Issuu

STRENGTHENING THE TWO-STEP CHANNEL

Thinking Outside the Box

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

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

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

Ieditor’s note

By Chris Jensen

Does Your Business Need Spring Training?

’m a diehard baseball fan who cannot wait for spring training to get here, a sign that winter is winding down and major league players are gearing up for a new season. Players and fans are filled with optimism that their team is going to bring home a championship this year (yes, even Cubs fans can dream).

Spring training is about working out the kinks and practicing the fundamentals. Derek Jeter has probably fielded a million groundballs since he first started playing baseball, yet he’s out there fielding hundreds more each day. He doesn’t take his skills for granted and wants to make sure he’s doing everything he can to prepare for the regular season. It’s that type of dedication and work ethic that makes him a perennial All-Star. Spring is a crucial time for hardware and home improvement retailers as well. The spring selling season will go a long way toward determining how successful your business will be each year. Is your store ready for the rush of customers looking to tackle spring projects? Are your seasonal displays in place? Are shelves full of merchandise and aisles free of clutter?

More importantly, is your entire team of associates prepared to assist customers with their spring projects? Have all employees undergone rigorous training on product knowledge and selling skills? Can they explain step-by-step how to complete popular projects and list all the products that will be needed?

Even your seasoned all-star associates need to keep their skills honed, just like an all-star baseball player. Perhaps your salesfloor associates need their own annual spring training camp to ensure their skills are fine-tuned. Challenge them and find new skills to teach them. That’s how high-performance champions stay at the top of their game.

If you share my love of baseball, drop me an email at chris@thehardwareconnection.com and tell me what steps you have taken to get your store and your retail team ready for spring sales success, as well as the reasons why you think your favorite major league team is going to win this year. The best response will get a free signed copy of my new baseball book, Baseball State by State. I hope your team delivers a winning performance this year. n

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By Tom Chasteen

Did You Survive February Madness?

This month begins “March Madness” for college basketball, with 64 teams competing in a frenzied tournament that culminates with the crowning of a champion.

Those of you who regularly attend several wholesaler shows know that last month the hardware industry created its own “February Madness.” However, unlike college basketball this could have far more serious implications than crowning a national champion.

Ace Hardware held its spring show in New Orleans February 21–23, Orgill held its dealer market in Orlando February 21-23 and True Value held its show in Atlanta February 23–25. That’s three national shows all starting and ending in a ﬁve-day period. College basketball has nothing on us!

Typically, the four biggest wholesaler shows are two to three weeks apart, which gives vendors time to ship their booths to the next show and go back to the ofﬁce to follow up with retailers they had spoken with.

Orgill has traditionally held its spring show in February, then the Ace and True Value markets followed sometime in March or April, followed by the Do it Best show in May. This schedule, in my

opinion, is much more functional for both the retailers and the vendors than having them all clustered together.

The one thing I witnessed that really caught me by surprise was how wellattended all the “February Madness” shows were. The Ace show was full of energy as members gave a great retirement sendoff to Ray Grifﬁth and welcomed John Venhuizen as the new CEO. Orgill had a record number of prospects in Orlando, and retailers were writing orders.

The True Value Market was also well attended with the usual trafﬁc jam of retailers getting their carts in the aisle to write orders, and I noticed quite a few retailers still walking the aisles on the last day.

The real losers in all of this “February Madness” were one of the most important and often overlooked components of our industry—the vendors. If we, as an industry, continue to drive up the cost to do business in this channel for the vendor community you’ve got to be naive not to think that cost won’t ultimately show up somewhere in our cost of goods. With the emergence of Amazon, the big boxes continuing to advertise lower prices and Wal-Mart “guaranteeing” the lowest price, the

– Byron Bunnell, Rainbow Ace Hardware, Rice Lake, Wisconsin

the way i see it

last thing we need is to make it more expensive for vendors to do business in our channel.

Vendors are just like us, they are trying to find ways to trim costs and become more efficient. Their margins are under pressure just like ours are and we tasked our wholesale partners to negotiate better deals. Somewhere something has got to give. And scheduling wholesaler shows on top of one another is one area where we could take our foot off the necks of our “vendor partners” and not lose anything in the process, while possibly restoring some respect and loyalty from the vendor community.

I will probably be criticized for this stance, but I still remember how this industry worked together years ago. Were we competitive? You bet we were. Look at the retailers who have been able to survive this economic meltdown—a lot of those store owners have survived because of customer loyalty and respect in their communities.

Only mutually profitable relationships are repeated and any time you (intentionally or unintentionally) restrict or hinder a trading partner’s business you ultimately compromise the loyalty and respect that helps bond that partnership.

We are never going to eliminate the big boxes from our industry and we aren’t going to stop Amazon from reaching our customer base, so what will be our competitive edge with our vendor partners? I’m not honestly sure, but hindering their

ability to spend time with their customers (they can’t be in two places at once) and driving up the cost to do business in this channel (many vendors had to purchase an extra booth or cut back on show booth space) is definitely not the way to do it in my humble opinion as a third-generation hardware dealer.

The strong attendance at each of the February shows demonstrates that this channel continues to be strong and our single greatest strength is that we are independent retailers.

Our biggest weakness is also that we are independent business owners and we like it that way. It’s not easy to run a wholesale operation either. Can you imagine what it’s like as a wholesaler CEO to get gentle and not so gentle suggestions by retailers on how to run a wholesale operation? Most of us wouldn’t last a month in that seat.

If our retail channel is to continue to be successful in attracting new vendors and be positioned to grow again when our economy picks up, then we need to work with one another through our wholesaler partners to make this channel one of the most efficient and profitable for vendors to distribute their products. Otherwise I’m quite certain someone else will.

From one retailer to another, let me know what you think by emailing me at tom@thehardwareconnection.com. n

Tom Chasteen, the publisher of The Hardware Connection, operates Tavernier Hardware in the

Florida Keys.

Awoman came in and asked

“Do you have Rid-X towelettes?” As I pondered how you could use towelettes to clean out your drains, she said, “Wait, I meant Rain-X!”

Bob Brame

Cadiz Hardware Cadiz, Ky.

HARDWARE STORIES Amazing but TRUE

OWe had a shoplifter the other night. He was stealing a ﬂashlight. He palmed it and was walking around the store. What he didn’t know was that the ﬂashlight was turned on. He was about to leave the store and his pocket was glowing. We nailed the guy. And the police really liked watching the surveillance tape.

Dave Sem

Miami, Fla.

Sebo’s Do it Best Hardware Anacortes, Wash.

ne contractor comes in with a dog that walks itself. While the contractor is loading his cart, the dog will walk behind him, holding his own leash. When the contractor stops, the dog will put down the leash, then pick it up again when it’s time to move on. The customers love seeing the dog that walks itself.

Jesus Guzman Shell Lumber and Hardware

Ahusband sent his wife to our store and told her to pick up a two-by-four. It took a little while for us to ﬁgure out what she needed, because she showed us the note she jotted to remember. It read: “tubafore.”

Scott Adams Duncan Box and Lumber Huntington, W.Va.

How’s

Business?

MIDWEST

How has business been in 2013?

Sales have been steady for the ﬁrst quarter of 2013, falling in line with our relatively optimistic expectations. We are cautiously optimistic as our business building/outdoor season approaches.

New initiatives for 2013?

We implemented our ﬁrst in-store event last fall with a ladies night event. The turnout was exciting and the wordof-mouth advertising done by ladies who attended after the event was incredible. We look to expand upon this type of customer interaction marketing. We have another spring kick-off/decking event planned for this April.

Additionally, we will be continuing to reassess and reinvest in our online presence through a redesigned website, consistent Facebook presence

and a recently added company Pinterest page.

Lastly, we hope to continue working toward the near-term goal of expanding our store several thousand square feet. Design work and other due diligence is in the works and we have a timeline for ground-breaking in 2013 yet.

Most successful niches?

From a product standpoint in our hardware department infrared heaters, light-duty commercial locksets, faucets, grab-bars and suction grab bars.

We have had great luck with a “stack & tack” mortarless stone and with custom walk-in showers. Overall our millwork/windows/cabinets are a good niche with considerable growth within the last 12 months.

Grant Leavitt Marcus Lumber Company • Marcus, Iowa

Marcus Lumber

TOUGHEST CARTS

How’s Business?

How has business been so far in 2013?

We’ve had a good start to the year, with a real winter, for the ﬁrst time in years. Our sales are up 7.5% YTD, and the customer count is up 4.5% YTD. Even better we are also seeing a nice margin increase.

New initiatives for 2013?

Our goal for the year is two-fold. We are concentrating on commercial sales expansion, especially with our existing commercial customers. It’s surprising how much more business is out there, if you only ask for it. It’s an easy conversation with your current commercial customers, and just ﬁnd out what other items they are not buying from you, and if you can be competitive on them.

During the past year we remodeled our entire store and expanded our salesﬂoor, adding a pet and bird department, along with expansion of our paint, plumbing, electrical and tool departments. It’s now time to reap the rewards of that investment. Our customer response to our changes has been very rewarding.

