Hardware Connection November/December 2012

STRENGTHENING THE TWO-STEP CHANNEL

Growing Sales Sales Down Economy

Jeff Powers, Owner Powers Do it Best Hardware

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

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

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

Senior Business Advisor: John Hammond jhammond@thehardwareconnection.com

By Chris Jensen

Hardware Retailers Join Forces for a Good Cause

Superstorm Sandy struck on October 29, causing 113 deaths and an estimated $50 billion in damage to a widespread area of the Northeast. The Hardware Connection prepared a Special Report on how home improvement retailers were impacted by this devastating storm—see page 16.

Independent hardware retailers quickly jumped to the aid of their fellow retailers to help get much-needed supplies to the hard-hit areas. They banded together without concern for wholesaler affiliation, not just because they are caring individuals, but because they realized how easily it could have been them.

These retailers know that when disaster strikes, communities rely on hardware stores to come through with desperately needed products such as generators, batteries, flashlights and tarps. Many have been in that same situation before during other natural disasters and know how critical it is to meet customers’ needs, even if their stores are without power.

Jon Phillips of Phillips Hardware in Albany, N.Y., drove through the night with his father, Abbott, to deliver generators to a retailer friend in New Jersey. “As we headed back to our home to go to sleep, we realized how truly fortunate we really are,” Phillips says.

Matt Mazzone’s two stores in Brooklyn escaped damage, but he is surrounded by devastation in his home in the hard-hit area of South Beach Staten Island. “Times like this make you realize how important friends and family are and that material things can always be replaced,” he says.

On the north shore of Long Island, Alan Talman of Karp’s Hardware considers himself lucky and blessed to have escaped damage, but it’s just a short drive to total devastation in south shore towns such as the Rockaways. “Lots of hard-working, fully employed tax-paying people lost their homes and their jobs or businesses in one big swoop,” he says.

Three thousand miles away on the West Coast, a retailer with a big heart watched the disturbing images on TV and knew he needed to do something. Just like he did after earthquakes devastated Haiti and Japan, Gene Pedrotti launched a fundraising campaign to aid victims of Sandy. He has pledged to match dollarfor-dollar donations up to $25,000.

Out of so much tragedy comes heartwarming moments that make us proud to be part of such a caring industry. If you want to help out, go to www.redcross.org to donate to the Red Cross. n

The big boxes are spending millions to lure away your customers. And, empowered by the Internet, smartphones, and a wider range of shopping choices, your customers are expecting even better service, selection, and price.

Today’s independent retailers must adopt new technologies to…

• Manage inventory more effectively to be price competitive and profitable.

• Empower staff with tools that make them more efficient and knowledgeable.

• Reward customers with an overall shopping experience that will bring them in and keep them coming back

As we have done for nearly four decades, Epicor leads the way for retail excellence. To learn how Epicor can help you build a smarter retail business visit www.epicor.com or call 1.888.463.4700 today.

Solutions for Retail

By Tom Chasteen

Paying Attention to the Things That ‘Need to be Done’

The political season is finally over.

At the end, like a lot of Americans, I just wanted it to be over with— enough already. The one thing we all can be very proud of as Americans is that we all had a vote and we all got the opportunity to say how we felt. Now hopefully we can get on with the business of rebuilding our economy. As I traveled around the country this fall going to the wholesaler shows and speaking with retailers from all over the country it became very apparent that parts of our country are doing very well economically. And there are areas that are still struggling with the housing bust like my market in the Florida Keys.

We still have a huge number of homes that are in the non-resolved foreclosure process and until many of these home issues are resolved I am afraid we will continue to struggle in our area. Will we ever see the “glory days” of 10 years or more of double-digit growth? I’m not sure we will and, quite honestly, I’m not sure the economic price we are paying right now is worth it.

What I do think is going to happen is that the small business owners in this country are going to pull us out of “the

mud” in spite of our politicians and governmental regulations. We are entrepreneurs and somehow we seem to find a way. It stems from an unwillingness to simply quit even when quitting is probably the better short-term option.

As Americans we tend to root for the underdog and are usually unwilling to give in even when it seems there is no way we can succeed. I was laughing with a long-time friend of mine (who also owns and manages a small family business) about people who open a business and think they can come in at 10 a.m., take a twohour lunch break and go home at 4 p.m. Or the people who think all of your sales are “net profit” and that you are making a “killing.”

We both look at those situations and think “What planet do those people come from?” Owning your own business is a lot of hard work, long hours and worry. In the hardware business, like a lot of other businesses, it’s much more about living a lifestyle than a “business.” Every hardware store owner I know that is still actively involved in their business works a lot more than 40 hours a week.

the way i see it

We don’t do it because we have to, we don’t do it because we necessarily want to, we do it because things “need to be done.” For us it’s more about getting something done than it is about the hours we spend doing it or the money we make in the process. Please don’t misunderstand me, PROFIT is not a dirty word—it is critical to any business’ success. However, many times profit is not tied directly to the number of hours we do or don’t put into working in our businesses.

We have all seen people open a new or existing hardware store and think it is not necessary to put in the hours it takes to be successful. Those people have either tried to “buy a financial statement” or are extremely naive. The results are usually the same: they lose a lot of money and are out of business in less than five years. But think about how exciting it is to watch someone new come into our industry, open or buy a store, work their tail off learning the business and become successful. The only thing more rewarding than that is if it is your own kids who are the ones who are becoming successful.

Our business has always been built on honesty and hard work. It’s also been built on the willingness to help one another and share ideas. If our industry is to continue to be successful and fend off the onslaught of mass merchants

and internet merchants, then we must be willing to work harder and share ideas among ourselves and the “new blood” that is attracted to our industry. We must be willing to try new ideas and embrace that dreaded word “change” to find new ways to improve our store’s bottom line.

The very first place to start is to make sure we have the merchandise our customers are looking for on our shelves. My Uncle Paul always used to say “You can’t sell from an empty wagon.” Then he would say “You never got a call on a telephone until you put one in.” For much of his career he was a wholesale hardware salesman. And he literally was a salesman until the day he died. For the 25-plus years he owned a hardware store he was never hesitant to try new merchandise.

To continue to be successful in the hardware business or any business for that matter is to pay less attention to the hours you are putting in and more attention to the things that “need to be done” while always keeping an eye on your cash flow. Those hardware retailers who can do that are typically the more successful hardware retailers.

From one retailer to another, I hope you have a successful holiday selling season. Share your thoughts with me at tom@thehardwareconnection.com.

As a leading warehouse supplier for all major co-ops and hardware distributors, we can help put the right mix on your shelves, with consistent packaging and a variety of merchandising options. Your assortment can include a wide range of Southwire® products, from building wire, to MC cable, cord and flexible conduit. And, with Southwire’s in-store evaluation, we can help you understand the local factors that contribute to higher turns and improved profitability. Use our experience to focus on what’s most important – a well-organized electrical aisle where customers can find the correct product.

Jeff Punzel, Owner Punzel Ace Hardware

HARDWARE HUMOR

HARDWARE STORIES Amazing but TRUE

We love hearing all the amazing but true stories from our readers, so keep them coming. Michael Kokesh wrote us recently to say, “Had to reply with some stories for your ‘Amazing but true hardware stories’—a few weird ones have come our way for sure,” he writes.

Michael Kokesh, Long Lake True Value

At a local business-to-business trade show, we had a variety of displays such as vanities and toilets. A family with kids was there and a little boy jumped on one of the toilets and went to the bathroom.

Bart Raser Carr True Value

North Adams,

Mass.

Afemale customer came in looking to buy a stronger glue for her dentures, as they kept coming out. After telling her we don’t sell glue for that, she insisted on purchasing silicone glue, which we told her repeatedly not to use or do.

A male customer calls the store and says he has lice. He wants to use Raid to spray on his head. We advise that Raid is not meant to spray on people’s heads and we don’t have head lice killer. He said he’ll just come in and get whatever we have, so he came in and bought (insect) lice killer. Hopefully, he didn’t use that near the oxygen tank that he was pulling with him.

she forgot to remove the plastic protective piece over the plug. The item was quickly “repaired” and

A customer came in the store and stated that her 3-way plug adapter was faulty and wanted to return it. When asked why it was faulty she said it wouldn’t fit in the outlet. Perplexed, we immediately noticed that she forgot to remove the plastic protective piece over the plug. The item was quickly “repaired” and given back to her.

