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Serving Hardware, Home Center & Building Material Retailers

DISTRIBUTOR PROFILE SERIES

On the Bright Side How Distribution America Powers a Successful Retail Network 29

Planning for Safety Is No Accident 38

VOLUME 216 • ISSUE 6 • JUNE 2019 • HARDWARERETAILING.COM

All the Right Tool Accessories 44

WEBSITE

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• eCommerce Solutions • How-To Demonstrations • Workshops & Clinics From Industry Experts

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On the Bright Sid How Distribution America Powers a Successful Retail Network 29

“For me, the hardest task is reaching new customers. Pointy has helped massively with this—now when someone does a simple Google search for a product we stock, they’re directed to our store.” Michelle Leopold | Standard 5&10 Ace | San Fransisco

Increase In-Store Sales Pointy is designed for retailers looking to drive online traffic directly to their stores. This easy-to-use device connects between your barcode scanner and POS system. Simply scan products and Pointy uploads them, giving retailers the ability to promote in-store products on Google. It’s hassle-free and can increase your store’s foot traffic. Retailers can now purchase Pointy at a special introductory rate of $399 (regularly $699) through NRHA.

VISIT POINTY.COM/NRHA, CALL 646-693-7224, OR EMAIL NEIL@POINTY.COM

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VOLUME 216 • ISSUE 6 • JUNE 2019 • HARDWARERETAILING.COM

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Planning for Safety Is No Accident 38

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NRHA offers the only immersive and comprehensive retail management training program in the industry that can teach your future leaders how to increase top-line sales and bottom-line profits. This six-month program gives retail employees flexibility while providing an in-depth learning experience that can immediately have a positive impact on your business. Fall Session begins this September. Applications are due Aug. 1.

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DISTRIBUTOR PROFILE SERIES

On the Bright Side How Distribution America Powers a Successful Retail Network 29

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VOLUME 216 • ISSUE 6 • JUNE 2019 • HARDWARERETAILING.COM

All the Right Tool Accessories 44

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Headquarters Staff

COMING IN JULY

PUBLISHING EXECUTIVE VICE PRESIDENT AND PUBLISHER Dan Tratensek

COMMUNICATIONS DIRECTOR OF MARKETING AND COMMUNICATIONS Whitney Daulton SPECIAL PROJECTS EDITOR Liz Lichtenberger

136 N. Delaware St. #200 Indianapolis, Indiana 46204 Phone: 317-275-9400 Fax: 317-275-9403 Email: nrha@nrha.org Website: nrha.org SOCIAL MEDIA LINKS

MANAGING EDITOR Melanie Moul ASSISTANT EDITORS Kate Klein Chad Husted Todd Taber SENIOR DESIGNER Lynnea Chom GRAPHIC DESIGNER Kelsey Truex WEB DEVELOPER Kevin Trehan

@NorthAmericanRetailHardwareAssociation PRODUCTION SERVICES

@nrha_official North American Retail Hardware Association @nrha_official HEADQUARTERS STAFF PRESIDENT AND CEO Bob Cutter VICE PRESIDENT OF FINANCE AND BUSINESS SERVICES David Gowan EXECUTIVE COORDINATOR Marci Taschler

PRODUCTION MANAGER Nancy A. Vondersaar SALES AND PRODUCTION ASSISTANT Freda Creech

Young Retailer Year of the

Next month, meet NRHA’s 2019 Young Retailer of the Year honorees. NRHA honored these seven industry leaders for the ways they have helped grow their businesses and made their communities stronger.

CIRCULATION CIRCULATION DIRECTOR Richard Jarrett

CIRCULATION/SUBSCRIPTION/ LIST RENTAL INQUIRIES PHONE 314-432-7511 FAX 314-432-7665

MEMBER SERVICES TRAINING MANAGER AND EDITOR Jesse Carleton, 317-275-9418, jcarleton@nrha.org RETAIL OUTREACH COORDINATOR Renee Changnon, 317-275-9442, rchangnon@nrha.org EVENT MANAGER AND RETAIL SUPPORT Katie McHone-Jones, 317-275-9426, kmchone-jones@nrha.org

RETAIL LEADERSHIP INSTITUTE EXECUTIVE DIRECTOR Scott Wright, 317-275-9417, swright@nrha.org

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

STATE AND REGIONAL ASSOCIATIONS MIDWEST HARDWARE ASSOCIATION John Haka, 5000 Woodward Drive, Suite A, P.O. Box 8033, Stevens Point, WI 54481-8033; 715-341-7100; 800-888-1817; Fax: 715-341-4080

SALES/NRHA VENDOR PARTNER DIRECTOR OF SALES Lowell Huffman MIDWEST REGION MANAGER Brad Lyons, 136 N. Delaware St. #200, Indianapolis, IN 46204; 317-275-9424, Fax: 317-275-9403, blyons@nrha.org WEST REGION MANAGER Jon Dawson, 136 N. Delaware St. #200, Indianapolis, IN 46204; 317-275-9420, Fax: 317-275-9403, jdawson@nrha.org NORTHEAST REGION MANAGER Lowell Huffman, 136 N. Delaware St. #200, Indianapolis, IN 46204; 317-275-9443, Fax: 317-275-9403, lhuffman@nrha.org SOUTHEAST REGION MANAGER Nick O’Connor, 136 N. Delaware St. #200, Indianapolis, IN 46204; 317-275-9409, Fax: 317-275-9403, noconnor@nrha.org CANADA John Magner, 500 Queens Quay W., #101 W. Toronto, Ontario M5V 3K8; 416-598-0101 x220, Fax: 416-598-9191, jmagner@yorkmedia.net

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

NRHA MISSION

The North American Retail Hardware Association’s (NRHA) mission is to help 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 TJ Comstock, Northwest Hardware LLC, Billings, Montana EXECUTIVE VICE CHAIRMAN Greg Schlecht, Greg’s True Value, St. Francis, Wisconsin DIRECTORS Daniel Harris, Palos Ace Hardware, Palos Heights, Illinois; Lemont Ace Hardware, Lemont, Illinois Will Aubuchon, Aubuchon Hardware, Westminster, Massachusetts Jared Smith, Jared’s Ace Hardware, Bishopville, South Carolina David Dishke, Grand River Home Hardware, Caledonia, Ontario

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. POSTMASTER: Send address changes to Hardware Retailing, P.O. Box 16709, St. Louis, MO 63105-1209. All editorial contents copyrighted 2019 by the North American Retail Hardware Association. No editorial may be reproduced without prior permission of the publisher. REPRINTS: Contact the Editorial Department at 317-275-9400 for price quotations. Printed in the USA.

HARDWARE RETAILING | June 2019

SECRETARY-TREASURER Bob Cutter, NRHA President and CEO IMMEDIATE PAST CHAIRMAN Megan Menzer, Newton’s True Value, Cherryvale, Kansas

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Comfort, Room by Room

Contents JUNE 2019 | VOLUME 216 | ISSUE 6

54 INDUSTRY EVENTS

Take It Outside At spoga+gafa, the latest outdoor living products are center stage. Learn more about the new trends and emerging themes found at this year’s spoga+gafa event, which will be Sept. 1-3 in Cologne, Germany.

56 OPERATIONS

DISTRIBUTOR PROFILE

Across America

Learn how Distribution America maintains a chain of diverse retail operators in the latest Distributor Profile. Meet the team behind Merrilees Hardware, a three-store chain in Indiana and Ohio, and learn how they’re developing their own retail network.

A Piece of the Pie At Island Hardware & Supply, owner Paul Garwood has implemented a profit-sharing system that allows employees to boost their pay and share in the retail operation’s success.

Departments

38 OPERATIONS

Putting Safety on the Map Ensuring your retail space is safe for shoppers and associates is no accident. Learn how to design for safety with the advice of Gary Petz and Phil Mitchell, co-founders of the Discovery Retail Group. 4

HARDWARE RETAILING | June 2019

44 CATEGORY

Accessorize for Success Every tool department should feature powerful accessories to augment hand and power tool capabilities and help customers handle new tasks. Explore how accessories can improve your tool department.

06 . . . . . . . . . . . . . . . . . On the Web 08 . . . . . . . . . Independent Thinking 10 . . . . . . . .Taking Care of Business 12 . . . . . . . . . . . . . . . . NRHA News 18 . . . . . . . . . . . . . . . . . . . . . Trends 20 . . . . . . . . . . . . . . . New Products 26 . . . . . . . . . . . . . . . . . . Checkouts 58 . . . . . . . . . . . . . . . . Newsmakers 62 . . . . . . . . . . . . . . . . . . Last Word

On the Cover At Merrilees Hardware in Bright, Indiana, owners Dale and Shelly Drew are finding new opportunities to succeed. Photo by Kelsey Truex

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On the Web INDUSTRY EVENTS

Relive the Conference Check out the highlights from the 2019 NRHA All-Industry Conference. From speakers and awards to thousands of products, peek through the gallery and read day-by-day updates at TheRedT.com/conference-2019.

INDUSTRY EVENTS DISTRIBUTOR PROFILE

Joining Together Distribution America holds a unique spot in the independent home improvement market. Read more about the history, specialties and future plans of Distribution America’s six individual members. Also, read the full Q&A with CEO Dave Christmas to discover the company’s commitment to independent success at TheRedT.com/da-qa.

Powering Distribution America The independent retailers who rely on Distribution America’s six distributors are taking advantage of a network that spans North America and product selection that allows for insightful specialization. Discover more about the retailers who push Distribution America forward each day.

Class Is in Session Learn more about the education sessions from the 2019 spoga+gafa market in Cologne, Germany, by visiting TheRedT.com/spoga-education.

This series of quick lessons on topics such as selling skills, merchandising, product knowledge and operations is made for all employees. To download this month’s featured lesson, visit nrha.org/trainers-toolbox.

Safety in the Lumberyard Take a tour of the lumberyard of Gillman Home Center in Eaton, Ohio, where general manager Jeff Sievers provides an inside look at safety.

Built to Last: Teague Lumber is benefiting from high construction activity. Read more on the business at TheRedT.com/teague-profile.

A Sporting Time: Head to TheRedT.com/dj-profile to learn how family-owned D&J Hardware is bringing in unique categories.

SOCIAL MEDIA LINKS

@HardwareRetailing @hardwareretail

HARDWARE RETAILING | June 2019

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Independent Thinking

What Are Your Rare and Valuable Contributions?

“The program allows

students to step out of the distractions that are inherent to retail environments and learn how to apply the lessons that only come through intentional work.

