Issuu

S E E V I D E O I N T E R V I E W W I T H D O I T B E S T ’ S B O B TAY LO R

November 2015 Vol. 7, No. 7

THE INDUSTRY’S DIGITAL LEADER

Tackling 6 Key Issues of

Business

Succession

ALSO INSIDE:

Amazon Emerges as Threat to Everyone Amazing But True Hardware Stories Trends in Hardware Products

Click Here to view our profile

channellock.com

WHILE YOU’RE BUSY SELLING CHANNELLOCK ® TOOLS,

WE’RE BUSY MAKING MORE. We make world-famous CHANNELLOCK® pliers right here in Meadville, PA. And we distribute through a tightly managed network that ensures timely delivery to all of our valued retail partners. You can count on us for a seamless buying experience that streamlines ordering, provides comprehensive sales support and helps keep store shelves looking their best — in CHANNELLOCK BLUE®.

CONTACT CHANNELLOCK ® FOR MORE INFORMATION | SALESSUPPORT@CHANNELLOCK.COM | (800) 724-3018 ext. 341 E-mail

Website

CONTENTS

November 2015 ■ Vol. 7, No. 7

FEATURE: 6 KEY ISSUES OF BUSINESS SUCCESSION

AMAZON EMERGES AS THREAT TO EVERYONE

Editor’s Note: Chris Jensen The Way I See It: Tom Chasteen Digby’s Hardware cartoon: Scott Jensen Amazing But True Hardware Stories How’s Business? Regional Reports on Business Conditions From Tom’s Shop: Hardware Products Review Main Feature: Tackling 6 Key Issues of Business Succession Interview with Do it Best’s Bob Taylor Amazon Emerges as Threat to Everyone Hardlines Digest: Digital Signage and In-Store Pickup Service Category Report: Hardware In the News Upcoming Events Retail Ideas Behind the Numbers The Hardware Connection app is available for iPhone, iPad, Android and Amazon. Download here.

www.TheHardwareConnection.com

Like us on Facebook by clicking here.

6 8 14 16 18 26 32 43 45 49 52 57 63 64 66

Connection

THE HARDWARE Connection ■ November 2015 ■ 3

E-mail

Website

ADVERTISER’S INDEX Apex Tool Group | www.apextoolgroup.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Channellock Inc. | www.channellock.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Do it Best Corp. | www.independentsdoitbest.com . . . . . . . . . . . . . . . . . . . . . . . .4 ECi Software Solutions | www.ECiSolutions.com. . . . . . . . . . . . . . . . . . . . . . . . . . 17 Epicor Software Corp. | www.epicor.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Ganymede Technologies Corp./J3 Point-of-Sale | www.j3pos.biz . . . . 23 Hardlines Digest | www.hardlinesdigest.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Hillman Group | www.hillmangroup.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Kaba Ilco | www.ilco.us . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Krylon | www.krylon.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Mayhew Steel Products | www.mayhew.com. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Minwax | www.minwax.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 22 Pacsoft | www.pacsoft.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Safety Works | www.safetyworks.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Santeen Products | www.santeen.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 STIHL | www.stihlusa.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 42 The Vendor Center | www.thevendorcenteronline.com. . . . . . . . . . . . . . . . . . 21 WD-40 Company | www.wd40.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Wooster Brush Company | www.woosterbrush.com . . . . . . . . . . . . . . . . . . . . 15

Connection

91900 Overseas Highway | Tavernier, FL 33070 | www.thehardwareconnection.com 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 Associate Publisher: Craig Cope craig@thehardwareconnection.com 804-690-0666

Senior Business Advisor: John Hammond jhammond@thehardwareconnection.com Director of Vendor Programs: Diane Allen diane@thehardwareconnection.com 317-432-9177 National Account Manager: Cathy Karabag cathy@thehardwareconnection.com 408-772-7961 Beacon Awards Director: Tom Delph tdelph@thehardwareconnection.com Contributing Writers: John Franklin, John Fix III, Doug Donaldson

The Hardware Connection is published eight times a year by The Hardware Connection, Inc. All editorial contents copyrighted 2015 by the publisher. No editorial may be reproduced without the prior permission of the publisher.

www.TheHardwareConnection.com

THE HARDWARE Connection ■ November 2015 ■ 5

EDITOR’S NOTE

By Chris Jensen

Preparing the Business for Transition

usiness succession is very much top of mind these days. If you turn to page 32 you will find our cover story addresses this important topic, using real-life examples from several home improvement retailers as well as the expertise of Gary Pittsford. Also in this issue (page 43) you will find a video interview with Bob Taylor as he reflects back on his 14-year career as president/CEO of Do it Best Corp. What an amazing industry journey Bob has taken, going from successful retailer to a member of his co-op’s board, serving as chairman and then leaving his life behind in Virginia to join Do it Best Corp. first as a senior vice president in 2001 and then as president in 2002. Bob took a huge leap of faith, but so did Do it Best Corp. and its members, turning to an untested executive to serve as only the fourth president in company history. That was out-of-thebox thinking for a succession plan, and it worked. If you ask a Do it Best member what they like most about Bob Taylor, after they mention the fact that he’s hard-working, gracious, caring and approachable, they will undoubtedly point out his greatest trait—he’s a retailer, like us. He understands our issues

6 ■ THE HARDWARE Connection ■ November 2015

as retailers because he’s been there, done that. While Bob got Do it Best to evaluate programs and initiatives from a retailer’s perspective, to me his lasting legacy is the fact he carried on and enhanced Do it Best’s commitment to local, regional and national civic organizations. During his life as a retailer in Virginia, Taylor served as chair of the Virginia Beach Chamber of Commerce, Virginia Beach Vision, the local United Way campaign and the Better Business Bureau. He continued his civic activities in Fort Wayne with involvement on Corporate Council, the Northeast Indiana Regional Partnership, the Regional Chamber, the Foellinger Foundation and United Way. He also chaired the Fort Wayne Downtown Blueprint Plus and Baseball Plus committees and served for nine years on the national board for Big Brothers Big Sisters of America. Taylor also served on the Greater Fort Wayne Inc. Board, the Indiana State Chamber Board and was appointed by two governors to the board of the Indiana Economic Development Corporation. That is an example of making an impact on your local community that we all can learn from. ■ www.TheHardwareConnection.com

In retail, what can make the difference

in your business?

The answer is simple… Outservice Your Competition! Gain a real competitive

Outservice

advantage and better serve your customers with the Epicor

Deliver unforgettable customer experiences.

Mobilize

Eagle N Series retail software ™

Go wherever your customer needs you.

solution. From POS, built-in, real-time analytics and reporting to best-in-class inventory management, Eagle N Series will help you Outservice Your Competition every time.

Epicor Eagle N Series ®

™

Simplify

Unprecedented retail power, simplified

Streamline and simplify daily tasks.

Grow Take your business where you want it to go.

Analyze Discover insights that continually improve business results.

Optimize Create a more efficient, productive business.

Get there with Epicor

E-mail

Website

the way i see it

By Tom Chasteen

The Great Debate: Gross Margin vs. Gross Profit

hen I came into the family hardware business full time in the early 1970s there was never much discussion about gross margins. We ordered our merchandise each week or every other week from our suppliers, and we marked up our merchandise 40 percent, just like the other hardware stores in our market did. We typically did not get any advance notice of price increases (remember, we didn’t have access to POS computers or the internet yet). When we received our weekly merchandise shipments and if the cost price went up we simply changed the price of the items we still had in stock to the new retail price at a 40 percent gross margin. It was a much simpler time to be in the hardware business. We did not have to contend with the mass merchants and big boxes such as Home Depot, Lowe’s, Menards and Walmart. And the internet (some will look back and call it the great equalizer of retail) was not yet developed. Heck, this was even before we had fax machines.

8 ■ The hARDWARe Connection ■ November 2015

Today, selling hardware has become as complicated as any retail industry in our economy. We now have access to all of the retail tools any large chain has and, in most cases, we have access to the same or similar merchandise. Over the past several years we have tried to reduce the retail hardware business (like many other businesses) to a stack of computer printouts that are designed to determine how profitable we are. My family is from Missouri, and my mentors (my father and grandfather) were very conservative people, both in business and their personal lives. One thing they instilled in me was to always try to reduce situations, problems, opportunities and challenges down to their simplest form. I often find that logic helpful when I feel I’m faced with so many variables that it is difficult to focus on the real issues. This is often the case with “Gross Margin vs. Gross Profit.” If we break down the retail hardware business to its simplest form, it really is very simple: www.ThehardwareConnection.com

Quickly Convert from Straight to T-handle

Fits SAE and metric sizes and six fastener types: 12-point, hex, square, spline, e-Torx®, partially rounded hex

Hollow shafts fit over long threaded rod

Handle ends are size-marked and color coded

More Innovative Tools From Pass-Thru™ Adjustable Wrench Set Adjustable Wrench Pipe Wrench Pass-Thru Ratchet

INDEXING HEAD

Flip and Grip 6-in-1 Multi-Tool The only multi-tool with Crescent® wrench power.

the way i see it 1. We buy merchandise, price at a profit and put it on the shelf. 2. We sell the merchandise at a profit and collect the money (very important to collect the money). 3. We buy more merchandise to replace what we sold, price it and put it on the shelf. It really is that simple, when you boil it down. It is the other things such as advertising, fuel surcharges, price changes, availability, delivery, state and federal taxes, triple net leases, depreciation, competition and the internet that make this simple three-step process very difficult to accomplish profitably. To me the argument of which is more important, gross margin or gross profit, is foolish. I cannot pay my bills with gross margin and I certainly don’t want to wait until the end of the year to determine whether our family hardware business was profitable or not. It’s akin to trying to determine which is more important to the body, the heart or the lungs? They both are because one cannot function without the other. For me, the more important of the two is gross profit, but watching my daily gross margins helps me maximize my gross profits. To ignore one in favor of the other is like riding a bicycle vs. a unicycle.

i CaNNOt Pay My BiLLs with GROss MaRGiN aND i CeRtaiNLy DON’t waNt tO wait UNtiL the eND OF the yeaR tO DeteRMiNe whetheR OUR FaMiLy haRDwaRe BUsiNess was PROFitaBLe OR NOt. What I often try to do (sometimes I’m successful and sometimes I’m not) is reduce each one of the factors that can or do affect the three basic principles of retail— buying merchandise, selling merchandise, buying more merchandise—to their simplest form in an effort to make the process of running a profitable hardware business as uncomplicated as possible. I often get a chuckle out of people who try to overanalyze a situation to the point that they become paralyzed by indecision. I also have very little patience with people who try to overcomplicate a situation in an effort to justify their position or importance to the organization. My grandfather used to tell the story of a tractor trailer rig that got wedged under an overpass on a very busy interstate. The highway authority shut down the interstate as well as the overpass and brought

10 ■ The hARDWARe Connection ■ November 2015

www.ThehardwareConnection.com

EASY TO USE. EASY TO CONTROL.

