Issuu

Serving Hardware, Home Center & Building Material Retailers

Elevate Your Culture

How Happy Employees Lead to Overall Success Page 28

Succession Planning 2020: A Yearlong Series Page 42

3 Housewares Trends for Your Busiest Customers Page 46

Volume 218 • Issue 1 • January 2020 • hardwareretailing.com

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Make Success Happen “Instead of being so reactionary, I wanted to be more forward-thinking, and that’s one of the things they teach in this program. I think the biggest benefit is the value it brings directly to your business.” Franklin Cloninger General Manager Triangle True Value Hardware and Rental

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Volume 218 • Issue 1 • January 2020 • hardwareretailing.com

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Elevate Your Culture

How Happy Employees Lead to Overall Success

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Succession Planning 2020: A Yearlong Series Page 42

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Volume 218 • Issue 1 • January 2020 • hardwareretailing.com

“Expanding the aisle of Midwest Fastener products has been very helpful in servicing our customers. Our customers are extremely pleased with the selection in our new Bolthouse area!”

- Carol and John Bolthouse Owners Hastings Ace Hardware, Hastings, MI

Exceeding Expectations. One Fastener Destination at a Time!

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Headquarters Your NRHA Team

136 N. Delaware St. #200 Indianapolis, IN 46204 317-275-9400 nrha@nrha.org | nrha.org

@NorthAmericanRetailHardwareAssociation @nrha_official North American Retail Hardware Association @nrha_official

OUR MISSION

The North American Retail Hardware Association (NRHA) helps independent hardware stores, home centers and lumberyards, regardless of wholesale affiliation, become better and more profitable retailers. NRHA BOARD OF DIRECTORS CHAIRMAN OF THE BOARD Daniel Harris, Palos Ace Hardware, Palos Heights, Illinois; Lemont Ace Hardware, Lemont, Illinois EXECUTIVE VICE CHAIRMAN Greg Schlecht, Greg’s True Value, St. Francis, Wisconsin DIRECTORS Will Aubuchon, Aubuchon Hardware, Westminster, Massachusetts David Dishke, Grand River Home Hardware, Caledonia, Ontario Ryan Ringer, Gold Beach Lumber Yard Inc., Gold Beach, Oregon Jared Smith, Jared’s Ace Hardware, Bishopville, South Carolina Matt Woods, Woods Hardware, Cincinnati, Ohio SECRETARY-TREASURER Bob Cutter, NRHA President and CEO

At NRHA headquarters, there is a team of dedicated people who work every day to uphold the association’s mission. In this space, we’ll ask a few of them to answer a question of the month so you can get to know us a little better.

What are you looking forward to in 2020? “The video game Cyberpunk 2077 is finally being released after seven years.” Kevin Trehan Web Developer

MIDWEST HARDWARE ASSOCIATION John Haka, 201 Frontenac Ave., P.O. Box 8033 Stevens Point, WI 54481-8033; 715-341-7100; 800-888-1817; Fax: 715-341-4080 PACIFIC NORTHWEST REGION Ronald F. Moore, 3857 Wolverine NE, Suite 20, Salem, OR 97305 (UPS, FedEx); P.O. Box 17819, Salem, OR 97305 (U.S. Mail); 503-375-9024; Fax: 503-375-7980; AK, ID, OR, WA SOUTHWESTERN REGION Jeff Flora, 638 W. 39th St., Kansas City, MO 64111; P.O. Box 419264, Kansas City, MO 64141 816-561-5323; Fax: 816-561-1249 AR, KS, LA, MO, NE, NM, TX

HARDWARE RETAILING | January 2020

317-275-9400, editorial@nrha.org

EXECUTIVE VICE PRESIDENT & EXECUTIVE EDITOR Dan Tratensek MANAGING EDITOR Melanie Moul, mmoul@nrha.org PROFILES EDITOR Kate Klein, kklein@nrha.org ASSISTANT EDITOR Todd Taber, ttaber@nrha.org PRODUCTION EDITOR Hans Cummings, hcummings@nrha.org GRAPHIC DESIGNER Autumn Ricketts WEB DEVELOPER Kevin Trehan PRODUCTION MANAGER Nancy A. Vondersaar SALES & PRODUCTION ASSISTANT Freda Creech

MARKETING & COMMUNICATIONS DIRECTOR OF MARKETING & COMMUNICATIONS Whitney Daulton CORPORATE COMMUNICATIONS MANAGER & EDITOR Julie Leinwand

NRHA SALES

317-275-9400, sales@nrha.org VICE PRESIDENT OF SALES & PUBLISHER Kevin Hohman, khohman@nrha.org

“I’m excited to get married in an intimate wedding ceremony in June!” Kate Klein Profiles Editor

“I’m new to NRHA, so I’m looking forward to learning more about the independent channel.” Matt Caruso Business Development Representative

IMMEDIATE PAST CHAIRMAN TJ Comstock, Northwest Hardware LLC, Billings, Montana

STATE & REGIONAL ASSOCIATIONS

EDITORIAL, DESIGN & PRODUCTION

NORTHERN REGION SALES DIRECTOR Brad Lyons, blyons@nrha.org BUSINESS DEVELOPMENT REPRESENTATIVE Matt Caruso, mcaruso@nrha.org SOUTHERN REGION SALES DIRECTOR Scott Gilcrest, sgilcrest@nrha.org BUSINESS DEVELOPMENT REPRESENTATIVE Jordan Rice, jrice@nrha.org CANADA John Magner, 500 Queens Quay W., #101W Toronto, ON M5V 3K8 416-598-0101 x220; Fax: 416-598-9191, jmagner@yorkmedia.net

EXECUTIVE STAFF PRESIDENT & CEO Bob Cutter VICE PRESIDENT OF FINANCE & BUSINESS SERVICES David Gowan

MEMBER SERVICES

800-772-4424, nrha@nrha.org TRAINING MANAGER & EDITOR Jesse Carleton, jcarleton@nrha.org RETAIL OUTREACH COORDINATOR Renee Changnon, rchangnon@nrha.org

Hardware Retailing (ISSN0889-2989) is published monthly by the North American Retail Hardware Association, 136 N. Delaware St. #200, Indianapolis, IN 46204. Subscription rates: Hardware Retailing (Payable in advance): U.S. & possessions $50.00 year. Canada $75.00 year. All other countries $100.00 year. (Air Mail $60.00 year additional). Single copy $7.00. The Annual Report issue can be purchased for $30.00. Periodical postage paid at Indianapolis, Indiana, and additional mailing offices.

EVENT MANAGER & RETAIL SUPPORT Katie McHone-Jones, kmchone-jones@nrha.org

RETAIL LEADERSHIP INSTITUTE EXECUTIVE DIRECTOR Scott Wright, swright@nrha.org

POSTMASTER: Send address changes to Hardware Retailing, P.O. Box 16709, St. Louis, MO 63105-1209.

NRHA CANADA

All editorial contents copyrighted 2020 by the North American Retail Hardware Association. No editorial may be reproduced without prior permission of the publisher.

NRHA CANADA Michael McLarney, +1 416-489-3396, mike@hardlines.ca 330 Bay Street, Suite 1400, Toronto, ON, Canada M5H 2S8

REPRINTS: For price quotations, contact the Editorial Department at 317-275-9400 or fax requests to 317-275-9403. Printed in the USA.

CIRCULATION, SUBSCRIPTION & LIST RENTAL INQUIRIES CIRCULATION DIRECTOR Richard Jarrett, 314-432-7511, Fax: 314-432-7665

Finders, keepers.

HOW TRIO HARDWARE KEEPS CUSTOMERS COMING IN — AND COMING BACK.

“Do it Best offers us the product

Customers in Plainview, New York, know that when they walk into Trio Hardware,

in and the rewards we need to

they’re going to find exactly what they need. Member-owners Todd and Ritsa

keep them coming back.”

Kirschner know that when those customers leave, they’re already planning their next visit. That’s the kind of relationship that can happen with help from Do it Best. When the Kirschners built their new store, they turned to the Do it Best Signature™ Store Design team to maximize their space and stock it from floor to ceiling with a wide range of the products they knew their customers would buy. Next, the Kirschners launched the Best Rewards loyalty program to give their shoppers a SM

compelling reason to come back again. Together, the Kirschners and Do it Best have developed an effective system to attract and retain customers. As a result, Trio Hardware serves a steadily growing base of loyal shoppers — again and again.

» Partnering with Do it Best can help you attract more customers and keep them coming back. Call us today at 888-DO-IT-BEST (888-364-8237) or visit doitbestretail.com.

mix we need to draw customers

Todd & Ritsa Kirschner Trio Hardware

Contents

JANUARY 2020 | VOLUME 218 | ISSUE 1

Departments

On the Web . . . . . . . . . . . . . 06 Editorially Speaking . . . . . . . 08 Taking Care of Business. . . . . 10

COVER STORY

Culture Revolution

NRHA News. . . . . . . . . . . . . 12 Trends . . . . . . . . . . . . . . . . . 15

Learn how developing a strong, supportive company culture boosted employee morale and positively impacted customers at Hassett Hardware.

OPERATIONS . . . . . . . . . . . . . . . .

New Products . . . . . . . . . . . 16 Checkouts . . . . . . . . . . . . . . 24 Newsmakers . . . . . . . . . . . . 60 Last Word . . . . . . . . . . . . . . 62

HISTORY . . . . . . . . . . . . . . . . . . .

Budget for Growth

Combing the Pages

Don’t just hope for a better year ahead. Create achievable goals by analyzing your financial statements to determine where you can improve your operation.

Hardware Retailing editors went through the archives to see what has changed— and what hasn’t—in the two decades since the turn of the millennium.

SUCCESSION PLANNING . . . . . . . .

INDUSTRY EVENTS . . . . . . . . . . . .

Starting at the Top

International Inspiration

This year, we’re exploring succession planning in every issue. In this first installment, Gary Pittsford offers a bird’s-eye view of the steps you can take today to be prepared for tomorrow.

Preview the International Hardware Fair, which takes place March 1-4 in Cologne, Germany. Be one of the first to discover international trends in hardware.

80%

of executives see culture as imperative for their operations to be successful. Source: PwC

On the Cover Hassett Hardware owner Eric Hassett redefined his company’s core values to create a clear path to success for staff at his multistore operation in the Bay Area.

Check out additional content about succession planning all year long at TheRedT.com/succession.

Photo by Nick Larson

Serving Hardware, Home Center & Building Material Retailers

Elevate Your Culture

CATEGORY SPOTLIGHT . . . . . . . . .

OPERATIONS . . . . . . . . . . . . . . . .

Happenings in Housewares

Leading With a Smile

Learn how changes in consumer lifestyles are impacting the housewares category and how you can curate your department to feed their needs.

PC Lumber & Hardware yard supervisor Mike French has a new perspective on leadership since completing his co-op’s leadership development course.

