Hardware Connection Winter 2011

STRENGTHENING THE TWO-STEP CHANNEL

THE GRADES ARE IN

Sacrifice Nothing

Like the co-ops, Orgill offers all the industry’s top brands at prices that allow you to compete with anyone in the market. Orgill also offers a complete range of marketfocused retail services such as rental, commercial industrial supply, MRO, farm and ranch. Additionally, Orgill has industry-leading pricing, store design, assortment planning and advertising programs available to every customer.

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At Orgill, you pay for nothing that you don’t think is right for your business. There is no national advertising fee and no programs are mandatory. We work with you to figure out how to make your business more profitable and you only buy the services and products you want.

Keep Your Money Where it Belongs

Orgill, Inc. is a privately held company. Our customers are not investors or owners of the company. We feel it is important that you not invest in your distributor. We want you to keep your money where it will do the most for you – in your business.

Service is Our Specialty

Because you are a customer with Orgill, we go out of our way to meet your needs. Whether that means having a sales representative visit you on a regular basis or providing you with direct access to anyone in the company. We are here to serve YOU.

Legislation That Actually Benefits Independent Businesses

By Chris Jensen

As an entrepreneur myself, I understand how difficult it is to start and grow a business when banks are reluctant to lend money. Having a dream is one thing, but financing that dream is where cold reality often hits home for the budding entrepreneur.

The House of Representatives recently passed a crowdfunding bill that would allow start-up small businesses to raise up to $1 million in capital without having to abide by cumbersome federal securities regulations. Individuals would be allowed to invest no more than 10 percent of their incomes. So if you wanted to open a hardware store you could borrow money directly from your community, either through social media or from crowdfunding sites such as Kickstarter.

One of the distinct advantages the big boxes and large chains have had through the years is the ability to go to Wall Street to raise funds necessary for expansion. This legislation does not level the playing field for independent business owners, particularly as long as municipalities continue the practice of throwing tax breaks and incentives only at large

chains, but it is a much-needed step in the right direction.

Study after study shows the best way to reinvigorate the U.S. economy is to support local, small businesses, the ones who have created two-thirds of net new jobs over the past two decades. When these small businesses flourish they not only create more jobs, but they generally don’t take these jobs overseas at the first sign of hardship.

Crowdfunding has been flourishing in Europe, because people have demonstrated a willingness to throw their support behind their neighbor. If communities truly want a local neighborhood hardware, grocery or department store, then here’s a chance for residents to step up as investors and ensure a local source of goods. If I’m a hardware retailer and I want to keep customers shopping local, then a smart way to do that is to make a financial bet on my fellow Main Street retailers. You could actually build a portfolio that’s not dependent on chains and conglomerates.

If you want to support the crowdfunding bill, go to this link: http:// tinyurl.com/7zfh9cz. n

By Tom Chasteen

Is All the Hard Work Worth It?

Recently I had one of my good friends and customers ask me why he sees my truck in front of the store at 8:00 and 9:00 in the evening. I replied that I’m usually trying to get caught up on things I didn’t get done during the day or projects I need to concentrate on without interruption. Mike looked at me confused and said, “You sure put in a lot of hours. Is it worth it?”

Mike’s question caught me a little off-guard. Although I’ve asked myself that question several times, (sometimes daily when things don’t seem to be going well) I had never had another person ask me that before. I replied to Mike, “Yes, I think it is,” and then we went on to talk about something else.

Mike’s question has stayed with me and my thoughts below may sound a little corny and strange to some people, but independent hardware retailers will be able to immediately understand and identify completely with my thoughts. Independent hardware retailers speak a special language that, unless you’ve actually been an independent hardware retailer, is difficult to understand sometimes. It’s like hitting your thumb with a hammer.

Unless you’ve done it before, you’ll never really understand the painful throbbing that will follow until you release the blood pressure under the thumb nail.

When pondering the question “Is it worth it?” I come up with many thoughts such as “It’s all I know,” “This is our family business,” “What else could I do?”, “I can’t disappoint my father,” “Who would hire me?” and “Could I earn as much money doing something else?”…And the list goes on.

But those weren’t the questions, the question was “Is it worth it?” For me the answer is without hesitation “YES,” because being an independent hardware retailer is not a job, it’s a lifestyle. It’s not about how many hours you put in compared with how much money you make, it’s not about achieving a superior return on my investment, and it’s not about the prestige of owning your own business. It’s all of those things combined, but it’s also about family, being a part of a community and helping people. In short, it really is a lifestyle.

Over the years we’ve all seen people either open a ground-up hardware

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the way i see it

store or buy an existing hardware store and be out of business within 12–18 months. There were undoubtedly mitigating factors, but there always seemed to be a common undercurrent that these budding entrepreneurs didn’t understand. Owning or managing a hardware store is a lifestyle that really requires a total commitment to be successful.

Like everyone else in this business I have bad days, sometimes bad weeks. I’ve had my share of disappointments and failures. For me there is nothing as bad as finding out one of your trusted staff members has been stealing from the business, or attending the funeral of someone who has been a part of your business (and extended family) for a long time. For me personally the lowest point was when my father died. I didn’t just lose my father, I lost my mentor, my boss, my business partner, my confidant and my best friend.

However, those tough moments are fortunately few and far between. Every day I get to work with a great group of people and the feeling of helping a friend/customer who sincerely appreciates your effort is hard to replicate in another career. Like the feeling you get when one of your customers drops off a cake or pie, or when one of your customers’ kids who you’ve watched grow up comes

home from college on break and stops in and says hello. How do you quantify the value of that? What’s the value when one of your customers moves away, comes back to visit and makes a specific trip to your store just to say hello and see how you are doing?

For someone who has never owned or managed their own hardware store, this may seem trite or like a scene out of Andy Griffith. But if you ask any independent hardware retailer they know exactly what I’m talking about. They’ve experienced the same feeling and can immediately identify with what I’m trying to describe.

I’m a third-generation hardware retailer and I can’t ever remember dealing with so many different issues that I have absolutely no control over than I have over the past five years. But even with all of the issues we’ve been through, I can honestly say I still have a great lifestyle. I really enjoy going to work every day and associating with a wonderful group of people, who for the most part appreciate it when we go the extra effort to be helpful.

So to all the Mikes out there who are wondering if it’s worth it I say, “It most definitely is!” It’s true, I do put in a lot of hours, but it’s who I am — I’m an independent hardware retailer. Just like Jimmy Stewart’s character in “It’s a Wonderful Life,” I simply can’t imagine doing anything else. n

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Hardware StorieS Amazing but True

If you have been in the retail hardware business for a few years, then you know your share of amazing stories. We’re guessing the stories below will remind you of a similar experience, so send your tales to chris@thehardwareconnection.com.

We sell pecans in the fall and ship them from our post office in the store. We will also crack the pecans for a nominal price in our cracking machine. One year, obviously not thinking, I put on the portable sign on the street: WE SELL CRACK AND SHIP PECANS. It only took an hour to make me walk outside and change the sign. Customers still come in and ask if we are back in the drug business yet.

Gary Johnson Home Ace Hardware, Columbus, Ga.

Sign posted on the salesfloor: “Unattended children will be given an espresso and a free puppy. Thanks kindly, Morgan Hardware.”

Larry Floyd Morgan Hardware Lavonia, Ga.

My favorite story is the woman who asked what was wrong with our potting soil for it to be so cheap. I replied that it was just on sale, but mentioned it might be a little damp due to recent rain. She looked horrified and asked, “Is it still good?”

Sally Verhagen Hardware Hank, Little Chute, Wis.

A young, visibly frustrated customer came in recently and asked if we had lefthanded nails. He said he was having real trouble driving nails in. We did not have any left-handed nails so we sold him a left-handed hammer.

Richard Filion Eldredge Lumber & Hardware, York, Maine

How’s Business?

NORTHEAST

Sales so far in 2011?

We’re up substantially, about 10 to 15 percent so far this year. We had a huge snow hit us in the winter, and that may be one of the reasons.

We didn’t run out of products and we got known for that.

What’s the trend in the past few months? It’s been a little up and down, but we’re still about 10 percent up in the last month.

Any new initiatives this year? We are now using the True Value circulars and they seem to be doing a better job than just direct mail. We’ll do four or five throughout the year. But I think it helps customers realize that the big-box prices aren’t much better than ours. People are finding that we have the products, service and advice.

Jim Ertzmann • South Hills

True Value Home Center Pittsburgh, Pa.

Sales so far in 2011? We were up a little this year. The local colleges are expanding, putting on additions, so we have benefited from that. People have been putting off buying for the past couple of years, and I think it’s got to the point where they can’t wait any longer. They have to paint and caulk and repair their homes. There are people out there who still have money and they’re looking to spend.

Trend in past few months? Sales have been about the same as throughout the year. Steady, but a little up.

New initiatives this year? We took up the Benjamin Moore line of paint and that’s been doing well. It’s like a car brand, where certain people will seek it out, and that’s helped our paint department. Now, paint is a very strong category for us and a step up from what we’ve had in the past.

New items or niches selling well? Basic hardware and rental is very strong. One thing that’s surprised us is the bouncy-house rentals for birthday parties. Seems like whenever there’s a birthday party for a kid, there has to be one of these bouncyhouses there.