Most successful niches?

We use our garden center to drive our business. We have 9,000 square feet of greenhouses, from which we

have been able to create a niche for the middle to upper-end plants and hanging baskets, which the box stores can’t compete with you on. The garden center then drives footsteps for our entire store, not just the lawn and garden department. By selling the ﬂowers, vegetables and hanging baskets, we are able to draw in the female customers, which is very important to growing your overall business.

We use our greenhouses to sell freshcut Christmas trees. We also bring in live reindeer, which draws in the young

families for photos with the reindeer. It is important to keep the young families involved in your store. In spring we have an open house, where we set up 6-8 inﬂatables from our rental department for the kids to use, and offer free popcorn, and cotton candy. It’s really a great family function.

Perry Hahn Hahn Ace Hardware • Hartford, Wis.

Perry and Barb Hahn.

The wild bird department at Hahn Ace.

How’s Business?

How are you preparing for spring selling season?

We are pretty slow, but we have some last-minute big projects that we are getting done before the spring rush. Found a bunch of old (dead) dogs and got them written off and donated. Lawn and garden is totally set up minus grills (Still have ice melt where the grills will go). Paint department is inventoried. Shop guys are Stihl silver qualiﬁed and entire staff is Stihl bronze trained. New store signage is ordered. Switched a few departments around—light bulb aisle is far more efﬁcient now.

Brandon Buckalew

Hardware Hank • East Grand Forks, Minn.

NORTHEAST

How has business been in March?

Here in the Northeast we have experienced the slowest week of the year this week, with Tuesday being one of the slowest days in memory. Fertilizer pallets are stacked high next to the top soil and mulch pallets, collecting snow right now. Saying this a lot

during the day: “Sure, how many keys would you like?”

Scott Pesavento Hemlock Hardware • Fairﬁeld, Conn.

How has business been in March?

This has been an incredibly slow week for us in central Connecticut. Last year, farms were planting and we were enjoying 60-70 degree days. Still lots of snow on the ground from Monday night’s storm and cold temps are putting a crimp on early spring sales too. What’s worse, no vendor is willing to extend any “early spring” rebates for us nor’eastern dealers. Can’t get customers thinking lawn care if its covered in the white stuff.

Melissa Brett Welden Hardware • Simsbury, Conn.

Welden Hardware

How’s

Business?

How has business been this winter?

Last winter we were selling lawn and garden and exterior paint in February— this year has been a different story. Lots of cold weather but not a lot of snow, so no ice melt and shovel sales. We are in the middle of having our building painted, so our garden center looks like a bomb went off. Hopefully this weekend we can get the painting done and the warm weather will follow close behind.

Matt Mazzone Mazzone’s

Hardware • Brooklyn, N.Y.

SOUTH

How has business been this winter?

We aren’t experiencing the winter that retailers are in the mid-North and Northeast. We had the worst February in my memory in the past 15 years. I attributed this to the lack of winter. I am going to have a basement full of ice melt

for the summer, no doubt. The news outlets seem to be trying to convince us that the economy is improving— I’d like to know where. I may consider relocating my store to wherever this is occurring. One other thing the news keeps cramming down our throats is that there is a “housing boom” beginning again. If their idea of a housing boom is $500,000 houses being sold for $225,000, then I hope my business never begins to “boom.”

Dusty Lee Stormer’s True Value •

Knoxville, Tenn.

Dusty Lee

From Tom’s Shop

HARDWARE PRODUCTS REVIEW

We made it through “February Madness,” attending three wholesaler shows in ﬁve days, and now we are hopefully headed into a great spring selling season. I also just came back from the Hearth, Patio & Barbecue Expo in Orlando last week and if it’s any indication of the coming spring season we better be ready to have an outstanding spring. The demonstration area was simply fantastic and was easily accessible from the main hall. Almost

PRODUCT #1: SILICONE REPAIR TAPE GARDNER BENDER

Gardner Bender has a reputation for developing useful electrical products, great assortments and outstanding packaging. They have done it again with a self-bonding silicone wrap repair tape. There are several other companies that market a similar product, but no one has put the packaging, assortment and selection together like GB.

By Tom Chasteen

every vendor was showcasing new products with ﬁre pits in every imaginable size, shape and color. Look for these reviews in future issues of The Hardware Connection.

As I mentioned in my editorial column, I thought the hardware wholesaler’s shows were well-attended and there were quite a few new products that I thought have real potential in the independent hardware store channel.

strength and can be used for electrical and plumbing jobs, around the farm and even to repair a radiator hose or exhaust hose. You can use it for boat or RV repairs.

This repair tape is really the “MacGyver” of multi-use tape. It is silicone, so it won’t rot. it has great

It’s waterproof and bonds after two minutes of being wrapped around itself. Once a serious d-i-yer has been exposed to this product,

From Tom’s Shop

HARDWARE PRODUCTS REVIEW

they will want to have at least one roll in their toolbox or garage.

GB’s repair tape comes in carded packages (1” x 10’ rolls) and in bigger rolls (1” x 36’) and comes in eight great bold colors including clear. Break out a roll and let your sales staff demonstrate this product in the store to the customers and just watch their faces.

I’m thinking of having a contest in our store for our customers to see who can come up with the most unique use of GB’s silicone repair

tape. Stop by the GB booth at the next show you attend and you will see ﬁrsthand why I like this product so much. To see a video demonstration click here.

From Tom’s Shop

HARDWARE PRODUCTS REVIEW

PRODUCT #2: REGROUT™ TOOL | HYDE TOOLS

Hyde Tools is always coming up with something new and they’ve done it again. Removing old grout from a bathroom is almost as much fun as having a root canal and it typically takes a lot longer. Now Hyde has come out with the Regrout™ Tool, which not only makes the job easy but does it quickly, too.

The Regrout Tool is about the same size and shape as an electric engraving tool and you hold it much the same way, but the Regrout Tool actually acts like a mini jackhammer and literally cracks, chips and breaks up the grout

without chipping or busting the actual tile. It comes with two carbide tips—one has a pointed tip and the other has a chisel tip—and it will remove grout up to 1/8” wide with ease.

When I was testing this product there were several people standing around watching and before I had gotten two square feet done they all were wanting to try using the Regrout Tool. They all agreed it was easy to use and quick. It turned out to be a great “Tom Sawyer” tool, as they did over half of the job while I watched. Watch video here.

The possibilities are endless with

Selling Fixtures & Equipment

Simplified

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As a Store Owner

addition to fixtures and equipment, you can also list your entire store for sale. If you’re retiring or just ready to close, Wingate Nationwide Classified is the best way to find a buyer for your store.

Fulcrum Products has been leading the way with LED lighting products since LEDs have become viable for consumer products and now they have come out with a Motion Activated LED Path Light that is also weatherproof. This is not your typical accent light but is actually a real path light that uses the new LED ﬂoodlight technology to spread the light out over a greater area.

“I found the perfect fixtures for my store and saved a lot of time and money using www.wingateclassified.com”

a Buyer

You need to expand while keeping costs low. You may not have the budget for brand new items and you can’t find quality used equipment on other classified websites.

Wingate Nationwide Classified is your first stop every time you need equipment or are in the market for a whole store. We bring buyers and sellers together who are looking to make a deal. Growing your business has never been this easy.

The second generation of this light also includes a stake attachment so you can install it anywhere along a driveway or path where people may be walking at night. It is battery operated and because it is LED the batteries last for a long time, with the motion-activated feature ensuring the batteries last even longer.

The pathway light is very well made and only requires 4 AA batteries, while the energy-efﬁcient LEDs last 100,000 hours. To see the entire line of Fulcrum’s LED products go to www.fulcrumproducts.com

The HYDE® Regrout™ Tool

This new tool is not only the most effective grout removing tool on the market, it’s also the most economical and least likely to damage tiles.

The HYDE® Regrout™ Tool is safe and easy to use. It can be adjusted for the speed and precision required for deco insert tiles, liners, V-caps, quarter-round and 90° corners.

The HYDE® Regrout™ Tool:

• Removes grout at up to 1" per second

• Removes sanded or non-sanded grout up to 1/8"

• Will not damage tiles

• 3-speed control

Pricing Strategies Smart

Market Pricing in the Age of Smartphones

It is more important than ever to be priced competitively with your local competition. In previous articles we have discussed pricing against the big boxes, and now we intend to cover the rest.

In reality, I have found that although a big box can have a signiﬁcant impact on local shoppers, the real competition for most independent hardware retailers is another independent in the same market as well as additional fragmented competition from a small group of general merchandise food/ drug retailers.

In this article we will discuss how to maximize your sales by tailoring your prices to your own market. When pric-

ing local competition, you must consider all local retailers as part of your competition. Even if you do not have a big box or another independent hardware retailer in your market, you still share your customers with all the other retailers in your market that sell any of the same goods you do.

