Hardware Connection March/April 2012 by NHPA

If it’s worth doing, Do it Best.

At Do it Best Corp., we are proud to serve 4,000 independent member-owners with the best products, programs and services to drive their retail performance.

RetailFIRST! assists prospective members in opening their first retail hardware store, offering a wide range of incentives and project leadership every step of the way.

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RetailPLUS! is a customized program to help existing members become premier retailers in their markets. The program provides incentives and project management for stores undertaking a comprehensive improvement project.

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Zero long-term debt

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Over 8,000 private label SKUs provide exclusivity in the marketplace

With our PERFORMANCE SATISFACTION GUARANTEE, we’re putting money on your success. If, as a Premier Member, you’re not completely happy with Do it Best Corp. at any time in your first three years, we’ll help you convert back to your former co-op and pay you an amount equal to 10% of your average annual Do it Best Corp. warehouse purchases. It’s that simple.

www.independentsdoitbest.com

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Publisher/Principal:

By Chris Jensen

Trends are Moving in Favor of Local Businesses

This issue’s cover story identiﬁes “5 Hot Retail Trends” that bear watching. When you take a closer look at these trends, you will notice there’s a common theme—they all bode well for independent retailers and are somewhat related to buying local.

Whether it’s consumer interest in Made in the USA products or local businesses beneﬁtting from “cash mobs,” it’s nice to see things breaking in favor of small, family-owned and operated local businesses.

No one wants to live in a town filled with shuttered stores on Main Street and where you have to get in your car and drive 20 miles to Walmart to buy a light bulb. The proverbial light bulb is finally coming on for folks, who are recognizing the benefits of keeping their money in the community.

Local business alliances are strong and getting stronger. Hardware retailers are banding together with coffee shops and salons and book stores, and finding they’re not alone in the fight for customer loyalty. Local banks are gaining strength and finding the courage to invest again in the neighborhood hardware store, paint store or lumberyard.

You won’t want to miss a related story on page 39, which illustrates the rise of community-owned stores. When faced with the loss of their neighborhood store, residents in Nebraska, Wyoming and New York as well as in Winnipeg (among others) decided to band together, pool their resources and keep the stores open as communityrun businesses.

When neighbors band together to save a business, working side by side to move ﬁxtures and stock shelves, it forges a bond that’s tough to break. Everyone gets closer and looks forward to visiting their store to catch up with their friends and fellow investors.

When a hardware store in Washington state faced possible closure when its landlord announced it preferred to lease the space to a national chain, loyal customers took action. They launched a Save the Store campaign on Facebook that attracted 500 fans. It spurred local ofﬁcials to help the owner secure a new location for the business.

Never underestimate the power of individuals working together toward a common cause. It’s what makes this a great industry. ■

Jeff Punzel, Owner Punzel Ace Hardware

By Tom Chasteen

Don’t Get Me Started on Return Policies

It’s a strange land we operate our hardware businesses in. We are constantly being pushed or pulled between the “bean counters” who have no concept of what we do and evaluate business issues solely on the results of a spreadsheet and the reality that we face every day trying to run our businesses in a profitable manner.

A classic dilemma we face as store owners is the issue of defective goods and policy A. We are constantly trying to balance customer expectations related to warranty statements on the packaging— “If you are not completely satisfied with this product, return it for a complete refund”—with the unrealistic expectations and, in many cases, the outright abuse the customer shows in returning the product. As retailers we’ve all been in seminars where wholesalers tell us, “The customer is always right. Do not get into an argument over returned products. Give them a new one because it’s covered under policy A.”

Then when you get your store returns report it becomes clear the “bean counter” was not invited to the same seminar. Regardless, it’s us dealers who are stuck in the middle of two diametrically opposed policies.

A few years back when I called about a damaged case of fluorescent 40-watt light bulbs we received from the warehouse, I had a wholesaler staff person tell me to write them up as defective since they were policy A. Was that because they were trying to avoid doing the paperwork or could it be they were trying to keep their damaged return rates down to avoid the dreaded bean counter coming down on them at the warehouse level?

Fortunately this person no longer works for the wholesaler, but the real issue here is that they were ignoring what was the right thing to do, in my estimation, to satisfy the bean counter’s statistical analysis and in the process were compromising the very data that was being relied upon to support their “acceptable” guidelines.

This issue is not entirely one-sided, although I know retailers who abuse the policy A process. The data used to compile the acceptable limits for policy A is flawed from the beginning and the cost will ultimately show back up in the cost of goods by the manufacturer, because they have their own bean counters with their own set of acceptable parameters.

the way i see it

For me this is more of an ethics issue. I feel the manufacturer has entrusted me to do what is right as their personal representative to the consumer, my customer. We try to reciprocate by not abusing policy A or allowing our customers to abuse policy A.

It’s not very complicated on paper, but it gets interesting when there is a long-time customer standing in front of you at the checkout counter wanting to return the screwdriver he purchased to use as a cold chisel and the tip is broken.

Here is the three-step return policy we use in our store:

One: did they buy it from our store? If they didn’t then that is where it ends and we politely refuse to handle the return.

Two: has the item been abused? In other words, was it used in a blatant manner that it was not intended to be used for? If it was, then we may still accept the return but it does not go into the defective policy A bin for processing. It goes in the bin called customer goodwill and we eat it. When that happens our staff must take a piece of masking tape and put their name on it along with the customer’s name so I can review it later.

Third: is the item in resalable condition? We will never attempt to resell an item that has been used. But if it is in the original packaging and is in resalable condition we will take it back within 30 days of purchase, no questions asked. We will stretch this policy to 60

days to satisfy a good customer or try to develop a new customer.

We have never exceeded a half of one percent of our total wholesale purchases. If we are experiencing poor performance from a product we drop it from our inventory and look for a better made product. The most important part of our return policy is that once we have decided to accept the item back, we do it with the same amount of grace and courtesy we extended to the customer when they bought it.

Most customers are not trying to take advantage of anyone and those that are really aren’t the type of customer you want to build your business on. They made a mistake and have had to come back to your store a second time and are already unhappy with themselves and their project is probably still not finished, so why make their experience that much more unpleasant?

One final thing we do: when we empty our defective bins we make sure the items are not functional and then we lay them out on a piece of cardboard and hit them all with a shot of pink spray paint before we throw them in the dumpster. We’ve caught someone going through our dumpster trying to return an item that we had previously taken back as defective.

If only our wholesalers could come up with a policy for handling defective customers. n

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HARDWARE HUMOR

HARDWARE STORIES Amazing but TRUE

We had a young lady leave a really nice small bong inside a returned rented downhill ski boot. She called and said that she had left her sunglasses in the boot, and could she come and look for them. When we said we did not ﬁnd sunglasses, she never came to look.

Karla Robson

Slavens True Value, Cortez, Colo.

A dime bag of meth. Funny, she never came back for it.

Allen Biedrzycki

Huffman True Value, Huffman, Texas

Retailers shared the following tales about strange items left behind by customers.

Customer came in to use public photocopy machine to make duplicate of insurance check before going to the bank to cash it. Came back about half-hour later to see if the original was still in the machine (it was). Funny thing, the bank would not accept the black and white photocopy of his $25,000 insurance settlement.

Kenneth McRae

McRae’s Paint & Hardware, Dallas, Texas

We had a customer leave their 3-tooth partial bridge at the register. I guess the customer was not wearing it and it must have fallen out of his pocket while he was searching for change. He was back 10 minutes after we found it on the ﬂoor.

Matthew Abramsky

Tony’s Ace Hardware, Hazel Park, Mich.

We had a customer running a home daycare lose a child at the store. Come to ﬁnd out (after locking down the building to search) she actually left the child at a store down the street.

Jessica Bettencourt Klem’s, Spencer, Mass.

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and Do

Howʼs Business? MIDWEST

How were winter sales? They’ve been down. Going into winter, things were looking good, people were stocking up and getting ready. But with the light winter, our small engine sales and repair has died. For December, we were down 33 percent from the previous year. Last December was a record, though, but we’re still 20 percent off our typical December. In January, we’re down 25 percent; February 15 percent down.

Best niche categories? We do well with lawn and garden, speciﬁcally fertilizer, soils and rodent control. We also have a strong equipment rental department with tools for concrete work and gardening. But the number one thing we do that makes us a destination is our small engine sales and repair.

New initiatives planned for 2012? We want to boost our internet marketing. We’ve also ﬁnally started carrying PEX pipe in addition to copper tubing.

Allan Funk Eagan Hardware Hank, Eagan, Minn.

How were winter sales?

Winter has been tough. It’s interesting, because sales are up over last year, but they were pretty bad last year. Our snowblower sales are really off.

Best niche categories? Our main niches are seasonal items. We do well with Weber grills and service and repair of power equipment. We also have a strong glass and screen repair service.

Doing anything with social media? The trick with Facebook is to get enough people to friend you so that when you do publicize a sale, it will hit enough people’s news feeds. We often tie weather or community events to Facebook posts. If it’s going to snow, we’ll post photos of our used snowblowers or snow shovels. We do get some foot trafﬁc from Facebook postings.

New initiatives planned for 2012? We’re looking to buy items at markets that will gain in popularity. We’ve done quite well with LED and solar lights and LED ﬂashlights.

Mike Wilmes Wilmes Do it Best Hardware Sioux City, Iowa

Allan Funk

Wilmes Do it Best Hardware

Howʼs Business?

NORTHEAST

How were winter sales? It’s been very quiet. Everybody is afraid of where their next job is going to come from. For the contractors, it’s worse than last year.

What are your best niche categories? We have architectural specialties such as columns and staircases. Hardware is a sideline.

What new initiatives are planned for 2012? We’re getting back into home shows.

Joel Kessel Lynn Lumber Lynn, Mass.

How were winter sales? It’s been pretty terrible. We’re about 12 percent down from last year. That decrease has been strictly because of winter products. Fortunately, we have a diverse enough product offering that it hasn’t affected us much.

Best niche categories? We have been selling a little more paint, especially with the mild winter. Some people have even painted the outside of their houses. With the new, low-VOC products, all they need are two days where it’s 55 degrees or higher.