How have you cut expenses? We’ve always been pretty conservative. We’ve saved money by monitoring damage on our big rental equipment, such as high lifts and backhoes. Sort of like how the rental car companies have checklists for scratches and dents, we give the equipment a once-over with the customer. We’ve found that customers will be more careful with the equipment and we don’t have to spend as much to repair or replace.

Bill Evans Evans & White Ace Hardware, Potsdam, N.Y.

Jim and Teree Ertzmann

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Bill Sloan Sloan’s of Madisonville Madisonville, TN

How’s Business?

SOUTH

Sales so far in 2011? Good. We’ve been up pretty much every month — about 10 percent in some months and only 8 percent in others. People are fixing and repairing instead of replacing, so they’re coming to us. They’ll do what they can to fix a toilet or dishwasher before buying a new one.

Trend in past few months? The past few months have been rather good with 10-plus percent increases. New initiatives this year? Part of the reason for the increase for the year has been because we’ve taken on the Stihl power equipment line. We have also brought in Sears Craftsman hand tools. We have started offering the new Ace line of Clark + Kensington paint, and that seems to be doing well. From all the TV advertising, paint and primer in one is a hot item. It’s what people are asking for.

What are you doing to stay price competitive? I try to keep retails in line with competitors, but the cost of products keeps going up. Certain categories have skyrocketed. Anything with magnets seems to have quadrupled in price. Certain ingredients in magnets have quadrupled in cost. I have the big-box websites opened on computer 24/7 and continually check prices on pricesensitive items. The paint and lawn and garden categories are very price sensitive. I have seen the big boxes raising prices, too.

Bruce

Phillips Crowder Brothers Ace Hardware Lakeland, Fla.

WEST

Sales so far in 2011? We’re down by about 12 percent for the year. The main reason is the local economy. We have high unemployment and the methane gas boom in the last few years is drying up. I think there’s a lot of money in the area, but people are holding on to it. They’re just not spending money now. I think we’ll survive, but it’s pretty bleak. Trend the past few months? It’s about the same throughout the year. But we’re still down.

How have you cut expenses?

We have consolidated some jobs, but haven’t eliminated any. We didn’t replace after attrition.

What are you doing to keep customers despite the downturn? We’re really working customer service. We’re making sure we greet customers at the door and spending more time helping them. We’re also trying to maximize our rewards program.

Other ways you reach out to customers? While we have reduced our advertising a little, we still maintain

radio advertising. That seems to do really well for us. I do a live remote three mornings a week and run a flight of ads. During the three or four minute remote, I talk about specials, bargains or sales. I’ll also talk about what folks are likely doing, such as fall painting projects. I’ve done it for 17 years and people here really seem to respond to it. When people come in the store and hear my voice, they recognize me as the guy from the radio.

Kurt Smith Sheridan Commercial True Value Hardware Sheridan, Wyo.

How’s Business?

SOUTHWEST

Sales so far in 2011? Thankfully, they have been okay. We’re a little over last year, maybe 5 percent. We haven’t had to let anybody go and that’s a good feeling.

Sales trend the past few months? We have had an uptick in the past 90 days. The interest rates are low and people are finding funding for their projects. We’re primarily a stick yard and do mostly commercial business, so we are seeing construction and renovation business pick up.

New initiatives this year? We’re making changes with our computer and point-of-sale systems. We have also started an email newsletter for customers. We include updates about the market and helpful tips and links. We started it as a way to stay in touch with customers on our new items and availability of products. Several customers have said the newsletter is great, especially the market reports. We have a sign-up sheet at the front counter, and customers can put down their emails for the newsletter. There’s also a link to the newsletter from our Facebook page. What other ways do you use Facebook? We’ve had it up for a couple years. And we don’t make it all about us, but about our community as well.

We’ll post things about state football games and rivalries.

New items or niches selling well? Strangely, hats and stocking caps. That started last year when we had a very cold winter and 20 inches of snow. We have also picked up various composite products, such as frame savers that have a Trex® bottom leg to help withstand rotting and thresholds that have a composite underlayment to prevent rot. These aren’t necessarily new products but have definitely been selling more as an upgrade item for doors and moulding.

How have you cut expenses? We try to be as efficient as possible. For example, we group orders for delivery and will pick up something on the way back. We have a map that divides the city and a color system to group orders together.

Whitney Stevens M&M Lumber Tulsa, Okla.

MIDWEST

Sales so far in 2011? Sales have been okay, steady and holding their own. They’re climbing in some areas.

New initiatives this year? We have opened up a site-to-store feature that True Value was offering. I have used that myself in other stores and thought it would be a service customers would like. No one in the area is doing it, and with the holidays coming up maybe we’ll get a little more business because of it.

New items or niches selling well? We try to bring in new products all the time. We have started selling a

How’s Business?

line of ham radios and cell phones. No one else in the area sells those, and it’s been successful. Right now, winterizing products are selling well. We have also put in a Pepsi cooler and sold pop and bottled water. When people come in here on lunch breaks, they’ll pick those up. Humidifiers and filters are also doing well now.

How have you cut expenses? We have looked so save money on our heating bills. We have added insulation and used high-efficiency light bulbs.

Marilyn Swift • Swift True Value Hardware, Houghton, Mich.

From Tom’s Shop hardware products review

If you missed the fall hardware show season, you missed some really great hardware shows. The retailer attendance and activity was almost “like the good old days.” I was both encouraged and invigorated listening to fellow retailers talk about their businesses and the opportunities they see down the road.

I discovered some items that could make great gift items for the upcoming holiday season. Our store is

By Tom Chasteen

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

located literally on an island in the Florida Keys and our market is both small and seasonal, so we’ve avoided the traditional Christmas decorations business that other hardware retailers pursue. Instead, we try to find items that if they don’t sell during the holiday season they still have a place in our product offering the rest of the year.

product #1: dual hi-powered adapter | original power

Original Power has come out with a very useful product that is an electronic charger that can charge up to two separate iPads, iPods or iPhones at the same time as well as other products that can be charged with 2.1 amps and be plugged into one of the two USB plugs at the bottom of the charger. The Dual Hi-Powered Adapter is smaller than a package of cigarettes and comes with an extralong, six-foot charging cable that is

nice for the ipad, iPod or iPhone. The packaging is very well done and in our tests it consistently charged a 16GB iPad in two hours or less.

The retail price for this item is in the $39.99 range. For more information go to www.originalpower.com.

From Tom’s Shop hardware products review

product #2:

Bench cookie™ | Bench dog tools

Bench Dog Tools is marketing a great product if you sell a lot of finish woodworking products or to serious hobby enthusiasts. It’s called the Bench Cookie™ and it’s just a little larger than a hockey puck and the same shape. The Bench Cookie has non-slip and non-scratch surfaces on each side, so if you are working on a finish product it won’t slip around on the work bench and it won’t scratch the surface of the item you are working on.

Bench Cookie Cone, which snaps on to one side of the Bench Cookie to create an inverted cone shape for when you have finished the project and are ready to stain or paint the finished piece. Both items

It comes packaged in a nice clamshell package and a shelf holder for the four Bench Cookies in the package. Bench Dog also offers the Bench Cookie packaged individually as well. They have developed an accessory called the

would make excellent gift items for the serious DIYers.

The retail for the “cookie” is in the $19.99 range and the cones are in the $4.99 retail price range. For more information go to www.benchdog.com.

From Tom’s Shop

hardware products review

product #3:

wreNch

aNd socket sets | Grip-tite

Grip-Tite has come out with both wrench sets and socket sets that are designed to grab on to both regular bolts but more importantly rounded off bold heads. Remember the old plumber trick of using 16 penny cut nails jammed into a pipe that had broken off when you don’t have an easy out available? Well, Grip-Tite has taken that concept and incorporated it into their wrench and socket sets that really do work. In our test we learned you have to be careful that you don’t apply too much pressure and break the bolt head off,

which will really ruin your day! Both the wrench set and the socket set will fit both SAE and metric bolt sizes from 7/16 (11mm) to ¾ (19mm) bolts. This is another item that if you don’t sell all of them during the holiday season it would be a complement to your tool department.

Retail price for the wrench set is in the $49.99 range and the socket set is in the $24.99 range. For more information go to www.mygriptite.com.

product #4: haNdy Bucket Builder | Bercom

The folks who brought us the HANDy Paint Pail have done it again with the HANDy Bucket Builder. This product is so simple it’s cool. The HANDy Bucket Builder is a plastic lid that fits on an empty five-gallon bucket that is molded to hold a 2x4 either flat or on its edge. By taking two HANDy Bucket Builders and two six-foot (or whatever size you want) 2x4’s you can create a very stable sawhorse or a bench you can sit on. This is a great item for anyone who needs a temporary sawhorse to work off or sit on. The best part is there aren’t any moving parts and you can carry your tools or parts in the buckets.

You can also use another set of the HANDy Bucket Builders to stack two fivegallon buckets on top of each other and raise your work surface to work bench height. When you’re finished just stack every thing together and store it in the corner.

The retail for the Bucket Builder is in the $9.99 range. For more information go to www.handypaintpail.com.

