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Above & Beyond How Connolly’s Do it Best Is Redefining Service Amid COVID-19 Page 26

Revving Up in Auto Parts Page 34

Plan for the Future of Family Business Page 38

Volume 219 • Issue 4 • November 2020 • hardwareretailing.com

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Above & Beyond How Connolly’s Do it Best Is Redefining Service Amid COVID-19 Page 26

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Serving Hardware, Home Center & Building Material Retailers

Published by the North American Hardware H dw and dP Paint i tA Association i ti

Above & Beyond How Connolly’s Do it Best Is Redefining Service Amid COVID-19 Page 26

Revving Up in Auto Parts Page 34

Plan for the Future of Family Business Page 38

Volume 219 • Issue 4 • November 2020 • hardwareretailing.com

“Midwest Fastener delivered an amazing facelift to our department and backs it up with day in, day out great service. They truly are one of our premier vendors”.

– Mike Brackin, CEO/Owner, HomCo Lumber & Hardware, Flagstaff, Az. pictured left to right, Todd Callan, Chief Operating Officer & Dan Groth, General Manager

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Headquarters EDITORIAL, DESIGN & PRODUCTION 317-275-9400, editorial@nrha.org

COMING IN DECEMBER

EXECUTIVE VICE PRESIDENT & EXECUTIVE EDITOR Dan Tratensek MANAGING EDITOR Melanie Moul, mmoul@nrha.org PROFILES EDITOR Kate Klein, kklein@nrha.org

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

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OUR MISSION

The North American Hardware and Paint Association (NHPA) helps independent home improvement and paint and decorating retailers, regardless of affiliations, become better and more profitable retailers.

Measuring the Market The annual Market Measure report returns next month featuring home improvement sales data, analysis about the state of the industry and conversations with experts about the housing market and the economy. Also, preview this year’s Cost of Doing Business Study and find out how your peers are budgeting for 2021 after a banner year for sales.

TRENDS EDITOR Todd Taber, ttaber@nrha.org PRODUCTION EDITOR Hans Cummings, hcummings@nrha.org SENIOR DESIGNER Aubrey Smith GRAPHIC DESIGNER Autumn Ricketts DIGITAL MEDIA SPECIALIST Kevin Trehan EDITORIAL & RESEARCH PRODUCTION COORDINATOR Natalie Harris PRODUCTION MANAGER Nancy A. Vondersaar SALES & PRODUCTION ASSISTANT Freda Creech

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

NHPA SALES sales@nrha.org

VICE PRESIDENT OF SALES & PUBLISHER Kevin Hohman, khohman@nrha.org

NHPA BOARD OF DIRECTORS

MIDWEST SALES DIRECTOR David Brodowski, dbrodowski@nrha.org, 440-520-9551

CHAIRMAN OF THE BOARD Daniel Harris, Palos Ace Hardware, Palos Heights, Illinois; Lemont Ace Hardware, Lemont, Illinois

SOUTHERN SALES DIRECTOR Scott Gilcrest, sgilcrest@nrha.org, 317-508-7680 NORTHEAST & NORTHWEST SALES DIRECTOR Jordan Rice, jrice@nrha.org, 217-808-1641

EXECUTIVE VICE CHAIRMAN Greg Schlecht, Greg’s True Value, St. Francis, Wisconsin

CANADA SALES DIRECTOR Matt Caruso, mcaruso@nrha.org, 224-456-3366

DIRECTORS Will Aubuchon, W.E. Aubuchon Co. Inc., Westminster, Massachusetts

EXECUTIVE STAFF

David Dishke, Grand River Home Hardware, Caledonia, Ontario

PRESIDENT & CEO Bob Cutter

Ryan Ringer, Gold Beach Lumber Yard Inc., Gold Beach, Oregon

VICE PRESIDENT OF FINANCE & BUSINESS SERVICES David Gowan

Jared Smith, Jared’s Ace Hardware, Bishopville, South Carolina

MEMBER SERVICES

800-772-4424, nrha@nrha.org

Matt Woods, Woods Hardware, Cincinnati, Ohio SECRETARY-TREASURER Bob Cutter, NRHA President and CEO IMMEDIATE PAST CHAIRMAN TJ Comstock, Northwest Hardware LLC, Billings, Montana

Hardware Retailing (ISSN0889-2989) is published monthly by the North American Paint and 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.