HARDWARE RETAILING | January 2020

How Happy Employees Lead to Overall Success Page 28

Succession Planning 2020: A Yearlong Series Page 42

3 Housewares Trends for Your Busiest Customers Page 46

Volume 218 • Issue 1 • January 2020 • hardwareretailing.com

Build your bench. Boost your bottom line. Empower key employees to increase sales and bottom-line profits with the industry’s most complete retail management program. Don’t miss out. Apply today.

nrha.org/rmcp

On the Web

INDUSTRY EVENTS

In Their Own Words The International Hardware Fair shines a light on new products and manufacturers who are pushing the industry forward on a global level. Hear from retailers TJ Comstock and Megan Menzer to learn what caught their eyes at the 2018 event by visiting TheRedT.com/ihf-video.

Fulfilled employees plan to stay nearly three years longer than unfulfilled counterparts. Source: PwC

OPERATIONS

Cultural Capital Evaluating your company culture is a responsibility for every home improvement retailer. Discover some of the top benefits that can come from assessing your workplace culture at TheRedT.com/culture-benefits.

CATEGORY

Don’t Box Yourself In Head to TheRedT.com/small-appliances to learn more about small appliance sales and trends at big-box stores over the past two years.

OPERATIONS

The Yearlong Resource Throughout 2020, Hardware Retailing is exploring succession planning. Bookmark TheRedT.com/succession to find resources each month to help you get started. Start off by enjoying a Mr. Oswald comic from the archives. Correction: In the December Market Measure feature, the figure for total home improvement sales in 2019 on Page 30 was incorrect. In 2019, hardware stores, lumberyards and home centers amassed $407.1 billion in total. To view the complete report, head to TheRedT.com/market-measure. 6

HARDWARE RETAILING | January 2020

PODCAST

One Cool Podcast In the latest episode of “Tell Me More...,” Gina Schaefer, co-founder and CEO of A Few Cool Hardware Stores, recounts how her business grew from a single location to 11. Visit TheRedT.com/pod to listen or subscribe now.

Stay Connected @HardwareRetailing @hardwareretail

nrha.org/rmcp

Editorially Speaking

Who Are These Kids? Your Magazine Is Brought to You (Mostly) by Millennials

ou may recognize me from your wholesaler market or know my name from a few bylines, but this is my official introduction: I’m Melanie Moul, the managing editor of Hardware Retailing magazine, and I’m a millennial. Alliteration aside, I’m choosing to introduce myself to you with that particular generational affiliation because it seems to be a four-letter word in some circles. I’m here to own that title and give you some insight into how and why this group of (mostly) millennial editors, designers and web developers works diligently on the pages, both print and digital, of this magazine every month. Whether you’ve had challenging experiences with millennial employees sometime in the last decade or you had challenges raising millennial children sometime in the last four decades, you are likely familiar with the stereotypes. Millennials—people born between 1980 and 2000—are often the butt of jokes that center around their lack of motivation in the workplace or their extra appendages that double as smartphones. I can appreciate that some stereotypes are rooted in truth, but I have to push back a little when it comes to my team. As members of the communications team at the North American Retail Hardware Association, it is our responsibility to get to know you as business owners, managers, sales associates and the other varied roles you have in this expansive industry. It is our privilege to get to know you as people. So, I want to give you the chance to get to know us as people, too. We are mostly millennials, yes. (The handful of Gen Xers here in the office balance us out and help us understand pop culture references pre-1985.) Some of us are married, some of us have children and some of us aren’t ready for either commitment.

Many of us are homeowners who have made upgrades like smart thermostats and connected lighting, and others have encountered the fate of all our appliances biting the dust at the same time. Those of us who rent are proud of our homes and invest in upgrades and personalizations, like paint, landscaping and new bathroom fixtures, even though we can’t take them with us when we move on to the next rental. We are passionate about our hobbies, including tabletop role-playing games, hot sauce, our pets, costume makeup, baking, various forms of exercise and reality TV. And we are all passionate about supporting independent retail. We often get positive feedback on the magazine, and it’s encouraging to know so many independent retailers across North America—and across generations—appreciate the work we put in every month. It is my goal to lead our team to produce relevant, high-quality stories full of actionable ideas for your operation. It is my belief that our life experiences, and learning about yours, help us achieve that goal. I look forward to getting to know more of you out in the industry and giving you more inside perspective into how we operate in this space. Meet more of the Hardware Retailing team on Page 2, and feel free to send me a note introducing yourself and offering some insight into your generation.

“It is my goal to lead our

team to produce relevant, high-quality stories full of actionable ideas for your operation.

HARDWARE RETAILING | January 2020

”

Melanie Moul Managing Editor | mmoul@nrha.org

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Taking Care of Business

New Year, New Obsession How to Worry Less About Your Competitors

ere we are at the start of 2020. I think this officially marks my 24th year in the home improvement industry. Wow … almost a quarter century of visiting independent retailers, doing research, writing columns and speaking at events. A lot has changed in those 24 years, but one might argue we are now in the midst of some of the bigger changes we have seen in our industry for quite some time—the e-commerce revolution. Just judging by the questions we get, the seminars I am asked to give and the articles we write, this new revolution in retail is on a lot of peoples’ minds these days. This isn’t likely to change in this new year. The one thing that must change, however, is the way we think about this revolution and how it impacts independent retailers. For guidance on how we need to change our thinking on the emergence of e-commerce and the likes of Amazon, I turn to none other than the founder of the company, Jeff Bezos. There’s a pretty (in)famous Jeff Bezos quote that I think truly speaks to not only Amazon’s rise to prominence but also the key to competing against this retail behemoth. To paraphrase Mr. Bezos: At Amazon, we are not competitor obsessed; we are customer obsessed. This simple and eloquent thought speaks volumes about Amazon’s approach to the market. While they are certainly aware of what their competitors are doing, they do not focus on those actions. Instead, they obsess over what their customers want and how to deliver it to them. Instead of obsessing over what your competitors are doing, if you obsess over what your customers want and need, you are setting the trends, not following them. That is exactly the way independent retailers need to approach their businesses in this new year. I know we write about Amazon

a lot (this column for instance), and I know you will read and hear about Amazon, Home Depot, Walmart and all the other myriad competitors you have out there in the coming months. But instead of spending so much time focusing on what they are doing, the key to your success in 2020 and beyond is going to be channeling that competitor obsession into a customer obsession. In this month’s issue of Hardware Retailing, we talk about company culture and how to better understand what yours is and how to shape it. This is an ongoing challenge for all companies. As you read this article and begin to consider how to best mold your company culture, I encourage you to figure out how to place your customers squarely at the center of your thoughts. It’s easy to say providing great service to your customers is part of your culture, but what does that really mean? Does every one of your employees know why this is so important and exactly how important it is to your success and survival? If not, they should. The next step is not just getting them to understand how important it is as a part of your company’s culture but getting them to obsess over knowing your customers better and finding ways to better serve them. If you have one goal for this new year, you won’t go wrong spending less time worrying about your competitors and more time focusing on your customers. So, thanks Jeff!

“The key to your success

in 2020 and beyond is going to be channeling that competitor obsession into a customer obsession.

HARDWARE RETAILING | January 2020

”

Dan M. Tratensek Executive Editor | dant@nrha.org

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NRHA News

NRHA Program Provides Real-World Training

ranklin Cloninger, general manager at Triangle True Value Hardware and Rental in Greenwood, South Carolina, says the business improvement project he completed as part of the North American Retail Hardware Association’s (NRHA) Retail Management Certification Program (RMCP) couldn’t have come at a better time. “We wanted to revamp some of our marketing approach, specifically with social media, and then we had this video go viral,” Cloninger says. The Rust-Oleum Glitter Paint video that Cloninger posted to his store’s Facebook page has accumulated over 1.8 million views to date, and he says they still get messages from all over the world asking about it. (Read Hardware Retailing’s coverage about the viral video at TheRedT.com/paint-video.) Cloninger credits RMCP with helping him create a marketing plan that capitalized on the store’s fame and resulted in increased sales and market penetration. “We were able to look at the analytics that I didn’t know to look at prior to the program,” he says. “I was able to take what was happening in real time in my business to the staff and say, ‘Help me figure this out,’ and learn why it was happening. It was really cool.”

From there, Cloninger developed a marketing campaign that included billboards and other forms of advertising. “Instead of being so reactionary, I wanted to be more forward-thinking. That’s one of the things they teach in the course,” Cloninger says. Although the program includes homework and requires in-person visits to Indianapolis that took him away from the store, Cloninger says he didn’t mind the time commitment. “I was doing my business work, not schoolwork,” he says. “It’s definitely a worthwhile program, and I found value in it despite being in the business for a while. I think the biggest benefit of the program is the value it brings directly to your business.” Cloninger’s story is a typical example of the interactive training students can expect from the program, according to Scott Wright, executive director of the NRHA’s Retail Leadership Institute. “RMCP is designed for students to apply what they learn in the classroom to their business to help drive sales and profits,” Wright says. “It’s the only program of its kind in our industry.” Enrollment is now open for 2020 class sessions. See the application deadlines and schedule in the box on the right. To learn more about RMCP, visit nrha.org/rmcp or contact Scott Wright at 317-275-9417 or swright@nrha.org.

Franklin Cloninger is a Fall 2017 graduate of the NRHA Retail Management Certification Program and was a 2019 Young Retailer of the Year honoree.

Apply Today Spring 2020 Class Application Deadline: March 1, 2020 Visit 1: April 14-17, 2020 Visit 2: June 9-12, 2020 Visit 3: Aug. 11-14, 2020

Fall 2020 Class Early Application Discount Deadline: June 1, 2020

The Fall 2017 class of the NRHA Retail Management Certification Program pictured at the final visit of the six-month course. During the program, each student completed a business improvement project for their operation. More than 200 students have graduated from the program since its launch in 2013.