HARD TO KEEP ON THE SHELF.

WD-40 Trigger Pro®. The same formula your customers know and trust to get the job done, in a convenient non-aerosol can. WHY YOU SHOULD STOCK WD-40 TRIGGER PRO: • 72% of category users are likely to purchase it * • Shoppers will buy it because it’s easy to use and control * • Category users expect to find it at home improvement and hardware stores * * S o u rce : W D - 4 0 Tr i g g e r P ro E n d - U s e r R e s e a rc h , Fe b r u a r y 2 0 1 3

LEARN MORE AT WD40.COM/TRIGGER

Click Here to View Our ProfileE-mail

Website

the way i see it FOR Me, BeiNG iN the haRDwaRe BUsiNess is VeRy MUCh LiKe wheN i was LeaRNiNG tO DO FRaCtiONs. aLways tRy tO ReDUCe the PROBLeM tO the Least COMMON DeNOMiNatOR. in engineers to determine the best and safest course of action. They discussed cutting up the tractor trailer rig or jacking up the overpass to remove the tractor trailer that had become wedged. Then a little boy came up and said, “Why don’t you just let the air out of the tires?”

For me, being in the hardware business is very much like when I was learning to do fractions. Always try to reduce the problem to the least common denominator. Can you solve the problem without doing that? Sure you can. I also know people who can ride a unicycle, but I have no desire to do it. I much prefer a bicycle—it’s much easier and more comfortable to ride. Let me know what you think, from one retailer to another, by emailing me at tom@thehardwarestore.com. ■

DIY in a whole new way!

Minwax® Wood Finishing Cloths are a great way to appeal to new and experienced DIYers! •Easy to use – simply wipe on the stain & finish and wipe off excess with a clean rag

•Soap and water clean up • Comes in 5 beautiful wood tone colors

•Provides beautiful results in an hour

visit minwax.com

Click Here to View Our Profile

Evens “Mo” Mompremier – Packing Lead

Built in America. Believing in America.* STIHL believes in the power of American manufacturing and our employees are proud to help rebuild our economy one Americanbuilt product at a time. We also believe in local businesses and that’s why for 40 years we have only retailed our products through servicing dealers like yours. Because it’s

real people, STIHL people, who help make STIHL the number one selling brand of gasoline-powered handheld outdoor power equipment in America.* To become a STIHL dealer: STIHLusa.com/Dealer

*A majority of STIHL powerheads are built in the United States from domestic and foreign parts and components. “Number one selling brand” is based on syndicated Irwin Broh Research as well as independent consumer research of 2009-2014 U.S. sales and market share data for the gasoline-powered handheld outdoor power equipment category combined sales to consumers and commercial landscapers. © 2015 STIHL

Click Here to View Our ProfiE-mail le

Website

HARDWARE HUMOR

14 ■ THE HARDWARE Connection ■ November 2015

www.TheHardwareConnection.com

This is where it all begins.

™

Start with a unique brush designed to deliver high-quality results that reach your end goals. Featuring Wooster-exclusive Micro Tip™ technology, Alpha produces the finest finish of any brush on the market today. It is made with a fuller, softer end that carries more paint for better release with less effort, but still maintains complete cut-in control. An original in its category, Alpha comes out on top in production efficiency. Take the lead.

The Wooster Brush Company • 800-392-7246 • woosterbrush.com

Click here to see our video! E-mail

Website

HARDWARE HUMOR

Amazing but TRUE

HARDWARE

STORIES

cusometimes we nickname we tomers. There’s one guy use call “Fondler Bob” beca hing that’s in he likes to touch everyt the store. Steve Beeson ue Value Beemun’s Variety and Tr Soldotna, Alaska

hat I find amusing is when customers start asking me about my family and kids, and I repl y that I have a husband. It stops some people in their tracks and I get some startled looks, but it usually leads to a nice conver sation. The stigma of being ga y is gone and the acceptance is here, which is a refreshing chan ge. Gene Pedrotti Pedrotti Ace Benicia, Calif. 16 ■ THE HARDWARE Connection ■ November 2015

n old customer came in and approached our sales clerk. “I’m having an issue with my toilet,” he said. The clerk responded, “What seems to be the problem?” The customer responded, “I think I need a new flapper. Every time I sit on the toilet my balls go in the water.” N.Y. Retailer Who Wished to Remain Anonymous

d nce had a lady who ha 18 strings of Christmas to lights connected end ile home end decorating a mob hing to and she wanted somet owing. keep the fuses from bl Susan Miller ting, N.J. Bob’s Hardware | Whi

www.TheHardwareConnection.com

Easy-to-use, affordable POS solution for hardware dealers

YOU BUILT IT! Your business is proof of your hard work. Don’t trust it to just any business management software. ECi RockSolid can help you build on your success by automating and streamlining your entire business from point-of-sale through inventory order placement and tracking to accounts receivable. All of this efficiency comes in one package at one value-driven price point. Let us manage the software while you keep building an even better business.

Build your future with ECi RockSolid!

HARDWARE

Ambassador P

“

It all comes back to the bottom line. The expense I have with RockSolid is much less than my previous system. And it’s a big bang for the buck.”

Watch the Calloway True Value Story:

http://lbmh.ecisolutions.com/rocksolid/testimonials/video-mitchs-ace-video.aspx info@ecisolutions.com |

Click Here to View Our Profile

Mitch Haase Owner, Mitch’s Ace Hardware

800-588-5128 |

lbmh.ecisolutions.com/rocksolid E-mail

Website

How’s Business? MIDWEST

Sales and customer counts for 2015? We are up 11 percent for the year in sales. Customer count is up about 4 percent. We are in a booming little area here. We just built a new store in a new location, moving seven blocks from the old site. The city worked with us as part of a St. Paul revitalization effort. The city wanted our store to be part of a bookend for revitalization and anchor one end of the block. The move has meant new, better traffic flow in a busier part of the city. Best niche categories? One of our strongest niches is window and screen repair. We have three window repairmen. We custom-make double-insulated windows and repair wood windows. Do you have a formal succession plan? We’re working on it. It’s complicated and expensive. We need

Kendall Crosby

to be sure everything is worded properly, which causes attorney fees to be expensive. I have two sons and a daughter in the business. Both are married with families. It’s on my mind every second. It’s not an easy thing. I’m planning to slowly hand over the business. If succession planning were a 10-step process, I’d say we’re on step three. Right now, we’re understanding and identifying the issues. Best-selling new items? We brought in Valspar paint, and that’s been really strong. At our front counter, we have an impulse display for cell phone accessories. Those items have been really hot. Another hot item has been the SnowPlow snow shovels. They have a thick poly blade, and

18 ■ THE HARDWARE Connection ■ November 2015

www.TheHardwareConnection.com

Click Here to View Our Profile

E-mail

Website

How’s Business? aggressive advertising. We did some heavy advertising with Weber and general fliers. We are heavy into the Ace Rewards to keep and retain customers. Best niche categories? We do well Kendall’s Ace Hardware with grills and barbecue accessories. We’re also strong with bird seed and bird feeders. start at $55 and go up to $99. I never Do you have a formal succession thought they would sell, but they have plan? Currently we do not. Right now, been one of our biggest sellers. I am we’re just at the beginning. I took over looking to bring in new items, espefrom my uncle and my son is 16 now, cially those recommended by Ace, because that shows a healthy hardware so we haven’t gotten into it. Best-selling new items? Greeting store. cards have been tremendous. We Kendall Crosby picked them up from another retailer, Kendall’s Ace | St. Paul, Minn. and sell greeting cards at the register. LED light bulbs have been selling well after that big Ace three-day promotion. Chris Wolf Sales and customAce Hardware of Woodbury er counts for 2015? Woodbury, Conn. Sales have been steady and on the rise. We’re up about 7 percent on customer count and about 12 percent on sales. We had more Sales and customer counts for 2015? Both seem to be picking up. I don’t believe more people are coming in, but the same customers are coming in more often. Building in the area has picked up. New home starts and remodeling have been driving the Ace Hardware of Woodbury business.

NORTHEAST

SOUTH

20 ■ THE HARDWARE Connection ■ November 2015

www.TheHardwareConnection.com

Wayne Blalock’s PRO Home Center

Best niche categories? We sell a lot of gas heaters and chain saws. We also sell appliances. Do you have a formal succession plan? No. I have some family who work for me and I figure I’ll leave it up to them.

Click Here to View Our Profile

Best-selling new items? We sell a lot of stuff that other people don’t want to fool with, such as assemblies for gas stoves and septic tank parts. Other stores send that market to us. Wayne Blalock Wayne Blalock’s PRO Home Center Sevierville, Tenn.

SOUTHWEST

Sales and customer counts for 2015? We’re a bit down from the previous year, probably by about 10 percent. But we had a great year last year. We had perfect

E-mail

Website

How’s Business?

Lewis True Value Mercantile

weather all year to build. That beautiful building weather let us sell throughout the year. Best niche categories? One of our strongest categories is lawn and garden, which is about 25 percent of our store sales. We do really well in niches such as fountains and other specialty and seasonal products. We have sold a lot of fairy gardens. We put a lot of effort into finding those kinds of niches. We go to gift marts and sell a lot of lawn and garden giftware, such as stained glass, outdoor statuary and fountains.

Click Here to E-mail View Our Profile 22 ■ THE HARDWARE Connection ■ November 2015

Website

www.TheHardwareConnection.com

Lewis True Value Mercantile managers look official for Customer Appreciation Day. L to r: Travis Hayden, Henry Schmier, Rob Rogers, Ryan Sower and Bill Robertson.

Best-selling new items? What has sold really well recently has been items related to self-reliance, items such as indoor and outdoor vegetable gardening. Also, YETI® coolers have really taken off. Ryan Sower Lewis True Value Mercantile Bayfield, Colo.

WEST

Do you have a formal succession Sales and cusplan? We have a semi-formal succestomer counts for sion plan. It’s a family partnership that 2015? We are down we have set up. just a little bit in

How’s Business? Louie’s Ace Home Center

customer count and just a little in sales. But overall, I’d say we are on par with where we were last year. The drought has really hurt the valley, which is a big agricultural area. Best niche categories? We have a really strong rental department, especially with tables and chairs. Three or four times during the summer, we’ll have all our tables and chairs out, and we have 100 tables and 1,000 chairs. We found that no one within about 150 miles rents tables and chairs, so we started that niche. In addition, we provide really good customer service. We deliver the chairs and we’re very flexible with the timing on rentals.