STATE & REGIONAL ASSOCIATIONS MIDWEST HARDWARE ASSOCIATION John Haka, 201 Frontenac Ave., P.O. Box 8033 Stevens Point, WI 54481-8033; 715-341-7100; 800-888-1817; Fax: 715-341-4080

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

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

HARDWARE RETAILING | November 2020

POSTMASTER: Send address changes to Hardware Retailing, P.O. Box 16709, St. Louis, MO 63105-1209. All editorial contents copyrighted 2020 by the North American Paint and Hardware Association. No editorial may be reproduced without prior permission of the publisher. REPRINTS: For price quotations, contact the Editorial Department at 317-275-9400 or fax requests to 317-275-9403. Printed in the USA.

TRAINING MANAGER & EDITOR Jesse Carleton, jcarleton@nrha.org RETAIL OUTREACH COORDINATOR Renee Changnon, rchangnon@nrha.org EVENT MANAGER & RETAIL SUPPORT Katie McHone-Jones, kmchone-jones@nrha.org EXECUTIVE DIRECTOR, PAINT & DECORATING PROGRAMS LeAnn Day, lday@nrha.org

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

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Contents NOVEMBER 2020 | VOLUME 219 | ISSUE 4

“Our goal is to offer customers fast, friendly, knowledgeable service. COVID-19 changed what that looks like, but it will never change how we do business.” —Lauren Mathews, Connolly’s Do it Best

Departments On the Web . . . . . . . . . . . . . 06

Editorially Speaking . . . . . . . 08

COVER STORY

The New Standard of Service In this two-part feature about how the pandemic has redefined customer service, catch up with Connolly’s Do it Best and Costello’s Ace Hardware to learn how the operations have permanently changed to better serve customers. Plus, get the stories from retailers across the U.S. and Canada on how customer service has changed for them.

Taking Care of Business . . . . 10 NHPA News . . . . . . . . . . . . . 12 Trends . . . . . . . . . . . . . . . . . 14 New Products . . . . . . . . . . . 15 Checkouts . . . . . . . . . . . . . . 24 Newsmakers . . . . . . . . . . . . 60 Last Word. . . . . . . . . . . . . . . 62

CATEGORY SPOTLIGHT

OPERATIONS

Sales in the Fast Lane

Succession Success

Don’t let the lucrative automotive category pass your business by. Discover how Summit True Value and NAPA gives customers the green light to buy with an in-depth inventory.

One hurdle to the continuation of family businesses in the independent home improvement industry is a lack of succession planning. Meet two families who each developed strategic plans to ensure their operations would transition smoothly to the next generation.

E-commerce sales for automotive parts are expected to reach $16 billion this year. Source: Hedges & Co.

PROFILE

On the Cover Lauren Mathews, communications manager at Connolly’s Do it Best, has worked with her team to meet customers’ needs during the pandemic. Photos by Lenny Karlsson

OPERATIONS

The $6 Million Model

Prepared to Serve

Learning From Disney

More than 30 years ago, Gary Johnson of Home Ace Hardware made a down payment of $200 to buy a small hardware store. That investment was just the beginning for Johnson, who has since grown the business to two locations and $6 million in annual sales.

Wholesale Lumber owner Joe Burks planned an extensive remodel of his sister’s store after her death, never dreaming how grief and change would prepare the operation to serve during a pandemic. Discover how customer connections have made the difference.

Retailer Brian Kabat of Kabat’s Ace Hardware Stores went behind the scenes at Disneyland for Disney Institute training and brought back takeaways he shares with Hardware Retailing.

HARDWARE RETAILING | November 2020

On the Web OPERATIONS

In Service of a Goal COVID-19 has challenged all retailers to rethink their core way of doing business. Read more about how retailers are adapting to the pandemic’s challenges on Page 26, and visit TheRedT.com/customer-service for a roundup of how independent retailers across North America have rallied to safeguard employees and customers.