Gardus, the same company that developed the LintEater line of products, has now come out with Vertalok rotary gutter cleaning system. Vertalok takes the same concept of using a cordless drill to drive the drive shaft within the aluminum pole to rotate the nylon bristle brush that removes the leaves and dirt from your gutter. Unlike many similar gutter-cleaning products, this one is light and easy to maneuver standing flatfooted on the ground.

Not only can you hook up your cordless drill to drive the power brush

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it also comes with accessories to use with your garden hose to flush out any remaining debris you may have missed. It also comes with an adapter to attach to your digital camera, so you can make sure you got the gutter clean without getting out a ladder to check. Vertalok has aluminum extension poles in the event your gutters are higher than normal. For more information go to www.gardusinc.com.

Assortment

n thE Continual Effort to get more of the right stuff into inventory, most stores try to add a few new items now and then. these new items may create some interest and hopefully create new sales. although adding a few new items to your inventory on a weekly basis is a good thing, sometimes it is just not enough. over time your inventory can become stale and to prevent stale inventories, you need to look at whole categories as a unit and make

large-scale adjustments within those categories. Periodic category management is the only way to keep your whole inventory current and productive.

Category management is a daunting task to do well by yourself, since the most important job you have is taking care of customers. Even if you know it is important, how do you find the time to review thousands of items, compare sales, provide new space, eliminate old items and replace them with new highly salable products?

LINE

Planning Made Simple BOTTOM

By John Franklin

Central True Value in Moncks Corner, S.C., remerchandised the entire store earlier this year. Sporting goods was downsized to accommodate more room for core categories such as decorative hardware. Shown here are (front l to r): Mandy Scott, Kayla Lawrimore. Back l to r: Robert Spann, Ryan Wiggins, Joel Turnbow. See the Dealer Profile on Central True Value beginning on page 38.

Wouldn’t it be great if you could just get a copy of a report that showed all the best-selling items in your local warehouse, or even better, a report that showed what you should carry in almost every section of your store? If you got this report you could go line by line and compare it to your existing inventory.

You would be able to get a good idea of what products were selling in the other hardware stores in your geographical area. You would also be able to see what you had in inventory that no one else had.

Today, we have the luxury of computerized inventories and this magical report now exists in many wholesalers’ distribution centers. It is normally referred to as an assortment planner.

Every hardware store needs to review categories of product periodically and it is really tough to do this on your own. However, many retailers buy from a co-op or wholesaler that is in a position to collect data from hundreds or even thousands of stores and a large number of manufacturers

Sunshine Ace in Naples, Fla., underwent a major remerchandising in 2010. The new assortment plan entailed expanding core categories and adding new product lines to make sure the store offered customers more of the products they need to complete projects.

as well. The data they produce is often the best available to an individual retailer.

Although an assortment planner has much of the work done in digesting sales data, each retailer still must spend some time reviewing the recommendations and making the actual physical implementations in the store.

When you do actually sit down to review your assortment planner, compare all new items carefully and avoid carrying multiple brands of the same product. If space allows, give your customers a “good, better and best” choice rather than a “good, good, good” choice.

If your primary wholesaler’s distribution center is a long ways away from your store, be reasonable when selecting items based on your location and climate. Some categories have little or no seasonal fluctuation, but some have huge seasonal swings.

bottom line

Part of assortment planning is reviewing older, slow or non-selling items. Try not to be stubborn on slow sellers. If you have items that you have carried for some time that are slow sellers, consider a change and don’t hang on to them for sentimental reasons. If you have some items that sell marginally, consider running a tracking history on them. You may find that you have just one or two customers buying this product. Rather than blindly dropping an item and replacing it with another, consider contacting these customers and asking them if they would consider a substitute item. They will probably love the input. Monitor all new items over time and weed out the failures to make room for more successful items. Although good previous sales history puts odds in your favor, keep in mind that they are still odds, not guarantees. Just because you sold an item well last year doesn’t guarantee you will do the same this year.

Setting Order Points

Let’s discuss how to set order points on new items with no history. First, you must determine if the item has a minimum sales threshold like table legs that need a minimum of four or clothesline pulleys and shelf brackets that need minimum sale quantities of two.

Next, set a reasonable level to start. Once set, monitor the new items every week. If the item sells out within a week,

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raise the order point. If it sells out again, raise it again. Keep doing this each week until you don’t sell out. In this way you will quickly find the correct order point. An order point of 1 may get you 52 sales a year, but a higher order point may sell 200. You won’t know what sales are possible unless you give it a chance to find the real order point.

On review, you should also lower order points where sales history cannot justify your initial order points. I would run a sales report with order points and then sort the report from both ends. Look at only the extremes where your order point is either too big or too small. Then manage by exception to fix the big problems while leaving the bulk alone. You do not have to tweak every single item indefinitely.

A note about pricing. To make the job easier in the beginning, go with your wholesaler’s recommended retail. After you get everything else set up, then go back and review your prices against your competitors to see where you can raise prices and where you must lower prices.

Remember that when you add a new item to your assortment, it may well be an item carried by one of your competitors. If your customers are currently buying this item from your competitor and you want them to buy it from your store, you must be close on the price or your new item will simply fail. Your customers know the price your

competitor is selling it for now, but you don’t. Be careful.

Planning Physical Changes

When you add a hundred new items to a gondola you need to have some idea of the space required to properly set it up. To reduce confusion and prevent a big mess in you store, consider doing just one or two categories at a time so you can devote the necessary manpower to get the job done quickly.

This is a necessary time to weed out non-productive items. Get them off prime shelf or peg space and onto a clearance shelf at a reduced price. You need open areas to add new items. Then and only then will you will have enough room to add new and potentially more productive items.

If your store layout allows for gondola expansion by raising the height or narrowing the aisle width, consider yourself lucky. Most stores are already maxed out. However, even if you do not have a lot of extra room, the process will still improve your productivity.

Try to get dating. Most suppliers offer programs for large assortments with future payments that help ease the initial expense. Consider outside help as well. Depending on your staffing at the moment, implementing a large number of category changes may require the need for help from a visual merchandiser.

Simulated Windows

Handles

Hinges

How successful are assortment planning projects? During the last 10 years I worked for a retail chain of seven stores, we did about 100 category assortment changes. We typically did three to five categories per store every three years. I can say that each and every one of these 100 assortment changes was well worth the work. Each category we fine-tuned produced a considerably better rate of increase than the average whole store increase for the period after we did the change. Some of the department and category changes we did resulted in huge sales gains.

The bottom line is this: done well, assortment planning can be the most powerful tool you have in your store to increase sales. You should set up a program where you do an assortment plan in each department every other year or so. This approach may be especially helpful in seasonal categories.

The reason assortment plans work so well is because they deal with both good and bad producers. If all you do is routinely remove slow sellers, you quickly end up with empty peg space that generates no sales and an out-of-stock look. If all you do is add new items, you end up with an overly crowded store that is cluttered with a lot of non-productive product. Properly done, an assortment plan helps you replace slow sellers with good sellers at the same time.

How to Carry It Out

There are several effective ways to work on a field assortment plan. One method is to download the assortment plan into your store system and run a report that compares the items on the plan with those currently in your inventory. If you cannot do this, some computer systems may allow dropping the store inventory and the field assortment plan into another separate program, like Excel, and then comparing the two.

A third method is to just sit in front of two computers and work line by line comparing the plan with your current inventory. If this is your only choice, then get your wholesaler’s field staff to help you.

For example, if we were planning to do a 12-foot planogram of lawn and garden supplies, we would bring up the current plan on one computer and then review the plan line by line with the store system. We would enter every code in the store computer. If it was already a stock item, we would notate the field file as such. If the item was not currently in the inventory, we would notate the file as such. This goes quicker than you might think.

However you get your data, what you must create are three separate product lists. The first list you must have is a list of all items in “both” the assortment plan and your current inventory. A second list must be all items that are in the “plan

only” but not currently in your inventory. The third and final list you need is the list of all items in your current “local only” inventory that are not on the new plan.

The first list, the current stock list, is the easiest. You already have the items, so just blow them off the field order report, unless you are getting really good dating and can use a reorder.

The second list takes a bit more analysis. As we said earlier, before you order a bunch of new items make sure that you do not have a similar current item.

The last list, your “local only” assortment of product, needs to be reviewed carefully. If you have additional space available above and beyond what is required for the new planograms, you should consider carrying additional items on this list that are good sellers and are not duplicates. However, I am sure you will find that there are a bunch of dogs on this list that need to be let go.

Here is where pre-planning helps. Once you have this list, and before you get the new product delivered to your store, you should work to reduce the stock on this list. You need the space, so you may need to reduce the price on some or all of these items. It may help to move a lot of this product to a clearance endcap to liquidate while you are waiting for the new goods to arrive. Just don’t wait until you get a huge pile of new stuff and just toss this stuff in a box somewhere when you run out of room.

Don’t forget to order peg hooks and other display items and have them ready before the arrival of the new assortment. Planned well, it makes for an easy job.