Do you have a formal succession plan? We really don’t. We’ve discussed it some and will be looking for a full changeover in the next 15 years. Best-selling new items? We recently introduced a pet area and that has started to go well. The higher-end dog food has done well, although it’s not a huge margin. The higher-end line of Valspar paint seems to be attracting customers. Also, the SharkBite plumbing fittings have done well. We can’t keep them on the shelves.

24 ■ THE HARDWARE Connection ■ November 2015

www.TheHardwareConnection.com

Matt Louie Louie’s Ace Home Center Fallon, Nev.

E-mail

Website

From

p o h S s ’ m o T HAR

UCTS D O R P E R DWA

REVIEW

here are some parts of the country where business still seems to be struggling to get a solid foothold. Anyone who has been in the hardware business for any length of time knows firsthand what they are going through. But by and large most retailers I speak to are starting to see their businesses recover and are gaining confidence in our national and local economies.

By Tom Chasteen

Manufacturers I’ve spoken with are also gaining confidence in our economy and are investing more time and money into research and development of new products. And now with technology advancements in the area of 3D printers, the time it takes to develop and launch a new product is significantly quicker than it was even five years ago.

PRODUCT #1: UNI-FIT® SOCKET AND RACHET SET CHANNELLOCK Channellock has developed a very interesting Uni-Fit® pass-through socket/ratchet set design in a very compact case. There is nothing unique about pass-through socket sets. They have been around for years and in the right circumstances they are not just the perfect tool to do a job, but the only tool that can do the job in a timely manner. What I think makes the new Channellock Uni-Fit® set so unique is its universal size sockets that can fit both SAE and metric size bolts and nuts. The set we tested (mfg. # 3190) has 13 pass-through sockets that fit 13 different size metric and 13 different size SAE bolts and nuts. 26 ■ THE HARDWARE Connection ■ November 2015

It sounds a little confusing, but let me explain. With the unique socket design each socket can securely hold both an SAE size bolt or a metric size bolt or nut. For example, the ¾” SAE size socket will also securely hold a 19mm bolt or nut and a ½” SAE socket will also hold a 13mm bolt or nut. The best part is our testers all reported that they were very satisfied there wasn’t any slipping or rounding of the nut or bolt head as they applied significant amounts of torque on the ratchet handle. www.TheHardwareConnection.com

Building a Fresh Look in Construction Nails

10590 Hamilton Ave. • Cincinnati, Ohio 45231 Phone: 1-800-800-4900 • www.hillmangroup.com

Hillman’s line of Construction Nails breathes new life back into a product category that has been stale for years. Designed with engaging packaging and informative merchandising graphics, our color-coding system provides a fresh approach to merchandising with our brand of Fas-n-Tite™ construction nails.

p o h S m’s

From

HARD

EVIEW

CTS R

ODU RE PR

Now the serious d-i-yer or even the casual d-i-yer can cover a lot of different projects that require either a regular socket set or a pass-through socket set with half the number of sockets and fewer trips back to the toolbox to find the proper size socket. All of our testers gave the Channellock Uni-Fit® pass-through socket set a thumbs up. Go to www.channellock.com.

PRODUCT #2: STAINLESS STEEL PADLOCK BRINKS HOME SECURITY Brinks Home Security has developed an all-stainless steel padlock. That is correct. One hundred percent of this padlock including the internal parts are stainless steel. How many times does a customer come into your store looking for penetrating lubricant or a set of bolt cutters because the padlock they used is seized up and the key won’t even go in much less turn the tumblers? How many times have you, as the store owner, gone to open a seldom used gate or locker and spent 30 minutes trying to get the padlock open? Hampton Products’ development of the Brinks Home Security line and specifically the stainless steel padlocks is a great idea. Our hardware store is located in the Florida Keys. The front door of our store is literally 200 yards from the Atlantic ocean, so non-corrosive products, specifically aluminum and stainless, are highly desirable over steel products that begin rusting the second

day they are exposed to the elements. When I handed our volunteer testers the Brinks Home Security Solid Stainless Steel Padlock samples to test, their eyes lit up. Several were used on boat docks that were directly exposed to the salt water and the elements. One tester used his sample in a caustic chemical area and another used the padlocks to lock up trailers. The testers’ responses were all the same: “What other stainless products do they make?” Over the eight-week test period all of the testers were very satisfied about the performance of the stainless steel padlocks. If your store is located in a coastal area, then the Brinks Home Security Stainless Steel padlocks are definitely worth your time to look into at the next show you attend. Ask for Paul Kaika—he is a personal friend and he has never steered me wrong.

28 ■ THE HARDWARE Connection ■ November 2015

www.TheHardwareConnection.com

We make it easy for fans to

SHOW THEIR PRIDE!

Genuine, OSHA-compliant hard hats. Attractive styling. Fans will be proud to wear these — you'll be proud of the add-on sales!

Call 800.969.7562 or visit www.safetyworks.com/nfl For more information or to order today!

p o h S m’s

From

WAR

HARD

VIEW

TS RE

DUC E PRO

PRODUCT #3: COLD CHISELS AND PUNCHES | MAYHEW TOOLS Mayhew Tools is really a neat company. They have been in business for 159 years and are still privately owned. Most of their products are all made in the United States and the few that aren’t are all assembled here in the United States. Mayhew Tools sets the standard in the commercial/industrial industry for punches and cold chisels. For me there is nothing pleasant about using a cold chisel. And I have rarely used one when there hasn’t been a minimal level of frustration, followed with the pain of rapping my knuckles, followed by some moments of profanity. So when most people need a cold chisel or a punch they want a good one, because they want the job over as quickly as possible. Most people who work with tools can generally get the feel of the quality of the tool the moment they pick it up. Mayhew’s cold chisels and punches are no exception. It starts with the weight and feel of uniformity of the straight edges of the chisels and punches. You immediately realize this isn’t a cheap import product. You will also immediately notice how clean the cold chisel and punch cutting edges are. Even the heavy-duty

scraper edges are sharp—you can put them to use right out of the package. One of our testers used the cold chisel to remove some rusted bolts on a boat trailer that had been dunked one too many times in salt water. When he was done I was truly amazed at how well the cold chisel held its edge. I used the 2-½” hand guard chisel to score some landscape block. I’m not a professional with a 2 lb. engineer’s hammer, so I appreciate all of the protection of the Mayhew hand guard. Again, the Mayhew tool exceeded my expectations. I think the primary reason all of our testers liked the Mayhew cold chisels and punches so much is that Mayhew has been making the tools to meet the demands of the commercial and industrial markets for years. After speaking with our testers and using one myself, I’m confident you will never have to apologize for the quality or workmanship of a Mayhew chisel or punch. After all, that is one of the main reasons why our customers come to a locally owned hardware store. Go to www.mayhew.com. • Click Here for Video of Mayhew Punches. • Click Here for Video of Mayhew Scrapers.

30 ■ THE HARDWARE Connection ■ November 2015

www.TheHardwareConnection.com

be m u N s e l a S g Super-Lookin

® JECT OF THE KRYLON PRO

WEEK:

ALL YOU NEE

NEW KRYLON ER COLORMAST ER PAINT + PRIM ®

™

ge. r and covera s g reat colo e d vi ro p t a ® techn o log y aint th want spray p Covermax rs le e b m a to ur d us c ith rw Your ™ Pa int + Pr im e ® Co lo rMa ste r n o yl Kr EW N they want. xactly what gives them e , rs or shading e use of ﬁlle th ut o ith w r hide hieves bette rmulation ac fo w than ever. ne e Th • more brilliant nd a p l and even ris c clean, nsures contro e tip y ra so colors a re sp l ® uch conica prietary EZ To rips. • Kr ylon’s pro no runs or d time fatigue with r e ng ws for more ﬁ ut o ith ead of 1) allo st (in s coverage w ur ho 4 indow of ed recoat w the next day. • The expand waiting until f o d a e st in project to work on a

Here’s how:

Results: Kr ylon ColorM

aster Paint +

Pr imer m

ing, includ akes every th

ing your sale

s, look g reat.

Click Here to View Our Profile

➜ website

Adapted from “Your Family Business, Your Family Net Worth,” by Gary Pittsford (2015, Advantage Media Group). To order go to: www.amazon. com/Your-Family-Business-Net-Worth/ dp/1599325934

Tackling 6 Key Issues of

Business

succession

fter 40 years of working with hundreds of family-owned businesses across the country, I can tell you that each business and every family is slightly different. I can also tell you that most business owners have the same basic concerns about retirement and planning for the succession of their companies.

Most of the business owners that I have met over the years have spent their adult lives running and growing their businesses. Many of them, now that they are between age 60 and 70, are thinking about slowing down and retiring from their companies. This succession planning process worries most of them, because they have not tackled this topic before. They realize that they only get to sell their company one time and that the plan that they come up with better be the best one. The following are some of the questions business owners ask as they consider the succession planning process: • Will someone within the family take over?

32 ■ THe HARDWARe Connection ■ November 2015

www.TheHardwareConnection.com

By Gary Pittsford, CFP®

Business succession

• Will the company be sold to an outsider? • What is my company really worth? • How can I reduce taxes if I sell the business? • How can I be fair to all of my children if only one or two children take over the company? Below are six key issues we discuss with each of our clients in regards to succession planning:

Business structure—The type of business that you have currently affects long-term planning, income taxes and the transition to the next generation. Is it an S Corporation, C Corporation, Limited Liability Company or a family limited partnership? Is there only common stock or is there some preferred stock? Are there 100 shares, 500 shares or 1,000 shares to work with? Talk with your financial advisors, accountants and attorneys to make sure that the entity you have gives you the most flexibility for designing a business succession plan. These discussions need to take place as early as possible. Sometimes it takes five to 10 years to make the changes necessary to fit your family succession plan.

Family members—Will someone in the family be buying the business from you? Will it be one child,

www.TheHardwareConnection.com

or possibly two or three? Will one child have 51 percent voting control? You, as the business owner, need to be satisfied in your mind that at least one or two of your children are best suited to take over control of the business. If they are not going to take over, then consider key managers who have been with you a long time that are good candidates. If key managers are not candidates, then perhaps there is someone else in your industry that you have confidence in who might want to buy the business.

Transition options—If one or more of your children are going to take over the business, then you need to have a discussion with your advisors about different techniques that can be used. Many business owners gift some of the company stock to their children who are taking over and sell the rest to them. If the stock in the company is going to be sold, then you want the sale designed so that you can take advantage of long-term capital gains, which are taxed at lower rates. Sometimes, if you have the right type of entity, it may be desirable to transition voting stock to one or two children and non-voting stock to other children who may not be in the business. There are many ways to transition a company to the next generation, and all of the options need to be considered when

THe HARDWARe Connection ■ November 2015 ■ 33

Business succession you talk with your financial advisors, attorneys and accountants.