“Our employees have always been very good with customers, but doing curbside transactions required a whole new level of service. We all learned something new.” —Scott LaCoe, Dalton Lumber Do it Center WEBINAR

COVID-19’s Home Improvement Impact Understanding how COVID-19 has altered the home improvement market today and in the years ahead is crucial. A new webinar sponsored by Epicor provides an in-depth look at shifting customer habits and emerging possibilities in the channel. Hosted by NHPA executive vice president Dan Tratensek, the webinar is now available to stream for free at TheRedT.com/covid-webinar.

PODCAST

Stream the Latest NHPA Podcasts NHPA’s lineup of podcasts is a great way to stay connected to the latest industry news and the people who are pushing the boundaries of home improvement. Visit TheRedT.com/pod to stream the latest episodes and browse the archives. Editorially Speaking NHPA’s newest podcast is hosted by Melanie Moul, managing editor of Hardware Retailing. Get an exclusive peak at upcoming issues by streaming the podcast today. Taking Care of Business Hosted by NHPA’s executive vice president Dan Tratensek, this podcast features insights from industry veterans and analysts to help every retailer excel. Tell Me More NHPA retail outreach coordinator Renee Changnon invites you to meet the pioneering retailers who are pushing the industry forward with innovation, perseverance and hard work. 6

HARDWARE RETAILING | November 2020

STAY CONNECTED

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Editorially Speaking

Finding Your Truth

The Unanswerable Questions of Business and Parenthood

arlier this summer, my husband and I made the difficult decision to put our toddler in daycare. With both of us working from home, it was the best solution for our situation. But it was a difficult to decision to make. I consulted his pediatrician, who couldn’t give me the only thing a first-time parent wants to hear from a professional: a straight answer. Her advice: Do what works best for you and what you’re comfortable with. Up until the day he started school, I was a nervous wreck, wondering if he would be safe and whether he would make friends and how he would adjust after having spent his entire life at home with his dad. Looking back now, I’m so glad my husband and I made the decision we did. In just five short months, sending Theo to school three days a week has made a world of difference both for our sanity and for his social and language development. However, as anyone who has been around small children in daycare knows, in addition to bringing home new words and skills, they also tend to bring home germs. Which, in the middle of a pandemic, has been a deciding factor for many parents who have chosen to keep their children out of daycare. My husband and I considered the risks and made the best choice for our family right now. But my immune system was not prepared. I’ve been lucky to have a fairly robust immune system my whole life, and I don’t have seasonal allergies. So when Theo came home from school earlier this year with congestion and a mild cough, we didn’t think much of it. Because he wasn’t running a fever, we figured he had developed seasonal allergies and treated his symptoms as such. And then one night, the cough kept him from sleeping, so we brought him into our bed where he breathed and coughed into my face all night.

You know where this is heading. Theo was diagnosed with a sinus infection and given antibiotics and a cough suppressant. Three days later, I was diagnosed with my first-ever ear infection. Sending my son to daycare, I completely expected him to get ear infections, and I also expected to get sick myself. But getting my first ear infection at 32 years old took me by surprise. So, what does this mean for your business? Even the most deliberated decisions and calculated choices come with risk. And even if you correctly predict those risks, they may take on a different form than you anticipated and a greater intensity. (The lore of caring for sick children while you yourself are sick is both true and unbelievably undersold.) Many of you have seen record sales this year, which means you have some difficult decisions to make about how to budget for next year. As you go into planning, you may consult advisers who can only tell you to “do what works best for you and what you’re comfortable with.” And you may make choices that come with greater risk. And you may end up experiencing those risks in different forms than you expect. And you may have the worst two weeks of your time as a business operator so far trying to nurture it while you yourself need nurturing. But if the calculated, educated decisions you make despite the uncertainties add up to a happy, overall healthy, growing business, then you’ll make it through this season of change a better operator. Or at least that’s what the parenting books tell me.

“If the calculated, educated

decisions you make despite the uncertainties add up to a happy, overall healthy, growing business, then you’ll make it through this season of change a better operator.