Doing anything with social media? Social media is a necessity and part of our overall marketing plan. We have a Facebook page and we post at least three times a week. On the page, we’ll often put up pictures of the store. We also do a lot of email blasts with our contact list. We’ve found that email blasts are very good at getting quick, but shortlived, response. When we do these email blasts, customers have been outside the next morning waiting for the store to open.

New initiatives planned for 2012? We deﬁnitely want to continue to utilize social media. We also want to continue making sure that we are offering new products. We’re always looking to have the right product mix. With all the storms and natural disasters we need to get our inventory under control.

Chris Rubeo Berger True Value Hawthorne, N.Y.

Berger True Value

SOUTH

How were winter sales? Since the ﬁrst of the year we are up about 10 percent. We’re having the best two months we’ve ever had. Part of that is because the luster of the big box is fading. People are discovering that price isn’t everything and they are willing to pay for quality.

We’re also doing better because of our assortments. Customers are bafﬂed by the wide assortments of big boxes. It’s like a mom and pop bookstore, where they make choices to bring in the best books and not others. Customers want assurances and recommendations on products. I try not to stock products I don’t have respect for.

Best niche categories? Rental tools for homeowners have been very good for us. We bought $40,000 worth of rental tools last May and they paid for themselves by the end of the year. The rentals also brought in customers that we wouldn’t have had otherwise.

Ken Stewart’s son, Ben, shows off their custombuilt houses for baby chicks. Each one has a heat lamp, waterer and feeder, and will hold about 75 chicks.

Howʼs Business?

Other strong niches are farm, ranch and gardening. More people are growing their own vegetables. There’s also a trend of people raising their own chickens, and our chick sales are very good. We bring in 150-200 chicks every two weeks from February thru May, and sell out in 7-10 days. All the chicks we sell have names. Kids love coming in and holding chicks. Doing anything with social media? We’re just now learning how to use it. We run a promotion where a local vet offers rabies shots to pets for a reduced cost. During the event, we have a pet trick contest. This year, we’re going to post videos of the tricks on YouTube with a link to our Facebook page so customers can vote for their favorite. It’s all

about maintaining a friendly connection to your customers. When you allow people to express themselves and the joy in their lives, they’ll appreciate that and you will connect with them. New initiatives planned for 2012? Because our swimming pool supplies have been good, we’re doubling the size of this department. To make room for the swimming pool supply expansion, we’re taking out the dollar aisle. We’ve had it for three or four years, and customers want to go to dollar stores for that. We’re also looking to expand our propane department.

Ken Stewart Stewart’s Hardware, Southport, N.C.

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Howʼs Business?

SOUTHWEST

How were winter sales? Fairly decent, in comparison with the last two or three years. We’re up about 3 to 4 percent for the winter. And we’re up 5 percent over the whole year. A lot of the increase is weather related.

Best niche categories? We’re fairly strong in outdoor living and lawn and garden. Contractor business is about 20 percent of our business and that has been stabilizing. Doing anything with social media? We’re doing a little with Facebook. Our social media presence is in its infancy. We’d like to use Facebook to get the word out about events we’re running.

What new initiatives are planned for 2012? We’re looking at some

WEST

How were winter sales? We’re up about 5 percent to 10 percent. We’ve been carrying some new lines, such as Stihl chainsaws. The sales in that area have been up quite a bit for January and up a little in February. Best niche categories? Our power equipment has always been consistent. New initiatives planned for 2012? We’re going to do a little more advertising. In areas where we’re not advertising, we’re seeing stagnant sales. We’re

Sunwest True Value

remodeling and potentially expanding to another location. Gordon Keith Sunwest True Value Sun City West, Ariz.

How were winter sales? Very slow. It didn’t get cold, so we didn’t sell any electric heaters. We’re about 10 percent down.

Best niche categories? Window screens. We have a niche of selling ﬁrearms that’s been slow but steady. We also do locksmithing, which has always been good for us.

New initiatives planned for 2012? None, just hoping for better weather. Robert Dacy

The True Value Hardware Store Austin, Texas

also looking to expand more into lumber and rental.

You opened a second store in December? We reopened a store (Penn Valley) that had been closed for a year. It’s so exciting because there are no other stores around. I’m used to an area with Home Depot and ﬁve other hardware stores.

Dave Gutierrez

Penn Valley and Placerville True Value

Penn Valley and Placerville, Calif.

From Tom’s Shop HARDWARE PRODUCTS

REVIEW

By Tom Chasteen

By far one of the coolest jobs I have on the magazine is to test, evaluate and write about new products. Name one person in hardware who doesn’t like looking over new products. It’s like asking a hardware guy if he likes to breathe—it’s a part of what we are.

PRODUCT #1: SUMP PUMP BACKUP KITS | SUPERIOR PUMP CO.

Superior Pump has taken the sump pump to a whole new level. It’s not the sump pump itself that people are most concerned with when buying but making sure it’s going to do the job when needed to avoid the unpleasant experience of a ﬂooded basement.

How many times have you gone down to your basement and checked your sump pump? What happens if it seizes up in the middle of the night or the power goes out? Do you actually know when it goes on?

Superior Pump has come up with the ultimate backup sump pump, which is actually two separate sump pumps. One is for regular use and one will kick in if the ﬁrst one is overwhelmed, quits working or when the power goes off.

The second pump is wired to a 12-volt (group 24 auto battery) that

automatically, but it sets off an alarm

will kick on automatically when the water level rises above the primary sump pump. And not only does it turn on automatically, but it sets off an alarm so the homeowner knows there is an issue that needs to be checked out.

This an easy step-up sale to those who have had or know someone who has had a basement ﬂooding issue and the mess it causes.

Check out this great item at your next wholesaler show or go to www.superiorpumpco.com and click on battery backup kits under the products heading.

Over 2000 Lumber & Hardlines

www.pacsoft.com

“Pacsoft has helped us along the way. The emailing of our PDF statements is fantastic, and the contractors love it.”

Landon Garner, Owner Garner Building Supply

“Pacsoft’s Optemizer Scibuy has improved store profit and put money in the bank.”

Dan French, Manager Baken Park Hardware

“At Pacsoft we take pride in providing our customers with the necessary tools and skills required to make the best decisions for their businesses.”

“By partnering with Woodware, Pacsoft has created a seamless millworking solution that has saved our staff a significant amount of time, and our customers love it.”

Lowell Stutzman, Owner Farmer’s Building Supplies

From Tom’s Shop

PRODUCT #2: 30 SECONDS® OUTDOOR CLEANER | COLLIER MFG. CO.

SECONDS

I can’t tell you how many times I’ve heard a chemical manufacturer make claims that their product will actually do what other companies falsely claim to do. So when I spoke with Gene O’Neil from Collier Manufacturing and heard him talk about how their 30 SECONDS® Outdoor Cleaner will prep surfaces the “easy way” before painting and will remove mold and mildew stains without scrubbing, and is biodegradable, and is safe around plants, and is fast acting; you just spray it on and hose it off ...Yeah, right!

So I asked Gene if we could test their 30 SECONDS® Outdoor Cleaner and see for ourselves, and he readily agreed. He sent us samples of all three sizes (it’s the same product, but I wanted to see how well it would merchandise on the shelf in

the unlikely event he was telling the truth) of his product and we gave them to our “testers.”

The responses were all variations of “this is really a great product.” They had tested it on concrete driveways, vinyl siding, plaster, wood decking and landscape bricks. All three testers came back with very positive results.

I decided to test it myself. I used it on a canvas bimini top of my boat, as it always has a mold and mildew stain issue even in the winter. Next, I tried it on the ﬁberglass boat—it worked great!

Check out this product line at your next wholesaler show or go to www.30seconds.net and take a look at the photo gallery. I’ll bet you have customers with these projects in your market.

“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

PRODUCT #3: BBQ TOOLS | MAN-LAW

MAN-LAW premium BBQ tools put a whole new meaning to the term “macho.” These are serious BBQ tools (no ﬂimsy tools in this group) for the serious BBQ customer. Their threepiece tool sets have a spatula, fork and tongs. All three have hearty wood handles and are 19” long for those really big barbecues. The spatula even had a bottle opener built into it.

MAN-LAW also makes a really cool set of miniature, glow-in-the-dark, stainless-steel temperature gauges for individual baked potatoes and meats. What a great idea! No more half-cooked baked potatoes or beef or pork that isn’t quite cooked through because it’s extra thick.

If you have a serious barbecue accessories department in your store, you need to check out the MAN-LAW line of products at www.manlawBBQ.com.

Since 1851, Wooster has been manufacturing the best paintbrushes and rollers, right in Wooster, Ohio. Cheap ingredients don't cut it. We take pride in Wooster quality, innovation, and performance. After all these years, our 500 employees still cook up something new every day.

Cobra Wireless Accessories has come out with some promising wireless accessories for the devices in your car. While wireless accessories are nothing new, accessories that actually stick and stay put are.

The Cobra products really work great. They will work with any style phone or GPS, because they use an “Ever-Last BreakAway Adhesive.” There are several different goose neck products and I discovered two favorites. One is the Universal Mini Mount, which uses the Ever-Last BreakAway Adhesive

technology in the suction cup. It really stays put on the dash.

My other favorite is the Universal Headrest Tablet Mount that ﬁts on the headrest post for viewing from the back seat. It is completely removable and will ﬁt just about any auto or truck. If your customers are traveling long distances with small children, this is a must-buy product.

Look for the Cobra booth at your next wholesaler show or go to www. cobrahandsfree.com/ms.html.

5Retail HOT

By Chris Jensen

Trends

Most retailers are too busy handling complaints, managing employees, adjusting pricing and all their myriad other day-to-day duties to sit down and take stock of what trends might impact their business. Putting out ﬁres always takes precedence over gazing at a crystal ball.

WE’VE DONE THE LEGWORK for you to identify “5 Hot Retail Trends” that bear closer scrutiny. Technology is driving some of these trends, but so are changes in societal attitudes.