Over the last decade or so some retailers have changed market strategy. Many national or regional food and

BOTTOM LINE

By John Franklin

drug retailers now intentionally duplicate your products. In addition to food products, your local supermarket usually carries a large selection of products you sell such as batteries, trash receptacles, housewares, pots and pans, light bulbs, bird seed and paper products. In season, they even sell fans, air conditioners and lawn furniture.

Your local drug store has become a neighborhood mini-market complete with a small hardware section with fans, heaters, trash receptacles, batteries, light bulbs and other miscellaneous hardware. Even the corner convenience market promotes automotive products, windshield wash, rock salt, ﬁx-a-ﬂat,

batteries, paper products and other similar products.

The bad thing is that all of these local retailers are after a piece of your business. The good thing is that these stores normally regard your non-food or nondrug items as blind convenience products and typically have high retails on them. However, it is important that you are aware of what products they sell and at what prices. This is even more critical if you share a parking lot with any competitive store.

The point is: closer is more competitive. Remember, a supermarket in your parking lot is more competitive on light bulbs you both sell than the big

Jeff Powers, Owner Powers Do it Best Hardware

box ﬁve miles away. Price your store to the closest competitor, not the big box. The customers that shop in the food market next to you are the same customers that come into your store. They know your prices.

Another recent development for retailers is the increased use of new technology, especially by your customers. Armed with smartphones, savvy customers now zip through your store and compare your prices with the other retailers down the road or even across the country. Prices that used to be blind are now quite possibly competitive. This development means retailers must be even more vigilant in market awareness.

These factors change the way your customers shop and how much they know about the products you sell. That is why it is increasingly important to establish your store as a competitive store. You can no longer just take your wholesaler’s or manufacturer’s suggested retail and run with it blindly. You can start with their prices, but tailor them to your actual market.

Remember, competitive does not mean lowest price. You do not want to be the lowest-priced store in town. If you are, the other stores in town will be able to afford much better service than you.

FOCUS ON TOP SELLERS

So how do you do compare prices? You start with your sales winners. If you want to have the greatest effect on

BOTTOM LINE

your store proﬁts, tweak the things that already create the greatest effect on store proﬁt. In other words, concentrate on the items that are already doing well and make them a little bit better.

For example, if you raise the price on a blind item from $3.99 to $4.49 and you don’t sell any, what proﬁt have you actually created for the store? If you raise the price from $3.99 to $4.29 on an item that sells 300 pieces a year, and still sell 300 a year, you have made an actual and substantial proﬁt increase. Multiply this effect on several thousand items and you have really done something.

If you want to do this in your store, here is how you get started. First, create a list of every local competitor that offers the same products as you. Second, create a list of all high-volume products that you sell. Third, tailor this high-volume list with your actual local competition and reap the beneﬁts.

Start by running a sales report in your system to locate all the high-velocity items in each department. This report will be a black and white list of proven winners, a list that shows the items that your customers buy most frequently. It will include huge amounts of actual product sold.

Don’t be tempted to take this list and just add 5 percent across the board. The problem comes not from raising your prices, but how you do it. You cannot do this job effectively in the ofﬁce.

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Learn how these retailers are using proven retail practices and powerful tools to optimize inventory levels, keep prices competitive, maintain healthy margins and more.

With the new list in hand, have your department heads go out and try to locate each item on this list and compare it to your local competition. Many items on this list will not be carried in other non-hardware locations like supermarkets or drug stores. However, you will find a lot of items that other non-hardware retailers do carry.

When you find a comparable listed item in a local competitor, make sure you are not lower. Raise every price you can to meet or slightly exceed your competitor. If you do not find an identical or similar item locally mark it on the list as “not found.”

After you get a large portion of the list done, you will take all of the “not found list” items and consider raising them a bit. Raise the retail on these blind items an additional amount that makes you feel comfortable. Don’t gouge, just crank it up a bit. Remember, they may be blind to you and your competitor, but not to your customer with a smartphone.

A high-velocity sales list will have thousands of items on it. It will take some time to do it properly, possibly weeks or months. When it is closer to being done (you will never really be done) you will have made your store both more competitive and more profitable at the same time.

Look for high-velocity items that can safely support an increase in margin without making them low-velocity items. High-velocity items are bought

often by your customers so they have greater in-mind price awareness than they do on other more blind items. You must be careful what you do here. Some items will go up 5 percent; some may go up 20 percent. Some may go down, and some may stay the same. You will usually find sales increase further as you get retails more closely in line with the other local options.

two Rules foR PRicing

I have two rules for retail pricing. The first rule is: never sell an item lower than your competitor unless you shout about it. Why? Because it does you absolutely no good to quietly sell some items lower than your competitor. You get no benefit, just lost profit.

Whenever you discount an item you must get something else in return such as increased traffic or more favorable customer perception. It is good for your business to get more customers, so it is alright to pay something for it: like reduced margins. If you set low prices on some products for competitive reasons, you must advertise them to let your employees and your customers know. If not, you simply waste margin.

If you find items that are much below your competitor, you may opt to take the correction in two steps rather than one noticeable jump. For example, a few years ago I found a top-selling item in our store retailing at $8.99 when Home Depot and Lowe’s both sold it for $12.49.

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Rather than take the jump in one shot, I took the price to $11.99, waited two more weeks and then went to $12.79, slightly above the big-box price. Only one customer mentioned the increase.

It is never good policy to be lower than the big boxes. Most big-box locations have a policy to beat any competitor’s price by 10 percent. If you are below a Home Depot price, you may lose the sale anyway because they will match and beat your price. You are much better off being right on or slightly above the bigbox price. Your customer expects you to be slightly higher, so make more margin and don’t let a customer football your prices to the big box.

The second rule is: never shout about (advertise or display) an item with a non-competitive high price. If you call attention to a high-priced item in your store you hurt your price image and customers presume you are high priced on everything.

In other words, don’t set up an endcap with a ½ gallon of Clorox at $3.99 if the supermarket that shares your parking lot has it for $2.99 regular and an occasional sale at $1.99. It is not that the $3.99 retail price is wrong, as it may be correct for your convenience market. However, at this high price you should keep it quietly on the bottom shelf. Do not display it on a prominent endcap with a big in-yourface $3.99 price sign.

Here is one last area of concern. As you visit your local competition look

bottom line

for obvious good movers that sell, even if they are not on your high-velocity list. Why? These items may be currently priced too high in your store for the local market. Once you lower your price to a suitable level, these items may also become high-velocity items in your store.

In conclusion, don’t leave money on the table. The bottom line in your store can be favorably impacted by adjusting prices. Set your prices as high as the traffic will bear, but no higher. Know what your competition charges and push your prices up and be careful not to raise retails too high for the smartphone user. Done carefully, you will often find you can crank up the retails without your customers even knowing you did so. This is an everyday, every week process that gives great returns.

One last but important thought: if you are a retailer in a market with another similar independent you need to make sure that you are the first store to quickly adjust to the market and not your competitor. Survival in this business is dependent on your ability to do unto others before they do unto you. n

John Franklin has 40 years of experience in hardware retailing, most recently as merchandise manager at Williams Lumber & Home Centers in upstate New York. Contact him with questions or feedback at john@thehardwareconnection.com.

DEALER PROFILE

Thinking

Outside the Box

Pearl Ace Hardware in Portland, Oregon, features an extensive line of housewares that has helped the store achieve consistent doubledigit sales growth.

WhenSherry Cook

began working in her father’s hardware store in 1967, the housewares assortment only took up four feet of ﬂoor space in the 4,000-squarefoot store. Now, because Sherry and her husband Duane Cook have identiﬁed housewares as a strong seller, about 2,000 square feet are devoted to the category

By Doug Donaldson

Whether it’s teapots in the housewares department or throughout the store, Duane Cook aims to have a three-tier assortment offering to attract different types of customers.

UPTOWN HARDWARE INC.

Year Founded: 1950

Salesﬂoor: Pearl Ace Hardware, 15,000 sq. ft.; Woodstock Ace Hardware, 4,000 sq. ft.

Wholesaler: Ace Hardware

Pro/DIY Sales: 66%/33%

Dealer Profile

Upper: Co-owner Duane Cook devotes as much as 3,000 square feet in the 15,000-square-feet store to seasonal displays such as Weber grills and accessories.

Lower: The Cooks encourage employees to get to know their customers, so they can better meet their needs. The store is also pet friendly and posts photos of customers’ pets on the front counter.

in their Pearl Ace Hardware store in northwest Portland, Ore.

Sherry’s father founded the company in 1950 as Uptown Hardware. Since then, the company has expanded and has two Portland locations, Woodstock Ace Hardware in the southeast side and Pearl Ace Hardware in northwest Portland.

As the business has evolved, it has always been trendy. In the 1950s and ’60s, the store drew women shoppers by offering a wide selection of large appliances. Following trends and looking for up-and-coming, vibrant neighborhoods, the Cooks moved the original store and opened a 15,000-square-foot store in Portland’s Pearl District.