”

ow strong is your ability to concentrate on something for a prolonged period? Even for five minutes? To test yourself, focus on making it to the end of this column without checking your phone or allowing any other distractions to get in the way. There is a book we recommend to students in the North American Retail Hardware Association (NRHA) Retail Management Certification Program (RMCP) called “Deep Work” by Cal Newport. Its subtitle gets to the heart of what it’s about: “Rules for Focused Success in a Distracted World.” Newport’s hypothesis is that in this digital, information-laden age—where every 10 seconds we’re checking our phones and social media accounts to stay informed and connected—the constant state of distraction prevents us from being able to focus and think critically for prolonged periods of time. He suggests when we can think critically without distraction for prolonged periods, and do it on a regular basis, we develop the ability to produce products, services and solutions that are rare and are truly valuable in the marketplace. The key words here are “rare” and “valuable,” and the book cites Carl Jung and Bill Gates as people who give credit to this ability for their success. Newport says we have an overabundance of “shallow work,” which is characterized by “logistical-style tasks, often performed while distracted, that don’t create much new value in the world and are easy to replicate.” I agree with Newport that the 21st-century economy will eventually reward the real skills you learn and apply from going deep, skills that are honed over time, similar to that of a craftsman. In our industry, these are the skills that go beyond the logistical tasks and can’t be commoditized or found in big boxes, mass merchants or even on Amazon, which of course presents opportunity. So what do you provide that is rare and valuable? And what do you spend an inordinate amount of time on that is a commodity or is too easily replicated? More importantly, how are you honing your skills and those of your key employees to be able to perform the tasks that today’s marketplace will reward? Only you know the answers to these questions as they pertain to your business. In RMCP, we teach students how to compete in today’s marketplace. Since we launched the program back in 2013, we’ve had more than 180 students from across North America learn the time-tested tenets of retail success. It’s built into the curriculum—from learning about the Incremental Improvement Process to the business improvement project each student has to research and implement before graduating. These projects have provided more than $10 million in either sales gains or expense reductions to the students’ companies. That’s an average of more than $55,000 in ROI per student. Beyond the ROI, retail lessons and networking that are interwoven into RMCP, the program allows students to step out of the distractions that are inherent to retail environments and learn how to apply the lessons that only come through intentional work. So, did you make it all the way through in one pass? Or did you check your phone between paragraphs? The irony is if you don’t have time or the attention span to read Newport’s book, he has a TED Talk on YouTube that has more than 5 million views. It’s only 13 minutes long. Watch it first, then read the book. But in the meantime, seriously consider sending your key people through RMCP so they can learn to do the deep work that will make you rare and valuable to your customers. We’re enrolling now for our fall semester. Contact me at 317-441-4136 or swright@nrha.org or go to nrharmcp.com to apply.

Scott Wright, Executive Director, Retail Leadership Institute

swright@nrha.org

HARDWARE RETAILING | June 2019

FIRST CHOICE. BEST CHOICE.

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Taking Care of Business

Now Hear This…

“Producing podcasts is

... another illustration of how your association is committed to bringing you information and helping your business by using all the resources we have at our disposal.

”

ne need only look a few inches to the left to understand clearly something I came to terms with many years ago: I have the perfect face for radio! In fact, early in my days as a print journalist in Southern California, I secretly longed to be a radio newsman. I mean, TV newspeople in that area of the country were aspiring actors or models who logged more hours in tanning booths than press conferences. That wasn’t exactly what I was cut out for. But for me, being a radio journalist would be the perfect blend of things I loved: researching stories and talking. It may have only taken 30 or so years to come to fruition, but I am finally getting my wish … well, sort of. In April, the North American Retail Hardware Association (NRHA) launched two new podcast series, and yours truly is hosting one of them. Oddly enough, the one I was selected to host is called “Taking Care of Business With Dan Tratensek.” The other podcast in the NRHA series is called “Tell Me More…” and is hosted by Renee Changnon, NRHA’s retail outreach coordinator. While a podcast isn’t exactly radio, it’s pretty much the modern-day version of the old on-air talk shows. And like those old-school broadcast interviews, podcasts allow you to gather insights and information while you are multitasking. Driving to work—listen to a podcast. Mowing the lawn—listen to a podcast. Working out— listen to a podcast. Producing podcasts is new ground for NRHA, but it’s another illustration of how your association is committed to bringing you information and helping your business by using all the resources we have at our disposal. If you haven’t listened to either podcast yet, I would encourage you to do so. “Taking Care of Business” focuses on interviews with the industry’s movers and shakers and the folks who can give some insight into where the industry is headed. On the other hand, “Tell Me More…” is a lighthearted look at the world of retail. In this series, Renee does what she does best: seeking out interesting retailers and sharing their unique stories. The podcasts run about 30-45 minutes, so they are easy to digest in one sitting, and Renee and I try to keep the conversation moving and listeners engaged. You can access the podcasts in the app stores on any device, so we hope you give them a listen. Visit TheRedT.com/pod for a preview of each series and to subscribe. In other news, I wanted to point out a couple of exciting new events that NRHA is involved with: the Independent Garden Center Show (IGC) and the Independent Home Improvement Show (IHIS) that will take place concurrently in Chicago from Aug. 13-15. Both of these shows are free for retailers to attend and they are open exclusively to independents! IGC has been around for years and showcases the latest in lawn, garden and outdoor living products, while the IHIS is brand new this year and is produced by the National Hardware Show®. During these two shows, NRHA will be conducting its State of Independents Midyear Review and hosting the NRHA STIHL Foundations of Leadership Conference. For more information about these opportunities, go to nrha.org/nrha-at-igc.

Dan M. Tratensek, Publisher

dant@nrha.org

HARDWARE RETAILING | June 2019

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NRHA News

NRHA Business Services Provider GMS Takes the Stress Out of HR Tasks

unning a home improvement operation requires a lot of time and energy. Not only are you seeking the best new products and finding ways to provide next-level customer service, you also need to stay on top of a range of administrative tasks related to human resources. One way the North American Retail Hardware Association (NRHA) supports independent home improvement retailers is by developing partnerships with business services organizations. Last fall, NRHA partnered with human resources company Group Management Services (GMS). GMS serves small businesses that may not have in-house HR staff, and they have satellite offices throughout the U.S. That means that no matter where your business is based, you have access to HR experts as a member of NRHA. Hardware Retailing spoke to Carie Williams, sales representative with GMS, to learn more about the company and what it offers NRHA members.

Hardware Retailing (HR): Can you tell us about GMS and what the company provides? Carie Williams (CW): GMS is a professional employer organization (PEO) and a third-party administrator (TPA). We serve companies of all sizes across the country and help them take control of their HR functions. Some of the many aspects GMS helps manage include payroll and taxes, administrative issues, employee benefits and risk management. There are many liabilities a retailer who isn’t well versed in current human resources issues simply might not be aware of. One of the biggest benefits of working with GMS is keeping retailers updated on all issues that could affect their business. Not knowing these issues could end up costing retailers greatly. We make sure there isn’t a scenario where retailers are caught unaware of a human resources issue.

HR: What would you say to a retailer who is reluctant to allow a company to manage their HR issues? CW: If a retailer has multiple stores, they likely have at least one individual with a human resources background. However, retailers at smaller operations often tell me they rely on the services their wholesaler provides. While there is nothing wrong with that, I want them to understand how GMS can help. Our company has team members compliant in each state, which ensures that all rules and regulations are followed. We tailor our services to each company we work with. We are here so retailers can focus on the goals they have for their businesses. They didn’t get into the hardware industry to learn how to do human resources. Plus, HR is a moving target, especially with constant changes in compliance being mandated from the state and federal levels.

HARDWARE RETAILING | June 2019

GMS account manager Susanna Sorrells (left), works with Jason Wright, owner of Wright Hardware Company in Indiana to streamline his business’s HR tasks.

HR: What are some examples of how GMS could help an independent retailer? CW: GMS is here to help ensure our clients are covered. If an auditor comes to check the business and a retailer hasn’t been on top of the changes in workplace regulations, they might end up getting a costly fine. By working with our company, retailers stay on top of these state and federal changes and work with clients to implement new procedures and protocols within their businesses. Additionally, we can be as involved or under the radar as the retailer wants. Some stores might instruct their employees to reach out to their GMS account manager. However, others might prefer to have us in the background. It’s entirely up to the retailer. Our services include compliance advice, recruiting, background checks, payroll services and we even assist with succession planning. Once we begin working with a retailer, we’ll determine what areas they need help in and we will have an on-site visit at least once a quarter, providing personal, in-store assistance.

HR: How can retailers explore this opportunity further? CW: If a retailer would like to talk to someone about GMS and what we can do for their business, they can contact me at 317-559-6304 or cwilliams@groupmgmt.com. To learn more about the company and our partnership with NRHA, visit nrha.org/group-management.

NRHA News

Create Digital Leads the Easy Way With Pointy

ointy, an NRHA business services partner, can help you strengthen your online presence with each and every sale you make. By connecting to your barcode scanner and POS system, Pointy technology captures each item you sell or scan so it appears in a specialized Google listing, giving you a new, easy way to promote your in-store products on the internet. That information is integrated into Google’s “See What’s in Store” feature, which gives online customers a quick look at the products you carry. In addition, the Pointy software gives you real-time analytics to see how your products are doing online. This information allows you to compare online searches to in-store visits, a powerful metric that can help your future marketing efforts. NRHA is offering independent home improvement retailers a special rate for the Pointy system: a one-time-only fee of $399 (regularly $699). There are no recurring charges; with one payment, your business can streamline online opportunities with every transaction. To learn more about how Pointy can help your operation boost your online presence, visit go.pointy.com/nrha.

Strengthen Your Operation by Participating in the Cost of Doing Business Study

or more than 100 years, independent retailers have relied on the Cost of Doing Business Study to help them strategize for long-term success. As the industry’s leading financial benchmarking tool, the Cost of Doing Business Study provides a wealth of information to help independent operators understand how they compare to typical and high-profit hardware stores, home centers and lumber and building material outlets. Are your transaction sizes within industry standards? Are there opportunities to lower your total operating expenses without sacrificing sales? With the study, retailers can compare their most important financial metrics to industry averages to see how their operation is faring. By participating, you’ll receive a free copy of the final study (valued at $499); a Personalized Financial Analysis with your company’s finances compared to industry averages; and a what-if scenario generator to visualize how small financial changes within your organization can have a major impact. There’s still time to contribute your information to fortify the study. All submissions are kept completely confidential and no individual data will ever be published or shared. For more information and to submit your financial information today, visit nrha.org/codb.

HARDWARE RETAILING | June 2019

NRHA News

Improving Culture Boosts Retention and Sales ES

E AT U

4 PHASES

EV AL

With the NRHA Vision Process, retailers can improve their overall company culture by developing core values and motivating associates to invest in success.

STA

ulture isn’t an easy thing to tackle in any business, but it’s crucial to every aspect of your organization, from daily operations and task management to communication and staffing. The first step in improving culture is establishing core values. That’s where NRHA can help. The NRHA Vision Process provides a full year of guidance by a team of former retailers and retail experts, and a proven methodology that will give your entire staff the tools they need to grow and succeed. With the Vision Process, retailers develop core values to improve hiring and training; implement task management processes to provide accountability at all levels; assess staff personality types to encourage more effective teamwork; and create training and development plans to ensure your business’s long-term success. “Our employee retention has drastically improved and is well above industry averages,” says Michael Wynn, owner of Sunshine Ace Hardware. “I’m confident that the strategy we developed through the Vision Process deserves a lot of credit.” For more information on how the Vision Process can bring clarity to your business, visit nrha.org/vision-process.

D IZ

WHERE THE

RUBBER

MEETS THE

ROAD ULTRA HEAVY-DUTY 17-MIL DUCT TAPE

888-898-7834 www.itape.com info@itape.com

DUCT TAPE. STRONGER.