Retirement security—Many business owners still want or need additional retirement income after the business succession is completed. There are many different ways to lock in a monthly income for the retiring business owner. Using two or three different income options listed below usually works best, keeping in mind that some of these ideas are good for the company and others are good for the retiring owner. A fair compromise must be reached. • Taking a reduced salary and working part time is a possibility. • If you retain some of the stock, then dividend income is possible. • Being on the board of directors and receiving directors’ fees for several years is an option. • Being paid as a consultant in certain areas. • If you own the building, then rental income is an option. • Negotiating a deferred compensation plan for the retiring owner and spouse. • Selling some of the stock with a monthly installment note.

the retiring owner. Some of the options will be deductible by the company and some will not. All of the sales ideas must be reviewed carefully to make sure that the company can afford the two or three options you plan to use and that the retiring business owner is also receiving some tax breaks. After working many years to build up the company, the business owner deserves as many tax breaks as possible, but the plan chosen must be affordable by the company and children.

Tax decisions—Some of the transition options you will be considering will be ordinary income or perhaps long-term capital gains for

Reviewing your will and trust—Many business owners have several children and often only one of the children is interested in running the business and the others have chosen different careers. Most business owners tell me that they want to be fair to all of their children, but it is sometimes hard to do if one child is going to be receiving the family’s largest asset. Sometimes changing the payout to the children in your will or trust helps this process. For example, if your estate documents currently say that the three children will each receive 33 percent of the estate, then that could possibly be changed. The one child who will be taking over the company could be reduced to an inheritance of 10 percent and the other children could receive more. Changing the beneficiary of retirement IRA accounts and life

www.TheHardwareConnection.com

THe HARDWARe Connection ■ November 2015 ■ 35

Business succession insurance policies could help equalize the inheritance as well. Every business owner asks me the same question: “If I give this stock to one of my children, what happens if they die suddenly or get divorced?” A well-designed stock redemption agreement or buy-sell agreement becomes very important for protecting the company stock. A properly prepared buy-sell agreement should have provisions that cover every stockholder in case of death, disability, divorce, personal bankruptcy, termination and retirement. When you start moving stock to other individuals in the family, this buy-sell agreement becomes very important. Because the six key issues I have discussed above are complicated, you need to put together an excellent financial advisory team to help you with all of your important legal, tax and financial questions. Designing a plan to protect the company and your family’s net worth will take several months to prepare and potentially three to five years to implement. The sooner you get started the better.

iMPoRTAnT FiRsT sTePs Once a business owner has decided to sell, they need to ask what they should be doing next to prepare. I emphasize that they must waste no time in getting things cleaned up. Start cleaning up your financials. In the two or three years before the sale,

make sure that nothing appears on your statements that would give pause to a potential buyer. Make those final years of your ownership the most profitable of your career. Start cleaning up your personnel. Get the right people in the right jobs, and get your payroll down to where it should be. If your payroll expense is 25 percent and it should be 20 percent, it’s time to get that into shape. Clean up the premises, literally. Make the building look great, inside and out. You’re about to go out on a first date with a number of prospects, so you will want to show them your best—that is, if you want them to take a second look. In addition, once you decide to sell, you need to get a team in place—attorneys, accountants, financial advisors and others. That can make all the difference in the negotiations and how well you fare in the transaction—and in your retirement. n Gary Pittsford, CFP®, is president and CEO of Castle Wealth Advisors, LLC. Castle specializes in helping families and closely-held business owners with valuations, succession planning, estate and income tax analysis and retirement income projections. For more information visit www.castle3.com, call 1-888-849-9559 or email Gary@Castle3.com.

36 ■ THe HARDWARe Connection ■ November 2015

www.TheHardwareConnection.com

DeTAiLeD succession PLAn WoRKinG ouT GReAT FoR DReW FAMiLY

successful three-store operation. The family’s other stores are located in Milan and Bright, Ind. It is a 10-year succession Businesses can go on forplan and they are in year nine. ever, but people can’t. That Dale gets 5 percent of the comis why Mike Drew’s biggest pany each year and he will be success as a hardware store at 49 percent ownership next owner has been devising a year, according to Mike. detailed succession plan to “Dale is buying some shares ensure the business is passed on to the next generation—his and (my wife) Rose and I are gifting him some shares, to 36-year-old son, Dale. Mike Drew is happy Drew bought a small hard- get him to an equitable stake that his 10-year is working ware store in Cleves, Ohio, in in the business,” Mike says. plan to pass on his “I’ve had to prove some1980 and has grown Merrilees business, Merrilees thing to my dad for 10 years,” Trustworthy Supply, Trustworthy Supply into a to his son, Dale.

GET SERIOUS Santeen Toilet Bowl Cleaner and De-Limer is far more powerful than Whink or CLR at removing rust, lime and scale from surfaces.

Santeen frees toilet rim holes, jets and traps of lime, rust and scale. It helps restore a glossy look to any porcelain surface.

Befo

e o se re t ion. e h k Clic nsformat tra the

After

Professionals have been using Santeen for more than 65 years to clean valves, humidifiers, water coils, pipes, heat exchangers and boilers. Santeen quarts are safer and shrink-wrapped for added protection from fumes and spills. Order through your distributor or at:

www.santeen.com

Business succession Dale explains. “It hasn’t been easy, but it’s worked out great for us and for the business.” Dale had left the business for two and a half years after college but came back in 2004. He started taking on more responsibility in 2005, and Mike turned over day-to-day management duties to his son the next year. After a thorough job of pre-planning, the succession plan was underway by 2007. “When we started this succession plan nearly nine years ago I didn’t know for sure how dedicated Dale would be to run the family business,” explains Mike. “It is hard work and you just don’t know how things will work out, but he’s put in some serious sweat equity.” The first four to five years of the succession plan Mike worked directly with Dale in their Cleves store. He then felt comfortable turning over the day-to-day management for all three stores to him. Mike works with pricing, inventory and buying, which allows Dale to concentrate on the day-to-day details of hiring and supervising employees and interacting with customers on the sales ﬂoor. “Dad did a good job of stepping out of the business and grooming me on all aspects of the operation by letting me be in charge,” Dale says. “I became his eyes,” Mike points out. “I’m still the majority stakeholder, so I want to make sure the business is headed in the right direction.”

Dale Drew oversees the day-today management of Merrilees Trustworthy’s three stores.

Many retailers wait too long or until it’s too late to start succession planning, but Mike was proactive at preparing for the future. “We got great guidance from our accountant and an attorney and we set up the succession plan properly,” he says. “The plan shields Dale as well as protects us and our estate, since Rose and I have other children who did not want to be involved in the business. We have two daughters and another son, so we wanted to make sure our estate did not overlook them, while also recognizing that Dale is the one who has dedicated his career to running the hardware business.” Mike adds, “There are contingencies in place to protect him and us if anything were to happen to me. Our attorney said not to call him to change anything in the plan unless you can come to me in joint agreement, and that’s what we’ve done.” They set it up so that Dale would have to borrow money to get to the 51 percent level of ownership, according to Mike. “We still want him to get a small note so he has experience with doing that, but Rose and I will carry a small note for him, too,” he says.

38 ■ THe HARDWARe Connection ■ November 2015

www.TheHardwareConnection.com

They remain intimately involved in the details of the business—Rose still oversees payables while Mike pores over the financial reports—but they are able to enjoy the warm weather during the winter and get away from the business. As Dale points out, there are now a lot of checks and balances in place with his dad watching the back end of the operation. “Dad’s job is to look over reports such as price overrides, shrinkage and margins. He’s able to watch over the back end more closely and we’re more profitable as a result, because there is less slipping through the cracks now,” Dale says. Although they are getting close to the end of their succession plan, Mike anticipates that his son will want to keep him around. “I’ll be 60 years old when this succession plan comes to an end and we need to have medical insurance coverage. But I’ll still have to bring some value to the business to prove my worth,” he says. Not only is Mike very proud of the job Dale is doing with the family business, more importantly he is happy and content with his life as he heads toward the back nine of his retail career. “I’m so happy that our succession plan has done what I wanted it to. It’s made my relationship stronger with Dale and I think he’d say the same thing,” Mike says. n www.TheHardwareConnection.com

This year Marc Currie joined his father, Bruce, as an owner of Niece Lumber.

PAssinG on THe FAMiLY Business AT niece LuMBeR Niece Lumber was founded by Chester Niece in Lambertville, N.J., in 1920. The Blair family has been involved since 1936 and purchased the business in 1966. In 1994, Harry Blair Jr. turned over the business to his son-in-law, Bruce Currie, and daughter, Jeanne Blair. Earlier this year, Bruce and Jeanne welcomed Bruce’s son, Marc, to the ownership team. Marc joined the sales team in 2005 out of college and became general manager in 2013. Editor Chris Jensen interviewed Marc Currie about how the business succession process has played out. When did you decide you wanted to be the next generation to run the business? Marc Currie: I’m 34 years old. When I graduated college in 2005 I took a couple months off. Played THe HARDWARe Connection ■ November 2015 ■ 39

Business succession some golf, went on a few interviews in the wine business. At that time I had no interest selling lumber and millwork. As fate would have it, my father asked me to work the sales counter about one week before I received an offer to work for New Jersey’s largest wine and liquor distributor. Within this first week I soon realized this is where I needed to be and this is what I was groomed for. I can’t picture myself doing anything else. How long was the process to pass on the business to you? Marc Currie: For the past couple of years I was taking on some smaller president tasks. My father and I had talked about it for a few months. He made it official at our company Christmas party. My father is still very much active in the business. He allows me to develop the sales and marketing side of the business. I enjoy the interaction with our customers and just as important, our vendor relationships. Dad still handles much of the back office work with our banks, accountants and insurance providers. We both wear a few different hats and still spend considerable time at the sales counter. What is your father’s role in the business going forward?

Marc Currie (right) is adjusting to his new role as an owner of Niece Lumber, putting into practice lessons he has learned from his father, Bruce (left).