Of course, we can never forget during the holiday season how many customers come in who appeared to have hung their lights backwards and ask for a dual male-ended extension cord.

Michael Kokesh Long Lake True Value Long Lake, Minn.

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Basic information about your store can be posted together with good, clear photos and a list of the top sales points you want to make by clicking on the “List a Store” button at the top of our website page. Your “store for sales” ad will immediately become available for inspection online, 24/7, all over the world. The outcome is between you and the prospective buyers.

Wingateclassified.com provides positive benefits to all concerned. Members of all retail service organizations now have a low cost easy-to-use

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The best news is that all Hardware Connection subscribers are eligible for an immediate FREE 60 day Classified Ad when posted prior to February 15, 2013! Just use their name and Access Code - THC2012.

Sign up now to get the fullest advantage from your 60 day FREE “Store for Sale” Classified Ad. Unneeded fixtures and equipment are also eligible for a FREE 60 day Classified Ad to February 15, 2013. For more information, click on the link to our website or go to wingateclassified.com.

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“We’re ready to list your store for sale when you are.”

Howʼs Business?

SPECIAL REPORT ON SUPERSTORM SANDY NORTHEAST

Damariscotta Do it Best

Hardware led a relief effort in Maine.

THE IMPACT:

Matt Mazzone of Mazzone’s True Value in Brooklyn lives about 3/4 of a mile from the shore in South Beach Staten Island and reports he got two feet of water in his basement. “Not as bad as the houses behind me who had water up to their second floor. The storm surge was the worst in Staten Island. When high tide hit we were up 17 feet.

“Our stores did not suffer any damage, however, the town over from our hardware store (Red Hook) was destroyed, as was lower Manhattan,” posted Mazzone on Hardlines Digest. “I feel guilty even mentioning the damage to my house, which is insignificant compared to the people who lost everything, and by that I mean their lives, all around my community. Little by little we are hearing stories from

customers who lost everything. Our hearts go out to them. It’s truly devastating but physical damage can always be repaired.”

Some of the worst damage occurred in Brooklyn and Staten Island. Decorama Building Supply in Brooklyn had its yard flooded with two to three feet of water in addition to losing power and phones. They were quickly back up and running on a limited basis. Other retailers were without power for three to five days but did not suffer significant damage like Garber Building Supplies in Staten Island, Canarsie Lumber and Oriental Lumber in Brooklyn, Queens Lumber in Flushing and Superior Lumber in Neversink, N.Y.

Lynn Donahue, manager of A’s Ace Home Center in Manasquan, N.J., shared the following: “Our store survived with no damage at all but the communities around us are destroyed! Belmar, Brielle, Point Pleasant Beach, Bay Head and Mantoloking all suffered massive damage. Our normal Ace delivery day is Thursday, but Ace got a truck to us on Monday morning with much-needed supplies for the impending storm. The power went out at 4 p.m. on Monday, October 29. We reopened Tuesday with no power and let 3-4 people in at a time accompanied by an employee with a flashlight. All transactions were hand written and added up with a calculator. As much of

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Howʼs Business?

Upper: These are items that were collected at Costello’s Ace in East Islip, N.Y., and brought to Mastic Beach for some much-needed relief.

Lower: Olsen’s Ace Hardware in Slingerlands, N.Y., collected products from Ace stores in the Albany area and then delivered them to New York City.

the area was without power, Ace was having us call in our orders to them or write them down and fax them from an area that had power.”

Dick’s Hardware in New York City’s financial district remained open even though they didn’t have any power in the store, which was also flooded. They stayed open to help customers get supplies while using a generator to pump water out of the store at the same time. Although their store was damaged, they did everything they could to meet the needs of their neighborhood.

Saunders Hardware in Montclair, N.J., did a month’s worth of business in three days, according to owner Thomas Vultee, with gas cans and generators the items most in demand.

John Fix III of Cornell’s True Value in Eastchester, N.Y., managed to pick up a pallet of emergency goods at True Value’s warehouse in Allentown, Pa., two days before the storm, and received an emergency truck order with about eight pallets of goods from

True Value’s Manchester warehouse on the Sunday prior to the storm. “That Friday-Sunday weekend was the biggest three days in our history in terms of sales dollars,” Fix says. “We’ve been getting generators in 10 to 20 at a time and they go right out again,” he reported the week after the storm. “Gas cans and siphon pumps are the hot commodity as there is a gas shortage and people are trying to figure out where to get gas to power their generators (and their cars).”

Alan Talman of Karp’s Hardware in East Northport, N.Y., posted several updates on Hardlines Digest: “If you are watching the news, the reality is worse

than the news reports. The south shore of Long Island, Staten Island and a third of Brooklyn are devastated beyond comprehension. Tens if not hundreds of thousands of people are living in homes that are really not fit for habitation. Lines for gas were so long that landscapers and tree cutters were taking the ferry to Connecticut to buy gas for their chain saws so they could keep working,” he wrote.

“For the most part, the mood is powerfully positive,” Talman added. “Our customers are thankful for what they have, not complaining about what they lost. I’ve only had one or two customers (out of thousands) that were really

Howʼs Business?

flipping out. No one is luckier than I am. My family is safe and my store is operating at full capacity.”

THE RESPONSE:

Rob Gardiner of Damariscotta Do it Best Hardware in Damariscotta, Maine, led a community drive among retailers in his area to donate items for victims of Hurricane Sandy in New York. Not only did the store spearhead the drive and gather all donated items, it began setting aside space in its delivery trucks to make room for the donated items to take down to New York.

Damariscotta Hardware donated several pallets loaded with items in demand. Hancock Lumber, Louis Doe Home Center and Rogers Ace Hardware were other Maine retailers who donated supplies such as bleach, contractor trash bags, brooms, shovels, squeegees, work gloves, dust masks, utility knives, safety glasses, work lights, tarps, flashlights, batteries and snacks.

Click here to see a story a local TV station did on Damariscotta Hardware’s efforts.

Jon Phillips of Phillips Hardware, with seven stores in the Albany, N.Y., area, had already started gathering relief supplies for Hurricane Sandy victims through his sons’ Little League when another, bigger idea struck him: collaborate with other competing hardware stores in the area to gather even more supplies.

Karp’s Hardware in East Northport, N.Y., did not lose power, so it opened up its store to community members who needed to charge electronic devices.

“I decided to contact local hardware retailers from any co-op to help support victims of Hurricane Sandy,” says Phillips. “I thought it would be great if we could all come together to make a difference. The responses were positive and we all started to gather supplies.”

The responses were so overwhelming that Phillips ended up with multiple truckloads of supplies that required two trips: one to Staten Island and one to Breezy Point in Queens.

“The amazing thing about all of this was seeing everyone come together: town agencies, non-profit organizations, businesses, sports programs, our customers and our employees,” he says.

“I had some employees offer their personal gas cans for free to customers in need when we ran out. We are going to try to organize the local retailers to stay in touch concerning storms and

disasters so we know what products we each have available to assist our communities.”

It really hit home for Phillips when he and his family walked the neighborhood in Breezy Point where 111 homes burned to the ground. “The destruction was unimaginable. The volunteerism and joint effort of everyday people was heartwarming.”

Jim Olsen of Olsen’s Ace Hardware in Slingerlands, N.Y., collected product from Ace stores in the Albany region and then delivered it to the New York City area. Customers of Robinson’s Ace Hardware in Guilderland, N.Y.,

donated more than $850 in product to that effort.

Absecon Do it Best in Absecon, N.J., partnered with the American Red Cross to be a donation collection station. “The need is so great,” says Owner Marilyn Weisman. “I can’t begin to tell you the stories of people coming into our store for supplies, lots of them heading up to North Jersey and New York since most communities down here have restored electricity. I’ve been in business a long, long time—this is about as bad as I have ever seen.”

Talman at Karp’s Hardware opened his store to anyone in the community

Howʼs Business?

who needed to warm up while charging their phones or other electronic devices.

All Long Island Ace Hardware locations are serving as drop-off locations for non-perishable food items and clothing donations to help those in need on the south shore of Long Island. At Costello’s Ace Hardware in Island Park, Tide Loads of Hope was on site to do one load of laundry per household per day for those affected by Sandy.

