware & Appliance store in Holland Township, Mich. Click here: http:// tinyurl.com/7ee8bty

■ Jack Ritter, owner of Ritter’s True Value in Mechanicsburg, Pa., ofﬁciates a wedding in his store: http://tinyurl.com/6m7tj7q

■ Home Depot testing PayPal payment system at checkout: http:// tinyurl.com/6neg6h2

■ Illinois retailers forced to deal with intrusive regulation when selling caustic substances: http://tinyurl. com/7pxkyeh

■ Former owner of Zachary Ace Hardware is killed in Tulsa: http:// tinyurl.com/7fxg392

■ Friendly ‘cash mob’ occupies Chagrin Falls Hardware in support of local business: http://tinyurl. com/788tga6

FEBRUARY

n Florida Hardware Co. Market

February 11-12, Doubletree Hotel, Orlando, Fla.

n Iowa Lumber Convention

February 23-24, Sheraton West, Des Moines, Iowa

n Long-Lewis Hardware Market

February 11-12, Montgomery Civic Center, Montgomery, Ala.

n Orgill Spring Dealer Market

February 2-4, Orange County Convention Center, Orlando, Fla.

UPCOMING EVENTS

Send calendar dates to chris@thehardwareconnection.com

n South Dakota Retail Lumberman’s Association Annual Convention

February 14-15, Best Western Ramkota Hotel & Conference Center, Sioux Falls, S.D.

n True Value Spring/Rental Market

February 20-22, Orange County Convention Center, Orlando, Fla.

n Western Building Material Association Annual Convention

February 8-10, Tulalip Resort, Tulalip, Wash.

MARCH

n Ace Hardware Spring Convention & Exhibit

March 8-10, Georgia World Congress Center, Atlanta

n Blish-Mize Spring Dealer Market

March 23-24, Overland Park Convention Center, Overland Park, Kan.

n ENAP Inc. Annual Meeting & Show

March 7-9, Disney’s Coronado Springs, Orlando, Fla.

n Emery-Waterhouse Co. Spring Dealer Market

March 16-17, Rhode Island Convention Center, Providence, R.I.

n HDW Inc. Spring Dealer Market

March 2-4, Jackson Convention Center, Jackson, Mich.

n Hearth, Patio & Barbecue Expo

March 1-3, Georgia World Congress Center, Atlanta, www.hpbexpo.com

n Illinois Lumber & Material Dealers Association Convention & Expo

March 20-21, Peoria Civic Center, Peoria, Ill.

n International Hardware Fair

March 4-7, Koelnmesse, Cologne, Germany

n International Home & Housewares Show

March 10-13, McCormick Place, Chicago, www.housewares.org

n Lumbermens Merchandising Corp. Annual Meeting

March 7-9, Ft. Worth, Texas

n Mountain States Lumber & Building Material Dealers Association Products Expo

March 8-9, Denver Merchandise Mart, Denver

n Nebraska Lumber Dealers Convention

March 8, Embassy Suites Omaha-La Vista Hotel & Conference Center, La Vista, Neb.

RETAIL IDEAS

ATTRACTING NEW CUSTOMERS WITH TOYS

When Emily Brooks had a baby last year she quickly discovered the nearest toy store—other than Walmart— was 90 minutes away. Brooks’, whose family operates Brooks True Value in Andalusia, Ala., convinced other family members that they should add toys as a niche category.

“I had lived in Asheville, N.C., and saw a cool toy store there, so I knew what the possibilities were,” she says. Since Brooks True Value literally encompasses an entire city block, they were able to devote 5,000 square feet to toys by getting rid of clutter and reducing their slow-moving inventory.

Brooks concentrated on adding toy products that can’t be found at Walmart and non-electronic toys.

“I’m a firm believer that kids should use their imagination, so we went with what works by itself and has an educational purpose. We have a lot of wooden classic toys,” she says.

The toy niche has been an immediate success, particularly during the holidays. “It brought in new customers and customers we hadn’t seen in a long time. Customers love that they don’t have to drive a long ways to get these products,” says Brooks, who

Brooks True Value in Andalusia, Ala., has found success selling toys.

adds that toy margins are above their hardware margins and their average transaction size is up.

They are planning to increase their selection of science fair project kits up to age 14 and are looking to branch into teacher supplies as well.

BUY LOCAL CAMPAIGNS GET CREATIVE

You don’t get 4,764 Facebook fans following your business without being creative, so Dave Warren has become the master of self-promotion. The owner of Dave’s Ace in Milton and Evansville, Wis., took to Facebook to encourage his customers to think local for the holiday season.

“I like locally owned businesses because they employ our friends and neighbors and support our schools and community,” Warren says. He offered other local businesses a chance to be featured on his Facebook page, as long as they donated one item worth $10-25. The items were put in a gift basket that

Warren awarded to a lucky customer on Christmas Eve.

To attract attention, Warren posted a picture on his Facebook page showing customers holding “Occupy Dave’s Ace” signs. With nice participation from local businesses, Warren considers his promotion a success. Customers of Chagrin Falls Hardware in Chagrin Falls, Ohio, took the initiative to “occupy” the store on January 21 with a “cash mob.” An email circulated around town encouraging people to support the store, which has been a Main Street fixture since 1857 and owned by the Shutts family for 72 years.

The community response was tremendous, with long lines at the checkout all day. “This is so cool. I’ve seen people I haven’t seen in years,” commented Steve Shutts in an interview with the Associated Press. See link to full story on page 58.

Dave Warren of Dave’s Ace conducted a Facebook promotion to get customers to support local businesses for holiday shopping.

TURNING UNWANTED HARDWARE INTO A MASTERPIECE

David Goldberg, co-owner of Union Hardware in Bethesda, Md., knew what to do with thousands of dollars of unused door hardware—he turned it into an eye-catching piece of art. Goldberg fashioned old door levers, brass plates and door knobs to create an impressive outdoor art mural that is inspired by Vincent Van Gogh’s Starry Night.

David Goldberg of Union Hardware shows off his

hardware.

The inside of the 98-year-old store has undergone a similar transformation. What used to be an old-fashioned hardware store now focuses on luxury plumbing and hardware products. Goldberg attends trade shows in Europe, where he finds products that stop customers in their tracks. His favorite is the Betty Blue sink, which is literally a flat table sink that has the water disappear in the edges. n

Starry Night creation of door

BEHIND THE

NUMBERS

43%

Growth in Hispanic population over the past decade. Hispanics have $1.1 trillion in buying power, which is projected to grow 50% by 2016 according to INC. magazine.

Increase in existing home sales in November to a seasonally adjusted rate of 4.42 million, according to the National Association of Realtors.

45,000

Number of votes for Howard Brothers Hardware in

Duluth, Ga., to earn Independent We Stand’s “Indie Award.”

93.8

National Federation of Independent Business’ Optimism Index reading in December, reflecting a positive trend for the fourth straight month.

4.1%

Increase in retail holiday sales in 2011, according to the National Retail Federation, beating forecast of 3.8% growth.

15%

Percentage of average local business’ Facebook fans who live in the city where the business is located, according to The Wall Street Journal .