Marc Currie: Going forward, at least for the next year or so, we’ll see a bit more of the same. He’ll continue to work with our bank, accountants and insurance providers. During this time I’ll become more involved with these folks and spend less time at the sales counter. He’ll always spend some time at the store even after he officially retires, and that’s fine by me and the rest of the staff. He can only play golf so much. What experts did you rely on to help you navigate the business succession process? Marc Currie: Over the past year we have relied on the expertise of our attorney James Rudy and our accounting team from Withum Smith and Brown. Both of them have a tremendous amount of experience with locally owned, small businesses like ours. My grandfather used to deal with their fathers and they truly have

40 ■ THe HARDWARe Connection ■ November 2015

www.TheHardwareConnection.com

our best interests in mind. We have a unique operation here and these people understand it well. I do bounce ideas off other lumberyard owners who have gone through similar situations. Our agreements among the partners are unique and so are the agreements among every other yard owner I’ve spoken to. What method of business valuation did you rely on? Marc Currie: This valuation has been fairly consistent over the years. In a tight family business with no real aspirations to sell to outsiders, we have not had a need to get a true fair market valuation. The bank makes their valuation to extend us our credit line and our attorney makes his valuation to make things work between my father, Jeanne Blair (my aunt and our third partner) and myself.

change and have a great deal of respect for my father and for me. What lessons have you learned from your father about retailing? Marc Currie: That we aren’t doing this for practice. Make the right decisions for the company and our employees. It makes no sense for us to chase around projects that will come in at single- digit profit margins. Allow our employees to make the right decisions. If it turns out it wasn’t the right decision, then we’ll circle the wagons, discuss it and they will make a better decision the next time around. I also learned at a very young age to take care of your community and the organizations that operate within it.

What advice do you have to other retailers about business succession? Marc Currie: Make sure you have a high comfort and trust level with all parties involved. For us it was easy, my What was the most difficult dad would jump in front of a train for part of the business succession me and I would do the same for him. If process? Marc Currie: It’s been extremely easy you have issues with parents, siblings for both of us. I know this is odd when it or cousins now, it won’t get any better comes to business succession planning. when you are managing a business with He’s very ready to hand off responsibili- millions of dollars in sales. Look at sucties and I’m very comfortable in tackling cession from multiple perspectives. Be honest with yourself. Are you the probthem. We have great people working lem or the solution? Why would you with us. There isn’t a better staff in our industry. They are extremely open to this want to work in an environment with partners you don’t trust? n www.TheHardwareConnection.com

THe HARDWARe Connection ■ November 2015 ■ 41

dealer spotlight

Success

Through Service

store: TRUE VALUE HOME CENTER owNer: HUgH DURHAM employees: 75+ locatioNs: THREE iN SOUTHERN CONNECTiCUT

the Need for a premium BraNd Since becoming a True Value dealer in the 1970’s, Hugh Durham has continued to add products to meet the evolving needs of their customers. When outdoor power equipment was first introduced into their product inventory, Durham knew he needed to stock a premium brand to stimulate sales. He became a STIHL dealer in 2001 and sales surged almost immediately. Since then, chain saw sales alone have increased 66%. Altogether, the three locations now sell around 1,000 pieces of STIHL equipment annually, equating to approximately, $700,000+ in sales. According to store manager Scott Neddeau, “We chose to sell STIHL because it’s the number one selling brand of outdoor power equipment in the country. The name sells itself.” “We carry everything STIHL – trimmers, chain saws, leaf blowers and vacuums,” said Durham. “We build and display as much product as possible. We remodel our stores on a regular basis, and when we moved power equipment to the front of the store, it resulted in a tremendous increase in sales.”

staNdiNg out amoNgst the Big Box stores Durham and Neddeau say their inventory and customer service practices help set their dealership apart from the competition. “The big boxes don’t carry STIHL. As a servicing dealer, we take the time to set up the saw, gas it and explain it to the customer, showing the full operation of the product,” said Durham. “We provide the personal attention that they wouldn’t receive at a big box store.” The STIHL iCademy® training program and STIHL MasterWrench Service® training are critical to the dealership. They have three Gold-certified technicians, several Silver-certified technicians. “We service what we sell with a complete and highly competent service department,” Durham said. Learn more about becoming a STIHL dealer: STIHLUSA.com/dealer. n

42 ■ The hARDWARe Connection ■ November 2015

ADveRTisiNg

Bob Taylor

wholesaling

leaves Behind

Legacy

Achievement

Click to watch the full interview with Bob Taylor at the 2015 Do it Best Corp. fall market.

Bob is on hand as members Howard and Wayne Miller of Hartville Hardware in Hartville, Ohio, open a new 300,005-square-foot store in 2012.

t its October market in Indianapolis, Do it Best Corp. said good-bye to a friend and a leader, whose lasting impact will be felt for many years. Bob Taylor may be retiring as president and CEO of the co-op effective January 4, 2016, but he doesn’t plan to disappear from the industry he has been in for 40 years or the company he has led for the past 14 years. www.ThehardwareConnection.com

Middle left: On June 26, 2015, Bob thanked more than 400 current and retired employees in attendance as Do it Best Corp. celebrated its 70th anniversary.

Bob and Do it Best Corp. have been strong supporters of the local United Way campaign, just as he was back in Virginia.

Middle Right: Bob joined Do it Best Corp. in January 2001 as senior vice president of operations, overseeing purchasing, retail logistics, marketing and international development. He succeeded Mike McClelland as president and CEO in January 2002.

The hARDWARe Connection ■ November 2015 ■ 43

wholesaling

Bottom: Bob loved interacting with Do it Best retailers in stores and at markets.

“I’m trying to keep my calendar a little open. We will be connecting back to the Virginia area,” he says. He intends to continue attending Do it Best markets, but notes that his visits with members will be more social. Taylor joined the co-op in 2001 and led the launch or expansion of numerous key member-focused programs during his tenure, while also strengthening the co-op’s strong financial standing and overseeing a period of consistently high industryleading member rebates. “As a former member-owner, Bob understood the unique challenges independent entrepreneurs face, and he ensured that we have a full menu of flexible, scalable, affordable and customizable programs to help us grow our businesses,” added Jim Lehrer, chairman of the Do it Best Corp. board of directors. “Perhaps his greatest legacy will be in the committed, members-first employee team he leaves behind, which positions the coop and its member-owners for continued success.” n

44 ■ The hARDWARe Connection ■ November 2015

www.ThehardwareConnection.com

Top Left: Bob and his wife, Marion, and their two children, Meg and Robie, discovered what Hoosier Hospitality was all about when they moved from Virginia to Indiana in 2001. Top Middle: Bob served six years on the Do it Best Corp. board of directors, the last two as chairman, before being named the co-op’s fourth president and CEO. Top Right: Bob was inducted into the Home Channel Hall of Fame in May 2012. Middle Left: Back in the days when he was a member, Bob (second from left) is shown in the family’s Do it center store in Virginia Beach, Va. Middle Right: In June Big Brothers Big Sisters of America (BBBSA) presented Bob with one of its highest honors: the Charles G. Berwind Lifetime Achievement Award.

Amazon threat to

amazon.Com

Emerges as

wenty years ago, a man in Seattle, Wash., began selling books over the internet. No one could have predicted that in two decades he would be leading the world’s second-largest retailer, an electronics manufacturer and even a producer of movies. But that is today’s Amazon, a ruthless competitor of virtually every kind of retailer around the world, both online and bricks-and-mortar. In 2014, Amazon’s sales rose to nearly $89 billion. In the third quarter of 2015, sales were up an impressive 23 percent, reaching $25.4 billion. With holiday sales forecast to hit $35 billion this year, it looks like $100 billion in 2015 sales is well within reach. Along the way, Amazon has become an expert in distribution. Today, it operates 109 gigantic fulfillment centers in the United States and nine other countries, which enable it to distribute its own products as well as those from 2 million third-party sellers who

Everyone Fulfillment centers range in size to a million square feet or more.

are based in 100 countries and whose products are bought by businesses and consumers in 185 nations. One way in which Amazon distinguishes itself and one of the reasons for its remarkable growth is that it enables third-party sellers to store their products in its fulfillment centers. This means that consumers might buy a product from Amazon’s own inventory and also from that of one of its “sellers” and have both items shipped to them in a single shipment. This approach represents a tremendous savings and convenience. Behind it all, or, rather, continuing to lead it, is Jeff Bezos, the company’s founder, whose drive and vision keeps pushing Amazon into more diversified business activities. The company has been a stock market darling, but it has not been a profitable business as Bezos keeps investing in new things, such as developing a ﬂeet of more than 15,000 robots to be used in its fulfillment centers to lower operational costs and improve

www.ThehardwareConnection.com

The hARDWARe Connection ■ November 2015 ■ 45

amazon.Com efficiency. In its last fiscal year, the company recorded a loss of $241 million, but in the second quarter of 2015, it did show a small profit. In this year’s third quarter, A look inside a fulfillment center, showing the company reported its secmultiple levels and massive conveyor systems. ond straight quarterly profit, making a buying decision based on with operating income of $406 style, finish and design. million. According to Forrester Research, Although it began selling only books, a specialist in e-commerce analysis, today Amazon competes with every two big categories remain stubbornly type of retailer because it offers the ofﬂine. The ability to touch and feel products of so many other sellers as well as its own inventory. It offers liter- physical products — as well as the immediate, proximate need for those ally millions of items on its websites in goods — is essential in both grocery the U. S. and in other countries. and home improvement. Grocery and For hardware retailers and home home improvement continued to lag in center operators, Amazon’s offerings online sales in 2014 and remained the include tens of thousands of competileast penetrated of 30 categories that tive products, all easily accessed from the company measured, accounting for its various websites and typically delivless than 10 percent of online sales. ered within a day or two. The company is a competitor to How can (and should) local retailconventional and online retailers ers compete with this internet retailing around the world. It did $55.4 billion giant? The first thing you should do is in North American sales in 2014 and check out the Amazon website to see what kinds of products are being offered $33.5 billion in international sales, which were up 12 percent, a sales that compete with your inventory. It is gain far greater than most other retailimportant to see how prices compare. Many of the Amazon products offer free ers achieved last year. Amazon tracks the kinds of products delivery if the purchase price is above a rather modest amount, which makes it a a buyer previously bought or searched for and offer suggestions as to other formidable price competitor. items in which a purchaser might be Fortunately, for many of the prodinterested. Suggestive selling the interucts listed, such as faucets, consumers want to check them out in person before net way. 46 ■ The hARDWARe Connection ■ November 2015

www.ThehardwareConnection.com

This concept also allows products from third-party sellers to be grouped together in a logical way, along with Amazon’s own inventory of similar products. The company now operates fulfillment centers in 19 U. S. states and nine foreign countries. It reports that operating those fulfillment centers accounted for $10.7 billion of expenses last year. Most of the computer programs used in the fulfillment centers are proprietary Amazon systems designed to process mastER oF DIstRIBUtIon orders that generally include only one or Another way in which Amazon distinguishes itself is how it operates its various two items, compared to the shipments of multiple items that chain retailers and fulfillment centers, compared to how chain retailers and wholesalers operate wholesalers ship to stores. The systems their own distribution centers. Retailers’ automate receipt, replenishment, placement of merchandise, order-picking, and wholesalers’ centers must be designed to handle a wide variety of prod- packing and shipping. Receiving, stocking and picking items ucts—different materials, shapes, sizes and weights. This limits, to a great extent, one at a time is far more labor-intensive than operating a conventional distrihow much efficiency can be achieved bution center, regardless of computer with materials handling and computer systems. Since most Amazon orders systems. Compromises must be made. consist of only one or two items, each Amazon, on the other hand, dedifulfillment center must process and cates each fulfillment center to a specific ship thousands of orders daily. Amazon type of products. For example, its 1.2 employs far more people in each million-square-foot distribution center in Jeffersonville, Ind., handles only soft goods, while a center in Lexington, Ky., not too far away, is devoted to electronic items. The 900,000-square-foot fulfillment center in Plainfield, Ind., focuses on larger items like grills, TVs and boxes of diapers as well as potentially hazardous items like cleaning supplies and perfumes. The materials handling needs vary, as Yellow totes holding products move along do order-filling and packaging systems. conveyor systems. To encourage repeat sales, some years ago the company began offering free two-day shipping for a modest annual fee of $99, a program called Prime. This program has proven to be very successful as Prime users buy more frequently and rely on Amazon for a wide variety of products on an almost-daily basis. Its website emphasizes the advantage of Prime on virtually every item listed.