Click links that follow to see how hardware stores in New Jersey recover after Sandy:

• Hardware stores post-Sandy cleanup

• Sandy cleanup forces south Jersey hardware stores to retool stock

MID-ATLANTIC

Dozens of retailers in West Virginia lost power and dealt with storm damage as more than two feet of snow got dumped in the area. Elkins Builders Supply in Elkins, W. Va., was without power for

a growing community of thousands of

“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

Howʼs Business?

days, but they kept operating to make sure their customers had the supplies that they needed.

Taylor’s Do it Centers, based in Virginia Beach, Va., made a donation of $1,000 in merchandise on its employees’ behalf. A local group organized a road trip the day after the storm hit and the donated supplies (rakes, gloves, bags, cleaning supplies, etc.), along with other donations from some local businesses, were driven up to New Jersey and delivered to the affected communities.

MIDWEST

Here is some of Ace Hardware Corp.’s activity related to Sandy:

Prior to the storm hitting, Ace’s inventory team in Oak Brook, Ill., began meeting on Wednesday, Oct. 24, to form their plan and on Friday they began encouraging retailers to place their orders.

Ace’s supply chain/inventory control teams moved inventory to the areas they believed would be most impacted to ensure those retailers were able to support their communities. Supplies poured out of the Prince George and

Wilton RSCs and the Suffolk RDC almost as soon as they arrived. Dozens of truckloads full of thousands of generators were shipped to Ace’s Prince George RSC and the Wilton RSC.

Through the Ace Foundation’s partnership with the American Red Cross, Ace was able to quickly get muchneeded funds to hurricane victims and provided supplies such as thousands of pairs of work gloves and hundreds of work shovels to the communities affected.

WEST

Two days after Sandy hit Gene Pedrotti, owner of Pedrotti’s Ace Hardware in Benicia, Calif., began a fundraising campaign to raise $20,000 for the American Red Cross to aid Sandy storm survivors. Pedrotti personally pledged to match donations up to $10,000. The store reached its goal in 16 days, so Pedrotti extended the campaign and raised the goal to $50,000. In addition, he vowed to match donations up to $25,000.

From Tom’s Shop

HARDWARE PRODUCTS REVIEW

The holidays are upon us as we begin to wind up 2012, and even in a slow economy, vendors are still introducing innovative new products. Power tools continue to migrate over to lithium ion batteries and ergonomic handles seem to have become the standard.

The vendor community is undergoing continual change as companies

By Tom Chasteen

merge or are sold to other companies. Strong brand names maintain their hold by building top-of-mind brand awareness and there seems to be less interest in private-label merchandise than there used to be.

PRODUCT #1

ODDJOB™ MULTI-TOOL | APEX TOOL GROUP

Apex Tool Group, formally known as Cooper Tools, has one of the strongest families of tool brands in the industry today. Brands such as Crescent®, Nicholson®, Wiss®, Plumb®, Lufkin®, Diamond®, H.K. Porter®, Weller® and Campbell® have been industry standards for many years. One of the new products launched under the Crescent brand is the OddJob™ multi-tool. It is a “11 tools in one” product that we always look for when trying to do some minor household repair.

Unlike other products that claim to be an “all-in-one tool,” the OddJob actually feels like a real tool when you first pick it

From Tom’s Shop

Smart. Fast. Mobile.

up. It’s hefty but well balanced and doesn’t feel like it will come apart the first time you accidentally drop it. The OddJob is a hammer, nail puller, ratcheting screwdriver with bit storage in the handle, retractable knife and soft mallet. It has a flexible shaft attachment for the screwdriver bits. If you are looking for that unique tool to give someone who collects tools like coins or for someone who doesn’t have the room or the inclination to have a tool collection, then the OddJob is the perfect gift for them. It really can do a hundred little jobs around the house and you won’t have to drag out five tools for one small project.

PRODUCT

Gardner Bender has released the new Sperry Instrument Pro Grade of multimeters. These testers are serious tools with the professional and serious do-it-yourselfers in mind. They have a high-impact housing with a rubber boot, so they don’t break apart when dropped on a concrete floor. The one we tested was the DM6450 Digital Multimeter with “auto range,” which really makes using a multimeter a breeze.

We were truly impressed with how easy it was to use. The large readout display is very good, the rotary dial clicks firmly and is big enough that you actually have something to turn

and it has 37" test leads, which means you don’t have to balance it on your knee. It runs on one nine-volt battery and it has a lowbattery alert function that is handy.

GB has been the standard in our industry for many years and is known for its electrical wire, crimps and tools. The new Sperry Instruments digital multimeters are serious tools for the serious user.

To see the complete line of Sperry Instruments digital multimeters, go to www.sperryinstruments.com.

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Everything points toward the 057 HS

High security laser/sidewinder keys are dramatically increasing in popularity. Systems using these keys are secure and provide greater functional reliability. For that reason, these keys will only become more prevalent in the foreseeable future.

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From Tom’s Shop

PRODUCT #3: TEAREPAIR INC. | TEAR-AID REPAIR PATCH

TEARepair Inc. has developed a innovative product called Tear-Aid® Repair Patch that will repair a tear in fabric and vinyl and can even be applied underwater.

This unique product has great stretching qualities, which makes it ideal for repairing seats. It won’t pull off when stretched, it’s air tight and water tight, it’s clear and it

won’t discolor over time.

Type A is for fabric repairs and will stick to canvas, rubber, plastic, nylon, aluminum, fiberglass, stainless steel, polyester, Dacron and Gor-Tex®. Type B is used for vinyl and vinyl-coated products and can be applied underwater to smooth, non-textured vinyl surfaces such as pool liners.

Tear-Aid is easy to apply and is easy to cut by using an ordinary pair of scissors. It comes in five styles: vinyl repair, fabric repair, seat repair, inflatable repair and underwater repair. The graphics and packaging are excellent for impulse sales around the checkout area of your store.

To learn more about Tear-Aid and see how it works click here.

BRANCH STORE

By Chris Jensen

Helpful Tips on Opening a

BRANCH STORE

Frattallone’s Ace has expanded to 18 stores in the Twin Cities region of Minnesota by following a systematic approach to evaluating store locations.

When it comes to opening a branch store, few know more about the process than Mike Frattallone. His family is now up to 18 Frattallone’s Ace Hardware stores in the Twin Cities region of Minnesota after his father, Larry, opened the fi rst one in 1975.

“OPENING ANOTHER STORE IS SUCH

a fearful thing to do. You have to be very circumspect,” Frattallone says. “Make sure you’re not in a slam-dunk situation with your first store due to a great location, otherwise you have no idea what it’s like to struggle in a challenging site.”

If you are in a unique location, then be careful and be prepared, Frattallone advises. “Have your district manager

give you worst-case scenarios,” he says. “For us, our first site was in a tough location while our second store was in a much better location. The third store was not so hot.”

When evaluating sites Frattallone looks for high-density population and high-income households. “We’re a hightouch, high-service retailer, so we do better in these areas,” he says.

Branch storE

Dave Bailey of Dave’s Hardware in Phoenix advises getting your wholesaler to run a series of demographic reports with a 1-mile, 3-mile and 5-mile radius. Look at “area supply” and “area demand” for key categories and compare the “number of households” times the “mean income,” which will indicate if the area has more or less money available to spend, according to Bailey. “Then compare these figures to your existing location so you have a real feel on how the new location will do,” he says.

Most wholesalers are offering such good incentives to open branch stores that financing is not even a concern. It comes down to how much risk a retailer is willing to take on and whether they are up to the challenge.

Existing vs. ground-up

Once you have made the decision to branch out you face the tough decision of whether to buy an existing store or build a new ground-up store.

Buying an existing store at least gives you a concept of what you can match, Frattallone notes. “We bought a 40-yearold store and redid everything. Even a marginal existing store has footsteps,” he adds.

However, Frattallone points out that it is harder to buy an existing store if it’s not from your same wholesaler affiliation. “I fear going into a store where we have to close for a few months and gut

it. People write you off and find other places to shop,” he says.

It is a very challenging position when you consider acquiring a marginally profitable store, according to Frattallone. “With Ace’s ‘branching out’ program it’s hard to look at unprofitable stores. We’ve had a few cases where we looked at existing stores and decided to pass because there just wasn’t enough upside,” he says.

With more store owners reaching retirement age and looking to sell their businesses, the opportunities can be enticing to aggressive retailers who have visions of expanding. As Bob Brame of Cadiz Hardware in Kentucky puts it, “Be careful. Be careful. Be careful.”