HARDWARE RETAILING | January 2020

Application Deadline: Aug. 1, 2020 Visit 1: Sept. 8-11, 2020 Visit 2: Nov. 10-13, 2020 Visit 3: Jan. 12-15, 2021

NRHA State of Independents Conference Highlights 2020 Growth Opportunities

he NRHA State of Independents Conference held Dec. 5 in Indianapolis hosted independent retailers, wholesale executives, manufacturers, channel partners and industry experts for a day of future-focused industry presentations and panel discussions. Jim Robisch, senior partner of market research and consulting firm The Farnsworth Group, and Dan Tratensek, executive vice president of NRHA, presented their analysis of the current state of the home improvement market, using data from the annual Cost of Doing Business Study and retailer responses to industry surveys. Tratensek also moderated the retailer panel discussions on 2020 growth forecasts and embracing change. Retail panelists included Brian Kabat, president of Kabat’s Ace Hardware stores in Arizona; Leigh Ann Akard, co-owner of Akard True Value Hardware in Zionsville, Indiana; Dave Umber, owner of Umber’s Do it Best Hardware in Fort Wayne, Indiana; Jackie Sacks, co-owner of Round Top Mercantile in Round Top, Texas; Eric Hassett, owner of Hassett Ace Hardware stores in the San Francisco Bay Area; and Adam Taylor, owner of Trust PRO Hardware in Indianapolis. Matthew Mazzone, owner of Mazzone Ace Hardware in Brooklyn, New York, presented on his approach to doing business

in a diverse market. He shared how his operation has evolved from serving a primarily Italian neighborhood to meeting the home improvement needs of a widely diverse customer base. Dawn Ernst, director of IT at Buchheit stores, talked about how she led the development of their proprietary employee management system, Snapshot. She discussed how the program has improved company culture and how retailers can benefit from having in-house IT staff. Eric Hassett, owner of Hassett Ace Hardware in the San Francisco Bay area, and Matt Woods, owner and chief operating officer of Woods Hardware in Cincinnati, Ohio, presented together on evolving technology in the home improvement industry and how it has impacted their two distinct multistore operations. Hassett shared how his operation manages Yelp and other online review tools. Woods shared how his operation improved the customer experience in-store and virtually through the use of iPads and a website that provides virtual reality store tours, allowing shoppers to explore each store in 3D and view products on the shelves. The February issue of Hardware Retailing will include a complete wrapup of the event.

Left to right: Bill Brunelle, Independent We Stand; Matthew Mazzone, Mazzone Ace Hardware; 2019 Spirit of Independents Award honoree, Joseph Franquinha, Crest Hardware & Urban Garden Center; and Dan Tratensek, NRHA.

January 2020 | HARDWARE RETAILING

NRHA News

Trainer’s Corner: Product Knowledge

RHA’s Basic Training Course in Hardware Retailing has helped thousands of retail employees learn about the wide variety of SKUs sold in the average home improvement operation. To ensure the information in its training courses stays current, NRHA periodically reviews and updates its training material to reflect trends and technological developments. Last year, NRHA worked with buyers from major wholesalers to review course information, working together to assess major developments in core categories, such as code changes, new products or revisions to current information. Now, the following departments in the Basic Training Course in Hardware Retailing are current. • Plumbing

• Hardware and Fasteners

• Electrical

• Heating and Cooling

To access these resources, log in to your training account at nrha.org/training. If you’re not yet an NRHA Training Member, call us today at 800-772-4424 to sign up.

Time for a Refresh Employees who have already completed these courses, but want to see the updated information can download the update sheets for each department, which are available on NRHA’s learning management system. These sheets also make for a good tool for retraining or refreshing the basics.

Trends Monitoring the Market Use the following industry metrics to anticipate emerging trends and opportunities in the channel. Data is not seasonally adjusted, meaning these graphs represent real-time shifts in the market.

Analyze total retail sales for building material and garden equipment centers to track your business’s performance against national averages.

Understand consumers’ desire to save or spend by gauging overall consumer confidence levels.

Serve customers renovating or upgrading homes more effectively by observing housing starts and existing home sales.

Consumer Confidence

Monthly Retail Sales

(Measured by surveys sent to U.S. households; in basis points)

(Building material and garden centers; in millions)

OCT

SEP

AUG

JUL

JUN

APR

MAR

JAN

FEB

DEC ‘18

NOV ‘18

OCT

SEP

AUG

JUL

JUN

MAY

APR

MAR

FEB

JAN

NOV ‘18

DEC ‘18

35 120

MAY

150

Existing Home Sales

Housing Starts

600

500

(in thousands)

400

300

200

100

NOV ‘18 DEC ‘18

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

Sources: The Conference Board; U.S. Department of Commerce, NAICS 444; National Association of Realtors; U.S. Census Bureau

January 2020 | HARDWARE RETAILING

New Products

“This product makes

Insect & Mosquito Repellent

multitasking easier for customers by allowing a quick transition from using your hose to filling a bucket or washing your hands.

Natural Insect & Mosquito Repellent by Medella Naturals is free of DEET and other chemicals. It’s safe for children and pets and leaves no oily or greasy residue.

”

—John Burkhart, McCoy True Value Hardware

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Hose Connector Hub Melnor's GreenThumb Wash & Fill™ Hose Connection Hub lets you wash hands, fill buckets and connect hoses without constantly swapping connectors. A built-in control switches from hose to spray to off. It features a fully articulated hose connection. Melnor 540-722-5600 or melnor.com

Aluminum Dish Rack Polder’s Aluminum Advantage Dish Rack won’t rust and includes plastic padded feet to protect countertops. It features five glass posts and can hold up to eight plates. It has a large utensil bin with split compartments and a slide-out drying tray that stores under the dish rack for extra drying space. Polder 203-888-9208 or polder.com

Send a note to editorial@nrha.org with the details about products you can’t keep on the shelf. Include your name, your business name and a few reasons why you or your customers love it. Your feedback will be considered for publication in a future issue.

HARDWARE RETAILING | January 2020

“Our customers

have fallen in love with the fast grab time and wide array of surfaces that Gorilla Glue Construction Adhesive works on.

—Dale Drew, Merrilees Hardware

”

Construction Adhesive Adhesiv Gorilla Construction Adhesive bonds virtually any surface including wood, drywall, concrete, paneling, trim and molding, ceramic, tile and more. mo It is repositionable for up to 15 minutes, usable indoors and outdoors, is paintable and cleans clea up with soap and water. Gorilla Glue 800-966-3458 or gorillatough.com gorillatough

Barbecue Caddy

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Carry condiments, tools, paper towels and more in just one trip with the Mr. Bar-B-Q® Barbecue Caddy. It conveniently stores everything you need for grilling within easy reach and can be customized with telescoping legs.

Ideal for welders needing fast setup and accurate holding of metal sheet stock or tubing, Industrial Magnetics Welding Squares feature holes for easy mounting and fixturing. Copperplated poles resist weld spatter and reduce marks on work surfaces. They have a large finger hole for easy removal.

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LED Spin Light ETI’s Spin Light with Motion Sensor features an integrated 11.5 watt LED rated for 50,000 hours of continuous use. It is UL rated for damp locations and screws into a standard porcelain socket. ETI 855-384-7754 or etissl.com

January 2020 | HARDWARE RETAILING

New Products

Impact Protection Work Gloves Wells Lamont's FX3™ HydraHyde® Impact Protection Work Gloves feature thermoplastic rubber on the knuckle backs to provide impact protection. The palm of each glove is HydraHyde-treated cowhide leather that is breathable and water-resistant. Lightweight spandex forms to the back of your hand keeping you cool and comfortable while working.

Rafter and Truss Fastening System The Quik Stik™ Rafter and Truss Fastening System attaches to any drill or impact drive. It allows you to drive screws overhead from a standing position without a ladder. Simpson Strong-Tie 800-999-5099 or strongtie.com

Well Lamont wellslamont.com

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Based on the cost of covering 100 sq. ft. per year, For information a little goes a long way! 803-396-8400 • Rust-Patrol.com 18

HARDWARE RETAILING | January 2020

Portable Grill The Tailgater GT is a charcoal grill designed for portability. It weighs less than 9 pounds and heats up in about 4 minutes. Its double layer construction keeps the outer bowl cool during use. The grilltop and inner bowl are stainless steel and safe for dishwashers. The bowls and grilltop latch together to avoid spills. It uses 80 percent less charcoal than typical grills. Grill Time 855-474-5584 or live2grill.com

Paw Cleaner C r MudBuster® features an array of soft, thick silicone brushes inside an easy-to-grip tumbler. It provides quick cleaning of your dog's dirty or muddy paws—just add a small amount of water, insert the paw and twist. Dab your pet’s paws dry with a towel and they'll be ready to roam your home once again. Dexas 800-527-5197 or dexas.com

Make it Personal

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ImpressAr t.com January 2020 | HARDWARE RETAILING

New Products

Glass and Polishing Cloth Clean windows, mirrors, chrome and more with just plain water and e-cloth’s Glass and Polishing Cloth. It removes light grease, finger marks, dirt and over 99 percent of bacteria. They are approved by the Good Housekeeping Institute and recommended by Allergy UK. e-cloth 800-677-4354 or hello@e-cloth.com

“

Our customers are always looking for eco-friendly cleaning products to use in their homes that actually work. E-cloth delivers great margins, repeat visits and happy customers. It’s winwin-win.

”

—Stacey Griffin Jess, Griffin Ace Hardware, San Diego

Grill and Furniture Covers Storigami™ grill and outdoor furniture covers are designed to easily fold to a manageable size for storage. Storigami covers are made from weather-resistant fabric and include looped handles and click-close straps. Classic Accessories 800-854-2315 or classicaccessories.com

Beef Jerky Jack Link’s Zero Sugar Beef Jerky is an excellent source of protein made with 100 percent beef. It contains no artificial sweeteners and no added nitrates. Jack Links 715-466-6608 or jacklinks.com

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January 2020 | HARDWARE RETAILING

New Products Clamp Edge System Available in multiple lengths from 36 to 100 inches, the BORA® Tool NGX Clamp Edge™ System features one-sided adjustability and locking handle grabs. It’s made of heavy-gauge aluminum and can be used with circular saws, routers, jigsaws and other portable power tools to deliver accurate cuts and reduce tear-out. Bora Portamate 866-588-0395 or boratool.com

Travel Coffee Maker The AeroPress Go Travel Coffee Maker gives coffee lovers everything they need to brew their favorite coffee anywhere they travel. Compact, lightweight and durable, it includes a mug with lid, 350 microfilters in a storage carton, filter cap, filter holder, stirrer and scoop. Aeropress 650-493-3050 or aeropress.com

HARDWARE RETAILING | January 2020

Winch Kinedyne’s 3-bar winches feature increased spacing between bars and a new “Thumb Saver” thumb pawl. The design allows for easy strap insertion, even when slots have built-up ice. These winches are made from heat-treated carbon steel and have a working load limit of more than 6,600 pounds. Kinedyne 800-848-6057 or kinedyne.com

Grilling Plankss Grilling Planks Plan infuse grilled d foods with a smoky flavor and can be used with any grill or in the oven. They’re certified food safe and sustainably produced. Wildwood Grilling’s planks are available in cedar, alder, cherry, hickory, maple and red oak. Wildwood Grilling 877-350-5007 or wildwoodgrilling.com

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Celebrating a Century in Business

he team at Borderland Hardware in Mercedes, Texas, hosted a memorable community party when the business turned 100 in October. Ken and Debbie Eilers wanted to mark the anniversary of their store’s opening in honor of Ken’s parents, Robert and Loretta Eilers, and applaud the community and employees who have supported the business for decades. Robert has worked in the business for 70 years, owning it for 50 of them. Ken and Debbie collaborated with the local historic commission and chamber of commerce to plan the ceremony. Before the big day, they gave their employees gifts and a private dinner to honor their service. The schedule of events for the party included a proclamation from the mayor, memory sharing from members of the Eilers family and the unveiling of a historic marker. The store also gave away door prizes and provided street tacos, cake and kettle corn for more than 400 people. “Not too many businesses make it to 100 years,” Ken says. “We wanted to thank our community, my parents and the employees. It takes a lot of work and the support from the community to last this long.”