www.ThehardwareConnection.com

The hARDWARe Connection ■ November 2015 ■ 47

amazon.Com fulfillment center than hardware wholesalers or chain retailers do in their distribution centers. Actual number of orders processed daily is not revealed by Amazon, but in a tour of an Amazon facility, six employees are observed in one shipping section. Each seemed capable of packaging and labeling about 40 items per hour, with a computer’s help in advising what kind and size of package needed and generating a label that indicated whether the shipment would be sent by the postal service, Fed Ex or UPS. Many, if not all, of Amazon’s fulfillment centers operate 24 hours, 7 days a week, so simple math indicates a team of six could process more than 5,000 shipments a day. These giant fulfillment centers certainly have a lot more than just six people packing orders. Its fulfillment centers are modern in every aspect—they typically are highcube and parts of them consist of four levels. The Jeffersonville, Ind., center, devoted to soft goods, is open 24 hours a day and employs 2,500. Extensive conveyor systems move merchandise from receiving areas to storage bins and, after orders have been filled, totes containing the items move to packing and shipping stations by conveyor. The bins in some of these centers are often very small, based on product size and quantity on hand, compared to those found in conventional distribution

centers, some being as narrow as 6” and only 12” high. What that means is that a fulfillment center can contain hundreds of thousands of SKUs. In some of those tiny little bins, there sometimes are several different items. Amazon’s computer system puts items together that often go together, to improve the picker’s productivity.

Constantly InnovatIng Among other current programs being tested is Amazon Fresh, in which it delivers grocery items in a few test markets. Recently it has launched a new division, Amazon Business, which is focused on serving the needs of businesses, rather than consumers. From a non-retail standpoint, the company developed the Kindle electronic book reader and its subsequent models, Fire TV and even tablet computers and a smart phone, which was not successful. It is also producing movies and music now. With its computer expertise, Amazon is one of the world’s largest “cloud” service operators, a division that is serving some of the world’s biggest companies and which has been growing rapidly and profitably. Amazon Web Services (AWS), as this division is known, currently has more than 1 million customers. Oh yes, Amazon still sells books, too. Where will Amazon go next and how big will it be? Only Jeff Bezos knows. n

48 ■ The hARDWARe Connection ■ November 2015

www.ThehardwareConnection.com

HARDLINES DIGEST

Dan Johnson and Anne Johnson, who own Oak Hill Ace and Dunstan Ace in Maine, say in-store pickup has been a great service for their customers.

Discussing

Digital Signage By John Fix III

In-Store Pickup Service

s retailers begin to gear up for the approaching holiday selling season, they turned to Hardlines Digest to share insights into two important areas: digital signage and in-store pickup service.

your phone or iPad so you can change anything you want remotely,” he said. Ron Foster of Marine Home Center in Nantucket, Mass., uses several ﬂatscreen TVs around the store at all department service counters and checkouts. “We use the ﬂash drive on the TV that uses the jpeg pictures as a slide show that rotates; we don’t use the sound. We DIGITAL SIGNAGE Jim Wilkerson of Blackhawk Hardware change out some or all of the pictures once a week. The only cost is for the TVs in Charlotte, N.C., wanted to know what and some time once per week. We use other retailers are doing with digital sigit for specials and for feature advertising nage. “I would like to be able to have like Weber, but also pepper in some fun monitors around the store with new stuff to keep people interested in looking items and specials on it. Has anyone found an easy-to-use, reliable and cheap at it. The most effective thing we did was to take some pictures of customers’ dogs way to do this?” he asked. Mike Bruns of Kingsford Ace Hardware when they come in the store and give it a cute caption. Customers love animals in Kingsford, Mich., responded that he and seeing their pets on the screen,” has three screens using EZ-AD TV and Foster posted. it works great. “It’s about $100 a month Mike McLendon from McLendon for all three and the ability to customize screens easily using templates, Ace con- Hardware in Renton, Wash., said they use a free online service from tent that they provide or an uploading Digitalsignage.com. “It will run on almost tool for YouTube. Plus, there’s an app for www.TheHardwareConnection.com

THe HARDWARe Connection ■ November 2015 ■ 49

HARDLINES DIGEST any device (android, Windows, Apple, can even embed in a web page). We use dedicated Windows players, but you can use an old PC, laptop or android device (it takes very little overhead). Could even run from iPad and project through Apple TV to a TV or monitor,” he said. McLendon added, “It’s a little more complicated than the ones that come with some display monitors but very adaptive to different purposes. And it’s free online storage and you can also add weather and RSS feeds. Been doing in two stores with different campaigns working on different monitors. Just need internet access to download campaign and then it runs on its own until you want to update campaign.” For a link to one of McLendon Hardware’s campaigns click here.

McLendon Hardware in Washington has had success with digital signage run through an online program.

setting up the text messaging for new orders for managers. It brings in new faces as well.” Bob Dannemiller of Crowder Bros. Ace Hardware in Florida says they get a few orders per week. “It is worth it just so you can take care of the online shopper. It isn’t a good process, but once you do it a few times it isn’t bad. Hopefully they will make the process easier to use in the future. I would like to see it run through E4W as a special order or order to keep IN-STORE PICKUP our processes the same for orders taken Diane White at White’s Ace Hardware in-store by us or online.” in Haines City, Fla., started a thread by Jon West of Pleasants Hardware in saying they just started the process to Richmond, Va., said the bugaboo with do in-store pickup. “It seems like a lot of work. Is anyone having good results with doing them as orders (which we considered and want to do) instead of invoicing the program?” she asked. it out is that the Ace software looks at our Dennis McCarthy of Mayer Paint and “Quantity on Hand,” not our “Quantity Hardware in Rochester, N.Y., says inAvailable” when considering if an item is store pickup has definitely been worth available for pickup. “So you run the risk it for them. “We usually average about an order a day, if not more. The interface of someone doing a sale for an item that takes a while to get used to and it is diffi- is actually reserved for someone else. We cult to have anyone continually checking do a ton of orders/special orders for our the site for new orders since they can be commercial and industrial accounts and this has tripped us several times. Not the sparse at times. I definitely recommend

50 ■ THe HARDWARe Connection ■ November 2015

www.TheHardwareConnection.com

most common situation for most folks, but certainly something to be aware of,” he noted. “Great service for our customers,” says Dan Johnson of Oak Hill Ace and Dunstan Ace in Scarborough, Maine. “Everyone wants to buy online, so we need to be there. Educating employees when a customer comes to pick up an item needs clarification. We have instore special orders, online orders, ISPU orders and Ace Supply Place orders. The process is clunky, but after you do a few it does do the job.” “It’s been great for us as well,” commented Matt Mazzone of Mazzone Ace Hardware in Brooklyn, N.Y. “Definitely brings in new customers. The back end is a little cumbersome, but I think that will all work out in time. We found it works best if we set up multiple staff members with notifications, so that if someone is off or on vacation another staff member will know to follow through on the order.” Randy Patzer of Garden City Ace Hardware in Garden City, Mich., posted, “We set up all managers to get the text and set up the store default email to also be notified. We have this email visible at the manager’s station. We also created a simplified checklist to follow— one page is best. We find that after you do three or four in-store pickups you don’t need the checklist anymore, but it was a great assist while learning. This list needs to be custom to what your store’s practices are. www.TheHardwareConnection.com

Sunshine Ace Hardware displays in-store promotions on TV screens throughout the sales floor, with campaigns created in PowerPoint and then run via a network that can incorporate video.

Steve Haupt of Rains True Value Hardware in Emory, Texas, said, “This thread makes me realize just how ‘slow’ I am. Even though we’ve had this service for a couple years, I’m going to start making sure that when the ship-tostore customers come in to pick up their merchandise that we make sure we make a positive impression. Every one of our ship-to-store orders has been a new customer, best I can tell. I’m under the assumption that we treat this customer just as I hope we do with all our customers, but I’m going to really emphasize to employees to make every effort to be extra conscientious when interacting with this new customer.” n John Fix started the Hardlines Digest in 1996. The list was run for many years using servers in John’s hardware store, but recently the list migrated to Google Groups. There are currently more than 1,500 subscribers reading Hardlines Digest. To read more or subscribe, go to www.hardlinesdigest.com.

THe HARDWARe Connection ■ November 2015 ■ 51

cateGorY rePort

SALES OF FASTENERS Sales of Fasteners (Independent Hardware Channel) 12 Months % Change vs. Year Ago Fasteners: Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . +3.0% Fasteners: Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . +6.1% Source: Vista Information Services, div. of Epicor Software Corp.

Unit Sales Breakdown for Fasteners Total of 2,045 Items with Sales Total Category Top 5 Items % of Unit Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.3% Top 10 Items % of Unit Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.9% Top 20 Items % of Unit Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.0% Top 30 Items % of Unit Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.5% Source: Vista Information Services, div. of Epicor Software Corp.

Seasonality of Sales of Fasteners (Index=100) 140

140 122

120 116 121 124

122

104

86 68

98 82

July 68 2014

Aug. Sept. Oct. 2014 2014 2014

111 117

Nov. Dec. Jan. Feb. March Apr. May June 2014 2014 2015 2015 2015 2015 2015 2015

Source: Vista 50Information Services, div. of Epicor Software Corp.