“In some cases, retailers looking to sell have to accept the fact that they’ve got $500,000 in inventory and it’s all scrap and you’d be buying it for dimes on the dollar,” says Frattallone. “If your store does not have profit, then it doesn’t have any value and it probably needs to be closed out.”

Monty and Marty Tunks, owners of King City Lumber in Missouri, were a little apprehensive when they decided to purchase a struggling store in Oskaloosa, Kan. They were able to double sales in the first year compared to the previous owner, a figure 20 percent above their expectations. The secret was giving the store a fresh look with more merchandise and providing a better shopping experience.

RIght: Gina Schaefer (front middle) and her staff at Canton Ace Hardware celebrate the store’s opening in September.

Left: Don’t hold a grand opening until you are sure your store is ready for the attention.

Dick McCoy of Orme Do it Best Hardware in Cambridge, Ohio, has grown the business from one to six stores by revitalizing run-down businesses. “We’ve made a name for ourselves by purchasing worn out, unprofitable stores and using the Do it Best Corp. RetailSTART!® program to remodel and remerchandise them,” he says.

BE ORGANIZED

Gina Schaefer opened her first store, Logan Hardware, in 2003. She and her husband, Marc Friedman, now operate nine Ace Hardware stores in Washington, D.C., and Maryland. She offers three helpful tips on opening a branch store:

1. Have a very comprehensive checklist of everything needed to open a new location from “get permits” to “buy supplies for the office” and everything in between.

2. Involve your current team members. We involve management and back office staff at all of our locations when we open a new store and everyone gets excited.

3. Get the word out in your new community right away. We

Gina Schaefer has developed a Founding Member program to build up a customer base before a new store opens.

have a Founding Customers program to help generate fans before we even open.

When executing a new store opening you have to think of your own time as critical, Frattallone says. “Dumb down the process to the lowest common denominator. Don’t kill yourself putting up fixtures. We hire a company to put in all the fixtures in one day,” he adds.

Once the fixtures are set up

Frattallone goes right to Ace’s planograms and everything is set. “Use the least expensive staff you can to set up the store—you don’t need $2,000 per week merchandisers,” he advises. “Just get it up and get it open. Once construction is done we open in 15 days.”

Upper: The merchandise is getting

Lower: Eric Meadors opened his third Meadors True Value Lumber location in Clarksville, Ark., this past May to protect his flank against competition.

You can service 80 percent of your customers with a basic planogram, according to Frattallone, then you can slowly add in all the other unique items later on.

He notes that some retailers put in 100 hours per week getting the store set up and then they are too exhausted to run the business when it opens. That’s another reason why you don’t want to hold your grand opening event on your first day of business. Wait a month or so to make sure all the bugs are worked out and you can catch your breath.

Branch Store

time to Delegate

If you are a control freak who doesn’t like to delegate, then opening a branch store may not be a wise decision. Retailers who branch out quickly realize the importance of relying on others.

Skip Miller, who owns Miller Lumber Company in Augusta, Ky., decided he couldn’t pass up the opportunity to open a second store. The nearby county seat of Brooksville had been without a hardware store for three or four years, and there was a vacant grocery store available. Miller’s son, Craig, is the general manager of their lumberyard in Augusta, while his other son, Scott, oversees the new Miller’s Home Center store that opened April 30 in Brooksville.

“You have to make sure you’ve got someone you can trust when opening another store or you’ll run yourself ragged going back and forth,” Miller says. “It’s not been too stressful having a second store, particularly since I’ve got capable sons to oversee each location. I’m a hands-off owner for the most part.”

Once you have multiple stores you can’t be what Frattallone calls the beckand-call person. “As the owner you can’t be going back and forth every time an issue crops up. You’ve got to be able to rely on other people,” he says.

For Frattallone’s Ace, no one buys except the buying staff. “You have to get everything down to a system—every time at every store, done the same way

set up for Orme Do it Best’s sixth store in Newark, Ohio.

with pricing, returns, vacation policies, etc. I don’t even know any of our safe combinations,” Frattallone says.

“If you can’t duplicate Bob’s knowledge of hunting in the second store, then you can’t have the same niche in hunting supplies,” he adds. “Retailers often luck into the perfect niche because of the expertise of someone on staff, and they think they can duplicate that. It’s hard to do and the market might not support that niche in another location.”

All the more reason why you need to have everyone ready to handle all areas of your business, so you are not too dependent on one person’s expertise. As Frattalone puts it, “I follow the advice we were given once by Ace: ‘Work on the business, not in the business.’”

That’s why Frattallone doesn’t worry himself to death about the details of his 18 stores. “All I did today was help customers at two of our stores. I learn more from doing that than anything else I could’ve done,” he says.

There are a few issues that only Frattallone handles such as employee theft. “That’s a very stressful thing and I don’t want anyone else having to deal with that, especially a manager who’s closer to the staff,” he says.

other ISSueS

Sara Kremer of Western Ohio True Value Hardware in Minster, Ohio, notes that they are getting ready to open a third store next spring. They currently

synchronize pricing with their first two stores, but she wonders whether they should adopt more competitive pricing with the third store since it will be closer to a Lowe’s store.

“We try to make our Epicor POS system as easy as possible while operating on a multi-store platform, so we make pricing the same at all stores. It’s a nightmare otherwise,” Frattallone advises. “Make sure you are using global price change in the system so it stays synchronized.”

Other retailers have questioned whether they should set up their second store as a separate corporation for liability reasons or combine into one entity.

“There is no good reason to set up a second store as a separate corporation,” Frattallone says. “You have to sign personal guarantees anyway, so it doesn’t matter from a liability standpoint. And you certainly don’t want to set up separate banking accounts.”

With 18 stores in an urban setting, Frattallone’s Ace is surrounded by bigbox outlets. Frattallone is not one to back down from a challenge. “The proximity of big boxes is not a consideration for us. We have a 20,000-square-foot store within one mile of a big box—you just have to retrain customers what your store has to offer that’s different and better,” he says.

When opening a branch store, make a list and check it twice. “I use a checklist but there are always a few displays that I forget to order,” Frattallone says. n

By Doug Donaldson

GrowingSales in a Down Economy

Barrows Hardware in Worcester, Mass., has stayed in business for almost 100 years by paying close attention to the local market and providing experienced customer service.

Outside BarrOws Hardware, a flashing Led-lit marquee suggests liking the store on Facebook and clicking to barrowshardware.com. On a back wall inside the store is a blackand-white photo of the original store, which opened in 1914.

despite the great contrast between the store’s humble beginnings to its current 10,000-square-foot incarnation, a couple things haven’t changed

for the business: a carefully selected assortment and a high level of customer service.

Brian Barrows, the third-generation owner, began working at the store on weekends sweeping floors and stocking shelves.

“we have always been a smaller, independent store,” Barrows says.

Located in an urban area of Worcester, Mass., the 10,000-square-foot Barrows Hardware serves an even mix of contractors and do-it-yourselfers.

“Our service and convenience combined with very competitive pricing is why Barrows Hardware has been voted Best Hardware Store by two local magazines for the past 10 years.”

SecretS of SucceSS

During the past decade, the store hasn’t had a down year—even during the lingering recession. Over the past five years, the store has seen steady, but what Barrows calls modest increases of 5 to 10 percent a year.

Brian Barrows with his father, Bob, carry on an almost 100year family tradition of hardware retailing.

BarrowS Hardware

Year Founded: 1914

Salesfloor: 10,000 sq. ft.

Wholesaler: Orgill

Pro/DIY Sales: 50-50

Dealer Profile

“We have more business now than ever,” Barrows says. “Compared to the big boxes, we find our pricing is just as good.”

The store’s assortment focuses on what Barrows categorizes as the “urban repair business.” Located in an area of older buildings, customers often visit the store for repair or maintenance projects. Plumbing repair is especially strong for the store, along with seasonal items, such as ice melt.

Barrows also takes advantage of Orgill’s sensitivity code pricing to ensure he’s making as much profit as possible. By monitoring products’ pricing sensitivity and customizing pricing, Barrows has been able to maintain a healthy profit margin.

Barrows also credits his employees’ expertise and a customer service mindset as keys to the store’s success in a market with several big-box stores. Within 10 miles, there are five big-box stores and several independent retailers.

“My employees know how to ask questions and take an interest in what customers want to accomplish,” Barrows says. “Then, the store employees can point out other products that customers might need. When they interact with the customers on that level, sales increase and the customers have a better experience, because they don’t have to make several trips to finish a project.”