“Not too many businesses make it to 100 years.

—Ken Eilers

”

Top: Ken and Debbie Eilers and Robert and Loretta Eilers of Borderland Hardware pose with a historic marker at their store. Bottom: More than 400 people from the community attended the anniversary celebration for the business.

Photo by Valley Business Report

Looking for creative ways to engage customers? Whether it’s promotions, merchandising or special events, we cover it here. Have an idea? Send an email to editor@nrha.org to have your story considered for publication. 24

HARDWARE RETAILING | January 2020

Honoring Employees For three years running, King’s Ace Hardware has run full-page ads in the local newspaper for Veterans Day, honoring store employees for their military service. The ads allow King’s Ace to recognize its veterans, but also give customers the chance to learn about the employees and thank them for serving, says Jim Lee, who oversees advertising and promotions for the business. The operation has five stores in the Billings, Montana, area.

Winning a Discount At Wiehe’s Hardware Hank in Barron, Wisconsin, customers can try to win a discount by answering a trivia question correctly. A staffer writes a new question weekly on a chalkboard near the store’s entrance, often picking current topics of local interest, such as deer hunting season.

Healthy Local Options Mike and Heather Schacht, owners of Evergreen Homestead Supply in Clark Fork, Idaho, started hosting a farmers market in 2017 at the edge of their parking lot. Their goal was to create a space where area farmers and artisans could sell products and local people could buy healthy food and socialize. The farmers market has become a group endeavor, with gardeners donating extra produce to a community table so people of all incomes can afford fresh and healthy food.

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A Personal Thank You When shoppers buy expensive items, such as grills, at Ace Hardware of Clarkston in Clarkston, Michigan, owner Jason Haley jots personal notes on custom thank you cards and sends them through mail Customers in turn appreciate the follow-up the mail. and thank him ffor the personal touch, Haley says. Ag-Industrial Jacks

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January 2020 | HARDWARE RETAILING

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The Power of Culture Motivate Your Staff to Work Better, Smarter and Happier

very workplace has its own unique culture: the shared values and actions that guide each business and influence how customers and the outside world view it. When employers honestly assess their workplace culture, take steps to address long-standing issues and hold employees at all levels accountable, teams grow more unified and can better serve customers. More importantly, businesses operate under a shared set of expectations, leaving little room for ambiguity or inaction. That was the experience of Eric Hassett, owner of Hassett Hardware, a chain of five home improvement stores in central California. After undergoing a culture audit at his business, he says sales have increased and teams are now operating toward a single purpose. At Friedman’s Home Improvement, a deliberate culture overhaul brought its four northern California locations closer together and helped employees reach new potential. Lynn Ichinaga, Friedman’s vice president of people and culture, helped the company unite 600 employees to achieve a single goal of prioritizing teamwork. Learn from these retailers how positive culture can unite and inspire employees to serve customers at a higher standard. For more insight into the benefits of culture reviews, visit TheRedT.com/culture-benefits.

Improve Culture Now Ensure your company avoids harassment and engages workers and shoppers from diverse backgrounds by attending one of Member Insurance’s upcoming webinars. Each session offers tips on best practices for protecting employees, customers and your business. Register for the webinars today by visiting TheRedT.com/culture-webinars.

HARDWARE RETAILING | January 2020

A Shared Language After taking DiSC personality tests, the team at Hassett Hardware now wears nametags that include colors designating their personality type to communicate more effectively.

January 2020 | HARDWARE RETAILING

Establishing a Core Culture Hassett Hardware | 5 Locations The Situation Hassett Hardware needed to ensure its 150 employees were operating under clear company values toward a shared goal.

The Solution Owner Eric Hassett took part in a yearlong program to define company values and guide his team effectively.

The Result Hassett says his employees communicate more effectively and feel more empowered to solve problems for customers.

Fulfilled employees plan to stay nearly three years longer than unfulfilled counterparts. Source: PwC

HARDWARE RETAILING | January 2020

s the third generation working within his family business, Hassett says he’s seen firsthand how the company’s culture has shifted throughout the years. After graduating from college, Hassett returned to the business in 1999. The years that followed included multiple acquisitions, bringing his company to five stores in total. Hassett says while the growth was vital for the business’s success, expanding to five locations and employing more than 150 people began to put a strain on internal communications. “When it was just my family in the business, we knew what the purpose was,” he says. “As we grew, I think the message got diluted and we weren’t all working toward the same goal.”

A New Vision Hassett says he first heard about a program to establish and implement core values from a peer. After researching the process, Hassett decided the time was right to introduce the culture review in his business to implement a new standard of excellence among his employees. As big-box and e-commerce competition grew, Hassett bet on superior customer service as a defining characteristic that would help his business fend off competitors. “I got up in front of all 150 employees and said, ‘We’re betting on service, and the way we’re going to offer great service is by improving our culture and having like-minded people work to improve it,’” he says. One of the key components of improving the culture was to develop a set of core values to guide all areas of the business. Hassett says since those core values were established, they’ve been used to steer overall company strategy, set employee goals and be the

final deliberation when employees don’t perform to expectations. “With our core values in place, everything is in black and white,” he says. “You’re either upholding the goals and values of the company, or you’re not.” Since undergoing the culture review, Hassett says nearly every aspect of his operation has improved: from reinforcing hiring standards to incorporating a new employee evaluation process, his team’s work to strengthen its culture is filtering into customer-focused improvements.

Be the Change Even a few years after first instituting the culture review at his business, Hassett says its effects are powerful and serve as a foundation for the business to improve even further. One of the lasting lessons for him as a business owner was understanding the influence he has over his team. “I think the process taught me to look inward first,” he says. “I saw that I had a lot of room to improve. I think a big part of our companywide cultural shift was the team seeing me shift.” Hassett says before the analyzing his company culture, he was friendly with all employees, but in his estimation, he never gave enough praise or slowed down to talk with struggling employees in depth. Now, he says he’s able to understand different communication styles and adapt his approach to best engage with any employee. He says by varying his communication style, he’s seen employees invest more deeply in the success of Hassett Hardware and feel empowered to find solutions for customers without asking for permission or waiting for approval. “Reviewing our culture changed how we do business,” he says. “Without doing that, I don’t think we’d have the same commitment to accountability.”

At Hassett Hardware, a yearlong process to establish and promote the company’s core values has motivated employees to act independently and represent the company proudly.

January 2020 | HARDWARE RETAILING

Focusing on a New Culture

Friedman’s Home Improvement | 4 Locations The Situation With years—even decades—of service under their belts, some employees were focused primarily on individual store success and were operating based on their own interpretation of the core values.

The Solution Events called Friedman’s Focus served as the companywide kickoff for a cultural shift that prioritized core values and teamwide success.

The Result Employees now put teams first, relying on their colleagues’ varied skills and knowledge to best serve customers and uphold company values.

Among employees, 96 percent believe fulfillment at work is possible, but they need leaders to demonstrate it. Source: PwC

HARDWARE RETAILING | January 2020

ynn Ichinaga had a problem most retailers would envy: Many of her company’s 600 employees have served for a decade or more, with some reaching 40 years of service. However, Friedman’s management began to suspect that with that longevity came stagnation, and employees were content to go through the motions of upholding a positive company culture without challenging themselves to truly deliver unparalleled service. To reenergize the entire workforce, Ichinaga and the Friedman’s team spearheaded a process to update and articulate the company’s core values. Slowly but surely, each of the company’s 600 employees learned about and bought into a new cultural shift at the business.

‘Part of Something Bigger’ Ichinaga and her team initiated a series of sessions called Friedman’s Focus, which served as the official introduction to the company’s new core values. “We brought a mix of people into those sessions, which lasted a full day and took place off-site,” she says. “We brought our entire existing team together and outlined our values and our commitment to safety to make sure everyone was on the same page.” Icihnaga says taking employees away from their stores put everyone on neutral ground and encouraged people to speak freely and reinvest in the company’s standard of excellence. “Some people in our Ukiah location had never met people from the Sonoma store, so bringing everyone together showed them that they were part of something bigger,” she says. “We made those sessions fun and engaging, and that was the big launch to our new culture.”

During Friedman’s Focus, teams learned the updated standard by which Friedman’s Home Improvement would now operate: ‘We were born to lead, connect, grow, serve and care.’ Ichinaga says each component of the guiding value contains specific meanings that reminds team members of what the company and the community expect from Friedman’s.

Old Team, New Tricks One of the measures of success Ichinaga points to is after the Friedman’s Focus sessions, veteran employees seemed authentically invested in the new cultural direction. One of the key updates was shifting to prioritize teamwork, inclusion and collaboration. “They saw under the new vision that teams were better able to share the load and develop future leaders,” she says. “I think seeing that was powerful; people knew things really were changing.” Ichinaga says customer service is still at the heart of Friedman’s, but by focusing first on teams, individual employees are empowered to become leaders at every level, effectively deputizing them to represent Friedman’s mission and objectives in every interaction. Two years after Friedman’s Focus, Ichinaga says the positive effects are still reverberating. The company has won consecutive awards the best home improvement store in Sonoma County and is frequently recognized for its community service. Ichinaga credits the company’s focus on revitalizing the culture as one of the key ways Friedman’s has evolved. “We often talk about Friedman’s like it’s a living thing, and our company culture is a huge part of that,” she says. “Since Friedman’s Focus sessions, it’s clear that every member of our team has heart; it’s clear to every customer.”

At Friedman’s Home Improvement, a process to update the company’s core values united long-term and brand new employees alike.

January 2020 | HARDWARE RETAILING

WHITEPAPER

5 Inventory Management Pitfalls to Avoid How to improve your inventory management and positively impact the bottom line. Many small to midsized businesses (SMBs) struggle to compete with their big box counterparts because they have fewer resources including personnel, technology, budget, and time. That said, making your resources as effective as possible is extremely important.

Surprisingly, many SMBs do not have inventory recordkeeping policies in place including regular inventory counts, maintenance, and documentation. Results from a recent ECI Software Solutions’ customer “Warehouse Management Woes” survey shows that 53% of small to mid-sized businesses conduct manual inventory counts at least once a quarter and 50% of respondent have challenges counting or reconciling inventory.

Inventory management is one of the most vital areas of any business yet often needs the greatest improvement. Struggles in this area can lead to a variety of problems including poor customer experience, lack of visibility across departments, low inventory turns, out-of-control labor costs, decreased profitability, and ultimately, business failure.

Accurate inventory recordkeeping enables SMBs to effectively balance inventory levels to ensure the proper stock is on hand. The benefits include: • • • • • • • •

Here are five inventory management pitfalls that many inventory managers face and how successful businesses can streamline purchasing and inventory processes to drive efficiency, eliminate errors, and reduce costs. 1.