HARDWARE RETAILING | November 2020

”

Melanie Moul Managing Editor | mmoul@nrha.org

The Power of Brand Names Distribution America Members combined buying power and strong vendor relationships help provide you with products your customers know and trust

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Taking Care of Business

Focus on Together A Push to Become Better

t’s likely that by the time you are reading this column, the Great National Election of 2020 will have been decided (unless of course we are battling it out in the courts). Nonetheless, I am writing this column in advance of the election and have no earthly idea which way this national debate will be settled. That being said, there are a few things I do know. I know there will likely be those who feel they “won” based on the outcome of the election. There will also be those who feel they “lost.” Undoubtedly, I will also fall into one of these two categories. So, I am writing this column as much to remind myself about a few things (depending on which camp I fall into) as I am to share my thoughts with all those other readers who find themselves on one side or the other. Right now, we are quite possibly the most divided we have been as a nation in decades. Just watching a bit of TV in the runup to the election seems to underscore this notion. But I want to encourage each and every one of you to take a moment and clear your heads from all the media that is so constantly pushed into them. To shake off the political talking points and the acrimony we have been fed for so long. I want you to remember that your lives aren’t directed by the goings on in Washington as much as they are guided by how you treat the people standing next to you. Just this weekend, I was out with my wife when we pulled off the freeway and saw a car with its flashers on that was obviously disabled. A young woman was trying to push the car while her partner steered. I hopped out to help get the car safely to the side of the road. And within a couple seconds two more cars had stopped. Without getting into details, everyone was there to help and literally everyone represented a different socioeconomic demographic.

No one stopped to ask about political beliefs. No one stopped to ask about social status. No one stopped to ask about lifestyle choices or views on America. Everyone stopped to help. We were all pushing in the same direction. So often today we focus on all of our differences. These differences are magnified by the absurd amount of media we have access to and the craven behavior of individuals who stand to benefit from our divisiveness. Please, just remember that for all these differences, we the people, at our core, want to support and help each other. I’d like to think that most people realize that, but by the grace of God, some of us are more fortunate than others, while others are left to deal with burdens they might need help to bear. Whether candidate A or candidate B will be stepping into office come January, it is time we reclaim the ideals that don’t just make someone a good citizen but also make someone a good person. Individually, we can make this change without any legislation or news story covering the topic. We can each elect to be kinder and more understanding, to listen more and shout less. We can focus on the things that bring us together and not the things that divide us. So whether you feel you have won or lost based on the results of this election, I encourage you to focus on how much we can gain together, if we just try pushing in the same direction for a while.

“ We can each elect to be

kinder and more understanding, to listen more and shout less. We can focus on the things that bring us together and not the things that divide us.

HARDWARE RETAILING | November 2020

”

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

nrha.org/membership

NHPA News

Access NRHA All-Industry Conference Content

ere you unable to attend the 2020 NRHA All-Industry Conference in October? This year’s conference theme was “Industry Disrupters” and presentations focused on content relevant to today’s challenges and opportunities. Access all of the virtual keynote presentations, retailer panels and other industry sessions by visiting nrha.org/webinars.

KEYNOTE PRESENTATIONS How Independents Are Still Disrupting: A Conversation With Dan Starr

Employees First: Disrupting Assumptions for More Loyal Customers and Stronger Sales

Dan Starr, Do it Best president and CEO

Kevin Hancock, Hancock Lumber chairman, president & CEO

Do it Best president and CEO Dan Starr discusses the future of the home improvement industry and the opportunities that are available for independents to disrupt, innovate, compete and win in their markets during a keynote Q&A with NHPA executive vice president Dan Tratensek.

Hancock Lumber CEO Kevin Hancock discusses the benefits of creating an employee-centric company and how the first mission of work should be to enhance the lives of the people who do it. He explains how corporate success begins with the employee experience—and its domino effect on customers, communities and corporations.

CATCH UP WITH... “Evolving Technology” Eric Hassett, Hassett Ace Hardware and Matt Woods, Woods Hardware

“6 Steps to Selling Your Business” Gary Pittsford, Castle Wealth Advisors

“The Disruption Cycle: What It Is, Why It Matters and What to Do About It” Steve McKee, McKee Wallwork + Company

“How to Manage E-Commerce in a Post-Covid Environment” Jimmy Barber Scott Sinclair, OneStone

“The Tools You Need to Improve Your Culture” Kim Peffley, NHPA

“5 Disrupters Challenging the Home Improvement Industry” Jim Robisch, The Farnsworth Group