Since Pearl Ace Hardware opened in 2003, business has steadily increased. Many years, sales have increased 20 percent, and even during the slowest times, sales still rose 10 percent. Duane credits such sales success to the store’s ability to tailor its assortment to the customer base in the Pearl District.

“We have a little bit of everything around us,” he says. “We have highly educated folks with good jobs in the

tech industry who are doing upkeep on their homes, property management firms that have to maintain condos and townhomes, and some light industry in the area, too.”

Duane estimates about one-third of his business is do-it-yourselfers and the rest comes from contractors and other small businesses. The Pearl store’s best-selling department is paint and paint sundries, which includes the Benjamin Moore line

Above Left: About one-third of the store’s customers are do-it-yourselfers, with light industry and contractors accounting for the rest of their business.

Above Middle: Pearl Ace Hardware devotes about 2,000 square feet to housewares and makes the most of that space with attractive, wooden shelving such as this candle display.

Above Right : To stay up to date on housewares trends, Sherry Cook goes to at least three home shows a year. The hot color for the coming year, teal, can be seen prominently displayed among this dishtowels display.

and accounts for about 25 percent of sales. Electrical is also a top-selling department, while grills post strong sales in the spring and summer.

“One thing that’s good about being a smaller business is that we can make decisions very quickly and put a new product on the shelves almost as soon as a customer asks for it,” he says.

Recently, some customers who work at a light industrial firm asked for a wider selection of fasteners to

What’s Cooking?

As the housewares buyer for Pearl Ace Hardware in Portland, Ore., co-owner Sherry Cook has developed a keen eye for trends within the category. Here are four trends she believes will be hot in the coming year:

1. Dual-function. Gadgets and appliances that save counter, shelf or drawer space by having more than one job will be popular.

2. Teal. Avocado green is just going out of style, but teal is another throwback color that will be big this year.

3. Small kitchen décor. Items such as wastebaskets and throw rugs allow customers to customize their space without major expense or time.

4. Bamboo. Customers look for items such as cooking utensils and placemats made from bamboo because it’s a type of wood that can be sustainably harvested.

Dealer Profile

help them complete a project. The store tracked down the fasteners and began stocking them. And when more customers started asking for environmentally friendly options, the store started carrying three brands of green-friendly cleaning products.

To attract as many customers as possible, Pearl Ace Hardware offers threetiered assortments—low, medium and highest. If a customer requests a product the store doesn’t have, they will find out where to get it.

As a mirror of customer demand, Pearl Ace has a mix of permanent and frequently changing endcaps. For example, a seasonal endcap stocks ice melt and snow shovels during the winter, and another endcap is devoted to displaying nationally advertised Ace products. One of the store’s permanent endcaps features shower curtains, which Duane says is a surprisingly good seller with high turnover.

feeliNG aT HoMe

As the housewares buyer, Sherry has been at the forefront of several trends. For example, two years before mass merchants started selling air-bake cookie sheets, she had them on the Pearl Ace shelves.

“We buy from a lot of different sources,” she says. “Because we’re small and independent, we can be ahead of trends.”

Because of the extensive offering of kitchen utensils, Pearl Ace Hardware has developed a reputation as a destination in the category. Co-owner and housewares buyer Sherry Cook believes in constantly updating the housewares offerings to keep customers coming back.

To research housewares trends, Sherry goes to the Seattle Gift Show three times a year, carefully studies trade magazines and maintains three file drawers full of housewares vendor information. Her guiding principle in housewares buying: Items have to be practical, yet fun.

An eye-catching example of this retail philosophy is the store’s kitchen tools and gadgets wall. With well-known brands such as Le Creuset, Zyliss and Joseph Joseph, the store positions its housewares between high-end gourmet and variety store brands. Another recent big seller has been Shun cutlery. Local chefs have even been known to shop the store for these knives.

“For us, and I think other retailers, housewares will continue to be big,” Sherry says. “I see the trend for the next generation being more at home, giving their kids a home feeling, even though everyone is busy.” n

By Phil Mitchell

Better Retail Operation 10 Weeks to a

Before you have finished reading our book you may tire of me beating you over the head reinforcing how important differentiation is to your business. It is, you know. In fact, I will be bold and say that differentiation is perhaps the most critical component of your store’s, or any store’s success. Imagine a field of yellow flowers— any kind you choose, but they must all be the same. In that field of yellow flowers if you were to examine them closely enough perhaps you could pick out small differences, but for the most part, each yellow flower is just like the rest. If we were standing together in your field of yellow flowers and I asked you to pick your favorite, it would be hard to do. Remember they all look about the same.

Now take a leap with me and imagine you are a prospective customer and each of those yellow ﬂowers

BETTER OPERATION

represents a choice of where you can spend your hard-earned money. Because there are no distinguishing factors to speak of, your decision would be difﬁcult right?

Now let’s say that in the middle of the field of yellow flowers is a bright red rose. If I asked you to pick the flower that stands out, I’d give you odds that you would pick the red one—almost all of us would. Why? It is because it is different and, therefore, it demands our attention.

There are a number of ways that you could make your store different from your competitors’ stores. Some of those ways would be good, some would probably be bad. In fact, it might seem that the number of ways in which you could differentiate your store would be inﬁnite, and that wouldn’t be far from the truth. However, there are a limited number of differentiating categories.

Better OperatiOn

We teach that there are only six categories within which you can separate your retail operation. Every distinguishing factor you might think of would fall within one of these categories. This is very important, because an owner can quite manageably think and formulate strategies within the context of six groups. But the almost infinite number of ways in which you might differentiate your store without the boundaries of categories, would be something, I think, akin to herding cats.

Here are those six key differentiating categories:

6 P’s of Differentiation

1. Proximity

2. People

3. Presentation

4. Promotion

5. Pricing

6. Products

I put Proximity first for a few different reasons. Proximity has everything to do with your store’s location and more specifically, with your store’s location in relationship to its target customers. Often a store wins the battle of differentiation simply because it is the most convenient. Its proximity is such that it attracts customers because of where it is located and the convenience it offers.

The second reason I put proximity first is because it is the “P” that is least

subject to change, short of relocating. Nonetheless, it is critical to understand that when people are deciding which yellow flower to pick, or in our case, which store to shop, the one that is the nearest often gets the nod.

Here is the reality that we face today. Often the competitor that is most convenient is not the one that resides two miles down the road but, rather, somewhere on another coast. Its front door is not of oak but of digits. Cyberspace and e-commerce are game changers and there is no doubt about that. While you are tucked away in your nice warm bed, one of your customers, possibly in his underwear, or heaven forbid, even less, may be placing an order for a what-cha-macall-it on the computer in his bedroom. It is an item you sell every day, maybe even for less, who knows? But the proximity effect, in this case, is the store that’s just down the hall.

While many small or mid-sized retailers have internet presences, most do not have online e-commerce. That could change, but when one enters the realm of cyberspace they do battle with inter-galactic bullies. The bullies are often huge (think Amazon) and financed beyond normal local operations’ abilities.

That said, however, some make it work. It’s a matter of aligning one’s self with site developers who have the know-how to bring a page to the top

of Google searches. Land on the top page or two and you’ve got a chance. It’s called SEO, which is an acronym for search engine optimization. It’s real, it’s somewhat of a science and the requirements change more frequently than those who work with it would like. Google often rewrites their algorithms in response to those who try to use their knowledge to “fool” the system. As with many other aspects of your business, developing your website and making it visible to the community is a job that is never truly completed.

Back to your brick and mortar store. Remember that proximity deals with location but also bear in mind that it deals with convenience as well. For example, if a customer was deciding where to go for a simple purchase, they would most likely think “close” first. But, if “close” meant heavy automobile traffic, long checkout lines, a parking lot that was difficult to get in and out of, rude employees or higher prices, convenience might look different.

Look at that list again: heavy automobile traffic—can’t control it; long checkout lines—can control it; parking lot difficult to get in and out of—somewhat controllable; rude employees— can be controlled; higher prices— somewhat controllable.

I want to make sure that you receive this key point: Proximity deals with both location and convenience.

Location is pre-established (unless you are developing a ground-up store), but you can successfully offset some of the negatives of a bad location by offering enough other advantages. Also notice that we jumped in and out of some of the other 6 Ps. Long checkout lines could be placed in People, parking lot might fall under Presentation, rude employees relates to People again, and higher prices obviously goes in the Price category. So even though the discussion is of proximity, because proximity includes convenience, it would be incomplete without demonstrating how the 6 P’s work together to influence buying decisions.

The category “People” is one of the six P’s that is most easily controlled, but some managers don’t do it very well. We have consulted with stores whose employees were rude, condescending or just not very knowledgeable. That’s a really bad combination and I think you would have to agree that any one of those attributes might make a store less appealing to its customers.