Inventory record inaccuracies: Many inventory processes involving physical counts, or disconnected spreadsheets with different data systems, can never really be trusted. Are missing items the result of employee negligence, fraud, or double shipments? Is there a logistics problem tracking the flow of inventory from purchasing to receiving to your store shelves? Important questions constantly go unanswered, and with little time to manually analyze the data, costly issues can drag on for months or even years.

Better customer service Reduced operating costs Less stocking labor effort and costs Accurate product receiving information Consistent on-time deliveries Accurate data for financial records Maximized retail shelf space to drive sales Efficient turn analysis

Inefficient storage, display, and receipt processes: Since many SMBs have limited time, personnel, and financial resources, inefficient storage, display and receipt processes are common. This pitfall is often the start of other costly mistakes including difficulty accessing merchandise, overordering, and missing stock.

To resolve this challenge, a business must have a documented process that holds personnel accountable for oversight and implementation. There needs to be clear instructions for each of the following: • • • • • • • 3.

Employee interaction with inventory Storage of material Storage locations Material/merchandise handling Safety guidelines Reporting/entering data Handling damaged inventory

Excess inventory: Holding excess stock or reordering products at at the wrong time contributes to some of the biggest overhead cost drivers for SMBs. Inefficient inventory control leads to wasteful spending. If cash is tied up in excess inventory, the business can’t invest in other areas that provide ROI.

Accurate inventory and sales information is essential to an accurate purchasing process, as well as understanding the best opportunity for future growth. Accurate inventory levels are also essential for successful marketing and advertising initiatives, as well as reducing the need to drastically lower prices to quickly sell excess stock.

Like what you’ve read so far? Continue reading this article to learn about the remaining two pitfalls your company may be facing and how leveraging technology can help simplify the purchasing process and improve efficiency. www2.ecisolutions.com/inventory

Stop Counting, Start Selling! Hardware inventory weighing you down? You could be making one or all of these 5 inventory management mistakes!

Get the complementary ebook at www2.ecisolutions.com/inventory

www.ecisolutions.com/rocksolidmax | How business gets done.

CALL FOR 2020 NOMINATIONS HA

UN O Y

G R E TA

ILE

• 202

Recognizing young leaders who represent the future of independent home improvement retailing

The deadline to submit nominations is February 28, 2020. Learn more at NRHA.ORG/YROTY

2 4T H

Nominations are open for the 2020 Young Retailer of the Year awards. Do you know someone outstanding?

L A

WARDS P

G O R

Planning for Profit How You Can Create a Budget for Growth

sk a typical home improvement retailer to predict their business growth for the next year and you might hear a variety of answers. “There’s a factory moving to town that will bring a lot of jobs.” “The housing market has been strong and we expect that to continue.” “A major competitor went out of business, so we expect traffic to pick up at our store.” The problem is, those are all factors outside of your control. What if your town isn’t getting a new factory, or the housing market is flat, or the competitive landscape isn’t changing? Don’t wait for outside forces to create change. You can still plan to increase the performance of your business. Start by taking a hard look at your financial statements to find the numbers you want to improve. Then, establish specific goals for how you can improve those numbers. In this article, explore the health and future growth of your business in three different directions. To drive top-line growth, use the retail revenue equation as a model. Boost the bottom line by focusing on your key profit indicators. Evaluate the overall health of your business by analyzing your return on net worth. In each direction, there are practical steps you can take to plan for a more profitable year ahead. If you want an in-depth look at some of the metrics used in this article, visit nrha.org/codb, where you will find additional resources. January 2020 | HARDWARE RETAILING

Drive Top-Line Sales Driving top-line sales might seem like a daunting task, but consider the benefits. Having every customer add a single $1 item to their shopping basket could add tens of thousands of dollars to your annual sales. Increase sales through incremental steps and you’ll find you will have more money to allocate to larger investments that benefit your business, such as higher wages for your staff to help with employee retention, diversifying your inventory or making improvements to your building.

You likely have more control over your sales than you realize, which is evident when you look at the retail revenue equation (see Page 41). According to the equation, your store’s revenue is a factor of three important ingredients for growth: store traffic (how many people engage with your business during a given period of time); conversion rate (the number of those customers who make a purchase) and transaction size (how much those customers buy). Find a few suggestions to increase each of those elements below.

Store Traffic Loyalty Programs. Build business with current customers by signing them up for a loyalty program. A robust loyalty program will help you learn your customers’ shopping preferences so you can create customized advertising to lure them back. Special Events. An in-store event can help you find new customers. Partner with organizations that target a different demographic than you typically do. The event will bring those potential customers into your business, giving you a chance to learn more about them and their needs.

Conversion Rate Product Knowledge. To close a sale, employees must be properly trained to answer shoppers’ product questions. Include training on individual products and guiding customers through projects. Answer Objections. Train employees how to answer a customer’s objections to a sale and then ask for the purchase. When a customer does not make a purchase, train employees to ask why. The feedback will help you improve areas that could be hindering your conversion rate, such as high prices or insufficient inventory.

Transaction Size Merchandising. Artful endcaps and impulse displays throughout the salesfloor can encourage customers to add items to their shopping carts. You can also increase transactions by adding niche categories to capture more shopping occasions. Suggestive Selling. Employees helping a customer with a project should be trained to suggest add-on items and upsell to a better product, when appropriate. Both are functions of customer service, as you are giving customers the information they need to make an informed purchase.

HARDWARE RETAILING | January 2020

Examine Your KPIs As you are driving top-line sales, don’t ignore the bottom line. Be smart about how you spend your money. If you let your expenses eat up all your cash, you will have little to show for your hard work. Part of your growth plan should include a review of your key profit indicators (KPIs), or the quantifiable measurements that help you gauge your operation’s performance. There are many KPIs you can use, including inventory efficiency ratios, employee productivity numbers and gross margin indicators.

NRHA’s annual Cost of Doing Business Study can help you establish a baseline to measure your KPIs. The study consistently shows that one of the big differences between an average performing retail operation and a high-profit one is the way they handle their operational details. In particular, there are three KPIs where high-performing stores consistently outperform the rest: payroll expenses, operational expenses and sales per square foot. There are several ways to tackle each of these KPIs, but here are a few suggestions.

Payroll Expenses Scheduling Efficiency. Use your POS data to help you determine your busy times of day and how many employees you need during those times. Once you adjust schedules, you may also be able to eliminate expensive overtime or overstaffing. Training. Turnover is costly to a company. Improve employee retention by refocusing your efforts on training. Training will give employees more confidence to do their jobs, improve job satisfaction and give them opportunities to move up in the company.

Operational Expenses Service Providers. If you haven’t audited your service providers recently, it may be time to see how you can save money. For example, shop around for a lower price on insurance or cheaper trash service. The pennies you save on operational items will add up to larger overall savings. Energy Efficiency. You might also want to look for ways to decrease your utility bills by upgrading to more efficient lighting and making sure the building is well insulated. You can also hire an auditor to check your utility statements and look for ways to save money.

Sales per Square Foot Merchandising. Effective merchandising not only makes good use of the space you have, but also will drive more customers to buy. Rotate endcaps regularly to encourage project sales and show off new products and niche items. Inventory Management. You also need to manage your inventory well. If you are carrying a lot of slow-moving items, then your salesfloor will not be as productive. Identify out-of-stocks on a regular basis so you replace missing inventory quickly.

January 2020 | HARDWARE RETAILING

Measure Your Return on Net Worth When you’ve boosted revenue and trimmed your expenses, there’s just one final area to address before you can measure profitability. If you are going to truly create value for your business, top-line sales must translate into bottom-line profit. You need to measure the return on your net worth. Turning revenue into profit requires insights into your operation and careful oversight of processes such as pricing and inventory management. Sales can tell you how much money is coming in, but return on net worth will tell you how much value those sales

are creating for the business. It indicates how well you are using your income to create a profit. A good target is 20 percent, while a very good business will generate 40 percent. The classic way to calculate return on net worth is by using the strategic profit model. This tool combines elements of the income statement and balance sheet to identify three operational areas that have the greatest impact on your return on net worth: profit margin, asset turnover and financial leverage. Here are some ways to impact them.

Profit Margin Cost Management. Decrease your cost of goods by attending wholesaler buying markets and taking advantage of discounts. Then, when your cost goes up, make sure the change is reflected in your price. Incremental cost increases can erode your margin if not managed well. Gross Margin. Pricing offers the greatest opportunity for increasing gross margin. Stay sharp on your pricing to maximize margins on each item, schedule regular price audits, price shop your competitors and make regular price changes to stay in line with increases in your cost.

Asset Turnover Dead Inventory. Outdated, excessive or slow-moving inventory will have a negative impact on your asset turnover. Establish a regular process for identifying dead inventory, such as through POS reports, then move it off the shelf and replace with a faster moving item. Accounts Receivable. Unpaid invoices will negatively affect your asset turnover, so put strict controls on who can have a house account. Limit it to larger contractor operations and commercial customers. Everyone else can just as easily use a credit card.

Financial Leverage Too Much Debt. Your financial leverage is an indication of how well you are positioned to invest in new growth. Get the number by dividing total assets by net worth. A standard target is 1.5. Being too far below that target may mean you are in a poor position for future investments. Too Little Debt. If you have little debt, it could mean you are not investing enough back in your business. For example, if you could benefit from a larger building, taking out a loan for the project is an investment that could result in increased customer traffic and higher transactions.

HARDWARE RETAILING | January 2020

2 Ways to Calculate Retail Performance Using the Retail Revenue Model The retail revenue model shows how to build sales. Look at the equation based on hypothetical numbers from a typical hardware store. See how making small changes in one area can result in a big revenue boost.

Conversion Rate

Store Traffic

112,000 X

65%

Transaction Size

Revenue

$25

= $1,820,000

Now, let’s look at what happens if you make some incremental changes: Get an additional 500 customers through the door in one year, increase your conversion rate by 1 percent and increase your average transaction size by $3.

66%

112,500 X

= $2,079,000

$28

This scenario adds $259,000 to your net sales!

Using the Strategic Profit Model The strategic profit model evaluates your operational performance. Compare how your numbers stack up against high performance retailers.