Discover New Opportunities at Joint NRHA Event

ll independent retailers are invited to attend the Independent Garden Center Show (IGC) Aug. 13-15 at McCormick Place in Chicago. There will be three other events co-locating at IGC this year: the Independent Home Improvement Show–Powered by NHS, the NRHA STIHL Foundations of Leadership Conference and the State of Independents Midyear Review, hosted by NRHA. The NRHA events will be held on the first two days of IGC, right on the show floor. The NRHA STIHL Foundations of Leadership Conference brings together graduates of the NRHA Retail Leadership Institute, and this year, the conference is open to all independent retailers. “The NRHA STIHL Foundations of Leadership Conference is a great chance to meet retailers who are dedicated to continuing education and developing operational leaders,” says Scott Wright, executive director of the Retail Leadership Institute. “We’re excited to co-locate this year’s conference at IGC because it allows so many new connections.” On the second day of IGC, NRHA will host the State of Independents Midyear Review, which is an offshoot of the

“This event will give attendees insights that they can take back to their operations and make any course corrections based on the data we provide. —Dan Tratensek, NRHA

”

annual State of Independents Conference, held in December. The event will showcase new data reflecting how independent operations are performing at the year’s midpoint, giving them time to implement actionable takeaways before the year’s end. “The State of Independents Midyear Review gives retailers and manufacturers a chance to do a checkup on their performance to see if they are on trend with the rest of the industry,” says NRHA executive vice president and Hardware Retailing publisher Dan Tratensek. “This event will give attendees insights that they can take back to their operations and make any course corrections based on the data we provide.” For more information on the events and to register to attend, visit nrha.org/nrha-at-igc.

Make it Personal

tamp it ourself ImpressAr t.com

June 2019 | HARDWARE RETAILING

Trends

Sponsored by HIRI | HIRI.org

Further Growth Predicted for Home Improvement Market

2019 Consumer Sales Forecast by Category Dollars in billions

Low unemployment, solid existing home sales and growth in product sales in 2018 are among the reasons the Home Improvement Research Institute (HIRI) projects continued sales increases for products in the U.S. home improvement industry. The consumer market for home improvement products is expected to grow by 5.3 percent in 2019, according to HIRI’s latest market study.

$31.8

$28.0

Lawn & Garden

Electrical Supplies

$27.1

$24.8

Plumbing Supplies

Major Appliances

$23.5

$20.2

Nursery & Soil Treatments

Tools

$19.4

$17.8

Other Building Materials

Soft Flooring

$15.8

$13.9

Hardware

Paint & Coatings

Product categories that will stand out for contributing to consumer sales growth will include plumbing supplies, electrical supplies and siding and exterior trim, the study results show. HIRI also predicts sales growth of 6 percent for the professional remodeler market in 2019, with siding and exterior trim showing notable sales increases. Learn more about HIRI and access market sizing and category data by joining HIRI at HIRI.org.

U.S. Home Improvement Products Market Growth Forecast Dollars in billions Professional

Consumer $350

$302.2

$311.8

$321.2

$329.6

$300 $289.3

$250

$200

$150

$130.6

$136.8

$142.8

$151.0

$160.9

$100

$50

2019

2020

2021

HARDWARE RETAILING | June 2019

2022

2023 Source: Home Improvement Products Market Forecast Update, March 2019, HIRI

New Products

“We recently moved into a new location, and we thought the BottleKeeper would be a great new product to feature heading into the summer.

”

—LaShae Bock, Bethlehem Ace Hardware

2 “I’ve gotten a lot of good

—Nick Watson, Henery Hardware

”

1. Beer Bottle Insulator

2. Rubber Sealant

The BottleKeeper® Standard 2.0 is designed to hold a beer bottle and keep it colder longer while also protecting it from breakage. The Standard is designed to hold a typical 12-ounce bottle, while other sizes are available for shorter bottles or larger “bomber” bottles. A cap is attached to the BottleKeeper that seals the inserted bottle and also has a bottle opener.

Flex Shot® is a thick rubber sealant used to caulk, bond and seal multiple surfaces. Its thick texture allows it to fill cracks and holes and stop leaks. Flex Shot comes with an extension tube that allows it to reach out-of-the-way areas.

BottleKeeper support@bottlekeeper.com or bottlekeeper.com

feedback from customers on Flex Seal products. I’ve had it on the endcap longer than we normally would, but we continue to sell through it.

HARDWARE RETAILING | June 2019

Flex Seal Products 833-411-3539 or flexsealproducts.com

Retailer Picks These four products were selected by retailers like you! Share your favorite products by contacting Chad Husted at chusted@nrha.org.

“I thought I’d just take a

chance on R.G. Bullco belts, and I am surprised at how well they are doing. This is something people don’t expect to see in a hardware store. —Jerry Johnson, Scott McLendon’s Ace Hardware

”

4 “Bring It On Cleaner

brushes have a quick-attach bit for putting on a drill. They make cleaning in tight spaces easy.

”

—Brad Johnson, Johnsons Home & Garden

3. Leather Belts

4. Brush Drill Attachments

R.G. Bullco belts are made in the U.S. from locally raised cattle and are crafted out of one solid piece of full-grain leather. The belts are cut to 3/16-inch thickness and then converted into different designs, including options for men, women and children. The company also makes leather wallets.

The Bring It On Cleaner Drill Scrub Pads Plus and Corner Scrub Brush are drill attachments designed to clean stained or discolored tile and grout. The brushes are made from polypropylene nylon bristles and can be used on any surface that could be cleaned with a toothbrush or scouring pad.

Dirtee Apparel 801-710-3942 or rgbullcoleatherbeltsusa.com

Bring It On Cleaner 800-867-2643 or bringitoncleaner.com

June 2019 | HARDWARE RETAILING

New Products

5. Paint Tray Liner

7. Smart Vacuum and Mop

PAINTWELL professional-grade paint trays and paint tray liners come in 9 ½-inch and 18-inch models, and are made from recycled RPET material, which is durable and solvent resistant. Both tray sizes have a Drip Guard feature to reduce spills, and liners are designed to fit nearly every paint tray. The trays and liners are ergonomically formed to be easier for painters to handle and maneuver.

The DEEBOT OZMO 960 is a robot vacuum and mop that includes AIVI™ (Artificial Intelligence and Visual Interpretation) technology to detect obstructions in its path and avoid them. This feature prevents the vacuum from catching shoes or other items left on the floor during its operation. It can also detect the type of flooring it is on and change its cleaning style automatically.

Lindar 218-829-3457 or lindarcorp.com

ECOVACS 844-326-8227 or ecovacs.com

6. Placemat Lunch Box

8. Decorative Cooler

FlatBox is a machine-washable lunch box that opens up to be a placemat during a meal. The ability to wash it makes FlatBox less prone to mold and bacteria compared to other lunch boxes, while the placemat function provides users with a clean surface to eat on anywhere they go. FlatBox is also insulated to keep cold food at the proper temperature.

The Caddy Cooler Pink is styled with a vintage car design. Made from recycled 44-gallon steel barrels and designed by Australian artist Aaron Jackson, it serves as a conversation starter while keeping drinks cold with an insulated interior. It features a drainage plug on the bottom. The cooler also comes in red.

FlatBox 855-352-8269 or flatbox.com

Think Outside 469-610-7646 or thinkoutside.biz

HARDWARE RETAILING | June 2019

9. Sling Hooks

11. Insect Trap

Campbell® Grade 100 Alloy Sling Hooks are available in both clevis and eye styles and are made for use with grade 80 and grade 100 chain slings. Latched models feature a heavy-duty latch and spring assembly designed for exceptional durability. The heavy-gauge, high-strength steel latch with reinforcing rib provides rigidity and bending resistance and has a yellow chromate finish for corrosion resistance.

The DynaTrap DOT is equipped with two LED and two UV-LED AtraktaGlo™ lights designed to attract a variety of household insects including fruit flies, house flies, moths, mosquitoes and more. Insects drawn to the trap will be captured on the back of DynaTrap by replaceable StickyTech™ Glue Card, where they are concealed from sight.

Apex Tool Group 410-773-7800 or apextoolgroup.com

Dynamic Solutions Worldwide 877-403-8727 ext. 345 or dynatrap.com

12. Bamboo Cutting Boards 10. Lighted Tool Box The WEATHER GUARD® 127 Saddle Box With Integrated Lighting is a heavy-duty truck tool box that features a pre-installed lighting system. Professionals can connect the box’s wiring harness, compatible with all full-size trucks in North America, to the power supply of a truck to activate the lighting system. When users open the lid of the truck box, the LED lights illuminate the tools and equipment stored inside.

Totally Bamboo features an assortment of bamboo cooking and cutting products, including state designs showing popular destinations. Bamboo is a sustainable resource and can be washed in the dishwasher for sanitization. Bamboo is also gentler on knives than plastic cutting boards. Totally Bamboo 760-471-6600 or totallybamboo.com

Werner 800-456-7865 or weatherguard.com

June 2019 | HARDWARE RETAILING

New Products

13. Bluetooth Speaker Lamps

15. Rust Preventer

Synergy Pro is a series of chargeable Bluetooth loudspeakers which feature both LED lighting and a multifunctional compartment that can be used for entertaining. The speakers can be paired for larger areas and can work up to 180 feet from each other. The Synergy Pro speakers come in three sizes.

Rust Patrol® No VOCs is a multifunctional rust preventer and lubricant. It is designed to prevent rust in harsh conditions, especially those with high humidity and high salinity environments. It does not contain VOCs, which makes it safer for working in a confined space.

Kooduu US 401-410-3103 or kooduu.com

Aidant Brands 713-244-8755 or rustpatrol.com

16. Spicy Honey 14. Nail and Screw Guide The Safety Nailer™ is designed to guard the fingers of the user when swinging a hammer against a nail or turning a screw. Magnets in the guide hold the nail in place and reduce nail buckling during insertion. The guide also allows for greater control. Safety Nailer 434-264-6025 or safetynailer.com

HARDWARE RETAILING | June 2019

Mike’s Hot Honey is a sweet-heat combination of honey infused with chili peppers that adds a kick to food and drinks. Mike’s Hot Honey is committed to supporting domestic agriculture and uses 100 percent pure honey sourced from beekeepers in upstate New York. The honey comes in a variety of packages, from squeeze bottles to gallon jugs. Mike's Hot Honey 212-655-0574 or mikeshothoney.com

17. Paint Storage Bucket

19. 3-in-1 Ladder

Store and Go is a storage bucket filled with an eco-friendly and biodegradable gel that encloses a paintbrush’s bristles and prevents them from drying out or the paint from dripping off the brush. The gel leaves no residue and is removed using a supplied spare bucket and a cloth. Store and Go works on water- and alkyd-based paints.

The King Kombo™ ladder combines a stepladder, straight extension ladder and leaning ladder in a single tool. Using its three configurations, the King Kombo can fulfill 13 applications, including fitting in the 16-inch stud gap in construction. The ladder comes in three classifications: Professional, Industrial and Technical, each offering different abilities and features.