Here is something we have observed: attitudes start at the top, with the manager. I knew a guy who owned a store and managed it himself. Truthfully, he hated people—he knew it and his customers knew it. To his credit, and after a few years, he removed himself from day-to-day operations and placed someone in that position whose personality was

Better OperatiOn

less abrasive. The store improved, as you would expect. Attitudes of employees followed suit and soon the store was a much more pleasant place to be. Business increased and even the old grouch was pleased. I don’t know how difficult it was for the new manager to run the gauntlet between the owner and the staff, but that’s not the point here.

Operations are different. Some retail environments have a lot of interaction between customers and employees, others not so much. But there are always crucial “points of contacts.”

Presentation is a P that is well within your ability to affect. Presentation deals with the way your store is “staged” within the theater within which it operates. Is it appealing, is it unique and does it differentiate? We will deal with a number of elements of presentation in weeks 1 and 2. We’ll lift the blinders off your perception of your store’s shopping environment.

The P that is Promotion will be discussed in week 4. We often tell our customers that it’s great to produce change, adapt new try-harder principles, work to establish better pricing images, etc. However, unless you communicate those changes they go unnoticed for too long. The changes that you will be undertaking represent a departure from your old businessas-usual. Past, present and future

customers need to know that. They might eventually learn from experience or from word of mouth.

It will be more effective if you promote heavily, tell your story and “toot your own horn.” Tooting one’s own horn is difficult for many people. In fact, it is one of the biggest challenges that my partner and I face in promoting our own business. But if not you, or not us, then who?

The discussion of pricing falls mostly in week 7, a little, perhaps in week 10. A friend and mentor once told me that pricing is not the main thing—it’s the only thing. Although I disagreed with him then and would now, his message did spotlight how important it is to have a system, to work that system and to establish a price image. n

Phil Mitchell and Gary Petz of DiscoveryBased Retail have strong backgrounds in retail operations and wholesale distribution. 10 Weeks to a Better Retail Operation is a follow-up to their first book, Discovery-Based Retail, which helped launch their retail consulting company bearing the same name. For more information, visit www.discoverdbr.com. 10 Weeks to a Better Retail Operation is available click here .

Phil Mitchell (left) and Gary Petz work with retailers to help them enhance retail operations and improve profitability.

Nominations Open for Beacon Awards

This year’s Hardware Conference, set for September 6-8 in Marco Island, Fla., promises to be the best ever. The industry’s premier event for the independent retail hardware channel is taking its awards program to another level. A new recognition program is being developed for 2013—the Beacon Awards, which will be co-sponsored by The Hardware Conference and The Hardware Connection with special industry sponsorship support from Apex Tool Group.

In addition to awards honoring community service and lifetime achievement, the Beacon Awards will recognize the industry’s best new stores. Whether it’s an existing retailer opening a branch store or a newcomer opening a groundup business, these new stores represent the future of the industry.

We are delighted to have the experienced hand of Tom Delph on board to help steer the ship for the Beacon Awards. Tom, who retired as group publisher of Hardware Age after a long industry career, has spent the past 17 years directing NRHA’s Young Retailer of the Year program. He will make sure the Beacon Awards gala banquet at this year’s Conference is a first-class event.

The average age of current hardware store owners is in the mid-50s, according to wholesale execs, and only 20 percent have a succession plan. Many do not have children who are interested in taking over the business, which puts these family-owned businesses at risk. This situation illustrates why discovering and encouraging the next generation of retailers is vitally important to the industry. We hope the Beacon Awards can be a push in the right direction.

The Beacon Awards banquet will be held Friday evening, September 6, 2013, at the Marriott Marco Island in Marco Island, Fla. Winners of the Lifetime Achievement and New Store awards will receive all-expense paid trips for two to the 2013 Hardware Conference in Marco Island including conference registration, airfare, hotel and meals. They will also receive a special Beacon Award

Beacon awards nomination

plaque and be featured in an article in The Hardware Connection.

Get your nominations in now for the Lifetime Achievement Award and the Best New Store—the entry deadline is June 15, 2013. The qualifications and judging criteria are outlined on the next two pages. Nomination materials should be emailed to tdelph@thehardwareconnection.com.

category: Best new store

Nominations: any dealer can nominate his store and nominations also accepted from wholesalers.

Qualifications:

• Store must have been open at least one year, to a maximum of 4 years.

• New ground-up store or it can be a substantially expanded existing store

• Can also be a store built to replace store destroyed by natural disaster

• Store must feature all the core departments: electrical, plumbing, tools, hardware, paint and lawn & garden.

• Can also be new to business owner, if substantial changes are made.

• Can be a branch store

Judging will be based on any or all of the following criteria:

• Financial performance (sales, profits, margins, etc.)

• Community involvement

• Store design

• Merchandising displays

• Promotion activities

• Specialized product areas/niches

• Employee training/recognition programs

• Innovative retailing concepts

Beacon Awards Banquet:

To be held Friday night, Sept. 6, 2013 at the Marriott Marco Island, Marco Island, Fla.

Honoree(s) will receive:

• All-expenses paid trip for two to 2013 Hardware Conference in Marco Island including conference registration, airfare, hotel and meals.

• Beacon Award plaque

• Feature article in The Hardware Connection

To complete nomination: Please include detailed information for each of the judging criteria, attach any relevant pictures, list the date of new store opening and also provide retailer name, store name, address, phone number and email address. Email nominations to Tom Delph, Beacon Awards Program Director, at tdelph@thehardwareconnection.com.

Entry deadline: June 15, 2013

category: Lifetime achievement

Nominations: any dealer can nominate himself and nominations accepted from wholesalers.

Qualiﬁcations:

• Must have at least 30 years experience as owner of hardware store, home center or lumberyard.

• Must still be active in the business.

Judging will be based on any or all of the following categories:

• Company ﬁnancial performance through the years

• Store growth (sales, store count, proﬁts)

• Community involvement

• Awards/recognition received

• Service to the industry

• Innovative retailing concepts

• Mentoring to other retailers in the industry

• Involvement with wholesaler and/or trade association boards/ committees

Beacon Awards Banquet:

To be held Friday night, Sept. 6, 2013 at the Marriott Marco Island, Marco Island, Fla.

Honoree(s) will receive:

• All-expenses paid trip for two to 2013 Hardware Conference in

Marco Island including conference registration, airfare, hotel and meals.

• Beacon Award plaque

• Feature article in The Hardware Connection

To complete nomination: Please include detailed information for each of the judging criteria, list the number of years of hardware retailing experience and also provide retailer name, store name, address, phone number and email address. Email nominations to Tom Delph, Beacon Awards Program Director, at tdelph@thehardwareconnection.com.

Entry deadline: June 15, 2013

HARDLINES DIGEST

Grifﬁn the store

SDull Moment PetsWITH IN THE STORE NEVER A

pring is right around the corner for many of us, hopefully bringing with it some robust sales and customer trafﬁc. Meanwhile, one of the most interesting discussion topics during the slow season was about animals in the store.

BRANDON BUCKALEW STARTED AN interesting discussion with the following post. “Just curious to see how many hardliners have a store pet? Someday I’d like to get a dog to run around the store and greet the customers. Not sure how I’d get him/ her trained to go outside for bathroom breaks and come back in, but I’ll cross that bridge when I get there.

cat lounges at Cadiz Hardware in Cadiz, Ky.

By John Fix III

If you have a good story about your store pet please share.”

Bob Brame of Cadiz Hardware in Kentucky has had several pets in the store. “Grifﬁn is the third cat we have had in 16 years. People actually love him and come just to visit him. My middle daughter had a pug when she was in high school. She would bring it to the store until a woman came in the front door one day, saw the pug and said ‘DEVIL DOG, DEVIL DOG’ and fainted at the front door. Needless to say, we decided maybe that was not the best. The second cat we had loved to hide in the Christmas trees and jump out at customers. The day she jumped out and attacked the leg of the notorious ambulance-chasing attorney I almost turned white. Funny though he liked her. An attack cat! He would then come in and ﬁnd her.”

Melissa Brett of Welden Hardware in Simsbury, Conn., uses their store pet to market the business. “Our Corgi, Gracie, has been awesome with kids and adults. If we don’t bring her daily to the store she gets mad at us. And now customers feel comfortable bringing their pooches in to visit. She is our mascot, as well as advertising branding as all our ads start with a photo of her and the phrase ‘Gracie says...’”

Susan Harlan of Vickery Do it Best in Smyrna, Ga., has more than one store

Nut stands guard at Vickery Do it Best in Smyrna, Ga.

pet. “We have two cats that reside with us, Nut and Bolt. Nut is more outgoing—she is a good ambassador for the store. Kids love her, and people do come in just to visit her. I think because having a pet is something a big-box store would never do, that people really enjoy it.”

Ed Tisdale from Family Hardware in Florida never had an ofﬁcial store pet, but he did have a good story. “Even as a child our home always had at least one if not two miniature schnauzers. I am allergic to animals that shed so that narrowed down our choices. When I bought our ﬁrst store I thought about making these dogs into store dogs. I decided against it because they would follow whomever was nice to them right out the door and jump into their car for a new and exciting road trip. I was also concerned about customers who asked if there were any other dogs in the store before they brought their dog in with them. Ours

hardlines digest

were very friendly, well-behaved, house-broken dogs.”