Although it’s possible to identify quite a few more current and future retail trends, the following ﬁve offer particular promise to independent retailers:

• It Pays to be Green…If You’re Committed

• Cash Mobs Restore Hope to Main Street

• Made in USA Movement is Here to Stay

• Mobile Technology Will Dominate

• Online Selling is the Next Frontier…and Google is King

When Mike Zettler built a new store in Powell, Ohio, he incorporated a white roof outﬁtted with high-tech solar tubes that reﬂect the sun and operate as daylight harvesters.

1. IT PAYS TO BE GREEN… IF YOU’RE COMMITTED

RETAIL TRENDS

Mike Zettler has discovered the best way to be a “green” retailer is to practice what you preach. When Zettler opened his family’s fourth store in Powell, Ohio, in 2009, he made sure the 26,000-squarefoot building incorporated a number of sustainable green initiatives.

Zettler Do it Best Hardware features a white roof outﬁtted with high-tech solar tubes that reﬂect the sun and operate as daylight harvesters, keeping energy costs down since the air conditioner and heat don’t need to run as frequently. Rainwater is diverted off the roof and collected in a cistern that is used to water plants in the garden center.

The interior lights brighten and dim automatically depending on the amount of sunlight that day, while motion detectors in all offices and the break room ensure no light is wasted. Light reflective floors add to the energy savings.

Surveys show that about 25-30 percent of consumers are willing to pay a premium for green products, numbers that cause some retailers to say it’s not worth it to pursue that market. Environmentally conscious shoppers are not going to be swayed by the fact a store has placed a few products on an endcap and proclaimed them as green. It takes a store-wide commitment to convince skeptical consumers that your business really cares about the environment.

“When you have multiple stores you start seeing how much of your money goes to utilities,” explains Zettler. “I started doing research on what Walmart and grocery stores were doing to cut utility costs and determined some of those ideas had merit for us.”

He admits it’s a lot easier to do these green initiatives with a groundup store than with a retroﬁt, but points out that his utility costs for a 26,000-square-foot green store are comparable to those for a conventional 10,000-square-foot store.

Zettler stocks environmentally friendly products where he can, but believes he can make the most impact by keeping an eye on his store’s carbon footprint.

The new lighting legislation that is phasing out incandescent bulbs gives retailers opportunities to engage in a dialogue with customers about energysaving products. After all, no consumer will pay a premium for a product if they don’t understand how it beneﬁts them.

Seattle and Austin, Texas, are two communities known for their environmental awareness. So it’s not surprising to see stores that sell only environmentally friendly products—such as Green Depot, TreeHouse and House + Build—are thriving in these cities.

TreeHouse features education stations within each department that offer interactive learning experiences about smart home products such as nontoxic paints. All of the store’s products are scored on health, performance, corporate responsibility and sustainability standards. What TreeHouse’s customers are really buying is peace of mind that they are dealing with a business that has done their homework for them.

RETAIL TRENDS

The Idea Center at TreeHouse in Austin, Texas, helps customers ﬁnd eco-conscious solutions for their homes.

2. CASH MOBS RESTORE HOPE TO MAIN STREET

A powerful trend is sweeping the country, and it spells good news for independent retailers. A natural extension of the “buy local” movement, “cash mobs” are the latest craze demonstrating the impact that local buying can have on a community.

The concept is that local residents, spurred on through social media, will show up en masse on a speciﬁc day and spend $20 in support of a designated local business. Some of this activity is modeled after the Occupy groups that have been protesting against Wall Street, especially since the idea is to keep wealth locally based in communities.

When a cash mob descended on Chagrin Falls Hardware in January it made national news and led to the Ohio store’s largest sales in its 155-year history. As one of many businesses that has struggled to prosper in the

face of the stalled economy, Chagrin Falls Hardware got a much needed shot in the arm.

On a snowy day in February, Elyria Hardware in Elyria, Ohio, beneﬁtted from a cash mob organized by the town’s economic development group. Not only did third-generation owner Phil Stammitti see twice as many customers, he did ﬁve times his usual volume that day.

Brookline, Mass., is one of the roughly 170 communities around the world that organized an event on March 24 as part of “International Cash Mob Day.” Economy Hardware was one of the businesses targeted for the sales bonanza that day in Brookline.

This trend is only meaningful if it causes more consumers to view local businesses as their stores of ﬁrst choice.

RETAIL TRENDS

Cash mobs have been successful because most people intrinsically understand why buying local is a good thing.

Go to http://cashmobs.wordpress.com to learn how your community can organize its own cash mob.

3. MADE IN USA MOVEMENT IS HERE TO STAY

When you come up with the right idea at the right time, all things are possible. For Mike Petro and Dennis Cunningham, what they are passionate about is looking out for the welfare of the American worker.

They decided the best way to put Americans back to work was to get more people focused on buying American-made products. This conviction led them to develop the country’s ﬁrst store that only sells products made or assembled in the United States.

They now operate two All American Stores in Brookville and Huber Heights, Ohio, and their goal is to expand across the country via franchises. “When you operate a hardware store you’re part of a community and you hear about layoffs,” Petro explains. “We look upon this as a national issue, and the middle class is taking it on the chin. We ﬁrmly believe if you give consumers the opportunity to buy American they will.”

The store featured 4,300 items when it ﬁrst opened but they’ve since doubled that count, according to Cunningham,

Mike Petro (left) and Dennis Cunningham operate two stores that sell only American-made products.

who said the process to identify and verify the origin of products has been painstakingly slow. “Steel wool was a tough one but we ﬁnally found a commercial company that does small runs for us.”

The store’s logo is featured on a music video of the song “Made in the USA” shown here on YouTube: www. youtube.com/watch?v=g3U6ueckh9I.

“It was a real struggle when we started,” Petro recalls. “We were asking all these manufacturers about their products’ origins, and we kept hearing ‘we’ve never done this before.’ We’re starting to see more vendors step up and pay attention to this issue.”

help customers identify American-made products.

Dave Warren has begun a similar process to identify American-made items for customers in both his Dave’s Ace stores in Wisconsin. “You’d think it would be easy to figure out the origin of products, but so many of them do not make the information easy to find,” says Warren. He places stickers of small American flag crests (from youfindusa. org) beside each item’s price tag.

Dave’s Ace Hardware in Wisconsin uses shelf stickers from You Find USA to

You Find USA was founded by Greg and Annette Krznarich to raise awareness and sales of Made in the USA products in an effort to increase U.S. manufacturing and jobs in America.

It all began with a shopping trip to a Milwaukee hardware store two years ago. Greg was looking for a particular tool and wanted to purchase one that was made in the USA. He asked Annette to help him, so together they picked up package after package, reading the fine print for country of origin. After several frustrating minutes, they realized it would be a lot easier if there was something on the shelf by the price showing which products were made in the USA. They decided to create their own shelf sticker, which they are now marketing to hardware stores.

At the open dialogue session of last year’s Hardware Conference in Marco Island, retailers were asked how much of a premium their customers would be willing to pay for Made in the USA products. The consensus was that some shoppers would seek the lowest price regardless of origin but quite a few would be willing to pay as much as 20 percent more for Americanmade products.

Back in Ohio, which has lost 346,000 manufacturing jobs in the last decade, Petro says they get a lot of positive comments from customers who appreciate what they are doing. “To us it’s about buying what your neighbor produces

so they can keep their job,” he says. “We’ve lost 20 to 30,000 manufacturing jobs around here. The only way to reverse this is to change the trade laws or otherwise it’s up to the consumer. We’re banking on the consumer.”

4. Mobile Technology Will DoMinaTe

Many people would be lost without their cell phones, and they are on a continual mission to search for the latest killer app to make their lives easier. How cool would it be to leave behind your credit cards because you can pay for everything with one swipe of your phone? That technology is being used now, although it still needs some refining.

Electronic wallets will soon be all the rage, but first will come the battle for which system wins out. In one corner you have Google, who was first to market with a Google Wallet mobile app, partnering with Sprint Nextel. Opposing that effort are the other major phone carriers—AT&T, Verizon and T-Mobile—who are rolling out a system that also relies on Near Field Communication (NFC) short-range wireless technology.

A third option just might trump all these big hitters: PayPal (which is owned by eBay) is making an aggressive push with its mobile payment system rolling out to all Home Depot stores. What’s compelling about

PayPal’s system is that it doesn’t rely on NFC chips being inserted into phones and it doesn’t require the cooperation of the phone carriers.

With the PayPal payment system, consumers can use an access card that is proprietary to their account or gain access to their PayPal account at the checkout by entering their PIN. The transaction could be conducted via a credit card or debit card, but without risky financial data being passed back and forth.

The most promising aspect of PayPal’s location-based system— besides the fact it can work with most existing POS terminals—is the way it makes it easy for retailers to link up with loyalty programs and gift cards while opening up an amazing number of possibilities for disseminating targeted offers to customers.

Some retailers are already jumping on the mobile bandwagon as a marketing tool. Westlake Ace Hardware, with 88 stores in the Midwest, recently launched a mobile marketing campaign that provides consumers with weather alerts on their smartphones if they are willing to opt in to receive marketing offers from the retailer.

Research firm eMarketer notes that mobile-commerce more than doubled in 2011 to $6.7 billion, and this figure is expected to quadruple by 2015. In other words, you might want to get your website optimized for mobile phones.

Retail tRends

What mobile technology really does is ensures consumers have access to product and store information 24/7, no matter where they are. Consumers will be dictating the action, and what you know about your customers will be only what they allow you to find out.

Online selling is the next FROntieR…and gOOgle is King

Amazon has come to dominate the e-commerce market, but the company to watch out for is Google. The technology giant has its fingers in a lot of pies, and these ambitious initiatives offer some potential for small businesses.

Real exciting opportunities are emerging in search marketing. There is a movement afoot to start taxing online sellers. If companies such as Amazon have to start charging sales tax then they will also do less online advertising with search engines like Google. That in turn will lead Google to pursue more local advertising to replace the revenue they lost from national resellers.