This in-depth employee knowledge gives Barrows Hardware an edge, but also creates a challenge.

“My biggest challenge is hiring people, and we’ve been fortunate that we haven’t had to replace many employees over the years,” Barrows says. “The key is hiring seasoned employees who know the hardware business and are good with people.”

To make hiring go smoother, Barrows places ads in local newspapers with as much specific job information as possible. For example, he will discuss company policies, including work ethic, and requirements such as driving a forklift or heavy lifting.

Barrows has 13 full- and part-time employees. To retain them, he offers competitive salaries plus a simple IRA to full-time employees.

To promote his store’s service and sale items, Barrows sends out an eightpage circular four times a year. Inserted in local newspapers and mailed to nearby zip codes, the circular is also available on the store’s web site.

“We’re working to build momentum through social media,” Barrows points out. “We have a good presence with our web site, and one of the biggest advantages it has given us is linking to our vendors’ catalogs. If a customer wants anything in those catalogs, we can get it in the store.”

Barrows regularly updates his web site and the store’s Facebook page with promotions or events. For example, the store recently hosted a lawn and garden

Brian Barrows, owner of Barrows Hardware, connects with customers through the company’s web site and Facebook page.

expert and photos and information from the event were posted on Facebook.

Barrows credits the store’s web site and Facebook presence with providing an uptick in younger customers.

“A lot of first-time homeowners in the ’90s were of the mindset that they had to go to the big-box stores with their endless selection,” Barrows says. “That mindset is changing. Some younger customers now consider us a good choice. We’re getting a younger crowd and the web site and Facebook is how we’re trying to build momentum with that.”

Paint accounts for about 10 percent of the store’s sales.

DiversifieD sales Mix

Since its inception, the store’s customers have been an even mix of convenience shoppers, contractors and do-it-yourselfers. Barrows has used Orgill as his primary supplier for the past 15 years.

Barrows pays close attention to trends and customer demands. That attention to detail is reflected in the store’s 30 endcaps, which constantly rotate products and displays.

Dealer Profile

Whenever Barrows attends a market, he keeps an eye out for endcap promotions. For example, he recently bought a pallet of leaf blowers that quickly sold. And by paying attention to customers’ demands, he stocked an endcap with bed-bug control products that proved popular.

Paint is one of the key departments, accounting for about 10 percent of sales. The store has offered Benjamin Moore for the past five years. “A lot of women customers are coming in making decisions about home décor,” Barrows says. “The Benjamin Moore line has been a draw for women, plus we have the table and chairs in the paint department to allow customers to sit down, pull out materials, relax and ponder their paint decisions.”

The store has also gained a reputation for its propane supply and fill business. “We’ve become a destination for propane and are known for the best prices in the city,” Barrows says.

And while the store has undergone much change over its 98-year history, its independence has definitely endured. Customers are even rewarding the store for its independence.

“We’re seeing a lot more customers who want to shop local,” Barrows says. “They feel good about supporting an independent, local business. Customers see how supporting such a local business is good for them and good for the city.” n

By John Fix III

hardlines digest

Debating

vs.Average Cost Pricing Replacement Cost

Our area had lots of homes without power from superstorm sandy, but luckily we didn’t lose power at the store (and I didn’t lose power at home). The rain was also not that heavy, so even customers that lost power didn’t have much flooding. I hope all our hardlines members in the affected areas came through with little or no damage. We lost one window from wind, but otherwise came through cleanly.

The sTorm has undoubTedly had a big impact on the business of retailers in the affected areas, and there is more on that in the how’s business section of this issue. In this article we want to share some interesting insights into the pros and cons of replacement cost vs. average cost pricing.

mike Finoccahiaro, assistant manager at nugent & Potter in southampton, n.y., noted that they are currently basing all selling prices on replacement cost plus. “We have been debating whether or not to move to average cost, but realize it’s a big process when it

comes to making sure prices on Po’s are spot on. We have about a 97 percent Po cost accuracy right now, which we have worked hard on, especially since we have close to 250 purchase orders out there at any given time. also calculating freight into average cost seems to be a challenge. anyone have any thoughts on this?”

mike mclendon, vice president of sixstore mclendon hardware in renton, Wash., weighed in with the following detailed response:

The discussion on basing prices on replacement vs. average cost is one

hardlines digest

we struggled with as well. In 2008 we moved to average cost for valuing our inventory. It took a lot of prep upfront, but it forced us to clean up inventory and vendor info. But since then we feel that this is a truer way to value your inventory. Replacement cost is really only used as a look at a future cost of goods. I monitor the rolling 12-month average of the two cost bases and track the overall difference between the two. The difference between the two has only varied about 1.5 percent over the last five years.

As we slipped into recession the two values began to merge because of a lack of price increases on the vendor’s part, which caused the difference between the two overall inventory values to be only about 2 percent. But as the flurry of price increases by vendors happened in 2010-2011 the difference widened to about 3.5 percent. It is now beginning to decline again. I am sure individual items vary much more when price increases occur, but total sales is based on everything you sell, not one item.

As for setting prices using cost, we gave that up in 2008. Like so many businesses, we had used cost for determining prices forever. It seems logical to do that. It is fairly easy, too. But we had multiple people (buyers, managers, etc.) setting prices. Because of this, margins were all over the board. In many cases we were giving away margin (cheaper than the boxes). Each person had their

own way of setting the price. These people were so busy that they weren’t really spending the time needed to ensure that we were both competitive but also maximizing our margins.

Also, there was too much gut pricing and emotional influences were used to determine the price. The buyer might be an expert on purchasing items, but most of the time they are not the best person to determine what it should sell for. A professional (someone who concentrates on pricing) who evaluates the market price for each item is what is needed. Purchasing people should be worried about getting the lowest cost. You then have the best of both worlds. One advantage of this system is that you have someone not only monitoring market prices and margins but also monitoring your buyers’ ability to get competitive costs from the vendor.

The important point here is that when you know what something should sell for and you know what your desired margin is, then you have better information when purchasing goods. You know what that cost should be to be both competitive and to retain a desired margin. In many cases our pricing person will notify and work with the buyers, notifying them that they need

to look for a lower cost on something because the market price shifted. You would be amazed what happens when a buyer is told that we are going to sell his product below cost. In our company we have a weekly meeting with all buyers present and talk about these things and nobody wants to be on the low margin list. In just about every case we have found some way to get a better cost.

As for the way to determine a price without using cost, in 2008 we decided that we needed a structured process that produced a consistent method for determining a price that reduced many of the problems we had before. We also bought into the concept that cost should not determine what a retail price should be set at. The market (Home Depot, Lowe’s and Walmart) does that. Customers don’t care how much you pay for an item. They care about what they have to pay for it. And with all the choices available to them today that price can vary. Sometimes they know what they should be paying (the item is a commodity or it’s advertised a lot), but quite often they don’t. Thus the sensitivity of an item is a key factor in determining the price.

So we implemented a retail pricing strategy that bases retail prices on an item’s sensitivity and on its market price. There are 12 questions we use to determine the item’s sensitivity (ranking 1 through 8, with 1 being most sensitive and 8 being least sensitive). Each sensitivity code represents a percentage over market price (average price of the big

guys) that would be added to the market price to determine the new retail price. A 1 might represent a 2 percent increase over the market price, while an 8 might be a 60 percent increase over the competition, because the item is so blind and the competition probably doesn’t have it anyway.

Once that is done rounding is laid over the top of this to capture that last bit of margin. There is much more to it (dealing with various exceptions to the rules and dealing with when there is no competition to determine a market price), but this system has worked for us and has streamlined our pricing process.

We shop every item two times a year and some items multiple times per year. Each year using this we have been able to squeeze at least 1.5 percent more margin dollars overall. It was a lot of work to set up this system (took two years to work out) and it takes discipline to use, but pricing is the lifeblood of the organization. It has paid off in our ability to increase the overall margin by 4 percent in just the first two years after we implemented it at a time when the market was sagging, with no adverse effects on customer count or customer complaints on prices.

Thanks to Mike and the other dealers (see page 42) for sharing these excellent insights into their pricing strategies. n

John Fix started Hardlines Digest in 1996 and continues to run the servers out of Cornell’s True Value in Eastchester, N.Y. There are currently more than 2,700 subscribers to Hardlines Digest. To read more or subscribe, head to www.hardlinesdigest.com.