Tisdale continued, “When we bought our second store I’d bring the dogs in on days we were closed like Christmas, Easter, etc. While I was doing overnight paperwork the dogs would run through the store sniffing things out. The dogs loved this road trip. One of my employees showed me the ‘present’ one of the dogs left in the main aisle, just out of security cam view, the day after the holiday closing. This happened several more times with me finding the ‘aisle bomb’ before leaving the store. Jake, the younger male, always looked very guilty as I was cleaning up the mess so I assumed it was him dropping the bomb. His sister, Jackie, acted like nothing was wrong and would bark and nip at Jake.”

He adds, “On one of the last times it happened, I checked the video security camera and it was not Jake but Jackie who was leaving me the aisle bombs. I would have loved to have them in the store with me all day but did not want the liability nor the chance of losing the dog to a stranger or escape to go outside.”

Susan Miller of Bob’s True Value related her pet story. “My late husband used to bring in his basset hound. She liked to nap a lot and unfortunately people would constantly try to wake her up. They would pull her ears and one person even kicked at her with their foot trying to wake her up. He had to

Bill and Cheryl Atterbury’s store pet at Sutherlin True Value in Oregon.

stop bringing her in as she began snapping at customers who woke her up. One day the attorney’s wife from a nearby office asked to take her for a walk. She was in high heels. The dog saw a squirrel and lunged, dragging the lady face down across the cement sidewalk. The lawyer came in and said I am not going to sue you but I want your homeowner’s insurance info. Our homeowner’s insurance paid the claim. There are downsides to having an animal in the store.”

Tom Schutt of Schutts’ Hardware

Hank in Kerkhoven, Minn., had a cat in his store for several years. “On the whole, it was a good thing. Some people definitely made an extra trip into the store to say, ‘Hi,’ to Sarg, the cat. But liability was a concern of mine. This cat was extremely docile. However, if I had

one kid pulling my tail, and two more squealing and grabbing at me, well, I might give the kid a swat, too. My cat never bit anyone, and when he swatted at an overzealous kid, he kept his claws pulled in. However, he hurt a few kids’ feelings when he hissed at them, and when the kid is crying, the parent doesn’t really ask, ‘Why?’ If I were going to do it again, I would be sure to de-claw the cat, and it needs to be very docile. Also, keep a copy of the cat’s rabies shots handy.”

Bill Round of Round’s Hardware in Massachusetts related his own experience with basset hounds. “We had basset hounds in the store for years. Customers loved them and some would come in just to visit the hound

on duty at the time. I was always concerned about liability. There is nothing as frightening to me as a dog’s snarl accompanied by a child’s cry. Dad’s position was that a good hound can’t do bad things, so it was the kid’s fault. Never any legal problems, no hospitalization, no broken skin or bloody injuries, but it was scary.”

Round added, “I did hire an ‘animal behaviorist’ to observe my father and his basset hound in the store. She diagnosed ‘dominance-related aggression’ and charged me $500. I then had her tell dad about all the scary cases and lawsuits she had consulted with. These made me want to run and buy more insurance. Dear ol’ dad ignored the good doctor’s advice. I was in charge of k-9 discipline and protecting the customers until that hound died. I think customers and animals can be a bad mix. Make sure you have lots of liability coverage. Dogs are a major claims trigger. Cats? Who sues about cats? They might be OK.”

This is just one of the topics discussed during the past few months on Hardlines Digest. To read more or subscribe, head to www.hardlinesdigest.com. n

John Fix started the Hardlines Digest in January 1996. The list was run for many years using servers in John’s hardware store, Cornell’s True Value in Eastchester, N.Y., but recently the list migrated to Google Groups. There are currently over 1,500 subscribers reading the Hardlines Digest.

Gracie is the store mascot at Welden Hardware in Simsbury, Conn.

TOOLS/HARDWARE TRENDS

Sales of Utility Knives and Blades (Independent Hardware Channel) 12 Months % Change vs. Year Ago

Unit Sales Breakdown for Utility Knives and Blades Total of 970 Items with Sales

TOOLS / HARDWARE BUYING UPDATE

■ Brushless motors are the latest trend in cordless tools, especially in impact drivers. Brushless motors offer signiﬁcant advantages over motors with brushes, including higher efﬁciency and reliability, longer runtime and service life, and reduced maintenance, noise and vibration.

■ “A lot of our members are jumping on the brushless bandwagon,” says Tom Klein, vice president of marketing with ToolSelect, an online community of tool users. “We see it in the power-tool reviews on our site—people want to know what brushless tools are out there and what’s coming. The manufacturers are all working hard to get their customers the best possible tools, and these brushless motors are deﬁnitely what people want right now.”

■ The ﬁrst sub-compact rotary hammer for pros was introduced last fall, with other manufacturers expected to follow suit with their own versions. The lightweight tool, which is two-thirds lighter than traditional cordless hammer drills, is designed for use in tight spaces and over long periods of time.

■ Oscillating multi-tools that are corded and offer quick tool-free blade changing are increasing in popularity with pros.

■ Demand for power and hand tools in the U.S. will rise 4.8 percent per

Upper: Hartville Hardware attracts woodworkers, DIYers and contractors with a power tool assortment that is more dominant than any big-box store offers.

Lower: This is the dramatic new look for the hardware and fasteners department at Westlake Ace Hardware’s new store in Bolivar, Mo.

year to $13.1 billion in 2016, according to The Freedonia Group. Power tools will outpace hand tools, as power tools—especially cordless electric tools—beneﬁt from greater capacity for innovation.

■ Kitchen and bath decorative hardware trends are following the lead of the trends in ﬁxture ﬁnishes as polished chrome and polished nickel have surged in popularity, taking share from brushed nickel, brushed chrome and satin nickel. ■

FLEX HEAD RATCHET

STANDARD LINE DIAMOND BLADES

• The 120XP™ Flex Head Ratchet from GearWrench® includes all the features of the standard 120XP Ratchet plus an adjustable ﬂex head with six positions, giving the end user additional clearance and improved access.

Deliver great performance and speed in applications that include cutting hard concrete, green concrete, tile and general-purpose masonry.

• It has a 60-tooth gear that alternately engages double-stacked pawls to produce 120 positions and threedegree swing arc.

• The new ratchet is available in both full polish and cushion grip in 1/4” and 3/8” drive sizes, allowing for greater comfort and ease of use for technicians.

• The enclosed head design resists dirt inﬁltration and exceeds ASME strength requirements.

• New line incorporates 27 SKUs (from 4” to 14”) and includes segmented rim, turbo rim and continuous rim products for large and small angle grinders plus highspeed saws.

• Standard Line diamond blades start with a formulation that emphasizes consistent diamond content and even distribution. A hardened and tensioned steel core provides rigidity and stability during cutting; cooling holes are designed to extend the life of the blade and enhance user comfort.

Multi-Material Drill Bits

• Will drill through just about any type of material including brick, block, tile, metal, wood, laminate, plastic and marble—will even drill through multiple materials at the same time.

• Feature a diamond-ground, four-facet carbide tip with super-sharp cutting edges that guarantee centered starts with no walking, fast drilling and excellent hole quality.

• Double-milled flute removes dust and debris quickly, which increases drilling speed (with no clogging) and results in longer bit life.

• Compatible with all standard 1/2” and 3/8” chuck drills and are available in 3” to 5” jobber lengths and 16” extended length, with diameters ranging from 1/8” to 1/2”.

Metalliscanner® x8

• The x8 debuts the new X-class series technology—a major advance in reduction of detection errors related to external factors.

• Efficiently locates and determines the depth of ½” diameter rebar and ½” diameter copper pipe up to 8” deep and automatically differentiates between ferrous (steel, iron) and nonferrous (aluminum, copper) metal.

• The x8 incorporates three sensitivity levels for easy unit of measure selection and provides simpler and more accurate scanning over rougher, textured surfaces, even lath and plaster.

• Use of glide pads, instead of rollers, allows the unit to scan both horizontally and vertically.

TruTac™ sTaPler

• The larger TruTac Forward Action Stapler is a heavy-duty stapler for home repairs and upholstery projects, while the smaller TruTac Forward Action Stapler is a light-duty stapler perfect for home decor and crafting projects.

• Both staplers are easy to hold with a comfortable ergonomic grip and easy to use.

• The patented forward-action technology of the TruTac staplers—so named because the handle and the staple’s exit point are on the same end of the stapler—allow for more precise control.

• The TruTac Heavy Duty stapler fires T50®staples up to ½” and the TruTac Light Duty stapler fires JT21®staples up to 3/8”.

ooK® Home Toolbox KiT

• The OOK® brand is now proud to be part of The Hillman Group.

• The OOK Home Toolbox Kit features enough picture-hanging hardware to hang up to 38 frames.

• The 103-piece kit comes with a 5-in-1 professional framer’s hammer for all your hanging needs plus screwdrivers, drywall and hardwall hangers, ring hangers and framebacks, and professional wire.