If you haven’t done a category management review in a while, talk to your wholesaler about current assortment planning information. Then you can begin to fine-tune your inventory for sharper results. Most wholesalers have experienced field staff available to sit down with you and help you do a thorough job with a category review. This may be your first one, but the field staff have probably done many and usually have a good idea how long it will take and how much help is required. Done properly, a good assortment plan will not just produce results, it will get noticed by your customers. They won’t know exactly what you did, but they will know you did something and they are apt to share positive feedback. And what retailer doesn’t love getting that? n

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

Time for a

Kevin Housand

Central True

Value Hardware

Moncks Corner, S.C.

The Destination True Value format places an emphasis on promotional endcaps to promote a competitive price image.

FreshLook

Central True Value Hardware , which has been owned and operated by the Housand family since 1976, underwent a total store makeover in early 2011 by adopting the Destination True Value format. With the housing market dried up and pressure from big boxes mounting, President Kevin Housand wanted to be proactive to make his home center more shoppable.

Salesfloor square footage: 25,000 sq. ft. salesfloor with 64,000 total sq. ft. under roof including lumberyard and garden center.

% Sales Pro vs. DIY: 85% DIY and 15% pro. That’s shifted about 10% more toward DIY.

Number of employees: 50

Top core categories: Plumbing and lawn and garden. Most successful niches: Rental and sporting goods.

Dealer Profile

What made you adopt the Destination True Value format?

We had not done a significant reset since moving into a new building in 2001. The store looked a little shopworn, we were constantly trying to manipulate inventory and it didn’t always look robust.

Store lighting was also improved? We got poor advice when we built the store and it never measured up to what it was supposed to be. Our old metal halide fixtures were designed 12 years ago for 100 foot-candles and we had half that. We replaced with T-8 fluorescent fixtures that produce more lumens and it’s much more effectively distributed. Now we average 82 foot-candles.

How did you approach the assortment planning process? This was less of a chore for us than other retailers, because we’re able to max out all the True Value planograms. We had to decide what was underperforming and where to beef up. We do a good job of cleaning out dead inventory on a regular basis, so rather than making a lot of changes we were mainly updating to the latest assortments from True Value.

What categories were given more and less space? Sporting goods got downsized significantly so we could enhance key departments such as outdoor living. We relocated hardware,

Above: Kevin Housand (center) operates Central True Value Hardware with his sister, Lynn Evans, and brother, Greg Housand.

Central True Value features a garden center and drivethrough lumberyard.

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.

electrical and sporting goods to facilitate more lawn and garden shelf products. No new categories were added and we didn’t increase our SKU count. One of the assortments we increased was hitch and boat trailer lights. We now have a lot of LED trailer lights that are much brighter and sportier.

Above Left: Wider aisles make the store more customer-friendly, while decorative hardware is now a dominant department.

What were the biggest challenges of the remodel? You can only do a remodel during certain times when it’s slow. Our spring volume picks up March 15, so we knew we had to be finished by then. We had time to put a polish on everything for a grand reopening April 15-16.

What impact has the remodel had on your business? We continue to get positive comments from customers and the common theme is that we’ve got more stuff and it’s easier to shop. We did make it easier to navigate by making the aisles wider. I can’t tell you we’ve seen a marked increase in sales — we’re a fraction ahead in sales — but we feel strongly that it’s prevented further erosion of sales. Margins are up 1-1.5%.

Did the remodel help you attract more female customers? We believe

Above Right: A new emphasis has been placed on customer service standards expected of every employee.

it has. We’re getting very positive comments from female customers. They like the décor package and the fact it’s easier to shop and the presentation of product is better. Softer touches are more appealing to women, but our male customers have enjoyed the different placement and commented that we have more than we did before.

How do you build your store brand identity? You’ve got to be involved in the community and I don’t just mean me. We’re very involved with Habitat for Humanity and the American Cancer Society’s Relay for Life. We make our storefront available for community events and fund-raising efforts. We also produce our own circulars, which allows us to tailor any promotion to position our store uniquely in

the market with products that can only be purchased here. The True Value Rewards program helps us establish some loyalty. The store has been around since 1950 and in my family since 1976 and we make our brand statement every time someone drives by our store.

What are biggest challenges facing your business? It’s the same for us as everyone — macroeconomic conditions. Health care is a big concern. We are currently paying 90% of premiums for staff members — that’s a lot of money and it’s only getting worse. I can’t go to my staff and tell them they’ve got to pay more when they’re seeing their other living expenses go up. We also struggle with the age-old perception that we’re higher priced because we’re an independent. Our size mitigates some of that.

What’s key to your garden center success? We’ve got people who know product and can advise customers and we’re always trying to identify what’s not in the big box. We buy higher-quality plants and only use qualitydriven sources.

How do you ensure customer service stands out? We have a customer service makeover going on now and I’ve already met personally with half our staffers to emphasize our standards and answer any questions. We

The store remodel created more space to devote to outdoor living products.

tried to define what customer service means at this store so it can be measured and objective. Every decision on the salesfloor has to driven by the customers we are serving on the salesfloor. Every customer must be greeted and offered assistance. We will recommend any items they need to complete their project but we won’t sell them things they don’t need just to boost sales. The telephone will be answered promptly. I also specified some phrases we won’t use like “That’s not my department” or telling the customer they have to do something like “go see Larry.” That’s not the type of impression we want to leave them with.

If we don’t have something then we should be offering special order as a customer service. Employees say they get as many as two requests a day for products we don’t have, so that’s as many as 200 a day, which might amount to $300,000 of special orders a year.

How do you approach competing against the big boxes? We spend a good bit of time ensuring prices on key items are competitive by comparing online prices of big boxes. We actually post big-box pricing next to ours — we’re always at or slightly above their price because we’re just trying to demonstrate that we’re highly competitive. We also price match without too much rigor. If it sounds reasonable we’ll match on the spot. Are customers more price-conscious today? There’s no question they are. They have technology at their fingertips while in your aisle to

tell them what everyone is selling that product for.

What’s your pricing philosophy? We’ve used this opportunity with Destination True Value to gain back some margin. We focused on highly consumable items and then went with True Value retails for the rest of our 34,000 SKUs and adjusted as necessary.

What lessons have you learned about retailing over the years?

Listen, ask questions, then talk — whether it’s a customer or an associate. If you listen to what the customer is saying, they’ll tell you what to do. n

The Hardware Brings the Industry

Dan Kamykowski, department merchandise manager for Ace Hardware Corp., makes a point during the Open Dialogue session.

Dale and Tom Chasteen have been bringing the industry together for 23 years with The Hardware Conference.

Hardlines Digest held its second annual meeting at the Conference so industry participants could put a face to a name.

John and Judy Fix of Cornell’s True Value.

Cocktail receptions are held outside so attendees can enjoy the beauty of Marco Island.

Heather Hughes and David Roth of Robert Bosch Tool Corp.

Conferencehardware conference Together

Dealers can learn about new products without the pressure of buying. Here, June Nash of Krylon talks with Whitney and Sean Stevens of M&M Lumber.

Long-time attendees of The Hardware Conference have trouble explaining why the event has such a hold on them. They just know they have to be in Marco Island, Florida, the second weekend of September each year to laugh and learn and catch up with old friends. By the end of the weekend they feel re-energized and ready to tackle the challenges facing them in their businesses.

When the exhibit area is open the ballroom is filled with activity as dealers and vendors get to know one another while discussing ways to grow business together.

This year’s Conference, which took place September 9-11 at the Marco Island Marriott, is the largest annual dealer event in the industry as well as the only industry event held exclusively for independent retailers regardless of wholesaler affiliation. It’s a labor of love for Tom and Dale Chasteen, who have been putting on the Conference for 23 years.

“Tom and Dale do an amazing job keeping it extremely relevant and making every person in attendance feel like he or she is a vital part of it,” said John Anderson of Centurion. “It is easy to get discouraged given the overall direction of our economy and country over the past several years. The Hardware Conference serves as a reminder that there are brilliant, hard-working people out there that will tough out this mess and help lead us back to better times.”

Industry AwArds

Four retailers were honored with Beacon Awards to recognize their

Jim Troiano of Do it Best (right) presented the Beacon Award to Paul Koreen of Hudson Do it Best Hardware.

The Hardware Conference honored John Fix III (left) of Cornell’s True Value with an industry Beacon Award for his groundbreaking efforts to unite the industry through Hardlines Digest. He is joined by Rick Heuser and Bill Zeithammer.

Tom Chasteen presented a Memorial Award to Richard and Sandy Schauer to honor Wayne Schauer, a long-time Conference attendee who passed away in 2011.

efforts within the industry and their respective communities:

• Mark Madden, Madden’s Ace Hardware, Daytona Beach, Fla.

• Paul Koreen, Hudson Do it Best Hardware, Hudson, Fla.

• Matt Noonan III, Noonan True Value, Springfield, Ill.

• John Fix III of Cornell’s True Value in Eastchester, N.Y., was awarded a special industry Beacon Award for his groundbreaking effort to start up Hardlines Digest in 1996 as an online gathering place for independent retailers to share ideas and get questions answered.

On behalf of The Hardware Conference, Tom and Dale presented Memorial Awards to the family of Wayne Schauer of Schauer’s Do it Best Hardware in Forest Park, Ill., and in honor of Jack Siegel of Seagull True Value in June Beach, Fla. Jack and Wayne were long-time Conference attendees who passed away this year.