Other retailers weigh in:

In inflationary times, replacement cost, as the basis for retail, will help preserve cash flow and margins. Commodity retails, especially in the lumber and building material business (or the bulk plumbing business), are generally managed manually based on competitive pressure. I would not recommend using average cost as a basis for retails generally. What tends to happen is that when you make a great deal on a purchase, you give said savings to the customer instead of to your company.

Mike Mayfield Mendo Mill and Lumber Co. Ukiah, Calif.

We use replacement cost (including freight) in calculating selling prices. We sell lumber and commodity products too, and the selling price has more to do with current market sometimes than it does with what my average cost is. That being said, average cost is the number that Epicor uses to calculate profit on each item. Average cost also includes any freight or rebate that was applied to inventory items.

Trey Kiper

Kiper

Hardware & Lumber Winnsboro, La.

Average cost gives you an accurate idea of how many dollars you have invested in inventory. This is a very relevant number. Replacement cost gives you an accurate idea of how many dollars you will have to invest to replace the inventory once sold. If you don’t sell out the item but the item replacement cost goes up, then the average cost will remain lower because it represents the current investment and not future purchases.

Jim

Bell Miller Industrial Elk Grove Village, Ill.

Average cost is a very important tool—with each invoice the average cost can change. This becomes really important when your vendor changes a cost on an item (without notifying you, this happens right?), this changes gross profit percentage and with proper monitoring can allow you to keep your retails in line. Our office personnel are usually pretty good at informing us of big changes in cost, but even the little changes can affect your bottom line.

Mark McGregor Emigh Ace Hardware Sacramento,

Calif.

By Matt Mullen

Cloud Computing for Your Business outsourcing it:

In all my years working with retailers, I have not encountered a single one ready to dive into change headfirst without a little hesitation. Remember when personal email was introduced to the market? It took time to understand value, set it up and decide which communications should go online. It’s hard to imagine how we would get by without it.

Cloud computing is no different. As these services become more commonly accepted, it is typical that small retailers are cautious about the benefits the Cloud can provide. Nevertheless, it is a compelling alternative to managing IT and hardware onsite that retailers should seriously consider.

Cloud Computing 101

The Cloud eliminates a multitude of challenges associated with on-premise IT solutions––upgrading to the next software release (and the next, and the next), running out of memory or disk space on the server, securely and reliably backing up your data. These, and many other IT services, are not traditionally the core competencies of retailers, and many have found that moving these services

to The Cloud allows for more time and money to be focused on essential business operations instead of managing IT.

The Cloud is used as a metaphor for the Internet––Cloud computing is essentially computing over the Web by users whenever and wherever they want. Retailers no longer need to purchase the physical infrastructure, worry about memory, storage and backup services, because all these services are provided and managed by the vendor. What may be the best part is that the retailer now has a software, hardware, security and data management environment that is always up to date and scalable.

From time to time you may hear the Cloud explained as a rental-based service––the retailer pays per month, essentially renting the software, hardware and infrastructure. It’s more of an expense vs. capital cost––you don’t need to buy extra hardware or a server. This is accurate; however, some software applications deliver software as a service or SaaS, like Salesforce.com.

In both of these instances the Cloud service provider is responsible for maintenance, updates and enhancements to the software, therefore eliminating the larger, upfront costs attached to an on-premise system. The difference is generally in the level of customization and personalization you can make to the software. In true SaaS environments, business processes are standard and

shared across all of the customers using the application. In rental or ‘hosted’ models, the business processes can be unique to the retailer, allowing a greater degree of management to that retailer’s discrete needs.

A Future For Your Business

In a recent report by Microsoft/Edge Strategies, 30 percent of small and midsize businesses are currently using some form of paid cloud service and that number is expected to rise to 48 percent in the next two to three years.

What is the number-one concern retailers have about the Cloud? Security, security, security. Cloud-based services are very intangible to many retailers. Consequently security is the number-one concern and deterrent from implementing the Cloud and taking full advantage of moving to a beneficial system. Cloud services are just as secure, if not more secure than traditional on-premise solutions. The Cloud has many more protocol requirements and typically the service provider takes security a lot more seriously than the retailer who runs on-premise software.

How can retailers ensure their data and the data of their customers is safe in the Cloud? Retailers want to know who owns the data, where and when viruses are being blocked, how many firewalls are operating, if their data will be incessantly accessible and that back-ups are readily available. Although risks are frequently in the forefront of retailers’ minds when they

think of Cloud computing, the benefits of implementing such a business-changing solution are abundant: reducing expenses on capital, all maintenance is handled by the service provider, the system can be accessed by multiple users regardless of their location via mobile devices, PC, etc., the provider is monitoring the system’s performance continuously, data is centralized allowing for enhanced security, automatic back-ups of your data are continuous and the requirement of large memory to run applications is not needed.

There is great future in Cloud computing for retailers. Use of Cloud is expected to grow for small and mid-size businesses. Of specific interest for the hardware retailer, point of sale, inventory management and billing and accounting are a few types of Cloud services that are expected to see a significant increase in usage in 2013. As retailers make the plunge into this quickly changing service, they need to consider the distinct challenges their businesses face and the benefits the Cloud offers. Retailers didn’t start their businesses to wrestle with IT. The fees and overhead required for installing and maintaining infrastructure is unreasonably expensive for most small retailers. The Cloud is a perfect model of a technology that pays for itself and fashions long-term flexibility crucial for the small to mid-sized retailer. n

Matt Mullen is head of product management and marketing for Epicor Software Corp.

HOUSEWARES & CLEANING TRENDS

HOUSEWARES/CLEANING BUYING UPDATE

■ 52 percent of upright vacuums sold in the first quarter of 2012 were cyclonic, according to the Retail Tracking Service of The NPD Group. The top three reasons consumers purchased a specific brand of upright vacuum were the price, the features and the fact that it was a brand they trust.

■ Only 2 percent of cookware sold in the first quarter of 2012 was PTFE/PFOA free, according to the Retail Tracking Service of The NPD Group.

■ 14 percent of flatware dollar sales in the first quarter of 2012 came from place settings.

■ The Millennials, those consumers aged 18-34, accounted for 26 percent of small appliance and 30 percent of non-electric housewares purchases for the 12 months ending March 2012, according to research from The NPD Group. This represented a 3 percent increase in spending by the Millennials in these categories.

■ Price and good value are the primary motivators driving purchases of housewares items by Millennials, reports Perry James of The NPD Group.

■ Across all age groups, 13 percent of small appliances sales and 8 percent of non-electric housewares sales come online, according to the NPD Group. Older consumers are actually more inclined to buy housewares online

Upper: Tags Hardware in Cambridge, Mass., frequently hosts product and cooking demonstrations in the store.

Lower: The housewares department at Sunshine Ace in Naples, Fla., features a competitive assortment of kitchen gadgets.

than those aged 18-34, most likely because the younger buyers are purchasing these items for the first time.

■ 63 percent of slow cookers sold in the fourth quarter of 2011 were oval, according to the Retail Tracking Service of The NPD Group.

■ Workshop vacuums with a tank capacity of 2.1-5.0 gallons represented 38 percent of category dollar sales in the fourth quarter of 2011, according to The NPD Group’s Retail Tracking Service. ■

HOUSEWARES/CLEANING PRODUCTS

CORKCICLE WINE CHILLER

Corkcicle keeps wines at the ideal temperature without the messiness, and unreliability, of an ice bucket. It can keep white wines at their ideal temperature for about 45 minutes and can cool reds in just 10.

Freeze the plastic, gel-filled Corkcicle, then insert it into the bottle to keep your white, rose, or sparkling wine chilled on the table. It is made of BPA-free plastic and contains a non-toxic thermal gel. CORKCICLE

www.corkcicle.com • 866-780-0007

SILICONE COLANDER

• Designed to strain large quantity of vegetables and starchy foods. Its rigid handles offer easy handling and a smooth transition from the sink to the work-top.

• It can also be used as a steam basket to cook vegetables and couscous. Flexible silicone structure folds for easy, compact storage in cupboard.

• Made entirely out of silicone, it doesn’t burn thanks to its insulated edges.

• 800-358-0608

WET & FORGET SHOWER

• Takes the work out of cleaning your shower. Simply spray Wet & Forget Shower once a week to clean and prevent the build-up of soap scum, grime, oils, mold and mildew stains.

• Soft vanilla essence—no bleach, ammonia, dyes or irritating fumes.