“You will see new technology come out to make this happen. You are already seeing handheld units that help you search for products locally,” says Ron Yatteau, e-commerce specialist at House-Hasson Hardware

This trend will allow independents to compete on a broader platform locally. Today, if you do a Google search for a drill driver up will pop a long list of

Retail tRends

national online sites where you can buy this item, Yatteau points out. “In the future if you search for a drill driver, Google and other search engines will only list local sellers, so they are more likely to get in their car and purchase the product at a local store,” he says.

To be ready for this new world of retail, you must have a website that lists what your store carries. This means you will have to market more through your computer and make sure your business is properly indexed. Ultimately, that means having your POS data uploaded and wrestling with deciding whether you want to publish your prices online. That brings a whole new sense of urgency to adopting a competitive pricing strategy. If Amazon has to start charging sales tax, then they will lose their price advantage.

Speaking of Google, some people think the company’s Street View program is a little intrusive in a Big Brotherly way. Google’s latest twist is to offer the ability to show a 360-degree view of a business’ interior. Customers wouldn’t need to get in their car and drive to a store to see if they sell a particular brand, because they would be able to see right on their computer.

“What Street View Interiors offers is the core of web experience that begins to make a business’ Google Place page feel a lot more like a decent website. My bet would be that that’s exactly what

to be ready for this new world of retail, you must have a website that lists what your store carries.

Google wants business owners to begin to regard their Places page as—their website,” says retail futurist Doug Stephens of Retail Prophet Consulting.

A retailer’s Google Places page now can contain reviews, maps, directions, telephone numbers, offers and a 360-degree tour of the location. “Add in applications like Google Checkout, and you have a fully functioning website with e-commerce capability—a quantum leap for the average small retailer,” adds Stephens.

The better your store looks in this Google-dominated New World, the more likely the customer will decide to make a purchase either via e-commerce or by visiting the store in person…the old-fashioned way.

“My concern over the last few years is that if we don’t do this type of marketing, we just become irrelevant,” says Virgil Cox of Cox Hardware & Lumber in Houston. “The boxes are there, in every market, 24/7/365 with their massive stores and budgets. Even the people just down the street won’t think of us without an Internet presence. They’re too busy texting when they drive by our stores.” n

By Chris Jensen

Local Show Power of Community-

owned StoreS

reSolve

Mike Wolchock has a bounce in his step these days. He has purpose and believes what he’s doing is making a difference. More importantly, he feels an even closer connection to his community.

WolcHock serves as tHe general manager of Pollock’s Hardware, which was a north-end fixture on Main street in Winnipeg, Manitoba, from 1922 right up until it closed in 2007.

“I was a long-time customer who loved the store and couldn’t believe it closed,” Wolchock recalls. He and other like-minded neighbors decided to do something about this unexpected void in their community, which they feared would signal the start of neighborhood decay.

Community StoreS

Upper: Pollock’s Hardware had been a fixture in the North End of Winnipeg for 85 years when it abruptly closed in 2007.

Lower: General Manager Mike Wolchock addresses fellow investors during the annual meeting of Pollock’s Hardware Co-op.

they decided to form a consumer coop and raise the working capital necessary to purchase and run the business. lifetime memberships were sold for $25, with additional loan capital coming from the Jubilee Fund, which is designed to support co-operative, community-based businesses in Winnipeg. about 70 people showed up at the first meeting. the initial business plan outlined a goal of securing 200 co-op

Community StoreS

members by the end of the first year and a total of 300 a year later. Instead, they had more than 800 members by the end of 2008.

Pollock’s Hardware Co-op bought the business and reopened on June 21, 2008, with a crowd of community residents lined up outside the store to show support for their new investment.

Wolchock, who was one of the original organizers, was brought in to manage the store four months after it reopened. “The previous owners did $340,000 in their last year. We did $411,000 in sales our first year (exceeding projections by 22%) and over $1 million last year,” he says.

The main reason for the dramatic sales increase is that Pollock’s now carries a lot more inventory. “The previous owners were getting old and were letting the stock dwindle. They didn’t have what people wanted,” Wolchock says. “We had about $100,000 in inventory when I started and we could only meet the needs of one out of 10 customers. Price wasn’t an issue.”

With 18,000 SKUs now in stock, Pollock’s is able to meet about 99 percent of their customers’ needs, according to Wolchock, who is understandably proud of but not surprised by the dramatic turnaround. “We sell a lot of things that other retailers gave up on like galvanized buckets, washboards and wooden drying racks,” he says.

“People love the fact that we kept their store open. It’s been here for 90 years and it was still needed. It’s cool to be a part of this effort,” Wolchock says.

The co-op operates with a board of nine community representatives including a contractor, teacher, professor and restaurant owner. An annual meeting is held to update members on the financial picture. When Wolchock comes up with ideas he presents them to the board. “We’re an interesting bunch of people,” he says.

Pollock’s Hardware Co-op operates with four primary goals:

• Meet the community’s needs as a successful hardware business.

• Promote local ownership and control

• Develop and provide community leadership

• Build a stronger community

With sales and profits exceeding projections and over 2,000 members now in the fold, the co-op was able to purchase the building last summer. The next step is even more exciting. Pollock’s Hardware Co-op has partnered with two economic development enterprises to purchase a second building down the street, which will sell lumber and building materials when it opens May 1.

Pollock’s will occupy 5,000 square feet of the warehouse, which will function as a social enterprise center as well as a source of supply for contractors, the public and co-op investors.

Neighbors pitched in to get Pollock’s Hardware ready to reopen, energized by the fact they had a stake in the business.

Mike Wolchock shows how Pollock’s is now filled with inventory to meet the needs of the community.

“What is amazing is the community energy and collaboration that has been seen in this project. Walking into the store, it isn’t uncommon to hear local residents connecting on more than just their hardware needs; people who have lived next to each other for over 20 years are for the first time meeting, discussing, laughing and talking of more than just hammers and nails, but their community. The store is a testament to the drive and determination of Winnipeg’s North End residents,” writes co-op member Allison Slessor in the store’s online blog.

Wolchock sees a larger lesson in the success of their little venture. “Think globally and act

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The community came out in force for Pollock’s Hardware’s grand reopening in June 2008.

locally with your investing and purchasing power. Together we’ve seen we can make a difference in our community,” he says.

REBORN IN THE PLAINS

Scott Orcutt will never forget Thanksgiving weekend in 2010. That’s when he learned the Duckwall variety store he managed in Cambridge, Neb., was closing with no advance warning. It was a shot to the gut.

The Cambridge store, which was part of the 213-store Duckwall-Alco chain, had always been proﬁtable, so Orcutt was dumbfounded. “I worked for Duckwall for 23 years, and this store was in my territory when I was district manager. When they downsized and took us off the road, I chose to manage the Cambridge store because I loved being part of the community. I ran the store until they closed it,” he says.

The town’s economic development ofﬁcials started calling other companies like Family Dollar to see if they would be willing to take the place of Duckwall. “We encountered a lot of closed doors. They all said we didn’t have enough people in town,” recalls

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Cambridge General Store features a greatly expanded selection of hardware items.

Manager Scott Orcutt is shown checking out the first customer when the Cambridge General Store opened this past May.

Orcutt, who pegs the town’s population at about 1,000.

Down but not out, the community came together. “We organized a meeting to see if there was any interest in doing a store on our own. Since it was December 22, we thought 30 to 35 people would show up,” says Orcutt. A total of 225 people showed up, about onefourth of the town’s population. That’s when they knew this project had legs.

A local lawyer helped them form a limited liability company (LLC) at no charge. Leading the charge was a committee of three individuals: Tammy Sexton (president of the Cambridge Development Foundation), accountant Randy Heitmann (also a member of the Cambridge Development Foundation) and Bill Minnick, who had owned a local hardware store at one time. The three got started by talking to other communities that had done something similar.

Community stores

A total of 123 investors stepped up and invested at least $500, and with the addition of a large investment group they ended up raising a total of $263,000. It didn’t take much to convince Orcutt to return as the manager of the newly formed Cambridge General Store.

A lot of volunteers came in and helped clean up the space, repaint the whole building and prepare the store for its reopening this past May. The community spirit was infectious, according to Orcutt, who is the only investor to work in the store.

Two main suppliers were lined up: Variety Distributors for general merchandise and Orgill for hardware. Now that Orcutt doesn’t work for a chain, he can go ahead and purchase the products he knows the community will buy. Special orders are available for the first time, which keeps residents from having to drive to a distant town for one or two items.

“There was nowhere else in town to buy hardware items, so we added a lot to the mix,” says Orcutt. “We knew what would sell here. We reduced departments that weren’t doing well and added two full aisles of hardware, boosting categories like paint and plumbing.”

The first annual meeting of investors was held in February, and everyone was pleased with the results. Sales totaled about $400,000 after the first 10 months, outpacing what the

COMMUNITY STORES

Duckwall store generated, according to Orcutt, who is conﬁdent the business will continue to grow. Everyone is looking forward to celebrating the one-year anniversary on May 18, a reminder that the size of the community’s spirit matters more than the size of its population.

Orcutt points to the fact that several investors volunteer their time such as Roger Jones and Louis Palmer, who come in every week and help unload trucks. “The community feels a part of this store because they have their money in it. It’s their store, and they’re supporting it,” he adds. “Everyone has a positive feeling bout the town now.”

GROWING TREND

Grassroots efforts are ﬁnancing a growing number of neighborhood businesses all over the United States and Canada. One of the ﬁrst and most successful community-owned stores took root in 2002 in Powell, Wyoming, where 800 local families bought $500 shares to get a department store named Powell Mercantile up and running.

The Saranac Lake Community Store opened its doors this past October after residents of the Adirondack community in upstate New York reached their goal of $500,000 after four years of dedicated fund-raising.

For more information on how to launch a community-owned store, go to http://tinyurl.com/6trjsgd. ■

By John Franklin

John Franklin has nearly 40 years experience in hardware retailing, most recently as merchandise manager at Williams Lumber & Home Centers in upstate New York. He is available for retail consulting or you can contact him with questions or feedback at john@thehardwareconnection.com.

MBOTTOM LINE

Saving Labor Costs with Sharp Inventory Control

ORDERING METHOD

ost home

improvement retailers work hard every day to improve proﬁt and be more efﬁcient, and most get to the big and important stuff. Unfortunately, owners are often too busy to tweak the small stuff.