X Profit Margin (pre tax)

Asset Turnover

X Return on Assets

Financial Leverage

Return on Net Worth (pre tax)

Typical Hardware Store

4.1%

2.3

9.4%

1.5

14.1%

1.5

36.6%

High-Profit Hardware Store

10.6%

2.3

24.4%

Source: 2019 NRHA Cost of Doing Business Study

January 2020 | HARDWARE RETAILING

01 What’s Your Plan? Starting the Conversation About Succession Planning

hether you are building your employee schedule for next month or investing in a new category without knowing how it will perform, you are often asked to make decisions that would be simpler if you had a crystal ball. However, you make those choices for your business based on data and evidence. For example, you use sales records from the same dates last year to anticipate how many associates you need on the floor this year. And you keep track of product requests from customers, you stay on top of trends and you track sales in similar areas to decide how much of a new category to bring in. Planning for the future is present in all aspects of your business, but how often do you think about the future of the business itself? If you haven’t considered a succession plan for you and your operation, no matter how close or far you are from retirement, the time to start is now. According to industry data featured in Hardware Retailing’s 2019 Market Measure report, industry sales are projected to grow about 3 percent by 2023, but the number of hardware retail outlets will shrink by about 1.5 percent. That doesn’t necessarily mean stores will close, although that is the case for some operations. These estimates by the North American Retail Hardware Association (NRHA) and Hardware Retailing suggest the industry is on track for a fair amount of consolidation. As more owners reach the age of retirement, they have a few options: They can close, they can pass their business on to someone within the company or their family or they can sell to an outsider who may or may not keep the business intact. NRHA staffers regularly talk to retailers throughout the U.S. and Canada, and through those conversations, we have learned there are a variety of reasons retailers are choosing not to sell their operations to the next generation. Whether it’s their children’s disinterest in the family business or too

HARDWARE RETAILING | January 2020

much competition in the market, many people share valid but unfortunate reasons for closing. However, some of those retailers who choose to close may have been able to preserve their business if they had created a feasible succession plan with enough time to execute it. NRHA’s mission is to help independent retailers become better, more profitable operators. To earnestly live up to that mission, we are committed to providing concrete, actionable solutions to keep the independent home improvement industry growing beyond just the next generation. In each issue of Hardware Retailing in 2020, we will be touching on the most critical components of succession planning to help you get organized. With input from industry experts, insights from retailers who are executing their own plans and exclusive research to gauge the status of succession planning in the industry, this yearlong series will serve as a comprehensive guide to help you kick-start a succession plan to preserve your business well into the future.

A Year of Succession Planning On the next page, see a preview of some of the installments of the succession planning series. To be sure you’re the first to see each installment, subscribe to receive the digital edition of Hardware Retailing in your inbox every month at TheRedT.com/subscribe.

Start Your Own Conversation Want to know how your industry peers are taking on succession planning? Head to nrha.org/forum to contribute to the succession planning thread. Ask questions, share your plans and find new solutions with guidance from your association and your peers.

The Series Check Your Files Preparing Your Succession Planning Documents Who Do You Have on Your Side? Choosing Your Advisers Let’s Talk About That Communication During Succession Planning The Family (Succession) Plan Selling Your Business to Your Children Expecting the Unexpected Succession Planning in a Pinch The After Party Planning Your Free Time Countdown to Succession The Numbers to Watch

January 2020 | HARDWARE RETAILING

01 Resources and Expert Insights Hardware Retailing has a wealth of succession planning resources. See some of them here, and read corresponding insights about succession planning from Gary Pittsford, president and CEO of financial advisory firm Castle Wealth Advisors. Pittsford and his team have been guiding independent retailers through succession for more than 40 years. For more from Pittsford and to access these resources, visit TheRedT.com/succession.

The Data on Succession NRHA surveyed retailers about their succession plans in 2016, and their answers were the basis for this study.

Pittsford’s Position “The pressure has been building over the last three to five years because most companies have recovered from the recession in 2008 and 2009. Now that sales and profits are higher, and owners are growing older, people are asking how to quickly develop a succession or exit plan.”

Compare and Contrast In 2016, Hardware Retailing profiled several retailers in a two-part series. The first installment highlighted retailers who sold their businesses, and the second featured buyers.

Pittsford’s Position “Developing a plan even three years in advance greatly improves profitability and the value of the business. Having a plan in place also protects your business in the case of unexpected tragedies, such as an owner’s unexpected death.”

HARDWARE RETAILING | January 2020

Mr. Oswald’s Take In the December 2000 issue, even Mr. Oswald had questions about the future of his business. What would his operation look like today if Fuller had taken over?

Pittsford’s Position “The next 10 years will mark a significant transition period because so many baby boomers are selling their businesses to younger owners. As the next generation comes in, the industry will change rapidly.”

Asking the Right Questions One of the supplements from the two-part story in 2016 was a quiz to determine if retailers were ready to buy an operation or sell their own.

Pittsford’s Position “Operations have recovered from the recession, so sales and profits are higher. Business owners are asking how to quickly develop a succession plan. They are eager to learn how to sell for a profit and retire comfortably.”

January 2020 | HARDWARE RETAILING

HARDWARE RETAILING | January 2020

On-the-Go Wares 3 Housewares Trends That Reflect Consumers’ Busy Lives

ast year, large retailers like Amazon, Home Depot, Lowe’s, Target and Kohl’s reported steady sales in housewares, with many lines capturing 10 to 20 percent or more of overall sales. As the category grows, independent home improvement retailers can boost sales and expand housewares inventory the same way large retailers

do: by monitoring shifting lifestyle trends which often pinpoint upcoming housewares styles. Learn from retailers in the Midwest and on the East Coast who operate expansive housewares departments. Their most valuable resource when deciding how to differentiate their department is understanding their customers.

January 2020 | HARDWARE RETAILING

Rising Reusables “Housewares is a tough business because it’s based on what’s trending,” says Craig Johnson, housewares manager at Tags Hardware. The store, located in Cambridge, Massachusetts, has a thriving 25,000-square-foot housewares department within a 55,000-square-foot salesfloor. Johnson and the rest of the staff stay on top of new trends to boost sales. When it comes to what’s current, Johnson says Tags’ customers are concerned about the impact disposable items have on the planet. “They really want to help the environment,” he says. “They’re geared toward eco-friendly items that eliminate the use of plastics.” Since Starbucks pledged to eliminate plastic straws by 2020, reusable straws have become popular. Tags stocks a line of durable, reusable glass straws that are made in the U.S. and come in a variety of colors and designs.

Silicone is another common alternative to plastic in the housewares category. It is used to make a variety of kitchenware items, including baking pans, ice trays, lids and utensils. It is stain-resistant, safe for appliances, flexible for easy storage and often comes in a variety of colors. Johnson says some of his store’s most popular items include reusable silicone bags that come in several sizes. Other popular items at Tags include flexible fabric squares coated with organic jojoba oil, beeswax and tree resin that serve as an alternative to plastic storage bags and cling wrap. They are washable, reusable and also compostable, making them a hit with customers.

Exploring products from local vendors can bring one-of-a-kind gift options to your inventory.

At Akard True Value Hardware, special spices and seasonings are proving to be a hit with customers looking to add depth and a personal touch to their home cooking.

HARDWARE RETAILING | January 2020

Akard True Value Hardware owner Leigh Ann Akard, says she stays tuned in to what her customers are looking for in Zionsville, Indiana, which means stocking absorbent cloths as an alternative to paper towels. “We also sell travel wine glasses and tumblers made with our own designs,” says Akard. “They are very popular, especially with moms from a local wine club. They all came in to get one.” Identify This Trend Host a focus group with customers to find out how they are making greener choices in their homes and learn how you can help support those habits. Be sure to offer a gift to participants, such as reusable straws or travel mugs.

Food Fads From the latest diets and delivery services to popular specialty beverages, trends in home cooking often drive demand for housewares items. Mail-order meal kits are becoming increasingly popular as U.S. consumers prioritize saving time and eating healthy. You can help your customers accomplish both when you dig into food prep products. “We recently changed our impulse area by the register,” says Akard. “We used to have seasonal items like gift wrap supplies at Christmas or plant food in the summer, but we added a taller case and stocked it with spices, seasonings and other food-related items.” In the new impulse area, Akard added nuts in a variety of flavors, including spicy and candied options. The display also features barbecue sauces and rubs and unique local fare. Exploring products from local vendors can also bring one-of-a-kind gift options to your inventory. Akard stocks locally made snickerdoodle-flavor peanut butter she says is a crowd-pleaser. “Those products are impulse buys because someone doesn’t run out to get spices or healthy snacks and end up at the hardware store,” says Akard. “But the nuts especially have done well for us because people are trying to eat healthier.”

New hobbies are also impacting the housewares category, especially when it comes to perfecting beloved beverages. According to a 2017 study by the American Homebrewers Association, 1.1 million Americans brew beer, accounting for 1 percent of total beer produced in the U.S. The data reveals brewing hobbyists are spread almost equally across the country, making brew kits a potentially powerful product line to explore for retailers everywhere. A popular addition in homebrewing is kombucha, a fermented tea drink. Commercially, the bottled drink product has steeped sales of $534 million, says Kombucha Brewers International, The first kombucha homebrewing kit recently hit the market, opening another opportunity for retailers to grow sales. Nearly half of Americans over the age of 18 drink coffee daily, and pursuing the perfect cup of coffee has driven housewares manufacturers to create single-serve appliances and unique brewing supplies. In 2019, dishwasher-safe, 1-cup pour-over coffee brew cones and ceramic mug sets in a variety of colors and styles hit the market for customers looking to brew their own perfect cup at home. Driven by the popularity of coffee, single-serve appliances have also expanded into the cocktail market. Home cocktail makers produce mixed drinks, including mocktails, on demand, similar to single-serve coffeemakers. Identify This Trend Keep your homebrewers satiated by keeping a fresh batch of kombucha or a new single-serve coffeemaker ready to test in the store. Offer free samples of brew mixes with every purchase of a kit or accessory to help customers get the most value out of their purchase.

Portable Appliances When it comes to small appliances, consumers are going much further than single-serve beverages. Many consumers are seeking commercial-grade appliances for their kitchens. A Millennial Homeownership

Stocking a variety of home cooking products like this department at Tags Hardware can draw sales from customers looking to reduce cooking time and prepare meals in advance.

report conducted by the Urban Institute finds significantly fewer millennials (32 percent) own homes than members of Generation X or baby boomers. With such a large segment of consumers renting or living at home longer, the housewares category has seen an impact. Without the ability or space to upgrade or expand kitchen appliances, millennials are driving an explosion in the small and countertop appliance market, including specialty appliances like pizza ovens, countertop ovens, toaster ovens, air fryers, sous-vide cookers and slow cookers. Many of the products are also smart devices, which are gaining in popularity. Forrester Research says the number of homes with smart devices will grow from 12.2 million in 2018 to 26.7 million in 2022, driven largely by consumers’ desire for convenience and speed.

One example of a smart appliance is a WiFi-enabled instant cooker. These electric pressure cookers significantly speed up cooking time and can be controlled through an app or by a voice-activated digital assistant. They can be used to make a variety of foods, from cakes and yogurt to slow cooker-style ribs. Identify This Trend Visit TheRedT.com/small-appliances to get the data on small appliance sales trends at big-box stores over the last two years.