HARDWARE RETAILING | November 2020

PANELS • Generations of Succession • How the Channel Is Serving Solutions Top Guns Awards Will Aubuchon, W.E. Aubuchon Co. Inc. Patrick Goebel, Star Lumber Kevin Hancock, Hancock Lumber Kirby Scales, Russell Do it Center

NHPA Presents the 2020 Market Measure Report

une in on Dec. 16 to a webinar on the 2020 Market Measure Report presented by Dan Tratensek, NHPA executive vice president and executive editor of Hardware Retailing. In this webinar, Tratensek will break down the economic trends and events that impacted the independent home improvement channel in 2020 and will offer important takeaways retailers can use to prepare for 2021. The webinar is sponsored by Epicor as part of the ongoing NHPA Strategic Series of webinars. The event is free to attend and open to all members of the home improvement channel. Visit nrha.org/webinars to reserve your seat for the December webinar and to catch up on past NHPA webinars.

Trainer’s Corner: Focus on the Automotive Category

s winter approaches for many areas of the country, customers might be thinking about making sure their car is prepared for the cold weather. If you have an automotive department, you can offer them the convenience of picking up items such as oil, coolant and washer fluids they need to keep their vehicle running smoothly and safely. This may also be a good time to review some automotive product knowledge with your employees. This month’s Trainer’s Toolbox, Automotive Fluids FAQ, focuses on frequently asked questions you might encounter when selling automotive fluids. The presentation-style format is designed for you to review key product knowledge in about 5 minutes in an

employee meeting. It includes handy Trainer’s Notes, so it’s easy for a manager to lead a short training session with minimal preparation. The resource is free and available at nrha.org/trainers-toolbox. Read the story about how one retailer grew his automotive category on Page 34, and then be sure to check out the free training tool. Effectively selling any category requires not only product knowledge, but also selling skills. And a good way to help employees understand how to engage customers is to have them take the Basic Training Course in Selling Skills. This course is available to NHPA Training Members. If you want to learn more about becoming an NHPA Training Member, visit nrha.org/membership or call 800-772-4424.

November 2020 | HARDWARE RETAILING

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

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

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

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

Consumer Confidence

Monthly Home Improvement Sales

$10

Existing Home Sales

AUG

JUL

JUN

MAY

APR

MAR

FEB

JAN ‘20

DEC

$20

NOV

SEP

AUG

$30 JUL

JUN

MAY

APR

MAR

FEB

JAN ‘20

DEC

$40

NOV

120

OCT

$50

SEP

150

OCT

(Building material and garden centers; in billions)

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

Housing Starts

600

500

(in thousands)

400

300

200

100

SEP

OCT

NOV

DEC

JAN ‘20

FEB

MAR

APR

MAY

JUN

JUL

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

HARDWARE RETAILING | November 2020

AUG

New Products

“The Ty Beanie Boo

masks are a cute and inexpensive washable mask that kids love. Kids love the different styles, parents love the low price. Automatic Driveway Deicing System Bare Ground’s KlearWay deicing system can be controlled remotely or manually operated. The oscillating driveway liquid applicator is fully adjustable and covers up to 1,000 square feet. It is compatible with smartphones, Google Home and Amazon Alexa and is capable of deicing up to 2 inches per hour. It can also be used to pretreat driveways and walkways to reduce snow accumulation.

”

—Erika Godbey, Houska’s Ace Hardware

Bare Ground bareground.com or 888-800-8356

Children’s Masks Cleaner and Polisher The HÄNS Swipe can clean with hundreds of swipes before needing a refill. The cleaning side comes filled with HÄNS’ All-Tech Cleaning Solution. The polishing side has a removable and rewrapable microfiber cloth that is antimicrobial and safe for all screen types.