WHAT FOLLOWS ARE SOME small but effective ideas. If you want to be leaner and more efﬁcient, try these in your store.

The ﬁ rst idea is a way to improve sales and dramatically improve stocking efﬁ ciency, all at little or no cost. Let’s compare two different methods of ordering product: OP (order up to point) and M/M (min/max).

A single-value OP system is simpler and takes less time to set up than a two-point M/M system, but sometimes the simplest system is not always the best. Once you get an M/M system up to accurate levels, it is no more work to maintain than a single OP system. I strongly believe the M/M system has far more advantages. Many hardware stores buy through co-ops or from vendors that ship every week, but bill only twice a

month. If you are one of those stores, then you have a hidden advantage. If you are large enough and lucky enough to get two deliveries a week, then this advantage is even greater. It is not just a free inventory ﬂoat for two weeks but also a trick to lower stocking expenses. How does this affect stocking efﬁciency? Let’s take a closer look.

For example, let’s take a 1/8” HS drill bit from the warehouse. We will assume you have set an OP of 3 and sell about 100 units a year, or an average of about 2 pieces a week. We will also assume two deliveries a week: one on Wednesday and a second one on Saturday. Now let’s look at both methods of stock replenishment.

OPTION #1: With an OP of 3, sales of 2 a week, and 2 deliveries a week, you will receive on average one unit every order period. Every time you sell one, the system will order one to restore the OP. If you order twice a week, you will typically receive one on Wednesday and one on Saturday. On the surface this is a great system, and it is used in many stores. What could be better? Let’s look at option #2.

Smarter inventory management can free up employees to spend more time taking care of customers.

OPTION #2: Change the system order points as follows: this time rather than a single OP of 3 set a min of 2 and a max of 6. The max is the min of 2 plus the two weeks’ average sales of 4. Why does this react differently?

The difference is this: with option #1, the system would order just 1 drill bit to take a stock level of 2 back to the OP of 3. Now, with option #2, it will actually order 4 drill bits to take the stock level all the way up to the max of 6. This may appear to have little effect, but the effect on your store can actually be quite large. The immediate advantage is that a customer can buy up to 6 bits at a time. In option #1, no customer can ever buy more than 3. So, ﬁrst and foremost, you have a potential sales increase because you have the ability to sell more at almost any time during the two-week period.

With Option #2, as the sales occur over the next two weeks, the system will wait until the min drops back below 3 when it orders another 4 bits to get back to the max of 6.

In addition to the obvious possible increase in sales, Option #2 has a hidden advantage that is potentially even more proﬁtable—your employees do almost 75 percent less work. You ask how is this possible? Here is how.

Previously in Option #1, with a single OP, your employees would have made four trips to the peg hook over the same two-week period. Now they only make one trip. Unless you sell a large number and need a reorder, you have reduced your labor for stock work by a whopping 75 percent.

If you sell out during any two-week period, a reorder must also be put away, but these additional sales are completely plus business. Yes, it does take a little longer to walk to the right location and put four on the hook rather than just one, but only a few seconds longer.

Multiply this small savings in time by the thousands of items you receive

on a weekly basis and you will ﬁnd you can dramatically reduce your total labor expense. Now employees can spend more time with customers and less time with stock work.

How much time is it? It is hard to believe, but here is the math. On 1,000 items, let’s suppose you save 10 seconds on each stock placement. This is 10,000 seconds or 167 minutes. This is almost three hours of time over just two weeks. And you know you will save more than 10 seconds per item and you have way more than 1,000 high-velocity items.

The truth is the savings in time are considerable. If your store receives one delivery per week rather than two,

you still have a 50 percent savings in stock labor on any item that would be reordered the following week.

Now, what does this potential productivity and sales improvement actually cost you? Absolutely nothing! You pay for the four received on the ﬁrst day at the same time as you would pay for same four if you had received them just one at a time over the last four deliveries.

When considering items that sell slowly, you may have a max that is just one more than the min, like min 0, max 1. This will hopefully keep one in stock all the time. Slow-selling items will also respond exactly the

same as if ordered under a single OP of 1. That may be exactly what you want if the item doesn’t have a minimum sales threshold.

MINIMUM SALES THRESHOLD

What is a minimum sales threshold? Some items must be present in other than 1 for a proper sale. These items defy computerized order point calculations and need human involvement. For example, if you sell 12 table legs a year, the system may try to set an order point of 1, the monthly sales average.

If you set an OP of 1, you just bought what I call the most expensive inventory in the building: inventory

that you cannot sell. If you don’t always have a set of 4 on hand, you won’t sell any. In this case you could force an OP of 4, or use a min of 3 and a max of 4.

In actual practice, there would almost never be 3 on hand, only 4 or zero. It is surprising how many stores you can go into and ﬁnd quantities other than 4 or 8 table legs in stock. The same goes with casters, wiper blades, shelf standards and brackets, clothesline pulleys and three-way switches. I once ran a report and found more than 2,000 items in hardware need to be sold in pairs or more.

An M/M system is not a magic bullet for everything, but it sure works on high-velocity items better than a single OP. But where the M/M system clearly becomes the best choice occurs when the difference between the min and max is 2 or more. Why? Because when the difference is 2 or more, it allows you to take the next two weeks of inventory on the ﬁrst order, not just one at a time.

On full-case items like light bulbs that come in a pack of 6, 12 or more, a single OP fails. You can tweak it a bit with the reasonability value if your system allows it, and let the system drop down a few before it orders a full case. Many times, if you sell one you can get a whole case you just don’t need.

Using the M/M system for a case quantity works much better. For

example, take the ideal system parameters for an item like light bulbs with a min of 6 and a max of 10. If this item only comes in a case of 12, every time the system orders product at 5, it orders a case of 12 to take the total count to 17.

Since you cannot do anything about the fact that you need to take 12 at a time, you have two choices: lower the min or raise the max. Lowering the min risks out of stocks. The min should never be set for less than one week’s sales. Why not just raise the max? Use a min of 5 and a max of 17. Then if you run a report it would not show as a problem that you could not have ﬁxed anyway. Make your reports show only real problems.

FEWER REPORTING EXCEPTIONS

Another advantage of an M/M system is the ease of reporting exceptions. If you have an M/M, you can run a report and look for all the items that are over the max and then work to get rid of the excess. The max is a true max, the highest amount of stock you should have in the building.

If you have more than the max and have more than one store, you can really optimize your combined inventory by moving excesses within branches and stopping new orders. This is especially effective on casequantity items where a single sale in one store can trigger an order of

BOTTOM LINE

far more than you actually need for the next few weeks. A transfer from a branch can satisfy the need without incurring additional purchases for some time.

The problem with the OP here is that it is actually both the minimum and the maximum and if you run a report it is far too large and ambiguous to deal with. Most items found with one more than the OP are not really a problem.

While we are discussing stocking efﬁciency, here is another small thing that reaps big rewards. Consider adjusting the salesﬂoor display space to accommodate the max quantity.

When we found items where we had to buy a case of 6, 12 or 24, we worked the display space to make the shelf quantity the same as the max wherever we could. How did we do it? We extended the base decks and shelves by 2” and created more shelf space to add additional stock. We had hundreds of items that now had enough space on the ﬂoor that we no longer needed backup stock in the stock room.

stock space for product. This space was above the reach of the customers, but was still in sight. I call it the visual stock room. Customers cannot get it without help from an employee, but they can at least see it, something they cannot do if it is in the backroom out of sight.

I am not saying you don’t need stockrooms, but they should be used for large product without space on the fl oor. Stock rooms should not be used for piles of small stuff that could fi t on the fl oor if some adjustment was done. This also cuts down on the number of trips to the stock room to retrieve the few in the box or case that did not fi t on the fl oor.

Stock rooms should not be used for piles of small stuff that could ﬁt on the ﬂoor if some adjustment was done.

It is amazing how fast stock work goes when almost everything you pick up in a tote stays on the ﬂoor. It also means that when the bin or hook is empty you do not have any more in the store to go looking for. This makes cycle counts and inventory counts easier and more accurate when all the goods are in one place.

With business as competitive as it is, you cannot miss an opportunity to make your store the most efﬁcient.

In most stores with sufﬁcient lighting levels, we put a 10” shelf at the top of every 96” ﬁxture. At that depth, it did not make a big shadow on the product below while it created a huge amount of

What do Home Depot and Lowe’s do for stocking parameters? The two giants have a built-in need to improve efﬁciency, and they both use this twopoint system. Shouldn’t you as well? ■

RetaileRs Helping

RetaileRs

By John Fix III

Spring is right around the corner, and it could not come soon enough for many of us after such a mediocre winter selling season. Here are some great discussions from the Hardlines Digest to help jump-start the season.

Hiring Teens

Hiring teenagers part time is a great way to round out the staff scheduling needs for many hardware stores. Preston Bullock of Jay’s Hardware in Wrens, Ga., wondered how other retailers are recruiting teen employees.

Kelly Grothe of Astoria Builders Supply in Oregon replied, “We have never had any issues finding a teen employee. We have been fortunate enough to have employees who have teens or know of some. If the person is a good employee, then chances are the teen will be also.”

Doug Bowen of Ramsey Hardware in Front Royal, Va., also looks to his current employees for suggestions for new staff members. “Ask those already there. Rarely will they mention

Hardlines digesT

someone with a lower work ethic than they have. And vet prospects through a teacher. Science, math or trade,/technology teachers usually know who are the ones who can think or act appropriate in different environments.”

Steve Sayers of Sayers Ace Hardware in Independence, Kan., suggested social media sites. “We’ve used Facebook with some success, lately.”

Ed Tisdale from Family Hardware in Cape Coral, Fla., related his thoughts as well as some personal experiences with hiring teens. “The best teens we’ve hired have been kids who were at the store frequently finding stuff to fix something they found at home or along the roadside on trash day.”