For the second straight year a gathering was held for those who participate on Hardlines Digest. John Fix recounted how the popular industry forum started out as a printed newsletter called Hardgoods Confidential. He shared plans to redo the website to update it and make it better for posting links and encouraged dealers to keep spreading the word about Hardlines.

“We started out with a couple of hundred dealers discussing issues related to the Triad system and now we’ve got over 2,500 people signed up,” Fix said. Rick Heuser presented him with a special hand-crafted pen to thank him for his efforts.

Dave Atkins of Ace Hardware Corp. (left) presented the Beacon Award to Mark Madden of Madden’s Ace Hardware.

harDware cOnference

Jim Powers of True Value Co. (right) presented the Beacon Award to Matt Noonan of Noonan’s True Value.

Fix was among the dealers who attended the Epicor-Activant Eagle Users Group Conference, a two-day session that preceded the Hardware Conference. Fix commented that the workshop was worthwhile and added great value to attending the Conference.

Open DialOgue SeSSiOnS

Top vendors from every core department participate in The Hardware Conference with tabletop booths displaying their latest product innovations. However, the Conference is not a buying show and vendors do not write orders, which means dealers can learn more about the suppliers without enduring high-pressure sales tactics.

The Open Dialogue sessions on Saturday and Sunday mornings gave dealers and vendors an additional chance to exchange candid opinions about key issues affecting the supply channel.

Mark Madden expressed the desire to see more private-label products and wondered how other dealers were approaching this issue. “It used to be

The Open Dialogue sessions were a chance for dealers and vendors to speak frankly about industry issues.

good-better-best, but now many have dropped the middle brand,” he said.

Joe DeRoest of Joe’s Hardware in Fallbrook, Calif., said he has gone away from private label because he’s trying to create a perception of quality in his store.

Another dealer wondered why a small change in an item leads to a new SKU number. “Unless it’s an exact item we have to give it a new SKU number,” replied Dan Kamykowski, department merchandise manager for Ace Hardware and the only wholesale buyer in attendance.

In addition to growing concern over inflation, vendors pointed out that rising costs for raw materials are placing

Tom Chasteen directed the Saturday night auction that raised nearly $31,000 for the Miami Children’s Hospital Foundation.

Mark Madden makes a “Spirit of Life” pledge to help support the Miami Children’s Hospital Foundation.

was to get price increases in stages so there wouldn’t be as much sticker shock for their customers. “I face margin erosion because I don’t always raise prices every time the vendor price goes up,” said Robert Shor of Sykes Ace Hardware in Miami.

The three principals of The Hardware Connection: Tom Chasteen, Chris Jensen and Dan Akers.

additional pressure on prices. “The price of aluminum is up 40 percent year to date and titanium is going up every quarter,” said Bob Clemence of Hyde Tools, who added that he buys his raw materials two years out.

Dealers were asked how they would like to see future price increases from vendors and the general consensus

“If you don’t raise margins in a slow economy you can’t win,” advised Chasteen.

The economy has forced dealers to take a harder stance on returns, because they are seeing more abuses of their policies. One dealer noted his sales were down 25-30 percent yet his Policy A returns were up 10 percent. “Customers are cleaning out their garages to find stuff to return,” noted DeRoest. Shor commented that some of his returns are related to the quality of goods coming from China.

Retailers let vendors know that they prefer to pick their own assortments for displays so they aren’t stuck with half a case of items that don’t sell. A number of dealers remarked that they have lowered their quantity on hand for C and D items, which led Kamykowski to point out that when

hardware conference

retailers lower their order quantities and order more frequently it increases the cost to touch the items at the wholesale level.

Retailers such as Fix noted they are able to sell oddball items on eBay, and although online sellers such as Amazon are emerging as a bigger threat many dealers have not yet embraced online selling. That didn’t stop them from pointedly telling vendors to stop selling directly to consumers on their websites.

“How important is country of origin when deciding what to buy?” asked Chasteen. Several dealers responded that they and their customers prefer American-made products, as long as the price premium doesn’t exceed 5-10 percent. Carlos Cabrera of Ecosmart said the reality is that consumers want American-made products at China prices and that can’t happen.

Thanks To sponsors

Special thanks go to the marquee sponsors: Epicor, Irwin, Bosch Tools, Gilmour, The Hillman Group, Wooster Brush, Krylon, The Hardware Connection magazine and Miami Children’s Hospital Foundation. Additional sponsorship support came from Centurion, Apex Tool Group, Sunnyside, Coach House Accents, H.D. Hudson, Duracell, Poms & Associates, Watcher

Protection, 3M Company, Minwax and WM Barr.

“There’s no way we could put on this Conference without the fantastic support we receive from these vendors. It’s great to see so many vendors who are willing to go the extra mile to support the independent channel,” said Chasteen.

The wholesale community also lends important support to the Conference each year, with representatives from Ace Hardware, Do it Best and True Value in attendance and conducting meetings with their members, while Orgill also supports the Conference.

Patrick Batzler (left) of Decko and Nathan Looman of Watcher Total Protection.

Casey and Debbie Mathews of Wooster Brush with Stuart and Laurie Hunt of Damp Rid.

At the end of the Conference the vendors auction off their display merchandise and the money raised is donated to the Miami Children’s Hospital Foundation. This year’s auction raised nearly $31,000, bringing the total fundraising amount over the years to nearly $750,000. “That speaks volumes about the type of caring people we have in the industry,” Chasteen said.

“Great opportunities to meet dealers and vendors to share retailing ideas, and a perfect setting for some rest and relaxation as well,” said John Fix. “This was our first trip to the conference, and

Bill and Anne Zeithammer of Isles Do it Best Hardware with Mark Evans and Jim Holden of Epicor.

Judy and I have already marked our calendars for next year.”

Start making plans to attend next year’s Hardware Conference, scheduled for September 7-9, 2012, at the Marco Island Marriott. For more information, call Tom or Dale Chasteen at (305) 853-0049 or go to www.thehardwareconference.com .

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By Phil Brakefield Another viewpoint

A Rookie’s Thoughts on Attending t he h ardware Conference

With almost 40 years of service to the independent hardware trade under my belt, comfortable that there wasn’t much regarding the industry I didn’t already know, and to finally find out for myself what all The Hardware Conference buzz is REALLY about, I packed up and headed to Marco Island in early September.

From the moment I first walked into the room full of vendors the day before the formal Conference kicked off, until I boarded my flight home a few days later, I found myself steeped in the company of friends old and new. Much to my surprise and pleasure, I came to understand that there was a LOT regarding the industry that I still needed to learn, as well as to revisit things that I had grown to take for granted.

The Conference’s tagline is “Where Relationships Are Formed” and with the experience now in my rear-view mirror, I can tell you that description is perhaps the best tailored I have ever seen. I saw dealers, no matter what flag flies above their store, and vendors, from an incredible spectrum of supplier companies, shaking hands, embracing, laughing and getting caught up like

they were attending a long-overdue family reunion.

Some were charter members of the 23-year-old Conference, some were seasoned veterans, and others, like myself, were raw rookies. The magic was that everyone, longevity aside, instantly shared the sense of family and belonging.

The scheduled meetings were unquestionably valuable and laser targeted to their attendees, but really made all the more sense when everybody gathered for an open forum of shared ideas and recommendations gathered during those individual sessions. Back in 1985 when all the mega rock star musicians gathered in Los Angeles to record “We Are The World,” Quincy Jones, who quarterbacked that event, told all gathered to check their egos at the door.

The Hardware Conference’s founder, Tom Chasteen, without saying a word, managed to convey that we all needed to

Phil Brakefield, owner/ president of UniSource, is a published author, speaker and tireless student of marketing strategies and products that help the independent hardware retailer stand out in his/her marketplace. He can be reached at uniphil@aol.com.

check our logos and our individual interests at the door. The result was an astonishing “mastermind” session filled with contributions from some of the best and brightest people in the industry, both from the dealer and supplier side.

Sounds ideal, huh? Can’t imagine it getting any better? Well, it did! The final event of the conference saw auctioneer Tom taking retailer bids on top-quality merchandise, from iPads to flat screen TVs, using the “bonus bucks” collected during vendor booth visits over the duration of the conference. Without exception, the winners donated the

goodies right back to Tom, who then auctioned them off for real money, which was donated to the Conference’s long-time charity of choice, the Children’s Hospital in Miami.

A short article in this magazine doesn’t allow space to give full measure of the impact or importance of The Hardware Conference. To the legions of you who I won’t have time to contact directly to urge you to attend next year, all I can say is...figure out a way to go! To the legions I have already been in touch with…can’t wait to see you there! n

Dealers Debate Employee

on Hardlines DigestIssues

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

The fall trade show season has ended, so dealers are back in their stores gearing up for the holiday selling season. Once again, the topics on Hardlines have covered a range of subjects.

employee titles

Bruce Phillips of Crowder Brothers Ace Hardware posed a question to Hardlines about employee titles.