• High-efficiency sprayer means no more scrubbing or wiping. Three months of cleaning power in one bottle.

SAUCY MAMA DRESSING

• Saucy Mama’s Sante fe Creamy Chipotle Dressing is perfect topper for your favorite Southwest or Tex/Mex salad and veggies.

PREPSTATION™ 3-IN-1 CUTTING BOARD

• Designed to be a triple threat, letting you cut, carry and rinse all in one place.

• Features durable bamboo cutting board.

• Part of updated line of “natural” condiments that is free of artificial preservatives, colors, flavors, sweeteners or hydrogenated fats.

• Suzie “Saucy Mama” Barhyte personally creates the company’s entire collection of gourmet mustards, finishing sauces, dressings and cocktail condiments.

• Saucy Mama line all-natural lineup includes Apricot Ginger Mustard, Champagne & Honey Mustard, Pacific Rim Ginger Dressing, Smoky Garlic Mustard, Backyard Brat Mustard, Cracked Pepper Marinade and more.

Bar Hyte Specialty Foods www.barhyte.com • 800-227-4983

• Colander expands for use and collapses for storage. Transfer removes completely to carry food easily

Chef’N

www.chefn.com • 206-448-1210

BAR10DER™

• Make your favorite cocktail perfectly with the first-ever 10-in-1 bar tool.

• Slick design features: muddler to crush fruits; stirrer to blend cocktails; knife to slice garnishes; channel knife to create twists; reamer to add freshly squeezed juice; jigger to get perfect pour; strainer to separate ice from liquid as you pour; zester to capture aroma of citrus fruits; plus corkscrew and bottle opener.

Quench Products 866-826-4790 www.thebar10der.com

By Fred Fischer

Welcome to the

New Era of Surveillance Systems

Today, the “Surveillance System” world has dramatically changed. For years we have talked about video surveillance using cameras with Bnc connectors, a video cable and a power cable, vhS tape recorders or more recently, dvrs and expensive equipment packages. in most cases, the images were fuzzy at best.

With today’s current technology the security cameras are iP cameras, have hd picture quality, and on top of that, intelligence. the cameras have processors much like a computer that run software in the camera. current model cameras can store up to three or four weeks of recording using an Sd card, removing the need of dvrs. the software to manage the cameras is web-based, allowing you to store a copy of the information safely away from anyone who may steal or destroy the physical copy in your store. the recorded

information is copied to an naS Storage device. you can now view the activity on any of the cameras from a computer at home or from a smart phone. using the intelligence of these new cameras, software companies can design software to integrate with your PoS system. no more searching through hours of tapes or dvr recordings to find the activity. now, viewing a sales transaction can be as simple as going to the invoice in your PoS system, clicking the mouse and watching a video player pop up so you are viewing the entire transaction. do you have a drill missing in your tool department? Go back a day or two until you see the drill, draw a box around the drill with your mouse, and the

software will then search forward until it finds when it moves. If that customer put the drill back on the shelf, the search goes on until the next time it moves—ultimately you will find your shoplifter.

Suspect someone of shoplifting? Maybe you did not catch them on this visit to your store. Go to the security recordings (usually the camera on the front door to get a good facial) and draw a box around the suspected shoplifter’s face with your mouse. Copy the face to a storage area and the next time this customer walks into your store, the camera at the front door will recognize the potential shoplifter’s face. The security software can then send a TXT message to alert your staff.

The camera at the front can do even more. The software will allow you to draw a line on the floor about six feet from the door. At the end of the day, the camera can provide a count of how many customers came in and out of your store.

Even better, let’s say you are running a weekend promotion. Your staff has put together an endcap display and the ad has been run. With the camera covering the endcap area, you draw a box on the floor in front of the endcap with the mouse and set the parameters. At the end of each day you can get a count of how many customers spent more than five seconds looking at the display. You can then match that to the

number of items sold to view response to the ad.

These systems can also help your customer service staff be more effective. If there is an area where a customer has been looking at product for more than three minutes and no one else has entered the area, the camera system can send a TXT message to alert staff, allowing them to quickly provide assistance.

Most good camera software packages can use both the new HD cameras and with a converter, the old analog cameras. You should be able to mix and match. With the ability to digitally zoom on multiple areas, one camera can cover a broad view of your checkout area and at the same time can zoom in on each individual cashier for more detail.

Security camera systems can be a lot more than just security cameras. They should integrate with your point-of-sale system. Security cameras have always been a great preventive tool for theft, both internal and external.

IP-based intelligent HD cameras can now provide you with the analytics to better manage your business. Take the time to investigate this new technology. n

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

IN THE NEWS

NEW STORES:

■ Rick and Dorothy Alspaugh have acquired Ace Hardware of The Woodlands in The Woodlands, Texas.

■ McCoy’s Building Supply is opening a new store in Tyler, Texas.

■ Harold and Telena Brox opened Table Rock True Value in Kimberling City, Mo.

■ Steven Burggraf opened Burggraf’s Ace Hardware in Duluth, Minn.

■ Spahn & Rose Lumber Co. has acquired McKlveen Lumber in Newton, Iowa.

■ City Mill opened a new store in Ewa Beach, Hawaii.

■ Kenny Queen Ace Hardware opened in Kenova, W. Va.

■ Dan and Patty Harris are opening Ace Hardware

store in Lemont, Ill., in December.

■ DIY Supply opened in Ottawa, Kan.

■ B&R Building Supply opened a second lumberyard in Hope, Ariz.

KUDOS TO:

■ Trevor True Value Hardware in Moline, Ill., is celebrating its 125th anniversary in 2012.

■ Mound True Value in Mound, Minn., is celebrating 25 years in business.

■ The Garber family is marking the 60th anniversary of Garber Building Supplies in Staten Island, N.Y.

■ Gadberry’s True Value Hardware in Corning, Iowa, is marking 40 years in business.

■ Logan Hardware was voted DC’s Best Hardware Store in the Express’ Best of 2012 Contest.

■ Avery True Value Hardware in Newland, N.C., is marking 50 years in business.

■ Kraus Department Store, a PRO Hardware store in Erie, Pa., was honored with the “2012 Commitment to Erie” award for its commitment to customers, the region and its employees.

■ Thurmond’s True Value in Lexington, Mass., celebrated its 75th anniversary.

■ Chuck Bankston of Bankston Lumber in Barnesville, Ga., was elected 2013 chairman of the National Lumber and Building Material Dealers Association.

■ George Senkler, owner of Concord Lumber in Littleton, Mass., was honored with the 2012 Lifetime Achievement Award from the Massachusetts Retail Lumber Dealers Association.

■ Ortmeier True Value in Beemer, Neb., and Wilke’s True Value in Kearney, Neb., were both honored with the 2012 Community Gem award by the Nebraska Retail Federation.

■ Ace Hardware Corp. named six winners of its “Coolest Hardware Stores on the Planet” Award for 2012: Hillcrest Ace Hardware in San Diego, Mountain Hardware and Sports in Truckee, Calif., Crowder Bros. Ace Hardware in Lakewood Ranch, Fla.; Simpson Ace Hardware and Sports in Sumter, S.C.; Intown Ace Hardware of Decatur, Ga.; and Bomberger’s Store, Lititz, Pa.

Click on video profiles below:

■ Hillcrest Ace

■ Crowder Bros

■ Intown Ace

PEOPLE ON THE MOVE:

Ron Beal

■ Ron Beal will succeed Bill Fondren as chairman of the board of Orgill Inc. Fondren is retiring from that role but will remain on the Orgill board. Orgill also named Brett Hammers chief merchandising officer, Jeff Curler vice president of advertising, David Mobley senior vice president-sales, Todd Nowels vice president sales-western division and Myron Boswell vice president salesmiddle America and Canada division.

■ Chris Locklear was named general manager of Rommel’s Ace in Exmore, Va.

Rich Wuerthele

■ Newell Rubbermaid appointed Rich Wuerthele as president of the company’s new Tools business segment.

William Burke III He will report to William Burke III, the newly appointed COO.

WHOLESALERS

IN THE NEWS:

■ Orgill Inc. announced the retirement of two executives at the end of the year: Chief Merchandising Officer

Ken Post and Vice President of Advertising

Steve East.

■ The Ann & Robert H. Lurie Children’s Hospital of Chicago presented the “Champions for Children’s Corporate Award” to Ace Hardware Corp., which has raised over $6 million for the hospital.