Ed adds, “I remember years ago thinking that this kid was ripping us off during his frequent trips to the store. He was barely old enough to be alone without his parents. One day I had time to really talk with him and found out he just loves to fix stuff and then uses it himself or sells it to a friend. He was almost 14 at the time. I told him when he turned 16 to see me about a job. He kept pestering me until I hired him at 15. He worked through high school graduation and now is employed by our County Sheriff and has passed his sergeant’s exam. We hired his kid brother also when he was 15 and he stayed with us until one of my customers hired him away from us. He now runs his own lawn care business.”

hardlines digest

sample On tOp?

Rob Gardiner of Damariscotta Hardware in Maine opened up a can of worms, literally, when he wondered how other stores handle paint samples. “When mixing paint for customers, do you place a ‘dot’ of the finished product on top of the can? I have some staff that have been doing this. I do not have a good feeling about placing wet paint on a can that is going into a customer’s possession because of the obvious reasons. (wet paint + customer + “I thought the lid was tight” = Excedrin headache)

Another reason is finished color, Gardiner adds. “I just spent five minutes explaining to a customer that the paint on top of her can was the same color she purchased a month ago. I explained it would require more than one coat and to wait four hours before applying her second coat (neutral base) and once dry it would match the color card in her hand.”

Melissa Brett of Welden Hardware in Connecticut replied, “We usually do it when a customer has ordered more than one color, but otherwise we do open the can after shaking to make sure it’s a ‘close’ match (we have the noncomputerized human system).”

James from Durst Lumber shared his thoughts. “We open it to make sure the colorant is thoroughly mixed. The dot on top is to help compare. Most folks know that paint dries darker than when it is wet.”

Marilyn Weisman from Absecon Do it Best Hardware had this suggestion. “We used to get labels that had a piece of clear plastic that peeled up for you to apply the color spot and then covered it again nice and neat. We have always put the color on the top of the can. Just makes it easier for the customer who stores all their paint to tell at a glance which color was in which can. Never had a problem with it not drying. By the time they have completed their shopping and checked out it’s dry. We have used the hair dryer trick, usually when testing paint for color on a stick.”

A few other retailers also suggested using a hair dryer to dry the sample more quickly, including Maurice White from White Do it Best Hardware in South Carolina. “We have a heat gun— a hair dryer may be better—to dry the paint to the end color. I have customers ask, will the paint dry darker than the color chip? It is hard to explain that the color chip is dry, not wet.”

Brett Seright from Seright’s Ace Hardware cautioned about hair dryers. “Keep in mind if you use a heat source (heat gun or hair dryer on warm/hot setting), you run the risk of ‘burning’ the paint, which can affect the color it dries to. If you’re going to do it, dry the paint using a hair dryer on the unheated mode.”

Jim Wilkerson of Blackhawk Hardware weighed in with his procedure. “In addition to paint drop on top

of can, we take a color chip and dry a drop on the chip; that way hopefully the customer can see and has the opportunity to say it doesn’t match. It is cheaper to do this than be expected to pay for the labor to repaint a room where the color did not match or was mixed wrong.”

Wilkerson added, “We are also considering putting the label on the can rather than the lid. Had a customer with two colors that were very close for adjoining rooms. She contended that we had put the wrong lids on the two different paints and we ended up paying for repainting a room. After thinking about it I am sure the painter switched the lids after the problem was brought to his attention. If the label is on the can you cannot get them mixed up.”

And finally, Maurice White added this great idea. “I always write the color number under the handle holder. That way when the customer pours the paint out, it won’t cover the number.”

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 . n

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.

Teens excel aT WoodsTock Home & HardWare

Larry Perry of Woodstock Home & Hardware in Vermont takes advantage of a school-sponsored program to hire teens. “We’ve been participating in a ‘Job Shadowing’ program with the local high school for 15 or more years. These are kids that the school has identified as unlikely to succeed academically but have promise outside the traditional schoolroom,” he says.

“Over the years we’ve hired around one-third for full-time seasonal and part-time year-round jobs. Most, but not all, have worked out. Through the shadowing program they’ve had a chance to see what’s involved in working here and we’ve had a chance to observe their work ethic.”

Currently, Perry has two full-timers, now 26 and 27 years old, who started working for him when they were 15 and 17. His daughter, Jill, was running the cash register by the time she was 6 and will continue working for the store until she leaves for graduate school in August.

Sierra Izzo joined Woodstock Home & Hardware as a part-timer in early 2004 when she was 17. In 2006 she moved to Maine for a couple of years but returned in 2008. She is full time and along with being opener and closer she mixes paint, does color matches, is responsible for the store’s Facebook page and is revamping the

Noah Thompson (left) joined Woodstock Home & Hardware in 2003 and returned in 2010. Enzo Mantello (right) is the current “job shadowing” student from the local high school, helping stock shelves, run the register, help customers and keep the store neat.

website, according to Perry. She meets with clients in their homes doing custom window treatments and color consultations. She also runs the forklift and unloads freight when the need arises, and is a furniture, housewares and home decor buyer. “She’s a gem,” Perry says.

Noah Thompson joined the store in 2003 and moved away for a short time but returned in a full-time position 2010. “When a piece of rental equipment fails he can usually figure it out and get it running again,” Perry says. Noah helps in every department of retail sales and is one of the go-to guys for window and screen repairs, grill assembly and all things mechanical.

“We have one 15 year old in the high school job shadowing program that we’re probably going to offer a summer job, and another in the job shadowing program, Eddie, who has Down’s Syndrome,” Perry says. “Eddie has full-time care assistance.

He comes in for about an hour each day and empties our wastebaskets and does some mopping and vacuuming. He’s been with us about 18 months.”

One of his early success stories with a teen hire was back in 1992. “I was asked by a friend to consider hiring a young lady who was another friend’s daughter. She had just turned 16 and lived about 20 miles away. I interviewed her and offered her the job, expecting she’d last about three weeks at most. After all, teens have lots of distractions and I figured the commute would get old real fast,” Perry recalls.

“Was I ever wrong. She worked for us after school and on weekends and full time during the summer for 10 years. At the time she finally said good-bye for good—to go to grad school in North Carolina—she had been with us for longer than any other staffer except for my store manager,” he adds.

Sierra Izzo (left) is shown at the International Housewares Show in Chicago with Susan Florence of MUkitchen. Sierra joined Woodstock Home & Hardware in 2004 when she was 17 and returned in 2008 as a full-timer.

The Perfect combination of andBusiness

By the time September rolls around, don’t you think you’ll be ready for a break? the 2012 Hardware Conference, set for September 7-9 at the marco island marriott in marco island, Florida, offers the perfect opportunity to find ways to improve your business while having tons of fun.

fun

The Hardware Conference is truly a venue where relationships are formed.

Start making planS to attend an uplifting event that can have a positive impact on your business. it’s the perfect opportunity to bring your whole family to a five-star resort right on the gulf of mexico with three miles of pristine white beaches.

tom and dale Chasteen, who operate tavernier Hardware in the Florida

The Open Dialogue sessions address real issues of concern to independent retailers.

Leading vendors have tabletop booths displaying their latest products, but it is a relaxed environment because it is not a buying show.

John Fix and Bill Zeithammer at the Hardlines Digest gathering at last year’s Conference. Hardlines members will convene again this year.

Joe and Kim DeRoest of Joe’s Hardware with Tom Chasteen.

Keys, have been putting on the Conference since 1988, growing it into the industry’s largest gathering of independent retailers. They have developed a family-friendly, affordable event that brings independent dealers together, regardless of wholesaler affiliation.

“It’s so important to get out of your store and talk with other dealers and find out what’s going on in the industry,” Tom says. “To be able to do that in a beautiful place and have a blast at the same time is hard to beat.”

Top vendors participate in the Conference with tabletop booths

hardware conference

showcasing their latest new products. Dealers also have the opportunity to engage in informal conversations with manufacturers without the pressure of buying. Another popular feature of the event is the open dialogue sessions, where dealers join vendors and wholesaler representatives in a frank discussion of industry topics of concern to all.

“It is always a great time. There are lots of great people to interact with, lots of great info to be exchanged and lots of fun family time to be had,” says long-time attendee Bruce Phillips of Crowder Brothers Ace Hardware in Lakeland, Fla.

The Conference is designed for the whole family, with plenty of free time for fun activities such as tennis, golf, sailing, shelling and walking on the beautiful sandy beach. For more information, go to www.thehardwareconference.com. n

Michael Alyer of Australia’s Resurg showed retailers how to calculate their Business Sustainability Rating during last year’s Dealer Seminar.

HARDWARE & TOOL TRENDS

Oscillating Tool Sales (Independent Hardware Channel) 12 Months % Change vs. Year Ago

Source:

Unit Sales Breakdown for Oscillating Tools

Manufacturers and retailers

Consumer

Ergonomic improvements in power tool design are enabling end users to operate with improved efﬁciency, which is particularly important to pro customers.

Texture is becoming an important consideration when choosing cabinet knob style. Customers are choosing to incorporate leather, suede or recycled glass that might be accented with a pewter, chrome or polished brass ﬁnish.

HARDWARE & TOOLS BUYING UPDATE

■ The Consumer Product Safety Commission is debating whether to adopt a new performance safety standard for table saws. It extended the public comment period several times until March 16, 2012. California has proposed legislation on its own requiring table saws to feature injury mitigation technology.

■ The 10 most popular cabinet hardware ﬁnishes are (in order):

Oil Rubbed Bronze, Stainless Steel, Satin Nickel, Satin Chrome,

Brushed Satin Pewter, Weathered Nickel, Polished Brass, Brushed Nickel, Antique English and Lancaster Hand Polished. Source: usacabinethardware.com.

■ The ongoing popularity of stainless steel appliances has fueled increased demand for stainless steel cabinet hardware.

■ Price pressure from big boxes and online sellers continues to drive the power tool category. Tool manufacturers are focused on producing power tools that offer greater power without increasing size or price.

■ Growing demand from both pro and DIY customers (particularly women) is driving sales for 12-volt lithium ion-powered tools. Improved battery technology is helping meet end users’ desire for longer running times and quicker recharging.

■ Closet rods are slowly evolving from merely functional to decorative, encompassing more ﬁnishes and styles.