The Inside Track By keeping a close eye on emerging lifestyle trends across the country and in their communities, retailers can gain a leg up and discover which housewares products will soon become must-have items for their —Heather Kauffman-Peters customers. January 2020 | HARDWARE RETAILING

By Hans Cummings, hcummings@nrha.org

20 Years On 20 Years of Trends From the Pages of Hardware Retailing

ow times have changed. Two decades ago, we saw the turn of the century—or turn of the millennium if you want to be more dramatic. In those days, the magazine you know as Hardware Retailing (HR) was Do-It Yourself Retailing (DIYR), changed previously from Hardware Retailer. Our covers then were primarily illustrated, compared to today, with our goal of having a retailer on the cover of every issue.

HARDWARE RETAILING | January 2020

As I browsed the pages of Do-It Yourself Retailing from the year 2000, just slightly before my time here at the North American Retail Hardware Association (NRHA) started, it felt like I was opening a time capsule. “Mr. Oswald” comics still graced the pages, the 2000 NRHA Annual Convention in Huntsville, Ontario, was separate from the National Hardware Show and one lucky attendee went home with a “Ladybug” Volkswagen Beetle!

FEBRUARY JANUARY STORE BRANDING The magazine showed retailers how to establish their stores as a brand and looked at the latest housewares trends.

TARGET MARKETING DIYR helped retailers with one-on-one marketing techniques and showcased the latest paint and decorating trends.

APRIL MARCH STOCK OUTS DIYR examined the issue of out-of-stock items and highlighted the latest lumber and building material trends.

BUILDING A STORE ON THE WEB DIYR helped retailers maximize their web presence and covered the latest trends in kitchen, bath and plumbing products.

January 2020 | HARDWARE RETAILING

JUNE OPENING BRANCH STORES DIYR took a look at overcoming the management challenges of expanding a business.

MAY PRODUCT KNOWLEDGE HANDBOOK There would only be three more of the biennial encyclopedia published.

AUGUST JULY ANNIVERSARY NRHA celebrated 100 years with a commemorative issue highlighting the association’s history.

INTERNATIONAL HARDWARE WEEK DIYR covered International Hardware Week held in conjunction with the National Hardware Show & Building Products Exposition.

Fortune 500: Then and Now Top 5

Year 2000 Annual Revenue ($M)

Year 2019 Annual Revenue ($M)

1. General Motors $189,058 2. Walmart $166,809 3. Exxon Mobil $163,881 4. Ford Motor Company $162,558 5. General Electric $111,630

1. Walmart $514,405 2. Exxon Mobil $290,212 3. Apple $265,595 4. Berkshire Hathaway $247,837 5. Amazon.com $232,887

HARDWARE RETAILING | January 2020

OCTOBER SEPTEMBER EMPLOYEE ISSUES We wrote about employee training and retention in this issue and reported on the 100th NRHA convention.

HOME DEPOT UPDATE DIYR reported on Home Depot’s new initiatives and future plans. See this year’s report at TheRedT.com/hd.

Compact fluorescent bulbs, the newest lighting innovation, had not yet supplanted incandescent lighting, and LED bulbs were still over a decade away. We had all survived the Y2K “crisis,” and people had strong predictions about the future. Roger Blackwell, keynote speaker of the NRHA Annual Convention and a marketing professor at the Ohio State University, made two predictions: We’d experience a mild recession in 2002, and Amazon.com would be out of operation within three years. His keynote address took place on July 24, 2000. The U.S. experienced a relatively mild economic recession from March through November of the following year. As of January 2019, Amazon was rated one of the most valuable companies on the planet and is considered one of the Big Four tech companies (along with Google, Apple and Facebook). Its net worth in December 2019 is in excess of $100 billion.

DECEMBER NOVEMBER MARKET MEASURE 2001 The magazine featured the industry’s annual report and showcased the winners of the Retailers’ Choice Awards.

NEW PRODUCT SHOWCASE We featured the best new products of 2000 and covered the latest industry internet trends.

Clearly, not all predictions come to pass. The ubiquity of computers and the rise of the internet changed not only the way retailers conducted business, but how we disseminated information. NRHA advertised its new website, www.nrha.org (back when we still had to type www), throughout Do-It Yourself Retailing. In 2000, Do-It Yourself Retailing still included the biennial Product Knowledge Handbook, information that has largely been supplanted information on the web. At the time, 35 percent of independent retailers had no plans for a website, and only 7 percent had websites and e-commerce. In a 2018 study by NRHA, 95 percent of independent retailers had websites, and 55 percent sold products online. In 2000, we listed manufacturer and distributor websites in Do-It Yourself Retailing, whereas today, that information is readily Googlable.

NRHA Celebrates 100 Years MARCH 12, 1900: NRHA was founded in 1900, which meant there was much cause for celebration at the turn of the millennium. Many pages of the magazine throughout the year were dedicated to the anniversary.

January 2020 | HARDWARE RETAILING

Online Predictions in 2000

Economic Changes

NRHA surveyed retailers in 2000 to find out how they were getting online. See the results from a similar 2017 survey at TheRedT.com/going-online.

In 2000

In 2018

35%

95%

of home improvement retailers had no plans for creating a website

of home improvement retailers had websites

55%

of home improvement retailers had websites and sold products online

of home improvement retailers percent sold their products online

American Made & Profitable For o Over O 80 Years rs

• Minimum Wage 2000: $5.15/hour 2019: $7.25/hour • Median Household Income 2000: $59,938 2018: $63,179 • Average New Home Price 2000: $200,300 2019: $361,100 (from CNN.com, statista.com, census.gov)

Out With the Old These companies were in operation in 2000, but aren’t anymore. • Orchard Supply • Builder’s Square • Blockbuster Video • Waldenbooks • B. Dalton Bookseller • F.A.O. Schwartz • Pan American (Pan-Am) Airways • Pontiac • GoldStar

Old Vocabulary

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Toll Free: 855-966-AJAX (2529) www.ajaxwire.com ajaxwire@aol.com 119 Bloomingdale Road,Hicksville,NY 11801 54

HARDWARE RETAILING | January 2020

Ask your Generation Z employees what these are. • World wide web • On-line • CRT (cathode-ray tube) • VCR • Fax machine • Slide projector • Dial-up • Pay phones • Mixtape

Before there was a Hardware Retailing website that housed industry events and news, the pages featured a robust calendar, industry personnel updates and tributes to lost industry veterans within Do-It Yourself Retailing. Today, in order to keep up with the pace of news, editors post industry updates, operations tips and exclusive content on HardwareRetailing.com nearly every day. We also deliver a weekly e-newsletter to keep you informed. Head to TheRedT.com/subscribe to get it in your inbox, which is likely on your phone. In a bit of serendipity, succession planning came up several times across the year 2000 issues. From columns to feature articles, and even a “Mr. Oswald” comic, preparing your operation for the next generation was a common thread throughout the year.

This month, Hardware Retailing returns to the topic and kicks off a yearlong succession planning series. Follow along at TheRedT.com/succession to prepare your operation for the next generation. Through the years, despite all the changes, we’ve offered our knowledge to help you, the independent hardware retailer. Our training programs are more comprehensive than ever and are updated regularly. We’ve expanded our online presence beyond our website to social media, like Twitter, Facebook and Instagram. We even have a podcast—something else that didn’t exist in 2000. If you’d like more information, circle #143 on product information card … oh yeah, we don’t have those anymore either.

Online Coverage of Hardware Retailing Head to TheRedT.com/2000 to check out the cover stories from each issue of Do-It Yourself Retailing from the year 2000.

TAKE IT TO

NEW PRODUCT

• Suitable for temperatures as low as -58°F • Water-resistant finish • Excellent conformability to irregularly shaped objects

-58°F to +230°F (-50°C to +110°C) STRENGTH

January 2020 | HARDWARE RETAILING

By Todd Taber, ttaber@nrha.org

Destination: Cologne The International Hardware Fair Connects Worldwide Industry

inding new ways to grow your business is critical. From scouting local opportunities to taking a global glimpse of the home improvement industry, there are many avenues for you to find new products and boost sales. At the 2020 EISENWARENMESSE International Hardware Fair, held March 1-4 in Cologne, Germany, thousands of retailers, manufacturers and industry observers will gather to highlight the innovative products and illuminating research that can help independents excel. Get an overview of some of the key features that will be on display at the 2020 International Hardware Fair. Learn firsthand how attending the event benefited two retailers from the U.S. by visiting TheRedT.com/ihf-video.

HARDWARE RETAILING | January 2020

Exhibitors will present their latest products on more than

1.8M square feet of show floor.

An estimated

vendors representing 62 countries will showcase their products.

Photos by Koelnmesse/Harald Fleissner

A Focus on DIY This year’s event focuses on storage, logistics and e-commerce solutions. But one of the main product categories highlighted at the biannual International Hardware Fair is its DIY selection. This year, the DIY Boulevard will expand by 20 percent, allowing more room to highlight new vendors and retailers to explore emerging product trends for their DIY customer base. The number of DIY vendors will increase by 25 percent, including more vendors from the European Federation of DIY Manufacturers.

Worth the Trip International Hardware Fair event organizers say more than 47,000 visitors are expected to arrive this year. Among them will be hardware retailers from the U.S., Germany and about 140 other countries. TJ Comstock, owner of Northwest Hardware and Megan Menzer, owner of Newton’s True Value, both attended the event in 2018. Both are owners of home improvement stores and say attending the event was a superb investment. “At the International Hardware Fair, everything is so much larger,” Menzer says. “So many of the booths are interactive, so it’s a completely different experience than at U.S. markets.” For Comstock, the breadth of vendors showcasing their products was the main draw. “Being able to see products that haven’t made it to the U.S. yet was great,” he says. “Attending the Fair gave me different merchandising ideas. Seeing how other people approach home improvement was really important.” For more information on this year’s event, visit For more information, visit eisenwarenmesse.com.

Important Imports To make the trip to the International Hardware Fair as simple as possible for North American retailers, this year the Fair is teaming up with global transport and logistics company DSV. Together, the organizations are consolidating shipments to deliver products quickly and efficiently across the world. Event organizers say shipments of any size can be transported to any spot in North America, helping independent retailers discover products and share them with their communities more easily than ever before.

January 2020 | HARDWARE RETAILING

LEADERSHIP

In this three-part series, we will highlight the lessons retailers have learned from leadership development and management programs inside and outside the industry.

By Melanie Moul, mmoul@nrha.org

Leading the Yard Learning the Value of Communication in Management

ike French has consistently received the same feedback throughout his career: “You’re too happy.” He’s disproved that feedback for years. The yard supervisor at PC Lumber & Hardware in Sellersburg, Indiana, says having a positive attitude is a core part of his management philosophy, and he can see the impact it has on the 12 people he manages in the busy lumberyard. “I want to leave everyone I interact with smiling,” French says. “Even if there is an issue we need to straighten out, when they leave my office, my job is to make sure everything is good and they leave smiling.” PC Lumber & Hardware is a large building materials supplier in the Louisville metro area, which means the

HARDWARE RETAILING | January 2020

day-to-day workload can be stressful. Reducing that stress and making the yard an enjoyable place to work is one of French’s priorities. “Morale in the yard overall is higher if I keep a positive attitude,” he says. French has served in his role at PC Lumber & Hardware for almost six years. He spent the majority of his career in adjacent industries, including construction and trucking. He shopped at PC for his professional and personal hardware needs, so he was familiar with the business when he was approached to take on the role of yard supervisor. “I built my house out of lumber from this location,” he says. “And it was a good fit for me to come into this position.”