Go!Paint info@go-paint.com or go-paint.com

Little Giant Ladder Systems 800-453-1192 or littlegiantladders.com

18. Structural Steel Connection Yield-Link is a structural fastener for steel construction connections that requires no field welding and allows beams to be designed without supplemental lateral bracing. This results in fewer fabricated steel elements and field connections. These connections are designed to absorb forces in seismic events. Simpson Strong-Tie 800-999-5099 or strongtie.com

20. Tick and Flea Spray Summit Tick & Flea Spray kills and repels ticks and fleas outside the home, ranch and farm. Its active ingredient is permethrin, a tick killer that also kills fleas, ants, earwigs and other outdoor pests. Summit Tick & Flea Spray kills and repels insects for up to four weeks, but won’t harm garden or landscape plants. Summit Chemical 800-227-8664 or summitchemical.com

June 2019 | HARDWARE RETAILING

Checkouts EVENTS

Cupcakes Under Construction

cing, sprinkles, marshmallows, gel, chocolate syrup—what else can you put on a cupcake? At Twins Ace Hardware’s Construct a Cupcake event in February, children of all ages were piling cupcakes high with their choice of toppings to create their own culinary delight. Craig Smith, co-owner of the store in Fairfax, Virginia, was there to encourage them. “I tell them to load it up,” he says. “Parents are sometimes wary when they see everything piling on top of that cupcake, but they typically join in.” The fun is going to a good cause. For the past five years, Smith has hosted the cupcake decorating event as a way to participate in the Fairfax chocolate festival while raising money for the local children’s hospital. Anyone can purchase an unfrosted cupcake for $3, and then they have the freedom to use as many of the toppings Smith provides to build their own unique cupcake. Smith says this year he sold about 300 cupcakes, with all

of the proceeds going to the children’s hospital. Over the last five years, the event has raised more than $4,000. It’s one of several events Smith holds throughout the year, including an art show and a pine car derby event, that raises money for the hospital. “This event has been simple to execute and super fun,” says Smith, adding that the main cost to the store is the price of the cupcakes and toppings. “Traffic to the store is usually low in February, so this helps increase business here during that time.” In addition to driving food traffic, Smith says the event also helps raise awareness and creates connections for community members who have needed to utilize the hospital. “We put out a lot of information about the hospital for people to see,” he says. “This event really hits home for a lot of parents who have had their children as patients in the hospital. It’s also important to have children helping other children, and it’s good when the kids see that connection.”

Customers enjoy decorating cupcakes at Twins Ace Hardware, which is one way the company supports the local children’s hospital.

Looking for creative ways to engage customers? Whether it’s promotions, merchandising or special events, we cover it here. Have an idea? Contact Melanie Moul at mmoul@nrha.org to have your story considered for publication. 26

HARDWARE RETAILING | June 2019

Beautiful products to inspire your customers.

Hangers

Gable Plates

Ties

Fasteners

Post Bases

Angles

Straps

Simpson Strong-Tie offers an eye-catching display in three sizes (2', 3' and 4') to increase visibility and sales of the new Outdoor Accents decorative hardware line. Featuring black powder-coated connectors and screws, Outdoor Accents provides both design elegance and structural strength, giving your customers the inspiration to build custom outdoor living structures. Visit go.strongtie.com/outdooraccents or call us at (800) 999-5099.

4' Display

Checkouts

COMMUNITY ENGAGEMENT

Cowboy Spirit Alive and Well in Oregon

n Lakeview, Oregon, the sight of spurs and cowboy boots isn’t unusual. The small community near the state line of California and Oregon is one of the last vestiges of isolated America, and with so many working ranches in the area, the town is proud of its character. A committee formed by Oregon tourism association Travel Oregon™ began looking to help Lakeview brand itself for tourists. Given its attachment to the ways of the old west, Lakeview began using a new slogan: “Kick Your Boots Off and Stay Awhile.” Banners were posted around town and at the chamber of commerce each summer, but Lakeview Ace Hardware owner Dan Henderson had bigger plans. Since Lakeview Ace is located on one of the roads leading into the town, he thought his store was a prime spot to get the word out about Lakeview honoring its western heritage. The area’s western legacy lives on in the Lake County Roundup, a rodeo entering its 100th year of operation. “It’s the second-longest running rodeo in Oregon, and it’s the signature event of Lake County and our area,” Henderson says. “It really shows how the slogan fits our area, and we’re excited to play a larger part in promoting Lakeview.”

Lakeview, Oregon, home of Lakeview Ace Hardware, recently began using a new slogan, “Kick Your Boots Off and Stay Awhile.”

COMMUNITY ENGAGEMENT

Banking on Potatoes

Bavarian Home Hardware partnered with several local organizations to raise money and grow potatoes for the local food bank.

HARDWARE RETAILING | June 2019

avarian Home Hardware in Kimberley, British Columbia, joined other organizations in town for the second year in a row for the Spud Bucket Challenge. For two weeks in late April, customers can purchase a 15-liter bucket and one seed potato to plant with their own soil for a $10 donation. All proceeds from the donations benefit the local food bank. “We’re always trying to help the food bank,” says employee Veronica Harris. “We know it’s important, and we plan to participate for many more years.” The challenge doesn’t end with a potato in a bucket. Community members plant their potatoes and care for them all summer. In September, everyone brings their buckets to the Harvest Garden Party, which is hosted by a local organization focused on sustainability and environmental protection. Prizes are awarded for largest potato, most potatoes grown in a single bucket and most interesting shape. At the end of the event, all the harvested potatoes are also donated to the food bank. Last year, the store and Topcrop, which donates the seed potatoes, sold 30 buckets and raised $370, plus all the potatoes grown. “We’re hoping to sell 50 buckets this year, which would raise $500 for the food bank,” Harris says. “And then we will also donate all of the potatoes grown in the buckets after the Harvest Garden Party this fall.”

HARDWARERETAILING.COM

Serving Hardware, Home Center & Building Material Retailers

SPECIAL PROFILE ON DISTRIBUTION AMERICA 2019

Distribution America Succeeding Together HARDWARE RETAILING

DISTRIBUTOR PROFILE SERIES

Strength in Members Distribution America’s International Network Prizes Individuality

istribution America is a team of six distributor members that combines a range of product specialties and service areas to power the largest independent distribution network in North America. Formed in 1991 with the merger of Liberty Distributors and Sentry Hardware, the company now serves thousands of customers from the upper U.S. to the Caribbean Basin and Central America. Distribution America president and CEO Dave Christmas says each member’s unique focus strengthens the Distribution America network. Learn more about the company and its plans for the future from Christmas. Take a look at individual overviews of the six distributors that enrich the company’s product offering and extend its reach. Finally, discover how the Distribution America network empowers Merrilees Hardware, a three-store chain in Indiana and Ohio. As the company celebrates its 20th anniversary in Bright, Indiana, learn how it’s planning for the future and managing its own network of home improvement stores.

Table of Contents 31 . . . . . . . . . . . . . . . . . Dave Christmas 32 . . . . . . . . . . . . . . . . . . . . . . Blish-Mize, Florida Hardware Co.

33 . . . . . . House-Hasson Hardware, Monroe Hardware

34 . . . . . . . . . . . . . . . . . . . . . . . . . . PACOA, United Hardware

35 . . . . . . . . . . . . . Merrilees Hardware Extra, Extra! Online Exclusives

This special section on Distribution America is published by Hardware Retailing magazine, which holds and reserves all copyright on the content contained herein. This special Hardware Retailing supplement is part of a yearlong series profiling the home improvement industry’s distributors.

HARDWARE RETAILING

For a full Q&A with Dave Christmas, visit TheRedT.com/da-qa. To read additional retailer profiles, visit TheRedT.com/da-profiles.

DISTRIBUTOR PROFILE SERIES

EXECUTIVE Q&A

Coast-to-Coast Contact Distribution America Members Benefit From Clear Communication Hardware Retailing (HR): What changes have occurred within Distribution America in the past few years? Dave Christmas (DC): The biggest change is that our members and the Distribution America office are doing more together than we did five years ago. We’re making large group buys together to take advantage of volume discounts. We’re also taking a renewed focus on consolidating our vendors. Our advertising and marketing offering is far more diverse than it was five years ago. We offer social media, website and email programs to retailers to help them on the digital front.

HR: In your opinion, what are some of the challenges facing the independent home improvement industry? DC: As big boxes and Amazon continue to extend their reach across the marketplace, they give consumers new ways to shop. So the imperative for Distribution America is to do all we can to help independents grow their relevance in their own marketplace. Everything we do is done with the goal of helping retailers. We encourage our members to take advantage of training programs. We also offer our AdStudio software, which allows retailers to develop traditional print promotions like circulars, flyers and shelf talkers. The materials can be customized for their markets and easily converted to digital formats.

HR: How important is it that the six Distribution America members retain a specific identity? DC: It’s very important to Distribution America and the members. The most significant thing the company affords its members is the ability to keep their own identity. It’s important to retain a regional focus and combine it with our national buying power as a group. About 10 years ago, we reorganized our business and took steps to help retailers control their own marketing initiatives. We decentralized and aimed to save money, freeing up funds to allow our members to be more effective marketing in their individual regions, and that’s worked very well for our retailers.

HR: What role does technology play within your organization? DC: Technology plays a huge role in Distribution America’s marketing and advertising programs. Technology also powers our central payment system, which streamlines the payables and receivables between our members and the vendors.

We also have a sophisticated demographic software tool that helps members and retailers identify places where they might want to open new stores or adjust their product assortment. The software analyzes the estimated potential of specific regions and looks at the number of households, population age, their income and more to help retailers make decisions about the store location and merchandise mix.

HR: Distribution America is planning to consolidate its vendors. How will that improve the company? DC: A little over a year ago, we got together to specifically discuss vendor consolidation. One of the takeaways is that we all want and need to consolidate vendor purchases in many categories. So we started a member-driven line review process. We have 100 percent assurance that our members will abide by what’s decided in the line review. The members will vote on which vendors we keep and eliminate. The goal is to be more effective by doing business with fewer vendors. This plan reduces cost and also simplifies accounts payable, warehouse line picking and all other vendor-specific activities. By partnering with larger and fewer vendors, we can develop more effective programs. We can also help increase sales by having a retailer feature a single vendor, as opposed to multiple vendors for one product line. This focus improves the look of stores, which can lead to additional purchases.

HR: What does the future hold for Distribution America? DC: We’ve had so much success by doing more together. We’re continuing that and expanding member interactions to discuss best practices in all aspects. We also want to stay on the forefront of technology. We feel it’s our job to develop the latest technology advances for members and retailers. We’ve also recently changed our model to be open to more niche distributors that might be out there and looking to take advantage of the programs and pricing models Distribution America has to offer.

Dave Christmas President and CEO As president and CEO of Distribution America, Dave Christmas oversees a network of six distributor members who in turn serve retailers across North America with extensive inventory and unique marketing programs.

HARDWARE RETAILING

DISTRIBUTOR PROFILE SERIES

MEMBER PROFILES

Blish-Mize Blish-Mize is the longest-operating wholesale hardware distributor and a founding member of Distribution America. Based in Atchison, Kansas, the company furnishes products and services to more than 1,500 retailers in 13 states and provides e-commerce fulfillment for some of the world’s largest online retailers. Established in 1871 by three brothers-in-law, the company is now overseen by CEO and president Jonathan Mize. He says Blish-Mize and Distribution America’s partnership provides a critical advantage in today’s hardware industry. “There are many strategic benefits that Distribution America offers,” Mize says. “For us to do this all on our own—vendor negotiating, consolidation, product line reviews and marketing and advertising retail services—would be nearly impossible while continuing to maintain all the products, programs and marketing services that we offer our customers today.” Mize says the company stocks more than 60,000 SKUs and operates a 450,000-square-foot distribution center located in Atchison, while also accessing cross-dock facilities in Denver and in the Dallas and Houston areas.

Staying at the forefront of technology is critical, Mize says. The company’s distribution center features voice-picking programs that send constant inventory updates to retailers via the company’s website and the Blish-Mize mobile app. In 2021, the company will celebrate 150 years in business. Mize says the anniversary will be a landmark Blish-Mize. “It will be a big milestone for us. There are very few companies in the history of the U.S. that continue to be family-owned and reach 150 years. It’s really a testament to our customers, who are truly like family and have allowed us to continue to be part of their successes,” he says. “We are a survivor in our industry and are very proud of this upcoming achievement.” Learn more at blishmize.com.