■ Aging baby boomers will increasingly turn to product solutions such as touch-opening drawers that don’t require hardware or knobs.

■ Electromechanical locks are being developed with easier programming through use of touch screens and voice-activated systems, although their use remains largely in commercial applications. ■

By Matt Mullen

What You Don’t Know Could Hurt You Payment Processing:

Every retailer takes payment. However, some retailers do it better than others. Payment can come in different forms, and some of these payment methods—such as credit cards and debit cards—can cost a retailer a signiﬁcant amount of money to process.

For example, if a customer spends $100 at your store and pays in cash, you keep all of that money. However, if that customer decides to use a credit card, you will lose about $3 of that $100 in processing fees. Approximately three percent of your overall sales is a signiﬁcant amount of money, and retailers should do everything possible to minimize these costs.

show you where your processing fees go, explain the difference between credit cards and debit cards, and describe recent regulations that affect processing costs.

NOT ALL CARDS ARE CREATED EQUAL

Processing fees vary greatly depending on the type of card issued. Most customers just carry a standard credit card, and that card carries the lowest possible interchange rate. However, let’s say you have a customer that comes in with an airline reward card. You are going to pay a higher percentage in fees to accept that card. Why? Because retailers fund the rewards on reward cards, and there is nothing you can do about it.

Payment needs to be an integral component of any retailer’s business and technology strategy. However, many independent hardware retailers are confused by the bank card processing industry.

I will pull back the curtains on the bank card processing industry,

It gets worse. Some hardware stores and LBM dealers sell to contractors that pay with purchasing cards. Those cards carry the highest interchange rates and are more expensive for the retailer to take than standard consumer cards.

Contractors like to use these cards because of the many business beneﬁts such as line item reporting, tax management tools, etc. These beneﬁts are transparent to the retailer, but retailers foot the bill for these services.

As you can see, this is a complex, confusing and sometimes unfair system. Most hardware retailers rely on their processing providers to educate them and update them on changes in the marketplace. If a retailer is not managing his payment stream effectively, it is usually to the processor’s benefit. It is up to you to educate yourself on this process and put systems in place that will minimize your payment acquisition costs.

Where Does All the Money Go?

To understand the bank card processing industry, you first need to understand the card payment value chain. Every time a bank card is used for payment, there are five participants in the processing of the transaction. The first is the cardholder who has been sold a card product by a bank and uses it to pay for purchases. The second is the merchant (you) who swipes the card, enters the transaction amount and requests an authorization request. The third party is the processor—the card processing agency for the banks. They send the authorization request to the appropriate credit card company (the fourth participant). The credit card company routes the request to the cardholder’s issuing bank (the fifth

participant), which approves or declines the transaction.

The merchant pays between two percent and four percent of the total transaction value to accept card payments. The vast majority of that fee (between 70 and 90%) goes to the issuing bank because they are assuming the majority of the risk of the transaction. The card companies only get about 5% of this fee and the processors get the remaining 10 to 25%.

CreDit CArDs vs. Debit CArDs

What is the difference between a credit card and a debit card? Credit cards are short-term loans. The bank is loaning the customer money based on a line of credit, and they make money through transaction fees and interest fee revenue (if the customer does not pay off the balance each month).

Every loan carries some sort of risk, and the interchange was set up to account for the risk of bank card transactions. When someone purchases a product with a credit card, the bank that issued that card carries a degree of risk that the consumer will not repay that short-term loan. The interchange is a funding mechanic that allows these banks to reap some revenue based on the loans issued.

On the other hand, debit cards are not loans. Debit cards are directly linked to a checking account or savings account, and the authorization process confirms that those funds are available the day of purchase and initiates the transfer.

For decades, the debit interchange structure was similar to the credit interchange structure. The fees were slightly lower, but the overall system was the same. This meant that banks were charging retailers for risk that did not exist.

The durbin amendmenT

In 2010, Congress passed the Durbin Amendment as an addendum to the Dodd-Frank Financial Reform and Consumer Protection Act. Senator Richard Durbin from Illinois wrote the plan to give the Federal Reserve the power to control interchange fees related to debit card transaction processing. Prior to the enactment of the Durbin Amendment on October 1, 2011, payment card networks priced debit card transactions in a similar fashion to credit cards, as a percentage of the transaction amount.

With Durbin, most debit card transactions are now priced at a fixed rate. The law provided that big card-issuing banks adopt the new pricing scheme, while small banks were allowed to continue pricing debit transactions under the previous pricing models. Under this new law, debit card charges were capped at

approximately 24 cents for the average debit card transaction.

The Durbin Amendment also prevents processors from distinguishing between Signature and PIN debit transactions. All debit transactions, regardless of form of authentication, are now subject to the same pricing regulation.

This is important for two reasons. First, your processor may not have changed your pricing structure based on these new regulations. They do not have to. If that is the case, it may be time to change processors.

Second, this changed the fundamentals of processing bank cards dramatically. Merchants may now want to steer their customers toward a debit or credit card, depending on the amount of the transaction. Under these new regulations, you want to encourage as much debit card use as possible for transactions over $11. For transactions that are under $11, you should encourage customers to use their credit cards.

Now that you have a good understanding of the bank card processing industry, we can discuss other strategies for analyzing and lowering your payment acquisition costs. In my next article, I will talk about some emerging mobile payment technology options and how they affect processing fees. n

Matt Mullen is director of market development for Epicor Software Corp.

IN THE NEWS

NEW STORES:

■ Handyman Ace Hardware has opened a new location in Dayton, Ohio.

■ Ganahl Lumber has opened a new store in Pasadena, Calif.

■ Carter Lumber has acquired DSB Builders Supply in Canton, Ohio.

■ Norman and Mike Taylor have acquired Duncan Box & Lumber Co. in Huntington, W. Va.

■ Short and Paulk Supply Co. has acquired Laing Hardware in Dawson, Ga.

■ Hartville Hardware is preparing to open its new 287,000-squarefoot home center in Hartville, Ohio.

■ Nick Redﬁeld is opening an Ace Hardware store in Sylvania, Ohio.

■ The Frattallone family has opened its 17th

Ace store in Burnsville, Minn.

■ Mark Pellicci opened his third store, Pellicci Ace Hardware, in Farmington, Minn.

■ Doug Curving, owner of Westboro Paint & Decorating in Westborough, Mass., is opening Village Hardware & Supply nearby in late spring.

■ Winﬁeld Muffett has opened Seaside Ace Hardware store in Seaside, Ore.

■ Scott Reeves opened Reeves True Value in Hammond, La.

■ Charles Grigg opened his fourth store, Griggs Ace Kennewick, in Kennewick, Wash.

■ Terry Cain opened Progress Ridge Ace Hardware in Beaverton, Ore.

■ Duck Creek True Value has moved

to a new location in Smryna, Del.

■ Williams Ace Hardware is opening new stores in Goddard and Andover, Kan.

KUDOS:

■ Ace Hardware in Lewiston, Idaho, is celebrating its 100th anniversary.

■ Three Fountains

Ace Hardware in West Columbia, S.C., was recognized as the “Best Hardware Store” in the area by Lexington Life magazine.

■ Massey Builders Supply was named Dealer of the Year by Southern Building Material Association.

■ Bennett’s Paint and Glass in Logan, Utah, is marking its 100th year in business.

■ Western Building Material Association named Bruce Abel of Don Abel Building Supply in Juneau, Alaska, as its Dealer of the Year.

■ Rommel’s Ace Hardware, which has 11 stores in Maryland, Virginia and Delaware, donated more than $1 million of products to regional Habitat for Humanity ReStores.

■ Scott Parker of Parker Ace Hardware received the F.M. Mansﬁeld Business Award from the Sault Area Chamber of Commerce.

■ Gentry’s Store in King, N.C., is marking 75 years in business.

■ True Value recognized 14 members as the “Best Hardware Store in Town” for 2011: B&C True Value Home Center, Grass Valley, Calif.; Berger True Value Hardware, Hawthorne, N.Y.; Brinkmann Hardware, Blue Point, N.Y.; Central True Value, Moncks Corner, S.C.; Geiger True Value, Chillicothe, Ill.; Gorham’s True Value, Hamilton, Bermuda; Horton’s True Value, Chetek, Wis.; Hoy’s True Value, Sweet Home, Ore.; Lake Isabella True Value, Lake Isabella, Calif.; Lott True Value, Childress, Texas; Red Lodge True Value, Red Lodge, Mont.; Shore True Value, Somers Point, N.J.; Strasser True Value, Kansas City, Kan.; and Titusville True Value, Titusville, Pa.

PEOPLE ON THE MOVE:

■ Don Phillips has been promoted to vice presidentoperations at HouseHasson Hardware.

■ Gary Furst has been named vice presidenthuman resources, general counsel and corporate assistant secretary for Do it Best Corp.

WHOLESALERS IN THE NEWS:

■ Ace Hardware Corp. reported ﬁscal 2011 revenues of $3.7 billion, up 5.1%. Fiscal 2011 net income rose 3.4% to $77.7 million and 4Q revenues were up 7.3% to $921.7 million.

■ Do it Best Corp. has introduced an enhanced version of its member portal, mydoitbest.com, featuring improved functionality and navigation and a more robust online catalog.

■ At its spring dealer market Orgill introduced a store format, North Lake Lumber, that featured compliance with Canadian product standards.

■ Pete Georger has been promoted to vice president-dealer sales for The BostwickBraun Company.

■ For the second time in less than six months, the United States Department of Defense has presented Do it Best Corp. with the Patriot Award for the co-op’s ongoing support for active-duty employees.

■ Rona, in announcing plans to close or shrink 23 stores, said its new stores will average 35,000 square feet, onethird the size of its current big-box format.

■ True Value reported revenue of $1.864 billion for 2011, up 3.4% from the prior year. The co-op posted earnings of $60.3 million for the year, with revenue up 5.8% in the 4Q.

■ Ace Hardware Corp. launched its ﬁrst fully integrated paint marketing campaign—Find Your Soul Paint™—in support of the new Clark + Kensington line. The co-op also named Camco, Cargill Salt, First Alert, Flanders Corp., Vanco and Werner Ladder as “Vendors of the Year.”