• Ultra-thin nails make tiny holes that won’t damage walls.

a growing community of thousands of independent

“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

By Matt Mullen

To Surcharge or Not to Surcharge – That is the Question

By now, most of you have received emails or mailings from your processor notifying you of the newly granted right to surcharge credit card transactions. This right came about as a part of the November 2012 settlement by Visa and MasterCard from an anti-trust lawsuit.

Prior to the settlement, Visa and MasterCard prohibited merchants from surcharging (with the exception of a few select merchant categories), and while American Express permitted it, it was with the caveat that all cards be similarly surcharged.

It means that merchants now have the ability to recoup the cost they pay to accept card payments. But not all card payments—credit only, not debit or prepaid cards. And not all of the costs, only that part that constitutes the cost paid to Visa and the issuing bank (interchange or the merchant discount). And not always all of that cost either, there is a cap of 4 percent no matter how much you actually pay per transaction.

We should also point out that merchants have a choice whether to surcharge at the brand level—meaning all Visa or MasterCard credit cards or at the product level. There are a lot of product types, but a good example is corporate purchasing cards. These “commercial” cards typically carry a much higher merchant discount rate than traditional consumer cards. But no playing favorites—if you surcharge Visa or Visa products you must also surcharge to the same level for MasterCard.

So, you may ask, how does this affect home improvement retailers?

Retailers need to take into consideration the impact the surcharge application may have on their dedicated customers. This notification gave guidance as to what you must do in order to surcharge, including such tasks as providing advance written notification to the card networks and acquirer of the intent to surcharge, adding signage on doors and point of purchase, and surcharge cost detailed on receipts.

More than likely larger retailers, who have the capacity to negotiate lower transaction fees with the credit card giants, will not add an additional “checkout” fee to a customer’s bill. Smaller retailers will now have the ability to pass it on to their customers. However, customers will not easily

accept the excess fees. If the big-box stores hold off on implementing the surcharges (as suspected) or elect to never implement them, the smaller retailers who go head to head with the big boxes could potentially find themselves losing some business to larger retailers over the issue of added surcharges.

Of course critics of the card networks might claim they are making it hard, that there was a reason they prohibited it in the first place and were sued, and that they don’t want you to do it. This may or may not be a fair criticism, but it seems to us it creates a competitive disadvantage against lower-cost payment products like cash, checks and more recently, digital providers. Visa, MasterCard and most if not all of the acquiring/ processing industry participants typically don’t want any process in place that makes a customer think twice about pulling out the plastic.

We expect to see surcharging expand in industries where margins are very thin. Fuel is a good example of a business category with thin margins where discounts (the flip side of surcharging) had been previously allowed. Allowing surcharges to be applied broadly will likely lead to a more widespread use of the right, and higher prices for consumers who pay by credit card at the pump.

It is my expectation that we will see a much slower adoption in

non-service, higher-margin competitive retail categories, which includes many of the same merchants that initiated the lawsuit in the first place. Merchants work hard to price their merchandise competitively and at the margins consistent with successful operation of their business. Customers, especially repeat customers, have an expectation of price, service and acceptance that would be disrupted by a dual pricing model. If the disruption is significant enough, then the customer may choose to shop where that disruption does not exist.

At the end of the day, merchants have benefitted from the settlement. You now have a choice for your business that was not available before. And like many business decisions, this choice comes with pros—1 to 4 percent increase on credit card sales—as well as cons like implementation, training, administration and impact on consumer preference.

As an industry we should all pay close attention to the actions of the nation’s largest retailers. Their use or non-use of surcharging will greatly influence consumer perception and reaction. From that action, or inaction if that is the direction pursued, the choice carries with it an opportunity for competitive advantage. n

Matt Mullen is head of product management and general manager of the Epicor Payment Exchange for Epicor Software Corp.

IN THE NEWS

NEW STORES:

■ Steve and Astrid Caropelo opened their third Ace Hardware store in Port Jefferson Station, N.Y.

■ Dean and Mila Curtis opened C&L Do it Best Hardware in Ashland, Neb.

C&L Do it Best Hardware

■ E & H Hardware Group opened its 10th Ace Hardware store in Middleﬁeld, Ohio, in February.

■ Jeff and Melissa Gillard held a grand opening celebration March 15-16 for Gillard’s True Value Hardware and Rental in Carmi, Ill.

■ Jim Ryan and Bob Trout opened their fourth Schreiner Ace Hardware store in Worthington, Ohio.

■ Dale Kettner and Terry Boesch have purchased Fairmont Building Supply in Fairmont, Minn., and will reopen as their second Boekett Building Supply location.

■ Edward Hines Lumber is opening a new location in Wheaton, Ill., in May.

■ McLendon Hardware has opened its seventh store in Tacoma, Wash.

■ Ramon Zavala Ramirez has

purchased Yancey Lumber in Patterson, Calif., and renamed it Patterson Lumber.

■ Jan Blanco has opened an Ace Hardware store in a new location in Casa Grande, Ariz.

■ Marvin’s Building Materials and Home Centers announced plans to open a new store in Lewisburg, Tenn., this summer.

KUDOS TO:

■ The PRO Group is marking the 60th anniversary of PRO Hardware, which was founded in 1953 by Paul Cosgrave on six still-relevant principles: national identity, group purchasing power, store modernization, promotional programs, inventory control and value-added services. Paul’s son, Gary Cosgrave, continued to build on his father’s legacy. Last year, CEO Steve Synnott, who has worked at PRO for 20 years, purchased the company from Gary.

■ Home Hardware Stores Ltd. was recognized as one of Canada’s Best Managed Companies.

■ Third-generation owner Mitchell Cohen is celebrating the 100th anniversary of Cohen & Co. Hardware and Home Goods in Philadelphia.

WESTLAKE ACE UNVEILS NEW STORE CONCEPT

On March 15, Westlake Ace Hardware held a grand opening for its new store in Bolivar, Mo., which showcases a new store design and layout for the 86-store chain.

“With the addition of the Bolivar location, Westlake has introduced an innovative new store layout unlike anything we have ever done before. From the building materials to the ﬂoor plan, it is uniquely designed to deliver a noticeably superior shopping experience to our customers,” said George Smith, CEO of Westlake Ace Hardware.

He added, “We’ve spent the past year studying and analyzing everything we know about our customers; the products they need, their mindset when they shop and help they’re looking for. I’m convinced we have created a store speciﬁcally designed to meet their needs and preferences.”

The 17,845-square-foot building’s attached garden center is the ﬁrst of its kind for Westlake. Additionally, the design incorporates construction materials and a design approach intended to provide an organic and modern feel: more natural light from garage-style doors and skylights, a wood and metal façade, and polished concrete ﬂoors.

The interior of the store features an entirely new signing and décor package. Traditional categories

Westlake Ace Hardware’s new store in Bolivar, Mo.

such as tools, electrical, plumbing and paint are strategically located around the perimeter of the store. The entranceway has been designed to be open air on temperate days to invite customer exploration. Decorative and lifestyle categories are situated in the center of the store, an environment that encourages inspiration and browsing, increases customer comfort and helps make Westlake a preferred destination for project needs.

■ Kroner’s True Value Hardware, operated by fourth-generation owner Bill Kroner, is marking 145 years in business in La Crosse, Wis.

■ Miller Farms Nursery in McKinleyville, Calif., is celebrating its 50th anniversary in 2013.

■ Bleyhl Farm Service Inc., a FARM MART retailer and farmer-owned cooperative based in Grandview, Wash., was honored as Grandview’s 2012 Business of the Year.

■ True Value Company has honored 13 members as winners of its sixth annual “Best Hardware Store in Town” recognition program:

Boland’s True Value, Chapin, S.C.; Cook’s True Value, Prosser, Wash.; DeRonne True Value Hardware & Rental, Eastpointe, Mich.; Horn’s True Value, Sayre, Pa.; Kelly’s Freeport Ltd., Freeport, Bahamas; Palm Springs True Value Hardware, Palm Springs, Calif.; Penn Valley True Value Hardware, Penn Valley, Calif.; Pojoaque True Value, Santa Fe, N.M.; Prairie Side True Value, Kenosha, Wis.; A Richardson’s True Value Hardware, Haskell, Texas; True Value of Litchﬁeld, Litchﬁeld, Conn.; True Value Home Center, Marshall, Minn.; and Watkins True Value Hardware and Appliance, Marysville, Mo.

■ At its spring convention in New Orleans, Ace Hardware Corp. recognized the following Vendor of the Year award winners: 3L Industries (International Vendor of the Year), Apex Tool Group , Leviton , Lonza , ShurTech Brands , United Industries and IRWIN TOOLS (Ace Hardware Foundation Vendor of the Year).

PEOPLE ON THE MOVE:

■ Chris Beach, president of The Bostwick-Braun Company, has added the CEO title. Former CEO Bill Bollin retains his role as chairman of the board.

■ Robert Sawyer was appointed president and CEO of Rona Inc.