Florida Hardware Co. Based in Jacksonville, Florida, Florida Hardware Co. traces its roots back to 1875. More than a century later in 1985, the company was purchased by Ralph Thieman, a hardware store operator from Quincy, Illinois. The company has stayed with the Thieman family and is currently overseen by president and CEO Don Thieman. Today, the business has three distribution centers in Jacksonville and one in Harrisonburg, Virginia. It also oversees a manufacturing plant for the Alligator brand in Soperton, Georgia. This network enables the company to serve retailers from as far north as New York and as far south as Central America. Thieman says in the last five years, the company has added distribution centers, acquired companies and welcomed new customers. In 2019, ensuring the company is best positioned to serve its 3,000 retailers is paramount. “We’ve seen a pretty big change with what’s happening with e-commerce and big boxes,” he says. “We’re seeing from our customers that many are diversifying their product mix and going into new categories. Everyone needs to

HARDWARE RETAILING

find a way to grow business, so they’re looking for opportunities outside their traditional markets.” Along with hardlines categories, the company also specializes in animal feed, pet food, equine products and other farm and ranch categories. Thieman says Distribution America enriches his company’s marketing and strengthens its relationships with vendors. “Distribution America is a valuable resource to us,” Thieman says. “Collectively, as independent distributors that are regionally located throughout the country, Distribution America allows us to act in unison.” Learn more at floridahardware.com.

DISTRIBUTOR PROFILE SERIES

MEMBER PROFILES

House-Hasson Hardware Founded in 1906, House-Hasson Hardware Co. is based in Knoxville, Tennessee, and serves 2,500 customers in 18 states, the Caribbean Basin and South America. President and CEO Don Hasson says the company is actively pursuing new strategies to grow. In March, the company announced a 100,000-square-foot expansion to its Knoxville warehouse. In 2018, the company added 50,000 square feet to its warehouse in West Virginia. When finished, House-Hasson will have 750,000 square feet of warehouse space. The company also purchased inventory from Hardware Distribution Warehouses (HDW), which ceased operations in January. House-Hasson later hired eight former HDW sales representatives, who Hasson says will strengthen the company’s presence in Texas, Louisiana and Arkansas. In total, the warehouse expansion and inventory purchase constitute a $10 million investment for the company. The investment is a positive development that brings new technological possibilities, says Hasson.

“Technology helps employees be as productive and accurate as possible,” he says. “In particular, voice-picking technology has been a major benefit to the company.” House-Hasson relies on Distribution America to improve buying power and enhance its marketing and advertising programs. House-Hasson has also started creating websites for retailers. The program currently serves about 100 stores and lumberyards and allows business owners to integrate inventory from House-Hasson directly onto their website. “It’s a ship-to-store program, so the customer comes to the store to pick it up,” he says. “We like that model; it drives more traffic to the store.” Learn more at househasson.com.

Monroe Hardware In business for more than 130 years, Monroe Hardware is a company built on historic traditions and a keen sense for technological innovation, says president Greg Allred. Based in Monroe, North Carolina, the company oversees a 350,000-square-foot facility that includes indoor and outdoor storage areas and an extensive pipe inventory. It currently serves 1,500 home improvement and lumber customers throughout the southeast and in Delaware and Maryland. Allred says the nexus of the business is its online catalog, which sales representatives and customers count on for real-time inventory updates. “Our online catalog receives constant updates so our sales team and dealer customers have access to a system that makes it easy for them,” Allred says. He says the system includes pricing updates and initiates special promotions. The system archives retailers’ order histories, generating data for customers about their past sales to inform future decision-making. Putting the technology in motion, Allred says, is a network of sales representatives and customers who have

decades-long histories. He says these connections help Monroe Hardware customers compete against big boxes. “The greatest opportunity for success is for our members to distinguish themselves from and compete with the boxes. Their independence allows them to be more nimble and react more quickly to changes in their customers’ requirements, new products and categories, and also maintain relationships with customers,” he says. Allred says Monroe Hardware is strengthened by Distribution America’s collective buying power and access to industry data and marketing support. The company uses that network of resources to continue its traditions and serve customers in the southeast, Allred says. Learn more at monroehardware.com.

HARDWARE RETAILING

DISTRIBUTOR PROFILE SERIES

MEMBER PROFILES

PACOA Focused on serving customers in the northeast, PACOA concentrates on hardware, paint and lumber retailers. The company distinguishes itself by having a deep inventory of tools, plumbing, electrical and janitorial products. Headquartered in Port Washington, New York, PACOA oversees a 95,000-square-foot facility to serve more than 2,100 customers from Maine to Virginia. The company also operates two auxiliary warehouses. Though PACOA now offers an array of home improvement products, its founders originally focused on serving the paint industry. In 1969, Teddy Geismar and his son Herb assembled paint rollers manually in their basement and sold them to stores from the trunk of their car. In 1974, the Paint Applicator Corporation of America (PACOA) was formed. Now the company counts more than 130 employees and can deliver 17,000 separate SKUs to its customers. PACOA credits its fleet of 16 delivery trucks to guarantee next-day weekday delivery for its customer base. PACOA’s more than 260,000-square-foot warehouse is powered by

radio frequency communication, which CEO Steve Geismar, grandson of founder Teddy, says ensures efficiency. Geismar says PACOA is now planning a 25,000-square-foot addition to its distribution center, which will enable it to add more categories and new possibilities to the retailers it serves. The company is also updating its storage and retrieval process with new warehouse technology. According to Geismar, PACOA’s partnership with Distrubution America enables the distributor to focus on serving independent operators. “Distribution America has a great team of people who understand our role as an independent distributor,” he says. “Distribution America is always fighting for the best programs for us to pass along to the market, and they’re always looking for new and exciting product lines.” Learn more at pacoa.com.

United Hardware According to Steven Draeger, United Hardware president and CEO for the last decade, the company serves retailers by helping them stay relevant in their communities. “I think complacency is one of the biggest challenges in retail,” he says. “We really push different program options to keep our customers’ stores fresh.” Draeger points to the company’s Spotlight of Opportunity program, which includes specialized planograms for specific categories. During biannual buying markets, United Hardware offers selected Spotlight of Opportunity products to customers up to 75 percent off. Draeger says the program is an affordable way to help retailers reset significant portions of their stores, an investment that energizes employees and customers. Founded in 1945, United Hardware is headquartered in Plymouth, Minnesota. The company currently serves about 1,200 independent retailers across 18 states. It operates a 450,000-square-foot warehouse in Milbank, South Dakota, that houses more than 55,000 SKUs. Draeger says technology is integral to success and has enabled better decision-making for United Hardware.

HARDWARE RETAILING

“Technology is constantly changing, so we continually reinvest in our warehouse’s management system, our enterprise resource planning and other management tools,” he says. “Retailers need to reinvest in their businesses, be it through POS systems or leveraging optional tools, like AdStudio and demographic software, which are brought to the table through our partnership with Distribution America.” In the future, Draeger says United Hardware will remain focused on serving its members, partnering with independent retailers and helping them serve their communities. “We think our market size and focus on retailers bring value to our members,” he says. “By focusing on the upper Midwest, we can be a stronger, more personalized partner with the retailers we serve, and that’s really where our expertise lies.” Learn more at unitedhardware.com.

DISTRIBUTOR PROFILE SERIES

RETAILER PROFILE

Neighborhood Network Merrilees Hardware Establishes Its Own Retail Chain

ale and Shelly Drew, owners of Merrilees Hardware, say the best aspect of running three successful home improvement locations is being able to help customers. The company’s motto is “We’re the problem-solvers,” a principle that’s shown in action each day. “When you have your own business, you feel like people are coming into your home and your customers are your family,” Shelly says. “I love helping people and spending the time to really understand what a customer needs and help them get through a project.” With the support of their longtime distributor, House-Hasson, Merrilees Hardware offers a deep product mix, including hardlines, automotive gear and pool products that came just in time for summer. The Drews say their connection to House-Hasson has strengthened their business through the years. “We have a very personal relationship with House-Hasson and Distribution America,” Dale says. “We know we can count on them for exactly what we need.”

The Right Mix Much like Distribution America operates a powerful international network, Merrilees Hardware comprises a thriving chain of regional locations. Dale and Shelly empower each location to find the right mix of products and services to meet customers’ needs perfectly. The business began when Dale’s father, Michael, bought Merrilees Hardware in 1980 in Cleves, Ohio. Dale worked in the store throughout high school, and as that store established itself, Michael bought additional locations in nearby towns Milan and Bright, Indiana, throughout the 1990s. Dale now manages all three locations, but has developed a company structure that permits each location to find its own local footing to best serve customers. Dale oversees day-to-day operations in Cleves, and Shelly focuses on the Bright location. Two brothers who have worked with the business for decades guide the Milan location. The arrangement allows each store to best serve its community, the Drews say.

HARDWARE RETAILING

DISTRIBUTOR PROFILE SERIES

The Bright location caters more to DIYers than to pros, the Cleves location is split about evenly and the Milan location, Merrilees’ largest, caters to both consumer segments, with an added focus on farm supply due to its rural location. “I’m happy with the mix,” Dale says. “The stores complement each other and let us pursue both markets in each store to help keep things flowing all year long.”

Always Searching One of the most important aspects of their operation’s success is finding the right mix of employees, the Drews say. They have around 30 employees among three locations, and managers are always looking for new hires to strengthen the business.

“I can’t begin to say enough about how important the employees are to our success. We truly value them, and they’re such a huge part of helping to take care of Merrilees’ customers. —Shelly Drew, Merrilees Hardware

”

“Finding good staff members is one of the biggest challenges,” Dale says. “I’m always keeping my eyes open for new employees. I’ll add an employee even if I don’t technically need one, if that person is a good, quality candidate for the store.” Shelly says the first few days on the job are a crucial period to instill lasting training values. Once the basics of the POS system and customer interactions are met, it’s time for the employee to work directly on the floor helping customers and refining their product knowledge.

Eyes on the Future The Drews say they’re considering ways to extend Merrilees’ reach and grow its customer base. Dale is collaborating with House-Hasson on an addition to his Cleves location. He and Shelly are also open to adding new stores to the Merrilees network. “We’re so busy now that opening a new location is a little overwhelming, but we always keep our eyes open and would love to grow into northern Kentucky,” Shelly says. This year, the business is celebrating 20 years in Bright. The Drews have two children, a daughter who is studying education in college and a son in high school. They would love to see one of them run Merrilees Hardware, but feel comfortable knowing whatever the future holds, the business has a solid base of support from its longtime employees. “I can’t begin to say enough about how important the employees are to our success,” Shelly says. “We truly value them, and they’re such a huge part of helping to take care of Merrilees’ customers.”

At Merrilees Hardware in Bright, Indiana, new employees start by learning the basics of POS operations. Once they are familiar with the system, employees begin working the salesfloor to expand their product knowledge.

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Safety by Design Protecting Your Operation, From Reset to New Construction

pyramid display of window cleaner at the end of an aisle can be an eye-catching reminder for customers who have been meaning to shine up their windows. But one stray jacket zipper catching the sprayer of a poorly built display can spell disaster, and not just because of the massive cleanup. When it comes to safety in your operation, the details matter, and not only in your merchandising. While it’s important to train your employees how to build safe, effective displays, it’s also crucial that you provide the tools and information to keep your staff and customers safe in all areas of the store. Safety also shouldn’t be an afterthought; when you’re designing a new power aisle, resetting your store or

HARDWARE RETAILING | June 2019

building an addition, you should incorporate safety into every decision. Keeping safety top of mind at every stage not only protects your customers and employees physically, but it also protects your business from liability. To learn more about the intersection of safety and design, Hardware Retailing spoke to Gary Petz and Phil Mitchell, co-founders of the Discovery Retail Group, a consulting firm that specializes in retail operation budgeting, design and strategy. Read the conversation with Petz and Mitchell here and see the highlights of store safety by design on Page 40. For an inside look at managing safety best practices in the lumberyard, hear how Gillman Home Center general manager Jeff Sievers prioritizes safety with his team at TheRedT.com/lumberyard-safety.