DO IT BEST MARKET RECAP

Do it Best Corp.’s President Bob Taylor discusses the co-op’s financial performance and highlights of the October Market.

Ace President and COO

John Venhuizen accepts the “Champions for Children’s Corporate Award.”

■ Do it Best Corp. reported sales of $2.68 billion for the fiscal year that ended June 30, 2012, a 11.2 percent increase. The rebate rose 9.4 percent to $115.7 million.

■ Five Do it Best Corp. members received rebate checks in excess of $1 million each

during the annual shareholders’ meeting at the co-op’s October Market.

Pictured here are (L-R): Eric Sachse, Meek’s The Builder’s Choice; Bob Taylor, president and CEO, Do it Best Corp.; Bob and Donna Plummer, RP Lumber; Scott Parker, Parker Do it Best Lumber; Matt Mullin, Alamo Do it Best Lumber; Dennis Reed and Dan Herrmann, Runnings Fleet and Farm; and Dan Starr, executive vice president and COO, Do it Best Corp.

OTHER NEWS:

■ Handy Hardware is closing its distribution center in Meridian, Miss., at the end of the year.

■ Bain Capital Partners has signed a definitive agreement to acquire Apex Tool Group, in a deal that is expected to close in the first half of 2013.

■ Stanley Black & Decker is selling its hardware and home improvement group of builder’s hardware, locksets and plumbing fixtures to Spectrum Brands for $1.4 billion.

CLICK TO PLAY

■ Midwest Rake Co., based in Warsaw, Ind., has purchased Seymour Mfg. Co.

■ Epicor Software Corp. has ensured that more than 1,000 Epicor customers were protected during the course of Hurricane Sandy. Epicor has provided a “depot service,” which means they provide spare registers, replacement servers and field service to POS systems. As flood waters recede and power is restored, Epicor anticipated a heavy volume of service requests due to power surges corrupting drives and water damage.

“Our focus is getting customers back online and their businesses operational as soon as possible when disasters strike—it’s our number one priority,” said Mark Fair, vice president of customer services for Epicor.

Located on Long Island, Cross Bay Hardware was hit hard by the powerful winds and penetrating waters of Hurricane Sandy. “We’ve been an Epicor customer for over 20 years and cannot say enough about the LPS support we receive,” said Mike Pecoraro, owner of Cross Bay Hardware. “The devastation of this storm has been incredible and the assistance we have received from Epicor has been the main

reason our businesses are still up and running.”

“We will continue to help our customers get back in business over the next few weeks as the remaining affected areas get power and network services restored,” said Fair.

IN MEMORY:

■ Glen Pieczynski passed away October 5 at the age of 71. He operated Linden True Value in Linden, Mich., with his wife Judy for 32 years before selling the business in 2009.

GET THE FULL STORY:

■ Deer runs loose at Doyle Hardware in Scranton, Pa.

Click here

■ Gulfport Hardware store owner accused of torching his own store.

Click here

■ Bookkeeper charged with embezzling $30,000 from Sandpoint Building Supply in Idaho. Click here

■ Horn’s True Value in Sayre, Pa., is celebrating 100 years in business in 2012. Click here

■ Cape Cod residents unite against Lowe’s store. Click here

■ Landmark hardware store burns in Delaware. Click here

JANUARY 2013

Handy Hardware 2013 Spring Market

January 31-February 2, George R. Brown Convention Center, Houston

House-Hasson Hardware Spring Dealer Market

January 17-19, Gaylord Opryland Resort, Nashville, Tenn.

Northwestern Building Products Expo

January 14-15, River’s Edge Convention Center St. Cloud, Minn.

United Hardware Spring/Summer Dealer Market

January 4-6, Minneapolis Convention Center, Minneapolis

FEBRUARY 2013

Ace Hardware Spring Convention & Exhibit

February 21-23, Ernest Morial Convention Center, New Orleans

Florida Hardware Spring 2013 Market

February 15-17, DoubleTree Hotel & Convention Center, Orlando, Fla.

Iowa Lumber Convention

February 20-21, Prairie Meadows Events & Conference Center, Altoona, Iowa

Monroe Hardware Spring 2013 Dealer Market

February 2-3, Cabarrus Arena and Events Center, Concord, N.C.

Northeast Retail Lumber Association’s LBM Expo ‘13

February 6-8, Hynes Convention Center, Boston

Orgill Spring Dealer Market

February 21-23, Orange County Convention Center, Orlando, Fla.

True Value Spring/Rental Market

February 23-25, Georgia World Congress Center, Atlanta

Wisconsin Lumber Dealers Convention

February 5-6, Chula Vista Resort and Conference Center, Wisconsin Dells, Wis.

MARCH 2013

Blish-Mize Spring 2013 Dealer Market

March 22-23, Overland Park Convention Center, Overland Park, Kan.

Emery-Waterhouse Marketplace 2013

March 15-16, Rhode Island Convention Center, Providence, R.I.

HDW Spring Dealer Market

March 1-3, Jackson Convention Center, Jackson, Miss.

Hearth, Patio & Barbecue Expo

March 13-16, Orange County Convention Center, Orlando, Fla.

International Home & Housewares Show

March 2-5, McCormick Place, Chicago

LMC 2013 Annual Meeting

March 13-15, Anaheim Convention Center, Anaheim, Calif.

Offering Drive-thru COnvenienCe

The city of Worcester is a densely populated, urban area about 50 miles west of Boston. Real estate is at a premium, so Barrows Hardware sought ways to maximize every square inch. That’s what led the store to create a drive-thru offering.

Stretching the length of the building, outdoor shelves contain products such as bagged concrete mixes, potting soil and fertilizer. Empty sample bags of each product hang over the checkout counter.

After ordering inside, contractors or do-it-yourselfers then pull alongside the storage area and directly load their trucks—no carting heavy bags through a big-box maze.

The covered storage area at Barrows Hardware allows customers to drive up and easily load bulky products, such as concrete mixes and potting soil.

While customers can load bulky items outside in the covered storage area, inside they can select products from these space-saving displays of concrete and mortar mix bags, as well as lawn and garden bagged goods such as potting soil and mulch.

The bags of products are kept dry from the elements with an overhanging roof and safe from shrinkage with gates that can be locked on either side of the driveway.

Making YOur garDen Center StanD Out

One of the best ways to sell home improvement products is to help customers visualize how the products will look installed. Rio Grande Ace Hardware in Taos, N.M., decided to test that concept to help establish a niche in water gardening.

“We have developed a water garden category that has been successful. We built a fully stocked koi pond in our garden center to help sell some of our products,” explains GM Sean Walker. “We excavated a hole during

the pond-build so our customers could see how it’s done.”

Walker points out that their garden center is one of the biggest in the area with three acres of available space.

“Live goods are a great part of our seasonal business. The pond helps make us stand out,” he says.

This

Niche is BuilT oN ThiN ice

Family Center Farm & Home in Harrisonville, Mo., now offers a new convenience for customers—an Ice House. General Manager Bill Mannion oversaw the installation of the

Left Upper: General Manager Sean Walker is shown during the early stages of the pond-build.

Left Lower: The fully stocked koi pond at Rio Grande Ace Hardware helps sell water gardening products.

standalone ice vending machine in the store’s parking lot a few months ago.

The packaged ice industry has annual retail sales exceeding $4 billion, and hardware retailers might as well get their share of those sales. Ice House America (www.icehouseamerica.com) offers three Ice House models ranging from $35,000 up to $150,000. The smallest can produce 115 10-pound bags per day, while the largest can produce 19,200 pounds of ice per day.

The Ice House at Family Center Farm & Home.

Behind the

Numbers

$949.9 Million

Revenues reported by Ace Hardware Corp. for the third quarter of 2012, up 4.2% from the prior year. Net income doubled from $17.0 million to $34.3 million.

4,078

Number of Ace Hardware stores in the United States at the end of the third quarter, after the co-op added 32 new stores and cancelled 32 domestic stores in the period.

$448.9 Million

Revenues reported by True Value Co. in the third quarter of 2012, up 0.7% from the prior year. Net margin decreased 14.9% to $15.4 million.

$8.6 Million

Do it Best member purchases during the Friday night Sneak Peek sales event at the coop’s October Market.

$115.7 Million

Amount of rebate handed out to Do it Best Corp. members at the co-op’s October Market, up 9.4% from last year.

$586 Billion

Holiday sales projected by the National Retail Federation this year, up 4.1% from last year.