Beanie Boo masks come in a variety of colorful styles. They feature a washable two-layer design with a flexible nose bridge and adjustable ear loops. Ty shop.ty.com or 800-876-8000

HÄNS SWIPE hans-swipe.com or contact@hans-swipe.com

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

November 2020 | HARDWARE RETAILING

New Products Portable Jig The Pocket-Hole Jig 310 by Kreg® is a portable jig for creating pocket-hole joints and works with materials from ½ inch to 1 ½ inch thick. It is suitable for indoor and outdoor projects and has a lifetime drill-guide warranty. It features an antislip base for secure positioning, a material thickness gauge, positive stops and an easy-set drill bit and stop collar. Kreg kregtool.com or 800-447-8638

Decorative Door Glass Affluent door glass by Western Reflections uses steel blue swirl glass and platinum nickel caming to create a Baroque design that appears to flow and pairs with any type of home exterior, from brick and stone to siding and shiplap. Affluent is available in four different frames in a variety of door light and sidelight sizes. It has a medium privacy rating. Western Reflections western-reflections.com or 800-507-8302

Smart Faucet The U by Moen Smart Faucet features voice-activation technology to provide precise measurements at the exact temperature needed. It can also be controlled by hand motions, the Moen Network app or by the handle. It is also compatible with Amazon Alexa or Google Assistant. U by Moen is available in five finishes. Moen moen.com or 800-289-6636

HARDWARE RETAILING | November 2020

Cordless Inflator Makita’s 18V LXT® Cordless Inflator delivers up to 120 psi to top off car and light truck tires, inflate bike tires, sports balls and more. It includes a built-in, high visibility pressure gauge display with backlight and an auto-stop function that automatically shuts off the inflator when a preset air pressure is reached to prevent overfill. Makita USA Inc. makitatools.com or 800-462-5482

Filtered Kitchen Faucet American Standard’s Filtered Kitchen Faucet reduces lead, chlorine and Class 1 particulates. It features an LED indicator to tell homeowners when the filter need to be changed. The filter installs in the countertop or on an inside cabinet wall. American Standard americanstandard-us.com or 800-442-1902

UNCERTAIN TIMES CALL

FOR CERTAIN MEASURES.

Made domestically. Tried and true. Especially now, with an uncertain future ahead, it matters where your products come from. RESCUE!® is made right in Spokane, Washington. Take on unprecedented times with pest control you can trust.

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New Products

Baseball Bat Flashlight Pro-4 Tactical’s Baseball Bat Flashlight provides 300 lumens of illumination and includes three AAA batteries and a removable wrist strap. It is 16 ½ inches long when fully extended and features three modes (high, low and strobe) and a zoom in and out. Pro-4 Marketing 833-776-3687

Self-Leveling Cross Line Laser Equipped with a green laser for enhanced visibility, visi Empire Level’s Self-Leveling Cross Line Laser delivers up del to four times the brightness of single diode red lasers. lase Cross line lasers are ideal for cabinet installation, light ligh alignment, tiling and similar applications. All laser electronics elect are impact protected with rugged rubber over-mold and locking pendulum. It features tripod mounting points, a 75-foot range and rare earth magnets to hold the laser securely on metal surfaces. It includes a carrying case, batteries and is backed by a limited one year warranty. Empire Level empirelevel.com or 800-558-0722

Disposable Latex Gloves Vystar’s Vyxtex disposable gloves offer liquid barrier protection, puncture and tear resistance and flexibility. They’re made from an ultra-low protein formula, reducing the risk of developing or experiencing latex allergies from extended contact. Vytex gloves are biodegradable and sustainably sourced. Vystar Corp. vytex.com or 508-791-9114

HARDWARE RETAILING | November 2020

Scented Candle Spiral Light Candles feature a unique wick arrangement that burns the candle circumferentially for greater surface area usage and better fragrance throw. They are made from ultra-refined food-grade wax, vegetable-based dyes and 100 percent cotton wicks on the outside and locally sourced softwood wicks on the inside. All scents are phthalate free. Spiral Light Candles spirallightcandles.com or 651-300-7640

LED Dome Light The Opti-Brite Surface Mount LED Dome Light features a polycarbonate housing and lens. It includes a white base and trim ring, touch switch on lens and is dimmable with memory. It provides 1500 or 1040 lumens of illumination. Optronics optronicsinc.com or 800-364-5483

November 2020 | HARDWARE RETAILING

New Products

Split-Stud Pocket Door Frames Johnson Hardware’s 1500SC Steel Split-Stud Pocket Door Frame is engineered for installation in 2x4 walls and can support solid core doors between 1 inch and 1 ¾ inches thick weighing up to 200 pounds. It features a soft-open/soft-close mechanism and installs in about an hour. Johnson Hardware johnsonhardware.com or 800-837-5664