Talking Safety With the Experts Hardware Retailing (HR): What are some key areas retailers should consider regarding safety while redesigning, resetting or building a new store? Gary Petz (GP): There are some basic considerations. For example, aisle width is important to consider when it comes to the safety of a store. Aisles that are too narrow cause constriction and increase the likelihood of customers bumping into merchandise or other customers with their carts. Gondola height is also a safety consideration. It is true that additional height allows more merchandise to be displayed, but it can also make shopping more challenging and possibly dangerous for shoppers who are shorter or who have disabilities. The Americans with Disabilities Act has recommendations regarding minimum aisle width and other physical store considerations, like changes in floor elevations. Retailers should be familiar with those recommendations to ensure a safe shopping experience and work environment for everyone. Beyond safety, in the case of aisle width, aisles that are too narrow are not inviting and may even keep shoppers from entering the area because they feel too restricted.

HR: What are some areas retailers may overlook when it comes to safety? Phil Mitchell (PM): We often see stores where endcaps have no base decks, only shelves acting as bases. Shelves protruding in this manner can cause shoppers turning the corners too sharply to trip or even cut their legs. It’s also important to remember that aisle clutter—such as merchandise extending off the shelf or unpacked boxes on the floor—is extremely dangerous and should be avoided. Wet and dirty floors should be cleaned quickly to prevent safety incidents. This problem is exacerbated in inclement weather when snow or rain may be tracked in. Retailers should use proper caution signage or placards when cleaning up spills or floors that are wet from the elements. It’s also important for retailers not to forget that there are slight differences between employee safety and customer safety. For example, an employee might climb to an overhead display whereas a customer never should. However, injuries are injuries, and we want to prevent them from happening to anyone. A safe workplace for employees is a safe place for shoppers.

GP: Something as simple as pegboard hooks that are too long can cause injuries. Best practices suggest using a side counter with the same length hooks. Avoid merchandising sharp items on base decks and shelves that are too narrow. We once visited a store with aluminum roof jacks protruding beyond the base deck, which could have easily caused injury.

Another area of the store that operators may not think about in regard to safety are places customers may not go, such as break rooms and storage areas. Keeping backstock properly stored and giving employees easy access to safety equipment, such as ladders, hard hats and back support harnesses, is critical.

HR: Why is safety as a component of design, merchandising and store setup important? GP: Safety is important in all of those areas because of the potential for injuries and resulting liability issues. For example, merchandisers should be built in proportion to the size and weight of the products. Displays should feature heavy items on the base and move upward toward smaller and less bulky items.

HR: What are some resources retailers should consult when developing their safety plans? GP: The Occupational Safety and Health Administration (OSHA) offers guidelines online at osha.gov. OSHA doesn’t provide resources specific to the hardware industry, but the recommendations for grocery retailers would be helpful for home improvement retailers to review. The North American Retail Hardware Association (NRHA) partners with Member Insurance to give retailers access to industry-specific resources and services. (Learn more about this partnership at nrha.org/member-insurance.)

PM: Retailers should check with their city, state and local municipalities for guidelines. Chambers of commerce or other local business organizations may also have resources available, especially for retailers who are considering building a new store or adding to an existing location.

Gary Petz Partner and Co-Founder Gary Petz has served many years in hardware and lumber operations. His experience allows him to help retailers focus on the customer experience. He is also the co-author of “10 Weeks to a Better Retail Operation.” Phil Mitchell Founding Partner Phil Mitchell has developed unique ways to analyze the productivity of existing sales spaces and has designed many layouts in retail hardware operations. He is also the co-author of “10 Weeks to a Better Retail Operation.”

June 2019 | HARDWARE RETAILING

Blueprints for Safety Keeping customers and staff safe is a comprehensive task that takes considerable planning to execute correctly. Whether you’re putting together a new endcap or building a new addition, safety is crucial down to the last product in the display.

HARDWARE RETAILING | June 2019

Once your team understands how safety plays into each element of your operation, it’s simple to maintain. Review this blueprint with your staff to be sure everyone knows what areas need to be examined regularly for safety checks on the salesfloor and beyond.

Take an Entrance Exam Evaluate your floors. Are they wet from customers tracking in rain or snow? Make sweeping and mopping a regular cleaning task throughout the day to prevent slips and falls. Be sure you have appropriate caution signage on display when employees are mopping or when there are slick spots. Another element of entrance safety is carpets or floor mats. Do you clean your entrance mats regularly? If they are getting worn and losing their effectiveness, it may be wtime to replace them.

Get an Outside Perspective There are likely potential safety hazards outside the walls of your building. Train every employee to look for problem areas as they enter the store, such as merchandise blocking the walkway, burnt out lightbulbs or worn safety signage or paint. Post signage alerting customers to possible vehicle traffic. Be sure your staff always wears necessary personal protective equipment, from hard hats when handling building materials to garden gloves when handling rose bushes.

Practice Employee Safety Don’t forget about security and safety in employee-only areas. If your break room doubles as a storage area, use the same safety practices you use on the salesfloor. Don’t stack items too high, and be sure there’s enough space to safely move items. Make sure personal protective equipment is readily available for employee use. Include “employees only” signage on key cutters and pipe threading machines so customers don’t attempt to use the equipment themselves.

Clear the Way Have your staff make regular trips through the store to catch any misplaced items or merchandisers that have shifted into the walkway. Keeping wide, clear paths will keep your customers and staff safe, while also encouraging shoppers to keep browsing. When putting stock away, don’t leave boxes in the aisles or box cutters unattended, and be sure ladders are clearly marked for employee use only. Train staff members to clean up spills of hazardous materials quickly and safely.

Don’t Cut Corners Follow the pyramid merchandising technique for displays: They should be largest on the bottom and narrow as they go up,with the heaviest items on the bottom and the lightest or smallest items on top. This strategy limits the possibility of customers or employees bumping into the display as they make their way through the store. Be sure to include signage on tall displays or heavy merchandise letting customers know to ask for assistance to get products down.

June 2019 | HARDWARE RETAILING

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Accolades for Accessories Exploring Add-Ons for Hand and Power Tools

etting the most out of a purchase isn’t just a shopping strategy for consumers. Manufacturers are eager to offer accessories that can extend the applications of their products and boost sales while retailers are always looking to increase transaction sizes through impulse items or add-on sales. Tool accessories fit neatly into this rationale, as accessories can greatly benefit all three groups. The accessories available for a consumer after they buy an expensive tool can determine which price point, brand and type of tool they choose. Manufacturers can extend the total amount of sales associated with a tool lineup. Retailers can use bundles and group deals to expand a tool department and gain larger average purchases.

HARDWARE RETAILING | June 2019

Explore how accessories can be prime players in hand and power tool departments. Hardware Retailing spoke to Don Newman, manager of Hardware Sales in Bellingham, Washington, about how his contractor-oriented retail location and its other divisions approach tool accessories. The pro-focused business developed from a company selling dynamite to loggers and miners in the 1960s into a hardware powerhouse in the Pacific Northwest. Online sales are handled through distribution centers in Ferndale, Washington, and Indianapolis, extending the company throughout the country. Hardware Sales’ focus on heavy industrial customers and other professionals has allowed its team to gain a great understanding of the demand for tools and their accessories, in every shape and size.

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Tool accessories can be one of the most important segments of an independent home improvement store’s inventory. Accessories can extensively augment and customize hand and power tools for customers, making them vital for retailers.

Wide, Wide World Hardware Sales does roughly 70 percent of its business with contractors and industrial customers such as builders and refinery operators in the area. This clientele demands high-quality tools and accessories to go with them, which reflects what customers find when they come into the business’s retail location in Bellingham. “We have a policy for carrying top-of-the-line items, and that extends to every accessory in the store,” Newman says. “This is reflected in our focus on professional customers, but our DIY customers and homeowners are also aware of that policy and reputation. They know they’re going to get a knowledgeable associate who isn’t selling them a lemon, even if they don’t recognize the brand name.” One way Hardware Sales sets itself apart from other businesses, such as industrial warehouses and big-box stores that cater to industrial customers and professional tradespeople, is how it approaches depth and width of inventory.

HARDWARE RETAILING | June 2019

Given its focus on the best tools and accessories, it might be easy to assume Hardware Sales limits how wide it goes on brands and selections. Newman says Hardware Sales has devoted significant energy to building its records of sales and customer buying habits to determine where to expand its A and B products. This is reflected in the number of brands stocked in the store on a regular basis, negating the need for special orders and delays, and in how the business approaches accessories such as blades for reciprocating saws or multitool attachments. “For items that come in a wide variety of sizes, we’ll go as wide as we need to in order to make sure we can cover any customer’s needs. We don’t know what size they need, and sometimes they don’t either, so we need it all,” Newman says. “We still follow the 80-20 rule—80 percent of sales comes from 20 percent of your inventory—but that depth is where we separate ourselves from big boxes.” Continued on Page 48

Getting Attached to Accessories Need some inspiration for your own accessory expansion plans? There are any number of items that can attract and intrigue customers while increasing your selection.

Attachments that replace entire tool families or expand a product well beyond its assumed capabilities can draw a lot of potential sales.

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Paint Roller Cleaner

For anyone looking to do a bit of ice fishing, an ice auger is a familiar sight. Nothing else will suffice to get the clean hole down to the water. However, an adaptor for a drill can span the gap between a hand auger and expensive motorized options. Not looking to sit on a frozen lake fishing? Similar adaptors for smaller garden augers can make planting flowers or a vegetable garden simple and fast.

A saturated paint roller can be a troublesome tool to clean, so there are plenty of options looking to make it easier. One option is a paint roll cleaner that attaches to the end of a power drill, has a long arm that holds the roller and spins while the roller is submerged in a large bucket. It speeds up the cleaning process while keeping the paint contained in the bucket for less mess.

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Power tools get a lot of the focus for accessories, but there are plenty of hand tool accessories. One is a hammer assist tool, which holds a nail on a magnetized rod, which the hammer then drives into a surface at the other end. Whether it’s driving a nail into a surface that doesn’t allow a hammer to fit or making better contact at a tricky angle, a hammer assist can make jobs easier.

Magnetized accessories come in all shapes and sizes. Drill bits that keep a screw on the tip without an extra hand make jobs easier and faster. But how can you store or clean up the kinds of items that can easily drop and roll away? From magnetized wall strips to trays, there are options that can keep screws, nails, fasteners and bolts secure and within reach. There are also tools that switch the magnet on and off.