“What do you call an employee that has been given the responsibilities of

approving refunds and getting cash and change out of the safe for cashiers? I know some people might term this person a ‘Key Person.’ You have to be careful with titles because it might upset or confuse the other employees. Also, many times assigning a title means more money. I’m sure many of us have employees that perform certain functions that could be deemed management or assistant management responsibilities, but this employee doesn’t want the added responsibility of having to boss around his fellow employees. What can you call this position?”

Pam Baumgartner of Woods Lumber observed, “Titles can be important to people and it can give them a feeling of accomplishment. That being said, it

Hardlines digest

should carefully fit the position. I don’t think it always means more money.”

Clarence Keller explained how they handle it at Rankin’s Hardware. “In recent years we have taken on the position that titles are made for business cards. My point is that everyone has their own responsibilities, regardless of what their title is. You can call them anything you want but it doesn’t change their assigned responsibilities. Having said that, we are now printing our business cards so that everyone has the same title — CUSTOMER SERVICE.”

Alan Talman of Karp’s Hardware had some interesting suggestions. “We like to keep it fun and casual. In the age of the Internet, the business card is way less important — unless it’s fun. My card has no title. One employee has Hardware Specialist and Music Director on his card — you can always come in and talk about music with him. One employee has Hardware Specialist and Sports Director on his card — you can always come in and talk about sports with him. You might try Senior Sales Associate. No managerial tag on that one. If he’s been there since the beginning, how about Founding Associate? Others ideas: Logistics Specialist

(no one on earth knows what logistics means), Senior Retail Advisor, Information Specialist or Head of State. It’s more fun when you change to fit your guy.”

employee development

Brandon Buckalew of Hardware Hank wants to develop and motivate his staff. “When I was young, my dad made my brother and I read ‘How to Win Friends and Influence People’ by Dale Carnegie. At first I was insulted, but by the time I was finished reading it, I thought (and still do) that this book should be taught in school (adding a chapter about cell phone etiquette).

I’ve read the book a few times since, and even have it on CD and will listen to it on long trips.”

Buckalew wondered if other retailers have any sort of program for their staff to read motivational books. “‘How to Win Friends and Influence People’ is a big book so I was thinking of starting my staff out with ‘How I Raised Myself from Failure to Success in Selling’ by Frank Bettger. I am thinking I’ll just buy a book for each staff member and give it to them. I don’t know how to get them to read it or follow through with it. I could offer some money, but I feel

“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

hardlines digest

like I have to have some sort of way to test them to make sure they actually read it.”

Matt Mazzone of Mazzone True Value had this comment: “We don’t have a firm policy in place for this, although I do think it is a good idea. We try to get our employees to read ‘Positively Outrageous Service’ by T. Scott Gross.”

He added, “Every week we insert a weekly memo in our employees’ pay envelope. The memo reviews any key points for the week as well as informs our employees of anything they should be aware of such as changes in policy. What we often do is include a quick review of any great articles or books that we have recently read, and try to get our employees to apply that to their everyday life.”

Larry Perry of Woodstock Home & Hardware provided a suggestion along with a link. “When I was a very young man my future father-in-law gave me a pamphlet titled ‘A Message to Garcia.’ It’s about a 5 minute read. I think it rates up there with ‘How to Win Friends...’ Here’s the link: www.birdsnest.com/garcia.htm.”

Scott Plummer from Plummer’s Do it Best Hardware has not had great success with getting employees to read. “I think there are better ways to get the point across to your employees than making them read a book (with pay or not). A lot of people just do not like to read. I would suggest you find a condensed book report or review of ‘How to Win Friends....’ and then give real-life examples how its theory relates to your store.

Plummer added, “A good sales clerk needs to be attentive and one that takes satisfaction in helping others. What does it mean to be attentive? What does it mean to take satisfactions in helping others? Give examples and ask for other examples. I have tried the book route and have been very disappointed. I

love to read, my employees don’t or at least not what I like to read. Start out simple to test the waters.”

Maurice White of White Do it Best Hardware suggested a book title. “‘It’s Called Work For A Reason’ by Larry Winger is short and amusing. It’s been a while since I read it, but as I remember he pretty much got to the point with some bragging rights thrown in.”

Layaways

Marilyn Weisman of Absecon Do it Best Hardware posted a question about layaways. “Just came across an article and it revived an earlier conversation where (son) Jonathan was talking about setting up a layaway program for the holidays. We used to do that with larger ticket items such as go-karts, riding mowers, etc. Is anyone successfully using a layaway program in their store? Do you put a service charge on as some of the larger retailers do?”

Bob Brame of Cadiz Hardware responded, “We are already doing layaways for Christmas. No we do not charge any extra but our contract allows us in Kentucky to keep the monies if they do not follow the payment plan. We do nothing less than 6 weeks and all have to be out 2 weeks prior to Christmas.”

Mickey Thurman from Levee Lumber had similar discussions at his store. “We were just talking about this the other day. We have a prepaid account

that works like a layaway plan. We plan on pro moting this as a Christmas idea. Good points about the term and service charges, we’ll need to look into that.”

Christmas Layaway PowerTools&APPliAnces

J.C. Warren of Stars Ferry Building Supply dug a bit deeper with his question. “Speaking of layaway programs, I was wondering what your terms are on the layaway programs. We let people put money down on product and hold it for them, but we don’t have any set minimums or time frames. We have given people their money back when they changed their mind, sometimes with a restock fee added. Could you give me some direction on how to handle layaways and possibly share some contracts?”

Steve Sayers of Sayers Ace Hardware posted this response: “We require 20% down and pick up within 6 months, or so. The pick-up time gets stretched many times but not the down payment. Years ago, a lady put a set of dishes on layaway for 10 years but she did pick them up.”

This is just a small sample of topics discussed during the past few months on Hardlines Digest. To read more or subscribe go to www.hardlinesdigest.com. Hope to see you on the list! n

By Matt Mullen

Retail I.Q. Technologies for Raising Your

Matt Mullen is director of market development for Epicor Software Corp. (formerly Activant)

In my last article, I talked about the emerging smarter and more connected consumer, and how retailers can leverage the latest technologies to cater to this new breed of consumer. While it is important for hardware store owners to understand what is happening with their customers to be able to effectively serve them, it is equally important for these retailers to know what is happening inside their businesses so that they can provide optimal customer service.

“Smart” retailers possess a strong understanding of what makes their business unique and can effectively manage this vision with the aid of realtime sales performance data and decision-making tools. The end result is a store that takes advantage of every sales opportunity, while giving

customers what they need, when they need it, where they need it and at the price they need it.

There are many products out there now that can make retailers “smarter.” The good news is that these technology solutions are now available to small- to mid-sized retailers.

Inventory Planning and Forecasting

Inventory is your single largest investment and asset, and proper management of this asset is essential to retail success. If your store runs out of popular items too often or doesn’t have enough merchandise variety, your customers will shop elsewhere. However, the opposite is just as damaging to your business. If you stock too much of certain products, you

will needlessly tie up important capital and profits suffer.

The keys to stocking the right quantities of the right items start with a clear vision of what is in stock, how much is already committed to a sale, what is backordered and what is in transit. At the same time, you need to factor in order lead times, along with current and past sales trends. Tracking all of this information for each of the thousands of products stocked by the typical hardware store is nearly impossible for a human, but it is a simple process for a computer.

Inventory planning software makes it much easier to keep inventory levels where they will do your business the most good — just enough to avoid stockouts, but not so much that it drags down profits or wastes shelf space. These are extraordinarily sophisticated tools that give hardware store managers real-time data and advanced techniques for analyzing and forecasting inventory levels. The software typically analyzes multiple years of sales history, and allows managers to create “whatif” models and experiment with reorder points and inventory stocking. Most inventory planning solutions also have a component that analyzes customer buying behaviors and patterns.

Until recently, inventory planning software was only available to the big-box retailers. This is a proven

technology that should be implemented by all retailers to take the guesswork out of one of the most critical tasks at any store.

Hardware store owners and managers need to keep constant tabs on the state of their businesses and quickly make the adjustments necessary to improve performance. The key to answering these questions is being able to see critical data about your business in real time, and use a variety of analytical tools to help you make sense of that information.

Business information tools give retail store owners and managers an advanced health check on their businesses. They provide real-time visibility in a snapshot view of the metrics that are important to you through a variety of graphs, tables, dashboards and scorecards tailored to your personal preference and management style.

Here is a story that illustrates the power and simplicity of business information tools. While on vacation on a beach, a business owner decided to quickly glance at his store’s performance using an application on his smartphone. The store had an unusually good day, and the owner did a quick scan of the top 100 items sold to see what caused the spike in sales. He saw that water pumps were flying off the shelves. He called the store manager to find out what was

going on, and found out that the area had been hit by a hurricane and local residents were coming to the store in droves looking for water pumps and emergency supplies. The owner immediately went online and put in an order for water pumps. He was able to react quickly to this opportunity and keep this item in stock because he had that real-time view into the health of his business.

Improvements to the Point-of-Sale

Today’s smart retailers are also taking advantage of the many opportunities presented during the checkout process.

A long checkout line can mean a smaller purchase or even a customer leaving the store empty-handed. Today’s point-of sale (POS) systems are designed to help you provide customers with superior service while moving them quickly through the checkout line. Touch-screen technology is becoming more prevalent at the point-of-sale. This technology’s modern, graphical user interface enables a fast, efficient checkout process that is remarkably easy to learn and reduces errors.