Next Steps Program Do it Best Leadership Development Institute

Mike French PC Hardware & Lumber Sellersburg, Indiana

Sessions Twice a year, spring and fall Key Audience New to experienced managers

Taking the Lead Last fall, general manager Kevin Passanisi approached French about enrolling in a leadership development program offered through the company’s co-op. Initially, French says he was skeptical about what he might get out of the program. Because he had so much industry and management experience, he didn’t know if he would learn anything new. “The more I thought about it, the more I realized what a great opportunity a program like this was to explore new ways to manage people,” he says. “I wanted to learn more about hiring and managing the up-and-coming generations because I come from an old-school way of doing things, and it’s not the way it used to be.” French is happy to report that his initial concerns about the program were wrong. What he found through the program was a core group of industry leaders who share his philosophy of a positive attitude at the instructor level and with his fellow attendees. French says in addition to the content itself, the people involved in the program were a key reason it was so valuable for him. “I would go through the program all over again, even if it were the same. I know I could get more out of it,” he says. “I don’t think it matters if you have 20 or 30 years in management, you’re going to gain something from this program.”

Since he returned from the weeklong Do it Best Leadership Development Institute, French says he has a new spark for positive management and leadership development for his own team. Here are some process improvements he plans to implement this year.

Encouraging innovation in the workplace. “I want to set up a program that encourages idea generation and innovation. I’m giving my employees more responsibility because I’m trying to develop them as leaders, and I want to reward the people who are coming up with better ways to do things. Sometimes, you do things a certain way because that’s how it’s always been done, but if you don’t have change, you’re going to fall behind.”

Regular team check-ins. “I have an open-door policy. I’m out with my team in the yard every day, but I want to encourage them to come to me to talk through issues or bring their ideas to me. Right now, we do annual performance reviews, and I want to start quarterly reviews. I want to take the time to have extended check-ins, something like taking them out to lunch so we can have that extra level of engagement. Meeting often also helps them know where they stand and if there are opportunities for improvement or advancement within the company.”

Identifying the next leaders. “There are a few leaders in my yard I want to get through the program because it would benefit them. It would help them understand what I’m trying to do here and the improvements I’m trying to make.”

Additional Opportunities Talk to your wholesaler representative about the leadership development and training options they have available. Ace Retail Training The co-op offers several different training programs, from online self-guided learning to in-store workshops and mentoring. True Value Training The wholesaler’s online training program includes courses in decision-making, leadership, performance excellence, presentation skills, project management and risk management. January 2020 | HARDWARE RETAILING

Newsmakers

Presenting Retail as a Career

dam Lukoskie of the National Retail Federation (NRF) is a leader within the NRF Foundation, which offers RISE Up, a training program designed to help people develop the skills to build careers in retail businesses of all types. Lukoskie provides insight into how independent business owners can help employees or prospective workers see retail as a profitable, rewarding career track. Hardware Retailing (HR): How can small businesses combat the perception that retail only offers entry-level work? Adam Lukoskie (AL): One way is to help correct that perception by showing people what’s possible. You can say, “At my business, if you come in as a part-time employee, here are the different steps you could take to make this a career.” There are real career paths in retail that can provide a healthy income for families. It’s just a matter of sharing what those paths look like and having people who have made this their career share their stories and talk, not just about the pay of retail careers, but also about the flexibility and other benefits. Does your company provide on-the-job training? Tuition reimbursement? Time off to do things like professional development? It’s really important to help workers understand how a company will invest in them.

Top Headlines Go to TheRedT.com/subscribe to receive Hardware Retailing’s weekly industry news digest. Receive the latest headlines, reports from industry events and exclusive online content in your inbox.

United States

Westlake Ace Expands Into New York

Inside True Value’s $150M Supply Chain Investment

Do it Best Forms Nonprofit Organization

HR: Why is it important to show employees potential career paths? AL: We talk a lot about career ladders, but in retail, it tends to be a career lattice because there are a lot of different paths available. It is really helpful for people to see that pathway, but that’s not unique to us in retail. That’s relevant to any worker. If people want to stay in a company, they want to see what paths exist. At minimum, having conversations with your workers about it is really helpful— talking with each person and understanding what their interests and skills are and how those can work within the business. Having a couple of examples of career paths to share is important. It’s also really helpful to have champions within a store—an assistant manager or manager who’s been there for quite awhile and loves it and can talk about their career. HR: Does communicating about career tracks help with recruiting and retaining retail workers? AL: Definitely. It also shows that you as an employer are one step ahead. You can say, “Here are the opportunities that exist for you.” That can help a business stand out for workers. They’re not just doing a six-hour shift and then leaving. Obstacles to people building careers in retail include not knowing that these careers exist. Employees need to be able to work with their retailer, manager or boss to consider their skills and interests and where they fit in the larger business.

Canada

BMR Adopts Store Merchanding Progam

Canada Ranks Third Globally for Home Improvement Sales

Kent Building Supplies Partners on POS Finance

Adam Lukoskie | Vice President | NRF Foundation In his role with the NRF Foundation, Lukoskie oversees management of all major programs, ensures that efforts between the Foundation and NRF on advocacy, workforce issues and research are aligned, and develops strategies, programs and activities to maintain the Foundation’s position as a leading philanthropic organization in the retail industry.

HARDWARE RETAILING | January 2020

To read Canadian industry headlines, visit hardlines.ca/hr.

Industry Calendar Visit TheRedT.com/calendar to find more information about these upcoming industry events and see what else is coming up. Contact editorial@nrha.org to get your event on the calendar.

January 10-12 United Hardware Spring & Summer Buying Market Minneapolis

21-23 Kitchen & Bath Industry Show Las Vegas

21-23 NAHB International Builders’ Show Las Vegas

February 30-1

7-10

House-Hasson Spring Market Nashville

Do it Best Spring Market Indianapolis

Follow NRHA and Hardware Retailing on social media for live updates from the 2020 KBIS Show!

Monroe Hardware Spring Market Myrtle Beach, South Carolina

@nrha_official @hardwareretailing

22-23 Florida Hardware Spring Market Orlando

14-16

27-29 Orgill Spring Market Orlando, Florida

14-16 True Value Spring Reunion New Orleans

Ad Index Ajax Wire Specialty Co. .............................................................................54 www.ajaxwire.com; 855-966-2529

Ironclad Performance Wear Corp..............................................................23 www.ironclad.com; 972-996-5664

Bee’s Wax Polish ......................................................................................21 www.beeswaxpolish.com; 800-568-1413

Koelnmesse Inc........................................................................................BC www.eisenwarenmesse.com/tickets; +1 773-326-9925

Coles Wild Bird Products Co. ....................................................................11 www.coleswildbird.com; 877-426-8882

Midwest Fastener ............................................................................... IFC, 1 www.fastenerconnection.com; 800-444-7313

Do it Best Corp............................................................................................3 www.doitbestretail.com; 888-364-8237

Mr. LongArm .............................................................................................20 www.mrlongarm.com; 800-821-3508

Dutton-Lainson Company..........................................................................25 www.dutton-lainson.com; 402-462-4141

NRHA Retail Management Certification Program .................................. 5, 7 www.nrha.org/rmcp

ECI Solutions ........................................................................................34-35 www.ecisolutions.com; 800-588-5128

NRHA Young Retailer of the Year .............................................................36 www.nrha.org/yroty

Franmar Inc. ..............................................................................................14 www.franmar.com; 800-538-5069

Orgill Inc. ............................................................................................64-IBC www.orgill.com; 800-347-2860

Hardware Retailing ....................................................................................63 www.TheRedT.com/pod

Rust Patrol.................................................................................................18 www.rust-patrol.com; 803-396-8400

House-Hasson Hardware Co. ......................................................................9 www.househasson.com; 800-333-0520

Sashco ..................................................................................................26-27 www.sashco.com; 800-767-5656

Impress Art................................................................................................19 www.impressart.com; 631-940-9530

Woodland ..................................................................................................22 www.pinecar.com; 573-346-5555

IPG.............................................................................................................55 www.itape.com; 888-898-7834 *This index is provided for the convenience of our advertisers and readers. The Publisher assumes no liability for errors or omissions.

January 2020 | HARDWARE RETAILING

Last Word

Why Company Culture Matters

company’s work atmosphere and core values are critical for customer and employee satisfaction. Research from global research firm PwC reinforces why. A good company culture impacts employee performance, job satisfaction and loyalty, according to PwC. And 96 percent of participants in recent PwC research “believe fulfillment at work is possible, but they need to see and feel what it looks like in practice.”

PwC’s data shows a company culture that helps people find meaning in their work is connected to workers feeling fulfilled in their jobs and reducing overall staff turnover. The data clearly indicates how establishing and maintaining a positive company culture is vital. Flip to Page 28 to hear from retailers about why you should work on improving your company’s culture.

Improve Your Culture in 3, 2, 1

2 1

Identify influencers who can energize the employees around them and create momentum around a purpose-driven culture.

Embolden leaders to model and signal behaviors that enable a fulfilling experience to employees across the organization.

Target specific behaviors that promote relationships, enable people to make an impact and foster individual growth.

The teams at Hassett Hardware (top) and Friedman’s Home Improvement have learned the importance of an empowering company culture.

83% 80% 70% of employees say “finding meaning in day-to-day work” is a top priority.

of business executives say culture is imperative to an operation’s overall success.

of employees say they would “consider leaving their current role for a new, more fulfilling opportunity.”

Source: Making Work More Meaningful: Building a Fulfilling Employee Experience, PwC

HARDWARE RETAILING | January 2020

New Episodes Now Streaming Discover two Hardware Retailing podcast shows featuring the latest ideas and expert insights into the industry. Listen and Subscribe

TheRedT.com/pod

Brought to you by

Jackie and Michael Sacks Round Top Mercantile Company Texas

“Orgill is extremely professional, and we know they’re here for us. They stand behind us 100 percent.”

Always By Our Side Orgill Offers the Resources We Need to Improve Our Business

WWW.EISENWARENMESSE.COM/TICKETS

WORK HARD! ROCK HARD! EISENWARENMESSE – INTERNATIONAL HARDWARE FAIR COLOGNE / GERMANY, 1 – 4 MARCH 2020

Koelnmesse Inc., Darrin Stern, 8600 West Bryn Mawr Avenue, Suite 410 North, 60631 Chicago IL, USA Tel. +1 (773) 326 9925, d.stern@koelnmessenafta.com

ER R EG I S T E O N LI N ! W O N