■ Bill Dwyre has joined Weiler Corp. as vice president-strategic marketing.

■ Dennis Hale has joined Alltrade Tools as vice president saleshardware, farm and special markets.

WHOLESALERS IN THE NEWS:

■ Ace Hardware Corp. reported ﬁ scal 2012 revenues of $3.8 billion, up 3.6 percent from the previous year. Fiscal 2012 net income was $81.8 million, up 5.3 percent, while fourth quarter net income rose 16.7 percent to $22.4 million.

■ At its spring dealer market in Orlando, Orgill showcased four model stores on the show ﬂoor and introduced a new dollar program called Dollar Central, which features 300 SKUs.

Frontier Farm & Hardware model store at Orgill dealer market.

■ True Value Company has hired a new advertising and branding

IN THE NEWS

agency, Minnesota-based Solve, to help the co-op develop a new customer-focused branding strategy.

■ Do it Best Corp.’s Winter Conference, held Jan. 23-24 at the Biltmore in Phoenix, featured training sessions led by world-class business experts Mark Sanborn , author of the bestselling book The Fred Factor, who shared insights into delivering extraordinary results; motivational speaker Cam Marston , who helped Do it Best members learn about more effectively connecting with customers from every generation; and former television host Ross Schafer , who discussed the importance of innovation and proactive retailing.

Harvey Lumber, a 150-year-old retailer with stores in Columbus, Ga., and Phenix City, Ala.

IN MEMORY:

■ Grant Benson Jr., owner of Benson’s Lumber and Hardware in Derry, N.H., passed away Feb. 23 at the age of 84. He served in the U.S. Air Force during the Korean Conﬂict and received the Derry Chamber of Commerce Citizen of the Year award in 1965.

GET THE FULL STORY:

■ Epicor Software Corp. and Central Network Retail Group announce ﬁrst Epicor Eagle® hosted conversion. Click here

■ Ace Hardware in Petal, Miss., was demolished by a tornado on Feb. 10. Click here

■ Fire destroys Ace Hardware in Burkesville, Ky., on Feb. 18. Click here

■ Ace Hardware in Wimberley, Texas, destroyed by ﬁre on Feb. 22. Click here

■ Central Network Retail Group has purchased two stores from W.T.

■ Details of a $6 billion classaction settlement with merchants who have accepted Visa and MasterCard. Click here

APRIL

Home Hardware Spring Dealer Market

April 13-16, Henry Sittler Building, St. Jacobs, Ontario

Kentucky Building Materials Association Convention and Product Expo

April 25-27, Galt House Hotel, Louisville, Ky.

Kitchen & Bath Industry Show

April 19-21, Ernest N. Morial Convention Center, New Orleans

Lumbermen’s Association of Texas and Louisiana Annual Convention

April 18-20, Westin La Cantera Resort, San Antonio, Texas

North American Wholesale Lumber Association Leadership Conference

April 28-30, Innisbrook Golf Resort & Spa, Tarpon Springs, Fla.

TruServ Canada Spring National Buying Market

April 13-14, Winnipeg Convention Centre, Winnipeg, Manitoba West Coast Lumber & Building Material Association Golf Tournament

April 11, Yorba Linda, Calif.

MAY Do it Best May Market

May 18-20, Indiana Convention Center, Indianapolis

Mid-Atlantic Lumber and Building Material Trade Show

May 2, Garden State Exhibit Center, Somerset, N.J.

Mid-America Lumbermens

Association Swing-into-Spring

May 2-3, Lake of the Ozarks, Mo.

National Hardware Show

May 7-9, Las Vegas Convention Center, Las Vegas

www.nationalhardwareshow.com

Oklahoma Lumbermen’s Association Summer Fling

May 30-31, Big Cedar Lodge, Mo.

Wallace Hardware Spring Market

May 14-16, Gatlinburg Convention Center, Gatlinburg, Tenn.

JUNE

House-Hasson Hardware Summer Dealer Market

June 20-22, Sevierville Events Center, Sevierville, Tenn.

PRO Group Inc. Group Merchandising Conference

June 17-19, Embassy Suites Downtown, Atlanta

JULY

United Hardware Fall & Christmas Buying Market

July 12-14, Minneapolis Convention Center, Minneapolis

World Pet Association Super Zoo

July 23-25, Mandalay Bay Convention Center, Las Vegas

Send calendar dates to chris@thehardwareconnection.com

How to Produce Sizzling Sale S in g rill S

Andrew Wilkerson, owner of Blackhawk Hardware in Charlotte, N.C., shares the following insights into how to develop a successful niche in grills and accessories.

We are both a Weber dealer and a Big Green Egg dealer. Both lines have done extremely well for us. We have about 1,500 square feet dedicated to grills and accessories. We sell tons of Genesis and Summits and lots of Big Green Eggs. The Big Green Eggs have a better profit margin and customer loyalty, but Weber’s gas grills are better sellers.

We assemble and deliver the grill ($35) and even pick up the customer’s old one. We carry a higher-grade Weber than the big-box stores, which just means that ours come with stainless steel grates already, not the cheap porcelain ones. This is helpful when a customer says “Lowe’s/Home Depot has it for X amount less.” It is also helpful to have a very expensive grill out as well to grab people’s attention.

The grills are nice to sell but the accessories surrounding the grills are the money maker in the long run. The utensils, rubs, lights, aprons, charcoal, cleaners, covers, etc.—this is what brings people back to your store and makes you a grilling destination. Plus, it allows you to keep them coming back

Blackhawk Hardware in Charlotte, N.C., has developed a very successful business selling grills and accessories.

for more things, as they see unique items in other departments.

You can limit the amount of grill selection you have without people noticing, but they really notice if you expand your accessories. This also allows you to sell things like coolers, Tervis Tumblers, insulated mugs and camping chairs, and it allows you to go into selling collegiate gear. We’ve found collegiate goods are very profitable and keep people coming back.

We don’t sell a single lower-quality brand nor would we want to. Located in a higher-income demographic, our store’s customers demand the best and we strive to exceed their expectations, both in the caliber of the products we sell and also in our service.

We are an authorized Weber warranty repair shop and do warranty work at the customer’s home. We have the same employees sell, deliver and repair the grills. We have found this to be a good idea, because it has made them grilling experts and able to answer any question someone might ask. It creates a relationship between us and our customers.

Being an authorized repair center, it is pretty amazing how many new customers we get after repairing a grill sold at Lowe’s or Home Depot.

We have 10 employees who have bought Big Green Eggs for themselves (Big Green Egg gives a great deal to employees of retailers). Those 10, half of whom aren’t even in the lawn and garden department, are some of the best Big Green Egg salesmen. Customers instantly respond to their genuine enthusiasm for the Big Green Egg, which at times borders on cult-like.

Two of them (Trish and Cliff) write a blog for us (http://blackhawkhardware. com/category/blogs/cookin-with-cliffand-trish/), which has been fantastic for sales. There have probably been 40 people come in and refuse to talk to anyone but Trish or Cliff about the Big Green Egg and then walk out that day with a large egg ($999) and probably $500-$1,000 more in accessories.

CREATIVE NICHE IDEAS

Here are some other unusual niches that have been successful for retailers.

• Doc’s Do it Best Hardware in Albion, Ind., operates The Groom Room, a standalone dog-grooming shop.

• Chalmers Hardware & Embroidery in Galveston, Texas, features an embroidery service that personalizes

clothing and

hats with company logos.

• Habersham Ace Hardware & Home Center in Cornelia, Ga., offers the Gift Garden in an adjacent building, which sells everything from Vera Bradley purses, collectibles and baby gifts to jewelry, gift baskets and china.

• Carolina Ace Hardware in Hendersonville, N.C., is the new home for Speranza’s Weather House, a standalone specialty store that sells 1,700 weatherrelated items such as rain gauges, thermometers and barometers.

• Ace Hardware Phoenix offers a full-service pool supply store offering pool chemicals, toys and supplies.

• Landwehr Hardware & Toys in Covington, Ky., is as much a toy store as it is a hardware store, with a nostalgic mix of old-fashioned and modern games, dolls, puzzles and toy trucks targeted to kids of all ages.

• Kopetsky’s Ace in Yankton, S.D. buys and sells new and used cell phones and also repairs cell phones and tablets.

Behind the Numbers

44,000

Salesfloor square footage of McLendon Hardware’s seventh store, which opened March 1 in Tacoma, Wash.

67%

Percentage of small business owners who worry about having enough money set aside for retirement, according to Gallup/Pew Research Center survey.

86%

Percentage of employees who plan to look for a new job in 2013, according to a survey by Right Management.

40%

Percentage of millennials (ages 32 and younger) who want training more than anything else from employers, according to 2012 HR Beat.

59%

Percentage of small business owners who say taxes pose a major risk to their companies’ viability, according to the National Small Business Association.

78%

Percentage of Americans who would rather buy an American-made product over an identical one made abroad, according to a survey by the Consumer Reports National Research Center.