Forward-thinking retailers are also providing their customers with advanced customer-facing displays.

These new displays feature receipt information while also presenting new products, commercials, promotions and other helpful information you want to communicate to your customers while they are a captive, attentive audience. Do you ever have more customers at the checkout line than you do cash registers? Most stores regularly have two or three cashiers on call, but they may have five or six other employees working on other projects throughout the store. With today’s Mobile POS technology, you can make them all cashiers. Mobile POS equipment lets businesses bring the cash register to the customer,

whether that customer is shopping a sidewalk sale or browsing in the aisles. This technology is also great for “linebusting” — the practice of ringing up customers while they wait in line, to speed up the experience for everyone.

The customer’s experience doesn’t begin at the counter — it begins the moment they walk into your store. The retail environment you create for them directly affects what they purchase. The technologies I have listed above will enhance your ability to anticipate to your customers’ needs, adapt to changes in the market and make the most of every sale. n

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Lawn & Garden Trends

Lawn & Garden Cutting Tool Sales (Independent Hardware Channel)

12 Months % Change vs. Year Ago

Unit Sales Breakdown in Cutting Tools

As customers make their way to the garden center at Central True Value in Moncks Corner, S.C., they must first walk past a wellmerchandised assortment of containers.

Two Fat Guys Ace Hardware in Greenwood, Ind., offers a dominant assortment of digging and cutting tools.

LAWN & GARDEN BUYING UPDATE

n Kitchen gardening is a growing trend these days as more consumers are showing a desire to grow their own produce. Not only do they want to save money but it’s reassuring for them to know where their produce comes from. The National Gardening Association claims a $500 return on a wellmaintained food garden.

n Home organic gardening is becoming more popular in response to concerns over pesticides in mass food production.

n U.S. demand for packaged lawn and garden consumables will

grow 4.5 percent annually through 2014, according to research by The Freedonia Group. Seeds and growing media will be the fastest-growing products. The large residential segment will benefit from solid participation in home lawn care and food gardening.

n With many areas of the country suffering from drought conditions over the past few years, consumers are increasingly seeking out drought-tolerant plants. Succulents are sustainable plants that store water and produce showy flowers even in adverse conditions.

n Consumers are incorporating vertical gardening, stacked pockets of vines and vegetables to hide eyesores and create privacy.

n More gardeners are blending flower and vegetable gardens. Certain flowers help protect vegetables from bad insects, attract good ones and promote plant health, while mixing plants can help reduce maintenance and save space. Good flowers to mix in with vegetables include lavender, marigold, nasturtium, zinnia and dahlia.

n Only 9% of gardeners currently use smartphone applications for their gardening activities, according to research from the Garden Writers Association Foundation. n

IN the NewS

New StoreS

n Dave Anawalt opened Malibu Hardware and Masonry Supply in Malibu, Calif.

n RONA Matériaux Parent store opened in Kedgwick, New Brunswick.

n Trig’s Ace Hardware opened in Rhinelander, Wis.

n Steve and Molly Carver opened West Waynesville Trustworthy Hardware in Waynesville, N.C.

n Rodney Hoffer opened his third store, Santa Cruz Ace Hardware in Santa Cruz, Calif.

n Mitchell Hardware opened its fifth Ace store in Spokane, Wash.

n Chuck Nutter has opened Nutter Hardware, an Ace store in Upper Arlington, Ohio.

n Steve and Amy Zwaller opened Bellingham Ace Hardware in Bellingham, Wash., in August.

n Shabbir Ali has opened Burnhan Hardware in the upper west side of Manhattan.

n Kate Smith and Rob Staffen have opened Penetang Home Hardware in Penetanguishene, Ontario.

n Cam and Kay Sidwell purchased True Value Hardware in Park City, Utah. They now own 12 stores in Utah and Idaho.

n Knecht Home Centers of Rapid City, S.D., has acquired Sonny’s Ace Home Center of Canon City, Colo.

n Mike Dwyer and Wendy Weiler opened Sunbury Ace Hardware in Sunbury, Ohio.

n Matt Chavez opened Josephs’ Hardware & Home Center, a Do it Best store in Fort Collins, Colo.

n Randy’s Do it Best Hardware opened a third store in Bridgewater, Va.

n Matt Kollar is opening Matty K’s Hardware this month in the Lincoln Square neighborhood of Chicago.

n Nef Cefo has opened Ace Hardware Middleburg Heights in Middleburg Heights, Ohio.

n Watkin’s True Value has moved to a new, larger location in Maryville, Mo.

n Hammond Lumber Co. has acquired three stores from New England Building Materials. KudoS to:

n Cally Coleman Fromme of Zarsky Lumber in Victoria, Texas, is the first

woman to serve as chair of the National Lumber and Building Material Dealers Association.

n Patricia Jones of Jones Lumber Co., Henderson, Tenn., is the first woman to serve as chair of the Southern Building Material Association.

n Bill Bollin, chairman and CEO of BostwickBraun Company, was honored with a Lifetime Achievement Award by PRO Group.

n Big Jo True Value has been named best hardware store in Santa Fe, N.M., for the fifth straight year.

n Sunshine Ace Hardware in Naples, Fla., Blackhawk Ace Hardware in Charlotte, N.C., Old Takoma Ace Hardware in Takoma Park, Md., and Kopetsky’s Ace Hardware in Yankton, S.D., were honored by Ace Hardware Corp. with the “Coolest

Hardware Store” award for their commitment to local customization and customer service.

n Mohler’s True Value in North Canton, Ohio, held a two-day special event over the summer to celebrate the store’s 100th anniversary.

n Ragley’s True Value in Punxsutawny, Pa., celebrated its 25th anniversary.

n Maui Varities Ltd., which operates 20 Ace Hardware stores in Hawaii and 11 more in Washington, Oregon and Nevada, is marking its 60th anniversary this year.

n Rocky’s Ace Hardware, based in Springfield, Mass., is celebrating its 85th anniversary this year.

n Jim and Kendall Proudfoot, owners of Proudfoots Home Hardware Building Centre in Pictou, Nova Scotia, have been awarded the 10th annual Paul

Straus Public Relations Award from Home Hardware for their community service.

n Clinton True Value, owned by John Woodside in Clinton, S.C., marked its 25th anniversary.

n Steve Allred of Allred’s Ace Hardware in Pleasant Grove, Utah, was awarded the Business Spotlight Award by the Pleasant Grove Chamber of Commerce.

n Charles and Barbara Oakley, who have operated Community Do it Best Hardware in New Caney, Texas, since 1972, were recognized with the Vocational Service Award by the local Rotary Club.

n Steve Scartozzi marked the 60th anniversary of Paoli Hardware in Paoli, Pa., with a special event in September featuring product demos and live music.

in the neWs

n Haynes True Value Hardware in Murfreesboro, Tenn., operated by Richard and John Schmidt, is marking 90 years in business.

n LaGrone Williams Hardware, owned by Keenan Williams in Hope, Ark., recently celebrated its 50th anniversary.

n Four Seasons Ace Hardware in Benton, Ill., operated by Terry and Harriet Presa, was named “Business of the Year” by the Benton-West City Area Chamber of Commerce.

n Deck’s Hardware in Ambler, Pa., was named “Best Suburban Hardware Store 2011” by Philadelphia Magazine.

n Lanier True Value in Lexington, N.C., held a grand reopening after the store underwent a 14-week makeover to adopt the Destination True Value format.

PeoPle on the move:

n Emery-Waterhouse promoted Don Dickson to executive vice president and chief operating officer.

n Ron De Leon joined City Mill as general merchandising manager.

n Do it Best Corp. named Randy Rusk as communications director.

Wholesalers in the neWs:

n Ace Hardware Corp. reported Q2 revenues increased 0.5% to $1.02 billion and net income rose 20% to $34.6 million. The coop also announced plans to open a 336,000-square-foot import distribution center in Suffolk, Va., in May 2012.

n House-Hasson Hardware has added

2,500 paint sundry SKUs to its inventory.

n Do it Best Corp. reported sales increased 1.2% to $2.41 billion for the fiscal year that ended June 30, 2011. Profits rose 5.1% and $105.8 million in rebates were distributed to members at the October Market.

n At its Fall Dealer Market, Blish-Mize continued the yearlong celebration of its 140th anniversary.

n True Value Company reported revenue rose 3.6% to $445.7 million while profits increased 3.4% to $18.1 million in the third quarter. Sales are up 2.6% for the first nine months of 2011.

n Orgill’s Fall Dealer Market in Boston featured a 5,000 sq. ft. model hardware store and a 30,000 sq. ft. model home center on the exhibit floor.

n Handy Hardware Wholesale is marking its 50th anniversary this year.

n More than 350 vendors and distributors attended Distribution America and PRO Group’s Executive Planning Conference in Naples, Fla., taking part in 2,693 oneon-one meetings. The overall winner of the best new product award was Shop Vac Corp. for its Wet/Dry Vac with Removable Toolbox.

n Do it Best Corp. President and CEO Bob Taylor was on hand for the opening of the first four Pongs Do it Best Home Centers in Jakarta, Indonesia in August. The co-op’s partner in Indonesia, Paulus Ong, plans to open as many as 40 stores in the next five years. The opening of the Jakarta stores makes Indonesia the 50th country in which Do it Best Corp. has member retail operations and the c-op has now opened its first international business development office in Singapore.