Fasteners Share of Sales by Type (Latest 12 Months) Staples 0

29.8%

Nails

Brads

26.2%

Rivets

13.5%

Rivet Washer

29.4%

1.2%

52 ■ The hARDWARe Connection ■ November 2015

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

Manufacturers and retailers use Vista’s retail POS and Consumer Panel data to better sell to their customers. Go to www.vistainfoservices.com.

www.ThehardwareConnection.com

Left: Hartville Hardware’s assortment of fasteners outpaces the big boxes. Right: Southaven Supply in Southaven, Miss., carries more than 1,200 cabinet knobs, all displayed in antique drawers.

hardware buYinG uPdate • • The market for builders and cabinet hardware is estimated to reach $18.1 billion by 2020, driven by a recovering construction market, technological advancements and innovation • in hardware design, according to Global Industry Analysts Inc. • Brass finishes, which lost popularity years ago, are regaining attention. Other cabinet hardware finishes on the upswing include bronze, polished • brass, antique brass and brushed nickel. • 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. • Aging baby boomers will increasingly turn to product solutions such as soft-closing components and touch-opening drawers that don’t www.ThehardwareConnection.com

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. The ability to integrate smartphones with locks is picking up steam in the residential market, but keyed options continue to be preferred, especially as a safety backup. 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, according to the National Kitchen and Bath Association. Consumers are looking for decorative yet simple and functional hardware that is not so trendy it will quickly go out of style, and they are looking to coordinate finishes throughout the home. ■

The hARDWARe Connection ■ November 2015 ■ 53

hardware ProductS

hardware eSSentialS™ builderS hardware

PerSonali-keY®

• Give your builders hardware aisle the facelift it needs. Hillman has created a winning combination of style, packaging and merchandising, transporting the consumer into a new dimension of shopability with high-impact signs, aisle violators and shelf system. • Modular planogram system provides clean and simple category separation with color-coded, tri-lingual packaging. • Full line covers all the bases from hinges and shelf brackets to door pulls and garage door parts. Over 2,000 quality products offered in the sizes, finishes and package types your customers demand. • Designed to satisfy a wide array of customers covering farm, ranch, mass merchant, builder and retail hardware. The Hillman Group 800-800-4900 www.hillmangroup.com

• A new, refreshed and expanded line of “Shape” Personali-Keys has been introduced featuring whimsical, eye-catching designs on specially designed oversized bows that include additional embossing detail. • New line of “Big” Personali-Keys feature trendy, popular designs on the oversized versions of Kwikset®, Schlage® and Weiser® head shaped keys. • A consumer favorite, these keys are a fun and functional way to identify keys and express individual style. • This popular category of Ilco keys includes a variety of patterns and shapes that feature designs that support charitable foundations and organizations, appeal to team spirited fans and more. Kaba Ilco Corp. 800-334-1381 www.kaba-ilco.com

54 ■ The hARDWARe Connection ■ November 2015

www.ThehardwareConnection.com

Be Part of the Hardware Industry’s Exclusive and Professional Women in Hardware Program! Designed for professional women and men in the two-step hardware industry to exchange ideas, educate, network and provide support and access to opportunities to further careers and help grow the independent channel.

Who’s Eligible to Join?

• Independent Hardware Store Owners and Managers • Vendors Involved in the Two Step Hardware Industry • Service Providers Involved in the Two Step Hardware Industry • Wholesalers/Distributors • Industry Professionals

Activities

• Membership beneﬁts include up to six networking events per year held in conjunction with other industry events. • Each event will have a business focus offering direct and immediate benefits. • Vendor and Service Providers will have the ability to interact with business owners and others in management positions sharing experience, concerns and solutions. • While focus is on women and their opportunities, men are welcome and encouraged to participate to better understand and lend their perspective of the industry.

For more information: Diane Allen diane@thehardwareconnection.com • 317.432.9177

Women in Hardware Program Sponsors

Presented by

hardware ProductS

Photoelectric combo Smoke and co alarm • This 2-in-1 combination smoke detector, which meets all UL safety standards, provides maximum protection with both a photoelectric smoke sensor for fire and smoke, as well as a sensor for carbon monoxide. • Features sleek, slim design (half the size of standard alarms) that combines element of style to maximum protection. • The long-life lithium battery won’t require changing for the full 10-year life of the alarm, saving the hassle and expense of battery changes every year. • It will provide a notification when it’s time for the alarm to be replaced, so no more late night battery chirps. FIRST ALERT 800-323-9005 www.firstalert.com 56 ■ The hARDWARe Connection ■ November 2015

Screenmend™ • The do-it-yourself solution to mend rips, tears and gaps in your window and door screens. • Screenmend™ repairs screens in less than a minute. Simply cut to size, place it on the screen, apply heat from a hair dryer and you’re done. • Featured on Shark Tank, the product includes enough material for multiple repairs. • Available in charcoal or silver gray, Screenmend comes in two 5x7 adhesive-coated patches or one 2x80 inch strip. ScreenMend (by Spark Innovation) 801-701-0096 www.screenmend.com www.ThehardwareConnection.com

IN THE NEWS •

NEW STORES: •

• • •

•

Alexander Lumber Co. has acquired Peoples Complete Building Center in Watseka, Ill. Crooksville Do it Best Hardware has opened in Crooksville, Ohio. Johnny Boyle has opened Boyle True Value in Lakehills, Texas. The Clouse family has purchased Gladwin Ace Hardware in Gladwin, Mich., from Richard Strohkirch. Neil Worrell opened his third store, Worrell’s Ace Hardware, in Belleview, Fla. Senneth Berrier has purchased Tags Hardware in Cambridge, Mass., from Simon Shapiro and Mardi Moran. Peter Grebeck is reopening True Value Hardware in Livonia, Mich.

•

ON THE MOVE

KUDOS TO: • •

•

• •

•

Kruse Lumber in Rochester, Minn., is marking its 100th anniversary. Encinal True Value Hardware in Alameda, Calif., is celebrating its 50th anniversary. Bonita Doerksen is celebrating the 20th anniversary of Coast Do it Best Hardware in Poulsbo, Wash. Randall Bros. in Atlanta, Ga., is celebrating its 130th anniversary. STIHL Inc. has been awarded the National Association of Workforce Services Agencies’ National Business of the Year Award. www.TheHardwareConnection.com

Curtis Lumber in Ballston Spa, N.Y., is celebrating its 125th anniversary this year. Cramer’s Home Building Centers in East Stroudsburg, Pa., is celebrating its 100th anniversary. Westlake Ace Hardware, with 91 stores in nine states, is celebrating its 110th anniversary. POPS Home Hardware in High Prairie, Alberta, owned by Treena Shunter and Maryann Peyre, received the Paul Straus Public Relations Award from Home Hardware Stores Ltd. Seright’s Ace Hardware, with stores in Post Falls and Coeur d’Alene, Idaho, was awarded the U.S. Small Business Administration’s regional Family-Owned Small Business of the Year Award for 2015.

•

John Morikis, formerly president and COO, has been elected chairman and CEO of Sherwin-Williams. George Judd has been named CEO of PrimeSource Building Products.

WHOLESALERS IN THE NEWS: •

Ace Hardware Corp. has introduced Emery Jensen Distribution as a new business unit, operating under Ace Wholesale Holdings, to service key national accounts and independent retailers in the geographic regions of the country not covered by EmeryWaterhouse and Jensen Distribution.

THE HARDWARE Connection ■ November 2015 ■ 57

HARDWARE

Ambassador P

M TM

The Hardware Ambassador ProgramTM was created to bring the hardware industry together to promote the independent hardware retail channel as the most efficient and profitable channel to distribute hardware and home improvement products and services.

Vendor Product Listings • View by Wholesaler to Download Product • Ability Listings by Wholesaler Directly into Retailers’ Point-of-Sale Computer Systems

Out Vendor Profiles, • Check Informational Videos & Product Reviews

Click Here to Learn More and View Vendor Product Listings by Wholesaler

www.TheHardwareConnection.com/Hardware-Ambassador

IN THE NEWS •

Do it Best Corp. re-elected one current board member—John Holmes of Holmes Building Materials in Louisiana—and elected four new board members to its board of directors for 2016: Eli Bliffert, Bliffert Lumber and Hardware in Wisconsin; Richard McCoy, Orme Do it Best Hardware in Ohio; Douglas Mans, Mans Lumber and Millwork in Michigan; and Jeff Pardini, Hills Flat Lumber in California.

OTHER NEWS: •

•

with The Hillman Companies to distribute its AjustLock™ line of adjustable barrel bolts and slide bolts.

Bruce Mitchell, the Alligator Man of “Swamp People,” made an appearance at the Dickies booth at the Do it Best October Market.

IN MEMORY:

ECi Software Solutions • Dave Karp, who got announced that its RockSolid™ in the hardware business business management system is when he purchased Cole ® now integrated with Point-of-Rental Street Hardware in San Software’s rental management Francisco at the age of system, delivering streamlined 45 in 1961, passed away Dave Karp operations for customers who offer October 25 at the age retail and rental. of 99. Cole Hardware, which today Epicor Software Corp. has released includes five stores in the Bay Area the latest version of the Epicor Eagle and is now run by his son Rick Karp, N Series retail business management was operated on the principle of solution, which is designed to aid exceptional customer service. Dave retailers in streamlining inventory is survived by his sons Rick and Larry management and diving deeper into and four grandchildren. “Up until the business analytics. very end, he was passionate about the many great people we have on our Newell Rubbermaid has agreed to acquire Elmer’s Products, which staff, their accomplishments and, of course, our terrific customers,” stated includes Elmer’s, Krazy Glue and X-Acto. Rick. The success of Dave’s business Ace Hardware Corp. announced can be summed up by the following motto he posted on a large sign over that it was signing an agreement the register: “There Are No Strangers exclusively endorsing Epicor as a Here, Just Friends We Haven’t Met.” POS software provider. Ajustco, a New York-based • Robert Hardy, who served as hardware manufacturer, announced president of 84 Lumber Co. during an exclusive distribution agreement its formative years, passed away www.TheHardwareConnection.com

THE HARDWARE Connection ■ November 2015 ■ 59

Connection

special preview of national hardware show

Women in HardWare™ Program ConneCts industry

Preview of The hardware ConferenCe in MarCo island

SEE COMPLETE COVERAGE OF THE HARDWARE CONFERENCE

May/June 2015 Vol. 7, No. 4

July/Aug 2015 Vol. 7, No. 5

Sept/Oct 2015 Vol. 7, No. 6

April 2015 Vol. 7, No. 3

the industry’s digital leader

tHe industry’s digital leader

The indusTry’s ry’s digiTal Tal leader T

S e e V i d e o i n t e r V i e w w i t h d o i t B e S t ’ S B o B tay lo r

THE iNDuSTRy’ iNDuSTRy’S STR S DiGi STRy’ Di DiGiTAL GiTAL LEADER ALSO INSIDE:

Rethinking Advertising Strategies Profiles of Beacon Award Winners Product Trends in Plumbing

the

Seeking Best New

Products ALSO INSIDE: 4 Hot Retail Trends Finding the Right Employees Hardware Products Review From Tom’s Shop

November 2015 Vol. 7, No. 7

Rebuilding After

Disaster

Great Service

Unlocking the Key to

Strikes

ALSO INSIDE:

Understanding Today’s Consumer Hot Products from National Hardware Show Product Trends in Electrical/Lighting

ALSO INSIDE:

Winning Strategies for Store Operations Hardware Dealer Launches New Product Trends in Lawn & Garden/Outdoor Living

CLICK HERE & SUBSCRIBE YOUR ENTIRE STAFF FOR FREE!

the induStry’S digital leader

Best New Stores Honoring the

Woodland Do it Best Hardware & Home

Brady & Cavany Ace Hardware

Tackling 6 Key Issues of

Business

Succession

ALSO INSIDE:

Amazon Emerges as Threat to Everyone Amazing But True Hardware Stories Trends in Hardware Products

Visit www.TheHardwareConnection.com and learn why The Hardware Connection has the industry’s most retailer subscribers. The Hardware Connection is a digital-only publication distributed 8 times a year via e-mail to more than 60,000 independent hardware retailers, wholesalers and hardware industry executives world-wide.

We offer the most retail-focused editorial so you’ll gain the know-how and advice you need to help grow your business. Sign up your entire team for a free subscription to the only industry magazine written by retailers for retailers.

We know hardware. We live it every day! www.TheHardwareConnection.com

IN THE NEWS September 26 at the age of 86. Robert founded the lumber chain with his brothers Joe and Norman in 1956 and is credited with creating the Five Do it Best members got rebates surpassing company’s culture of collaboration. $1 million each, with Scott Parker of Parker Do it • Lars Hybel, vice presidentBest Lumber receiving a rebate over $2 million. international sales for True Value last market as president and CEO Co., died September 27 at the age of before his retirement in January. 51. He is survived by his wife Carla and A special anniversary event was 11-year-old daughter Amelia. Go to held at the Indiana State Museum for gofundme.com/larshybel to support a members, employees and vendors. college fund for Amelia in his memory. Taylor used his final address as CEO • Dr. Patricia Anawalt, who was at Sunday’s Shareholders’ Meeting better known as an acclaimed UCLA to highlight the company’s dynamic anthropologist but also served as fiscal year. Member rebates for the chairman of Anawalt Lumber Co., year totaled $116.4 million, marking passed away October 2 at the age of 91. the 12th consecutive year they have She succeeded her husband, Richard exceeded $100 million. Anawalt, as chairman of the family “While this is a bittersweet lumber company when he died in 2000. market for me, it’s again one full of opportunities for our members FOR THE FULL STORY: to grow their businesses and achieve their dreams,” Taylor said. • Couple charged with embezzling “Between our 70th anniversary $85,000 from two NY hardware celebrations, new product launches, stores. Click here. enhanced savings opportunities • 5 things local officials need to know and distributing another year of about Amazon. Click here. consistently high member rebates, • Lowe’s launches first in-store Virtual my last market as CEO may be the Reality design tool. Click here. best one yet.” Do it Best also introduced a DO IT BEST CORP. CELEBRATES 70TH significant expansion to its exclusive ANNIVERSARY AT MARKET Channellock® product line including a range of Channellock-branded Do it Best’s October Market, held ratchets, sockets and wrenches. The October 9-12 in Indianapolis, was new professional-grade category highlighted by two milestone events: offers more than 600 updated and celebrating the 70th anniversary of new SKUs to Do it Best. members, the co-op and saying good-bye to exclusively produced under the Bob Taylor, who presided over his Channellock brand. ■ www.TheHardwareConnection.com

THE HARDWARE Connection ■ November 2015 ■ 61

Real-World Advice from Independent Hardware Store Owners

Join a growing community of thousands of independent hardware retailers Practical tips from fellow retailers delivered fresh daily to your email inbox Share your expertise and learn from your peers

Get in on the conversation at

www.hardlinesdigest.com

“ 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

Proudly Independent. Powered by You.

100E% E! FR

E-mail

Website

UPCOMING EVENTS NOVEMBER 2015

True Value Spring Reunion February 19-20, George R. Brown Convention Center, Houston

STAFDA Convention and Trade Show November 8-10, Phoenix Convention Center, Phoenix Distribution America/PRO Group Executive Planning Conference November 17-19, Marco Island Marriott, Marco Island, Fla. Wallace Hardware Fall Dealer Market November 11-13, LeConte Center, Pigeon Forge, TN

Orgill Spring Market February 25-27, Orange County Convention Center, Orlando, Fla.

MARCH 2016

Ace Hardware Corp. Spring Convention March 3-5, Las Vegas Convention Center, Las Vegas, Nev. Blish-Mize Spring Dealer Market March 18-19, Overland Park Convention Center, Overland Park, Kan.

JANUARY 2016

Do it Best Corp. Winter Conference January 15-16, Hotel Del Coronado, San Diego International Builders’ Show January 19-21, Las Vegas Convention Center, Las Vegas, Nev. Handy Hardware Market January 21-23, George R. Brown Convention Center, Houston

Hearth, Patio & Barbecue Expo March 16-19, Ernest N. Morial Convention Center, New Orleans International Hardware Fair Cologne 2016 March 6-8, Koelnmesse, Cologne, Germany International Home + Housewares Show March 5-8, McCormick Place, Chicago

House-Hasson Hardware Dealer Market January 21-23, Gaylord Opryland Hotel, Nashville, LMC 2015 Annual Meeting Tenn. March 9-11, Orange County Convention Center, Orlando, Fla. United Hardware Spring & Summer Buying Market Reliable Distributors Management and January 8-10, Minneapolis Convention Center, Marketing Conference Minneapolis March 10-12, Embassy Suites Lake Buena Vista Resort, Orlando, Fla.

FEBRUARY 2016

Florida Hardware Spring Dealer Market February 13-14, Double Tree Convention Center, Orlando, Fla.

Send calendar dates to

Northeastern Retail Lumber Association LBM Expo February 10-12, Rhode Island Convention Center, Providence, R.I. www.TheHardwareConnection.com

chris@thehardwareconnection.com

THE HARDWARE Connection ■ November 2015 ■ 63

RetAiL ideAs Rocky’s Canning Sweepstakes on Pinterest drew this entry from a user: DIY favors for a rustic wedding shower.

Rocky’s Ace LAunches PinteRest site Rocky’s Ace Hardware, a familyowned business based in Springfield, Mass., recently launched a Pinterest site. Pinterest will provide the opportunity for Rocky’s to demonstrate expertise and credibility in many targeted areas. The social network is akin to a digital scrapbook, allowing individuals to “pin’ or “like’ images of items and projects they have interest in. Pinterest also will help Rocky’s Ace Hardware reach additional consumers who may not have been exposed to the product assortment offered at Rocky’s 34 stores and online. “At Rocky’s Ace Hardware, we enjoy engaging our customers,” said Rocco Falcone, president and CEO. “Pinterest is a great way to share project knowhow. Everyone, including homeowners, craftspeople, the gardener and the home fix-it person will find fun content and helpful project tips here.” In conjunction with the launch, Rocky’s featured a “Creative, Crafty and Canny” Canning Sweepstakes that ran through October 15. This contest partnered with Ball brand canning jars and sought entries that show off the many creative uses for canning jars. “By expanding into social media in this aspect, we are able to inspire our customers with new ideas and uses

Rocky’s Halloween pet costume contest drew some creative submissions. The top winner will receive a $200 gift card.

for the products we carry. Anyone who browses through our Pinterest boards will find ways to improve their home, garden and much more,” said Geoffrey Webb, director of marketing and advertising. “We want to provide additional outlets for our customers to connect with us and each other. We will also gain better insight to what is popular, trending and what interests our customers.” Pinterest will allow Rocky’s to use creative images to help customers discover new and fun projects, plus find innovative solutions to everyday home issues. Pages or “boards” will feature different projects, tips and advice on how to successfully utilize products found at Rocky’s, sometimes in ways not always thought of. Check out Rocky’s on Pinterest at www.pinterest.com/rockysace.

64 ■ The hARDWARe Connection ■ November 2015

www.ThehardwareConnection.com

GoinG hoLLywood Fans of the TV show “Modern Family” hopefully caught the October 14 episode, when Phil and Lily visited Anawalt Do it Best Lumber in Pico, Calif., to put the finishing touches on the duck village.

“Modern Family” cast members Phil and Lily were filmed visiting Anawalt Do it Best Lumber.

hittinG the sweet sPot If you are looking for a unique way to entice customers, try appealing to those who have a sweet tooth. Cypress Ace Hardware in Houston opened a fudge shop inside the store in 2014. Mandy Seiders, daughter of owners Bill and Susan Murff, makes three different fudge flavors three times a week. More than 50 kinds of fudge are in regular rotation including pumpkin spice and chewy praline. Also available at the fudge shop are roasted nuts that are made daily. The recently expanded 28,000-square-foot store, which features a U.S. postal station, also sells feed (in a climate-controlled room), beer, animal health and grills and has a gift department selling everything from handbags to wine glasses. They grill every Saturday and in the spring they sell baby chicks and ducklings. Independent We Stand featured the store’s “Grill Your Ace Off” fundraiser in a recent blog, click here. n

Cypress Ace Hardware in Houston is delighting customers with a homemade fudge shop. www.ThehardwareConnection.com

The hARDWARe Connection ■ November 2015 ■ 65

E H T D N I H E B NUMBERS

47%

Percentage of internet users who are on Facebook, which has 1.4 billion users.

46%

90%

Percentage of U.S. single-family homes that are under-insulated, according to the North American Insulation Manufacturers Association.

43% Percentage of U.S. homes at risk or high risk for natural hazard or disaster such as flooding, tornado or hurricane, according to RealtyTrac.

Percentage of holiday shopping (browsing and buying) that will be done online this year, up from 44% last year, according to the National Retail Federation.

21.4%

Percentage of smartphone users who will use their device to order holiday merchandise this year.

88%

Percentage of Pinterest users who have purchased a product they pinned.

66 ■ THE HARDWARE Connection ■ November 2015