June 2019 | HARDWARE RETAILING

Continued from Page 46

While Hardware Sales will stock its inventory wide with accessory sizes for fast-moving A and B products, it also uses its past sales to go wide on C and D items, or slower-moving products. Big-box stores and retailers less invested in accessories don’t often have the depth of inventory to extend size availability beyond the top layer of product categories, Newman says, and it helps Hardware Sales find an edge. “Accessories for C and D items, or sizes of fittings or blades for those less-in-demand items, are harder to find for the average consumer. Most retailers won’t stock those items because they fit products that aren’t in the ‘20 percent’ area where most sales are made,” Newman says. “We want to capture those sales, and more importantly, serve our customers by having those hard-to-find accessories.” One of the ways Hardware Sales stays on top of its ratio for stocking such a wide assortment of accessories is its ordering system. After several years of buying history has built up, the sales staff has a solid idea of what is likely to be in demand during a given season. Distributors and manufacturers often provide their own buying sheets for a season based on

their warehouse supplies. Hardware Sales buyers use these as a baseline example of what it might need to order, but amend everything based on their own collected data that is focused on 30-day buying cycles. “We might know that a refinery is planning a turnaround (taking the facility offstream for repairs and renewal) or that major construction is starting up this month,” Newman says. “Combined with our sales data and our relationships with area businesses, we can stay informed our customers’ plans.”

Regarding Retail Expanding selections for accessories, blades and fittings can help build a department’s reputation for having abundant options in accessories. Retailers need to look at fast-moving items and niche products. Hardware Sales also amends buying plans with its own 30-day projections based on past sales and the calendars of businesses it sells to. For more on how to manage your inventory and update your buying strategy, visit TheRedT.com/manage-inventory.

Hardware Sales in Bellingham, Washington, is known for its wide variety of tool accessories. It also caters to a large industrial and professional tradespeople customer base with rental equipment and an industrial sales division.

HARDWARE RETAILING | June 2019

What a Deal

Newman encourages retailers to look beyond products available through their main supply chain and see what products are available when any brand or manufacturer is an option.

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Stocking the right accessories for a particular customer base is crucial, but some decisions are based on other influences. In the case of hand and power tool accessories, these influences can often be the deals and packages offered by tool manufacturers. Retailers who order the majority of their tools and accessories directly from wholesalers might not have as much experience with deal bundles as those who order direct from manufacturers, Newman says, but the diverse nature of Hardware Sales’ inventory means it orders through multiple distributors and directly from vendors. “Manufacturers operate similarly to retailers—they have planned sales and programs for different times of the year when they want to promote certain items to their customers,” Newman says. “This can mean there are deals where a certain order amount comes with free accessories or deal bundles for tools and accompanying bits and drills.”

Hardware Sales manager Don Newman says he works with manufacturers to access deals on tools and complementary accessories.

These deals often come in two types, with either the purchase of an accessory bringing the cost of a tool down, or accessories are added for free after a threshold purchase is made. The retailer can then use that discount to gain margin points or enhance deals and sales for customers. One option is pairing the discounted accessory with a tool it complements, forming a package for the retailer to advertise. Another tactic for Hardware Sales is using the discounted price from the manufacturer to bring down the total price of the accessories, making them a more attractive option for customers. Hardware Sales does most of its business directly with hand and power tool manufacturers due to its dedication to covering the length and breadth of the tool category. Newman encourages retailers to look beyond products available through their main supply chain and see what products are available when any brand or manufacturer is an option. One example Newman uses was the shift of one distributor away from a brand that had high customer loyalty at his business. Instead of bringing in a similar brand of accessories now offered through that distributor, Hardware Sales expanded to a different distribution channel to retain the brand customers were familiar with while still working in items from the new brand. This expanded the store’s diversity, retained a brand customers wanted and allowed for business to expand with the new items. Hardware Sale works with a wide variety of manufacturers, whether through a distributor or through direct sales. These include manufacturers of saw blades that include blade exchange programs, specialty wood drills, outside power tools, hand multitools, specialty circular saw blades and specialty hand tools for electrical work.

Merchandising strategies that work with hand and power tool brands can also help customers find the right accessories. Retailers should group brands together for easy identification.

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Sample Size Hardware Sales’ familiarity with its customer base and their schedules helps the business in its ordering and product selection. That relationship goes even further for hand and power tool accessories, particularly when it’s time to bring in a new product or brand. “We’re very familiar with our repeat customers’ buying habits. Who likes this brand of drill and why that contractor uses a certain saw from one company, but likes blades from another,” Newman says. “If we see an opportunity to expand a product line, or maybe add a third manufacturer where previously we had just two in a category, we don’t want to go in blind.” Newman uses the example of shifting brands through distributors for how Hardware Sales approaches such a change. While the business kept its longtime brand in stock, it slowly brought in the replacement brand from the original distributor. To get feedback on how it performed on the tough job sites of its customers, Hardware Sales put these new accessories in the hands of outside sales reps and its salesfloor staff.

“We get samples along with bringing in a new brand little by little. We don’t want to muscle out the brands we already have, but we also want to learn if the new brand can find its own segment of customers,” Newman says. “We know someone is very loyal to one brand, so they get a sample from a competitor. Often it doesn’t lead to the contractor changing their mind, but they give honest reviews of the new item when we see them next.” These samples can also be used to promote niche items that work well as accessories or in bundles and won’t take up a whole category like saw blades or drill bits. Finger sleeves with magnetic fingertips for picking up loose fasteners and inflatable window shims with multiple uses are examples of items Hardware Sales has used as samples when they were first brought into the store but soon found a foothold. “We’re always searching, from trade magazines to multiple buying shows. Accessories encompasses such a broad spectrum of products, there’s always something that can surprise you,” Newman says. “Then it becomes our job to surprise our customers with what we’ve found.”

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Regarding Retail Retailers shouldn’t be afraid to branch out from products offered through one distributor, Newman says. Working directly with a manufacturer that has products customers want can pay dividends in building a solid tool reputation and diversifying a store’s selection. These direct contacts can also expose a retailer to new deals available through tool manufacturers, allowing for strong merchandising options. Options for using distributor or manufacturer deals on accessories include: • Bundling tools with discounted accessories to encourage larger purchase sizes. • Packaging discounted accessories together at a lower overall price to encourage customers to try new brands.

Hardware Sales uses multiple distributors in order to ensure the most variety of brands available. Staffers also often work directly with manufacturers to put together a strong assortment of tools and accessories.

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June 2019 | HARDWARE RETAILING

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Spotlight on spoga+gafa Outdoor Living Market Showcases International Trends

hen you find exciting products to enrich your inventory, you set your business on a path to higher sales and customer satisfaction. With summer heating up, many independent retailers are capitalizing on gardening and outdoor living products. Learn how spoga+gafa, the international garden fair hosted annually in Germany, can introduce a wealth of new products and information to help you plant seeds with customers. This year, spoga+gafa takes place Sept. 1-3 in Cologne, Germany, and will present the latest outdoor living products from a collection of some of the world’s most innovative manufacturers. Featuring more than 2,000 manufacturers from 61 countries, the show is a leading force for future garden and outdoor living product trends.

HARDWARE RETAILING | June 2019

To learn more about the biggest garden and outdoor living trade fair in the world, Hardware Retailing spoke to spoga+gafa director Stefan Lohrberg. Sprawling more than 2.5 million square feet, the event includes four separate product segments: Garden Unique, where industry analysts present outdoor living information; Garden Creation and Care, where visitors learn about specific plants and soil mixtures for healthy gardens; Garden BBQ, which gives attendees a look at the latest grilling and barbecue products; and Garden Living, where show attendees browse the latest sports, camping and outdoor leisure products. Lohrberg says every attendee is sure to find something that captures their interest and provides new opportunities for their business. For a photo tour of the 2018 event, visit TheRedT.com/spogagafa-photos.

Photos from spoga+gafa

A Focus on Urban Greenery Lohrberg says this year’s event will focus on the theme of city gardening, or gardening without a garden. He calls urban gardening a “mega-trend” and says it is an important subject to highlight at this year’s event. To showcase the trend, spoga+gafa organizers will install several kiosks around the show floor, each focusing on a different aspect of urban gardening and related products to help bring information and products to event attendees in a variety of formats.

“We see that city gardening, especially with garden creation and care, is a critical topic for products,” Lohrberg says. “In the past few years, we’ve seen more people living in cities but wanting their own green spaces. They might only have a terrace or a small backyard, but there are still ways to add green space.”

Explore the Outdoor Furniture Trend Show Lohrberg says one of the most important aspects of outdoor living for many consumers is bringing the right furniture into their spaces. He says spoga+gafa will have many opportunities for attendees to browse the latest selection of outdoor furniture, which has grown more sophisticated than the lawn chairs of yesterday. Furniture at spoga+gafa combines design, ergonomics and multifunctionality to bring comfort and style to every outdoor space, according to Lohrberg. “One of the new aspects will be the Trends Show: Outdoor Furniture and Decoration. There will be an international panel that previews the garden trends for the next year. That will be very interesting for visitors from garden centers and independent home improvement operations.”

Get Inspired at the Outdoor Kitchen World One of the core concepts fueling greater interest in outdoor living is the outdoor kitchen. Lohrberg says more consumers across the world are beginning to incorporate full-service kitchens into their outdoor living spaces, and for home improvement retailers, that trend could translate to new sales potential. From classic grills to state-of-the-art innovations, spoga+gafa’s Outdoor Kitchen World will present an international look at the latest outdoor kitchen trends shaping the channel. “Many of the North American visitors I’ve spoken to have gone absolutely crazy about the outdoor kitchen products,” he says. “We’re presenting the biggest outdoor kitchen product collection. We’ll show how outdoor kitchens are affecting garden design, which is an opportunity to show new construction trends.”

June 2019 | HARDWARE RETAILING

By Chad Husted, chusted@nrha.org

HOW I DID IT ...

“We started this program to share in the store’s success. Everyone now has skin in the game. We have some of the best, highest-performing employees in the business.” —Paul Garwood Island Hardware & Supply

HARDWARE RETAILING | June 2019

Sharing Profits With Employees

he associates who interact with your customers on the salesfloor, offer their advice on products and projects and keep a store running are the lifeblood of the home improvement industry. To reward employees who contribute to sales growth, Island Hardware & Supply uses a profit-sharing program for its employees. Paul Garwood took over operations at Island Hardware & Supply in the early 1990s, and turned the Eastsound, Washington, business into a one-stop community store that offers anything

from hardlines to deli sandwiches. In 2002, he began sharing of the business’s profits with employees. The amount of profits shared fluctuates, but employees have job security in their base pay. In 2009, a down year for the industry, the business shared 99 percent of its small profits. “The program is a way to show employees that you believe in them and that their efforts help the business thrive,” Garwood says. Though semi-retired, he determines how profits are shared each month along with his managers.

Island Hardware & Supply currently has 15 total employees, including three managers. However, Garwood is quick to point out that by having a profit-sharing program in place, each employee plays a greater role in the success of the business. The business currently pays $12 an hour to all nonmanagers, with profit-sharing varying throughout the year based on seasonal sales and profits. During more profitable seasons, it isn’t uncommon to see high-performing employees earning another $18 per hour on top of their normal wage, Garwood says, and in slower seasons, the employees can still rely on their base pay. Managers have slightly higher base salaries of $15 an hour. Depending on their performance, they receive a larger share of the profits. A key for retailers looking to institute a similar program is

having high buy-in from employees, Garwood says. His first focus when implementing the program was to make sure employees saw it as an incentive. Profits are added to an employee’s base pay, which remains consistent and can be relied on even during low-profit seasons. Pay is not cut or withheld based on performance reviews. “We started this program to share in the store’s success. Everyone now has skin in the game. We have some of the best, highest-performing employees in the business. One of our employees is worth two or three big-box associates with their knowledge and what they can get done in a day,” Garwood says. “When a customer sees that, and sees that they can get a better deal at our store while being helped by such great employees, it only builds the business.”