Other News:

n Benjamin Moore now offers a limited selection of paint through Target’s website.

n Hundman Lumber of Bloomington, Ill., has agreed to merge with Alexander Lumber of Aurora, Ill. The combined companies will operate 30 stores that will all be named Alexander Lumber after the deal closes in the first quarter of 2012.

n The Midwest operations of Lyman Lumber were purchased at auction by BlackEagle Partners LLC and will operate as a business unit of US LBM Holdings.

n Sears is closing 29 stores including 12 hardware and appliance stores.

n Mead Lumber purchased four stores from Fullerton Cos.

n Standers Ace Hardware in Louisville, Neb., was destroyed by fire on November 1.

n Lowe’s closed 7 stores in August and announced in October it was closing 20 more stores in 15 states. Lowe’s has also purchased 42,000 iPhones for employees to use to improve the customer shopping experience.

John Locke, (left) owner of Orillia Home Hardware Building Centre, marked Home Hardware Blue Jays Fan Appreciation Day by presenting a $250,000 check to Austin Featherstone, (middle) a Special Olympics Canada Athlete and Anthony Miceli, (right) from Special Olympics Canada during an on-field ceremony at Rogers Centre in Toronto.

in MeMory:

n Dick Brant passed away October 14 at the age of 90. He started his career with Hibbard, Spencer, Bartlett, a Chicago-based wholesaler, and he later worked a number of years in the industry activities department of the National Retail Hardware Association. Brant capped his career by serving as managing director of Sentry Distributors.

n Gene Schneider, whose family has owned and operated New Market Hardware in St. Louis since 1924, passed away September 10 at the age of 88. Clerks still write up sales with pen and paper at the store, which is now run by Schneider’s son, Steven.

Get the Full story:

n Brian Young of Young’s Agway and PRO Hardware appeals for help after Hurricane Irene destroys his store and home: http://tinyurl. com/7gozuo9.

n Moussette Hardware in Montreal no longer accepts or returns pennies for cash purchases. Go to: http:// tinyurl.com/6p42ny3.

n Frager’s Hardware in Washington, D.C., was one of many stores that felt the effects of the earthquake on

August 23. Frager’s video surveillance system captured the scene as shown here: http://tinyurl.com/7rrlrzy.

n Read about Sears’ strategy to sell Craftsman outside its stores: http:// tinyurl.com/4xgy36l and http://tinyurl. com/4xu966s.

n Smash and grab caught on tape at Portland Ace Hardware store: http://tinyurl.com/6retamk.

n How Hurricane Irene affected business for one New Jersey retailer: http://tinyurl.com/7f2swjp.

n Congress introduces Main Street Fairness Act to level the playing field against online sellers: http://tinyurl. com/28rn5a2.

n Gay’s True Value Hardware in Tunkhannock, Pa., tries to recover after 9 feet of water floods the 99-year-old business: http://tinyurl.com/6pjkxrv.

n Dale Hardware uses federal stimulus money to fund store expansion: http:// tinyurl.com/84wtql8.

n A Montana builder constructs a house entirely of American-made products. Here’s the list of products: http:// tinyurl.com/5wbwd7j.

n TreeHouse is a new 25,000 sq. ft. home center in Austin, Texas, that only sells smart home improvement products that measure up to rigorous standards for healthy living and sustainability. See the store’s website at www.treehouseonline.com.

NOVEMBER

n Wallace Hardware Dealer Market

November 29-December 1, Gatlinburg Convention Center, Gatlinburg, Tenn.

JANUARY

n House-Hasson Hardware Spring Dealer Market

January 5-7, Opryland Resort Hotel, Nashville, Tenn.

n International Builders’ Show

February 8-11, Orange County Convention Center, Orlando, Fla., www.buildersshow.com

n Lumber & Building Material Expo ‘12

January 25-27, MGM Grand at Foxwoods, Mashantucket, Conn.

n Monroe Hardware Spring Dealer Market

January 21-22, Cabarrus Arena & Events Center, Concord, N.C.

n Northwestern Building Products Expo

January 9-10, Grand Casino, Hinckley, Minn.

n United Hardware Spring Dealer Market

January 6-8, Minneapolis Convention Center, Minneapolis, Minn.

FEBRUARY

n American Rental Association: The Rental Show

February 5-8, Ernest N. Memorial Convention Center, New Orleans

n Iowa Lumber Convention

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

n Orgill Spring Dealer Market

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

n True Value Spring/Rental Market

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

MARCH

n Ace Hardware Spring Convention & Exhibit

March 8-10, Georgia World Congress Center, Atlanta, Ga.

n Blish-Mize Spring Dealer Market

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

n Hearth, Patio & Barbecue Expo

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

n International Hardware Fair

March 4-7, Koelnmesse, Cologne, Germany

n International Home & Housewares Show

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

n Nebraska Lumber Dealers Convention

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

retail ideas

Using s ocial Media to B U ild Yo U r Brand

On its Facebook page, Meiners J-town Hardware in Jeffersontown, Ky., shared the top 10 reasons to shop at a local hardware store instead of a home improvement chain. Here’s what they posted:

At Meiners J-town Hardware our goal is to provide amazing customer service along with supplying the best products and repair services you need. In the meantime we like to have a little fun. Here is our top 10 list of reasons to shop with us versus those other guys — the ones with the big orange and blue stores.

1. You won’t get lost in aisle 17 — ‘cause we don’t have 17 aisles.

2. You can park right by the door or better yet walk down the street.

3. Our store clerks have been around the block a time or two and can answer your questions or point you in the right direction.

4. You don’t have to buy a bucket of screws, you can buy one if you like and save your money.

5. We feel like a hardware store — the kind your grandpa took you to when you were a kid.

6. We’ll remember your name and get to know you. Everybody could use another friend.

7. We have free popcorn. Don’t just make it an errand to run. Make a trip to the hardware store an event.

8. We support local businesses and local causes.

9. We’re locally owned and operated. Keep it in the community.

10. When looking for our team of clerks you won’t have to pause at the end of each aisle looking puzzled. You could probably just yell and we’d hear you.

Uniq U e n iche i te M s t hat s ell

Several retailers have shared unique niche items that have proven to be strong sellers. Steve Richmond of Richmond True Value Hardware and Rental in Braintree, Mass., has sold thousands of used tennis balls. He buys from a local distributor for 25 cents each and displays them in a basket by the register at a retail price of 50 cents each.

“They are a great add-on sale item near the register. Dog lovers buy them, parents prefer them over candy and teachers grab them all day long (for bottom of chairs),” he says.

Mike Frattallone of Frattallone’s Ace Hardware, with 16 stores in Minnesota, is constantly on the lookout for the next big thing in the impulse world. Here are a few of his top sellers:

• LED flashlights and batteries — an entire endcap is devoted to the product line, which sells a ton.

• Million Dollar Bills — novelty million dollar bill that sells for a buck and cost 45 cents with a really nice fullcolor plastic molded display. “One of my stores sold 900 in one year and the display takes up three square inches. It is an A item for us at all of our stores,” Frattallone says.

• Lollipops from Original Gourmet Food Company — “We’ve sold about 6,500 in a half year at 16 stores and the display hangs out of the way near our front tills (the display is magnetic so it hangs right off the Lozier upright),” says Frattallone, who sells them for 79 cents rather than the suggested price of 59 cents.

A Store Greeter t h At Work S Che A p

Walmart is known for its greeters, but some hardware retailers are discovering they can get better results without bumping up their payroll.

Marc Gimbel, owner of City Hardware in Seattle, encourages dog owners to bring in their dogs to meet Bear, a friendly black Lab who is stationed near the front entrance.

Customers who visit Jefferson Barns & Lumber in Sumter, S.C., are greeted by diminutive pooch Nemo, who gets all hurt and bothered without the proper attention from visitors.

Settergren Ace Hardware in Minneapolis has them both beat—the store deploys the talents of Jäger and Odis, two Muensterlander hunting dogs who are especially good with kids. Owner Mark Settergren hangs his hat on old-fashioned service, and greeting customers at the front door takes on different meaning with Jäger and Odis at his side. n

Behind the

Numbers20

Number of underperforming stores Lowe’s announced it was closing in October. The retailer also announced it would only open 10-15 stores annually beginning in 2012, down from previous projections of 30 store openings per year.

681,000

Total number of housing starts projected by the National Association of Home Builders in 2012, up from an estimated 586,000 in 2011.

86%

Percentage of Walmart customers who say it no longer has the lowest prices, according to a study by WSL/ Strategic Retail.

40

Number of Do it Best stores Pong’s plans to open in Southeast Asia over the next five years after opening the first in Jakarata, Indonesia, in August.

2,500

Number of items House-Hasson Hardware has added to its paint inventory.

22 million

Estimated number of digital signs that will be in use in U.S. retail stores in 2015, according to Intel Corp.