OTHER NEWS:

■ Benjamin Moore has formed an alliance to distribute paint through Orchard Supply Hardware’s 87 stores.

■ Manchester True Value in Manchester, Mich., has reopened after the store burned down in a ﬁre last May.

■ Central Network Retail Group has acquired the assets of eight-store Town & Country Ace Hardware, based in Chapel Hill, N.C.

IN MEMORY:

Do it Best VP-Retail Logistics

John Snider (left) received the Patriot Award after being nominated by co-op employee Brian Reed (right), a lieutenant commander in the U.S. Navy Reserve.

■ Paul Weintraub passed away March 25 at the age of 78. Paul started his hardware career with Biscayne Electric, before purchasing a True Value store in Miami in 1974. In 1980 he opened Budget Ace as the ﬁrst

hardware store in downtown Miami. After selling his hardware business, he worked throughout his retirement years as a factory sales rep. Paul served on the advisory board of Ace’s Tampa RSC and supported St. Jude’s and Miami Children’s Hospitals. Paul is survived by his wife Susie, daughter Hope, son Frank and nephew Tom Chasteen.

■ Del Garber, owner of Gig Harbor Ace Hardware in Gig Harbor, Wash., and past president of NRHA, passed away Feb. 28 at the age of 73. Del was also a past chairman of the Paciﬁc Northwest Hardware Association. He is survived by his wife, Maggie, and daughters Becky and Pam.

■ Charlie Hale, owner of Tuxis Lumber and True Value Hardware in Madison, Conn., passed away Feb. 4 at the age of 62. He was a past president of the Northeastern Retail Lumber Association.

GET THE FULL STORY:

■ Marketplace Fairness Act would restore level playing ﬁeld for brick-and-mortar stores against online sellers. Go to http://tinyurl. com/72tkodb

IN THE NEWS

■ The former accountant for Champaign Builders Supply in Champaign, Ill., will stand trial in April after being charged with embezzling $800,000 from the business over a nine-year period. Go to http://tinyurl.com/78uj9cl

■ The Housing Misery Index uses a map of the U.S. to illustrate changes in home prices and the rate of foreclosures. Go to http://tinyurl. com/766ueob

■ Gallatin County Tin and Hardware in Ridgway, Il., looks to recover from heavy tornado damage: http://tinyurl.com/7n5l828

■ Cash mob mobilizes to help Burton Bros. Hardware in Seaford, Del. Go to http://tinyurl.com/72on33c

■ Two people set ﬁre to a bathroom in a Tulsa hardware store as a diversion to steal meth chemicals: http:// tinyurl.com/7a87at3

■ Franklin the pot-bellied pig is a customer favorite at Crest Hardware in Brooklyn. Go to http://tinyurl. com/7xfz3vw

■ U.S. lumber future prices up 30 percent the past ﬁve months due to tight bank lending. Go to http:// tinyurl.com/7qkklue

■ IRS backs off push for credit card reconciliation: http://tinyurl. com/7ku3vzf

upcoming events

APRIL

n Home Hardware Spring Dealer Market

April 22-24, Henry Sittler Building, St. Jacobs, Ontario

n Kentucky Building Material Association Convention and Expo

April 18-20, Griffin Gate Marriot Resort & Spa, Lexington, Ky.

n Kitchen & Bath Industry Show

April 24-26, McCormick Place, Chicago

n Lumbermen’s Association of Texas and Louisiana Annual Convention

April 12-14, La Torretta Resort & Spa, Montgomery, Texas

n North American Wholesale Lumber Association Leadership Conference

April 29-May 1, The Broadmoor, Colorado Springs, Colo.

n TruServ Canada Spring Buying Market

April 14-16, Winnipeg Convention Centre, Winnipeg, Manitoba

MAY

n Do it Best Corp. May Market

May 19-21, Indiana Convention Center, Indianapolis

n Eastern Building Material Dealers Association Mid-Atlantic Trade Show

May 15, Valley Forge Convention Center, King of Prussia, Pa.

n Mid-America Lumbermens Association Swing-into-Spring

May 3-4, Lake of the Ozarks, Mo.

n National Hardware Show

May 1-3, Las Vegas Convention Center, Las Vegas, Nev.

n Wallace Hardware Spring Market

May 15-17, Gatlinburg Convention Center, Gatlinburg, Tenn.

JUNE

n House-Hasson Hardware Summer Dealer Market

June 28-30, Duke Energy Center, Cincinnati

n PRO Group Inc. Group Merchandising Conference

June 18-20, Embassy Suites Downtown, Atlanta

n United Hardware Distributing Co. Summer Dealer Market

June 14-16, Minneapolis Convention Center, Minneapolis

Send calendar dates to chris@thehardwareconnection.com

TUPELO HARDWARE HELPED START A LEGEND

RETAIL IDEAS

With creaky wooden ﬂoors and a rolling ladder, Tupelo Hardware in Tupelo, Miss., is not just a quintessential old-fashioned hardware store—it played a key role in giving Elvis Presley his start in music.

Ten-year-old Elvis and his mother, Gladys, came into the store in January 1945 looking to buy a bike for a birthday gift. But when Elvis entered the store, he walked right past the bikes as his eyes were drawn to a .22 caliber riﬂe. The store keeps copies of a letter written by the sales clerk, Forrest Bobo, a friend of the Presley family, who details what happened next.

“I showed him the riﬂe ﬁrst and then I got the guitar for him to look at. I put a wood box behind the showcase and let him play with the guitar for some time. Then he said he didn’t have that much money, which was only $7.75 plus a 2% sales tax. His mother told

Upper Left: An historical marker outside the front of the store denotes its place in history.

Upper Right: The store still sells guitars, along with t-shirts and other Elvis memorabilia.

Right Middle: Howard Hite stands behind the famous counter at Tupelo Hardware where Elvis bought his ﬁrst guitar.

Bottom Right: Hanging from the wall is a picture of the guitar Elvis purchased.

him that if he would buy the guitar instead of the rifle, she would pay the difference for him,” Bobo recalls.

The rest, as they say, is history. And that history lives on at Tupelo Hardware, which still sells guitars. The store, which dates back to 1926 and continues to be owned by members of the Booth family, features the original music counter where the “King of Rock and Roll” picked out his guitar.

That area is now dedicated to Elvis books, postcards and other memorabilia, and his fans flock to the store nearly every day. The annual Elvis festival in Tupelo attracts a big crowd, and as many as 30,000 people from all over the world come through the small store each year, according to employee Howard Hite, the resident Elvis historian.

The occasional celebrity stops in to see where Elvis got his start. Hite notes that Joe Perry of Aerosmith and Pam Tillis have both bought guitars at Tupelo Hardware. A guitar covered with autographs hangs on the wall behind the counter where music history was made.

“I never get tired of telling the stories about Elvis,” Hite says. “I think it’s pretty neat.” You can listen to Hite describe the store’s place in history in this video: www.youtube.com/ watch?v=wvlatdw0kkM.

Shell Lumber in Miami now hosts an annual Shakespeare production inside the lumberyard.

s hakespeare in the l umberyard?

Holding a Ladies Night event is one thing, but Shell Lumber in Miami has gone way beyond that. When coowners Andy Haase and Paul Naron heard the local Shakespeare in the Park production was in financial trouble two years ago, they stepped in with an unusual request: why not hold the play inside our lumberyard?

For the past two years, the store has hosted this unusual production, which attracts up to 400 people. The logistics alone are no small feat, as the production crew must build and strike the stage floor, set and equipment after each of the shows across six days, letting the lumberyard open for business as usual the next day.

Colleen Stovall, the artistic director of Shakespeare in Miami, says the lumberyard’s double balconies and open space actually make for a surprisingly good setting for a play. “The public’s reaction has not been what

I expected. To a man, everyone has been enthusiastic. I thought I’d receive more audience ‘freak-outs’ about the lumberyard location, but strangely enough, people think it’s cool,” she told a local newspaper.

LET THE MUSIC PLAY

If you’re tired of playing Muzak in your store, you should know there are other options out there.

Through its partnership with DMX, Pandora is now available for use in a commercial setting with no advertising and a media player that can connect to your existing sound system. Pandora also ensures that you have the proper licenses to play music in your business.

Pandora for Business costs $24.95/ month plus $100 for the DMX ProFusion media player. To play Pandora in your store, you need active DMX and Pandora accounts, a wired broadband connection with ethernet and a sound system with RCA inputs.

Grace Digital’s Wi-Fi radio offers music through SiriusXM Internet

Music for Business. The cost is $34.95/ month plus $199 for the radio, which can be hooked up directly to your phone and audio systems for on-hold and background music. Select from more than 17,000 radio stations in 50 different genres.

Price True Value’s specialty shop, The Kitchenette, hosted a cooking demonstration by noted chef Martha Foose.

SPECIALTY SHOP KEEPS LADIES FLOCKING TO PRICE HARDWARE

Price True Value Hardware in Atlanta, Texas, has had no trouble attracting female customers since owners John and Carol Price opened The Kitchenette in 2006. The specialty store-within-a-store caters to people who aspire to be home chefs, offering a bridal registry service, cooking classes and gourmet food and housewares items you can’t ﬁnd anywhere else local. ■

items can’t

BEHIND THE

NUMBERS

30%

Percentage of iPhone owners who want to make purchases in stores using their phone, according to the 2011 Mobile Consumer Report from Experian Simmons.

64%

Percentage of customers who have walked out of a store due to poor customer service in the past 12 months, according to

the American Express Global Customer Service Barometer. On average, customers will tell 9 people about a good customer experience and 16 people about a bad customer experience.

90%

Percentage of Americans who have a favorable opinion of small businesses, according to the Public Affairs Council.

39%

Percentage of employees who say they feel unappreciated at work, according to the Globoforce Workforce Mood Tracker, which also notes 38% of employees are searching for a new job.

44%

Percentage of small business owners who said the poor business climate had a negative effect on their health in 2011, as cited by Manta.

59%

Percentage of small business owners that have a business conﬁdante who is an immediate family member, according to a study by the National Federation of Independent Business.