Paul Garwood Island Hardware & Supply Eastsound, Washington

Problem Resolved Garwood wanted to step back from the business’s daily operations and wanted to compensate employees for their hard work and keep incentives high for extra effort. He froze his employees’ wages and instituted a profit-sharing program that can double the take-home pay of a high-performing employee. The store has consistently seen annual sales over $7 million since the program started.

Key Takeaway “For our employees, the job comes down to 50 percent attitude and 50 percent job skills. We can teach you the job skills, but the attitude has to come from the individual. Our program is a tangible way to show what can be achieved with the right attitude. I’ve never had an employee complain about profit-sharing in 17 years,” Garwood says.

Future Plans Island Hardware & Supply updates its profit-sharing program based on annual sales and the overall economic environment, but the basic tenets of the program will continue as long as the store can make a profit and compensate its employees accordingly. Employees at Island Hardware & Supply in Eastsound, Washington, are investing more than their time at work. The business shares its profits with employees based on their performance.

June 2019 | HARDWARE RETAILING

Newsmakers

Pay Attention to Financial Warning Signs

Upcoming Events June

any small business owners struggle to identify financial pitfalls or get help before problems become disastrous for their retail operations. Attorney R. Scott Williams from Rumberger, Kirk & Caldwell took questions on issues that signal danger and what to do about them.

13-15

Hardware Retailing (HR): What issues should retailers look for if they want to prevent the financial vulnerability that leads to bankruptcy? Scott Williams (SW): Retailers should be aware of several warning signs. They may be struggling with their line of credit or with staying inside the covenants of their bank loan. Sometimes, there isn’t enough cash flow or they’re struggling to make payroll. A trap many small business owners get into is thinking, “I’m just not going to pay my payroll taxes this week, but I’ll catch up next week.” Another common one is thinking, “I’m going to finance my receivables.” You’re borrowing with expensive money if you’re doing that.

17-19

HR: If retailers have identified those problems, what should they do next? SW: Take steps to remedy them. Focus on what’s profitable. If you’re on top of the numbers and paying attention, what may seem like a loss is actually a net gain. The advice I give everyone who comes in to see me is, “If you’ve dug a hole, rule No. 1 is to stop digging.“ Many people get personally invested in their project or idea and keep plowing on, even if they are losing money. You have to be a dispassionate business owner and say, “It was a mistake.” Recognize it for what it is and focus your time and attention on something that is making money.

August

HR: At what point do business owners need outside help? SW: If you identify a problem and can’t figure out how to solve it, that’s when you need to bring in outside people, such as accountants, restructuring people or bankruptcy lawyers. We can get creative to figure out ways to help companies. What often happens is that people will come to me when they have tapped out all of their line of credit. They’re financing their receivables. They are four months behind on their payroll taxes. A bankruptcy can give you an opportunity to fix your problems. But to fix problems, you need some cash and flexibility. There’s nothing I can do if you’ve let it go on so long there’s no negotiating with your creditors.

House-Hasson Summer Dealer Market Sevierville, Tennessee

PRO Group Inc. 2019 Group Merchandising Conference Atlanta

28-30 United Hardware Fall & Winter Buying Market Minneapolis

13-15 Independent Garden Center Show McCormick Place, Chicago • Independent Home Improvement Show—Powered by NHS • 2019 NRHA State of Independents Midyear Review • NRHA STIHL Foundations of Leadership Conference

16-18 Florida Hardware Fall Market Orlando, Florida

22-24 HR: What assistance is available to retailers with very limited resources? SW: Nonprofits, mentoring programs and some university-run programs can help you understand what’s going on with your business and help it get better. Resources are available that are free or have very modest costs. There may be options available in your community through a small business incubator or the local chamber of commerce. Unless you recognize the problem and are willing to be proactive, whether it be by searching online or going to a small business incubator, ignoring the problem is never going to solve it.

R. Scott Williams is a partner in the firm Rumberger, Kirk & Caldwell in Birmingham, Alabama. The law firm has 85 trial attorneys who represent both small and large businesses all throughout the U.S. Williams’ practice areas include bankruptcy, restructuring and commercial litigation.

HARDWARE RETAILING | June 2019

Orgill Fall Dealer Market Chicago

September 1-3 Spoga+Gafa Cologne, Germany

Find more events online at TheRedT.com/calendar. To have your event added, contact Kate Klein at kklein@nrha.org.

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Newsmakers UNITED STATES Do it Best Names New Regional Sales and Business Development Manager Do it Best has announced the addition of Kyle Walters as its newest regional sales and business development manager. Walters will lead a team of territory managers across a region of the southern U.S. covering seven states. Together, Walters and his team will focus on helping existing Do it Best members grow store sales and profitability, as well as recruit new members to the co-op by emphasizing its programs and services.

Lowe’s Announces Job Cuts, Relocations Lowe’s will eliminate and relocate hundreds of jobs in North Carolina, according to The Charlotte Observer. Approximately 600 full-time employees at offices in Wilkesboro, North Carolina, will have their jobs relocated to Lowe’s Mooresville, North Carolina, headquarters. The company also announced that about 80 tech jobs in Wilkesboro will relocate to the company’s data center in Winston-Salem, North Carolina, and 12 jobs will be eliminated. In addition, Lowe’s is terminating 207 full-time workers at a cross-dock terminal in Charlotte.

Ace Hardware Begins E-Commerce Delivery Service Ace Hardware is introducing a new buy online, deliver from store program for Ace store locations across the country. The co-op says the new delivery option is an important component of its enhanced e-commerce offering. ”There has been a tremendous consumer shift toward free and fast delivery in the marketplace,” says Bill Kiss, head of digital, retail strategy and innovation. “The introduction of delivery is another way Ace can bring our unique brand of helpfulness and convenience to customers.”

More than 70 percent of U.S. households are within 15 minutes of an Ace store, which positions the co-op to offer e-commerce delivery conveniently.

AD INDEX

Ajax Wire Specialty Co. .............................................................................52 www.ajaxwire.com; 855-966-2529

IPG.............................................................................................................16 www.itape.com; 888-898-7834

Allway Tools ............................................................................................ IFC www.allwaytools.com; 718-792-3636

Ironclad Performance Wear Corp..............................................................19 www.ironclad.com; 844-200-5664

Apex Tool Group LLC ..................................................................................1 www.crescenttool.com; 800-650-8665

Mars ............................................................................................................3 www.marsdelivers.com

Bonide .......................................................................................................50 www.bonide.com; 315-736-8231

Master Magnetics Inc. ..............................................................................51 www.magnetsource.com; 888-293-9190

Coast Air....................................................................................................59 www.coastair-ac.com

Midwest Fastener ................................................................................42-43 www.fastenerconnection.com; 800-444-7313

Coles Wild Bird Products Co. ....................................................................37 www.coleswildbird.com; 877-426-8882

NRHA Health Insurance ............................................................................63 www.cbigi.com/nrha-program

Do it Best Corp............................................................................................9 www.independentsdoitbest.com; 888-364-8237

NRHA Retail Management Certification Program ....................................BC www.nrharmcp.com

Dutton-Lainson Company..........................................................................61 www.dutton-lainson.com; 402-462-4141

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

Fiskars PRO...............................................................................................15 www.fiskars.com; 866-348-5661

Paladin Data Corporation........................................................................13 www.paladinpointofsale.com/nrha; 541-803-6060

Flexon ........................................................................................................49 www.flexonhose.com; 800.327.4673

Phifer ...................................................................................................... 7 www.phifer.com; 205-345-2120

Hardware Retailing Podcast ......................................................................61 www.TheRedT.com/pod

PRO Hardware .......................................................................................45 www.prohardware.com; 303-792-3000

Hillman Group Inc........................................................................................5 www.hillmangroup.com; 800-800-4900

ShurTech Brands .......................................................................................53 www.FrogTape.com; 800-321-1733

Hyde Tools Inc...........................................................................................11 www.hydetools.com; 800-872-4933

Simpson Strong-Tie ...................................................................................27 go.strongtie.com/outdooraccents; 800-999-5099

Impress Art................................................................................................17 www.impressart.com; 631-940-9530

*This index is provided for the convenience of our advertisers and readers. The Publisher assumes no liability for errors or omissions.

HARDWARE RETAILING | June 2019

CANADA Made in Canada Campaign Unites Brands to Inform Consumers A new program recently launched to educate DIYers and contractors on Canadian-made hardware and building products. The program, called Well Made Here-Bien fait ici, kicked off with the distribution of 5 million leaflets at 2,404 affiliate and corporate stores belonging to 10 companies: Ace Hardware, BMR, Castle, Home Hardware, Lowe’s, Patrick Morin, Reno-Depot, RONA, TIMBER MART and Unimat. The program was initiated by the Quebec home improvement association, AQMAT. The campaign has steadily been gaining traction, with participating brands actively promoting it.

TIMBER MART Expands Distribution Center Network With Ontario Opening This spring, TIMBER MART will complete a network of facilities by opening a new distribution center in central Ontario. The new facility will service retailers across Canada. The company’s newest facility sits on 5 acres in Mount Forest, Ontario.

Training Program Will Teach Skills to Entry-Level Warehouse Workers The Building Supply Industry Association of British Columbia (BSIA) has launched a new training program aimed at entry-level workers. Called the Building Supply Warehouse and Distribution Training Program, it’s being run out of the BSIA’s office in Surrey, British Columbia. Developed in cooperation with the trade association’s members, the province’s government and the Northwest Skills Institute, the course is a six-week certificate program covering essential skills for new staff. The program is industry specific and available to people willing to commit to the training and accept full-time employment within the home improvement industry.

For the full story on these briefs, head over to TheRedT.com/0619-news. To read the Canadian briefs, visit hardlines.ca/hardwareretailing. For the latest independent home improvement news, interviews, trends and videos, visit hardwareretailing.com.

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June 2019 | HARDWARE RETAILING

Last Word

6 Components of a Strong Leader

ow do you identify workers in your operation who are ready for additional responsibilities? You may have team members already on staff who can fill shift supervisor and assistant manager roles, so take some time to build up their skills and help them be more confident as leaders in your operation. Start by giving them small responsibilities, like resetting endcaps, and as they succeed with those tasks, find additional leadership opportunities, such as delegating staff to unload a shipment or train new team members.

Recognizes Strengths and Weaknesses

Brings New Ideas to the Table

An associate who knows their strengths and where they need to improve will be better able to help others develop their strengths.

Decision-making isn’t only for the people at the top. Look for an employee who consistently makes realistic suggestions for operational improvements.

Receptive to Feedback

Takes Care of Customers

Your future manager is always willing to accept constructive criticism and make improvements to their workflow.

Having the knowledge and patience to serve every customer who comes in the door is a quality of every top-tier employee.

Willing to Learn

Works Well With Others

In addition to using feedback to grow, pay attention to the employees who are always asking questions and want to know more about the operation.

Take a look at the qualities here that contribute to a successful leader. If you think you have someone in your business who has some of these characteristics, but may need a boost in other areas, check out the North American Retail Hardware Association’s (NRHA) Foundations of Leadership program. The 16-week online course helps up-and-coming leaders become more effective communicators and decision-makers. Learn more at nrha.org/fol or contact NRHA’s Scott Wright at swright@nrha.org to find out if someone on your staff would be a good fit for the program.

HARDWARE RETAILING | June 2019

Emerging leaders get along with other employees and encourage others to be strong team contributors.

Are you offering health insurance to employees? In today’s competitive market, providing health benefits can make a big difference to potential employees and could determine whether they accept your job offer or a competitor’s offer.

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