Post Foundation FootingPad® is a composite deck post footing system designed to evenly distribute deck post loads. It replaces concrete footings of equal diameter and meets ICC-ES building code acceptance criteria. FootingPad is made from recycled materials. AG-CO LLC footingpad.com

Cleaning Scrub Pad Glisten® Cooktop & Kitchen Cleaning Pads are designed to clean and polish gas and electric ranges, cooktops, ovens, range hoods, microwaves, small appliances, sinks, faucets and more. One side is nonabrasive and contains a grease-cutting cleaner. The other side has a soft cloth to polish, leaving a shiny, streak-free surface. Each cleaning pad is perforated and can be used as one large pad or separated into two smaller pads. Summit Brands summitbrands.com or 888-476-6688

HARDWARE RETAILING | November 2020

LED Light Tube Aleddra’s Gen4 Emergency T8 lamp is a self-testing/self-diagnosis T8 light bulb. It operates as an energy-efficient T8 during normal operation, but during a power outage will last over 90 minutes on battery. It automatically self-tests for 30 seconds monthly and for 90 minutes annually, meeting emergency lighting audit requirements with no labor cost. Aleddra aleddra.com or 425-430-4555

Pavement Repair Compound QPR Fast-Setting Asphalt Pavement Repair is ready to use for potholes or cracks wider than 1 inch. It sets hard in one hour, but is traffic-ready almost immediately. It requires no bonding agent and can be used in all weather conditions. QPR® (Quality Asphalt Repair) qprusa.com or 800-388-4338

Aluminum Railing Available in matte black, matte bronze and white, DuraLife’s Nantucket Aluminum Railing is made of powder-coated aluminum and can withstand up to 10,000 hours of salt spray. It’s designed to withstand the harshest outdoor weather conditions and can be used with DuraLife composite deck boards. It locks together using a patented installation system, eliminating the need for screws. Barrette Outdoor Living duralifedecking.com or 800-866-8101

November 2020 | HARDWARE RETAILING

New Products

Single Stage Snowblower The Ariens S18 series snowblowers feature a manual chute deflector, a 99cc engine and a paddle system designed to clean snow down to the pavement. It folds down for compact storage, has an 18-inch clearing width and can move 39 tons of snow per hour. It is suitable for small jobs and 1 to 8 inches of snowfall. Ariens ariens.com

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HARDWARE RETAILING | November 2020

Under Sink Turntable YouCopia’s SinkSuite Under Sink Turntable rotates 360 degrees and features nonslip feet. Adjustable dividers let homeowners create separate sections to keep bottles and supplies organized. It includes three adjustable dividers and is made from BPA-free plastic. YouCopia youcopia.com or 888-973-9288

Sensor-Controlled Mortise Lock Inox’s PD97 is a sensor-controlled, motor-driven electric mortise lock for sliding doors. It uses the sensor-controlled motor to send a signal to the lock, prompting it to engage or retract without needing to touch the lock or handle. It is ideal for commercial, hospitality and healthcare applications. A hand wave access control unit is optional. The PD97 is UL1034 certified and ADA compliant. Inox inoxproducts.com or 916-388-1888

November 2020 | HARDWARE RETAILING

Checkouts Dispensing Good Ideas

Essential and Generous

arkle Do it Best Hardware in Markle, Indiana, was one of the only businesses still open in its community when Indiana required all nonessential businesses to close due to COVID-19. The store not only stayed open and served the rush of customers who needed cleaning supplies and toilet paper, but it also partnered with a local food pantry to help people in need. The store is located within walking distance of low-income housing, and people were struggling to make ends meet as other businesses closed and area residents lost their incomes. A representative from the food pantry contacted Markle’s co-owner Whitney McBride, asking if the store could serve as a spot for giving out free toiletries and nonperishable foods. The organization provided a bookshelf, placed it at the front of the store and filled it with food pantry items. The store’s staff kept the shelves full and loosely monitored who took supplies to be sure they didn’t take more than three items at a time. When Markle Do it Best customers found out about the satellite food pantry at the store, they began donating more cereal, snacks, canned goods and shampoo than the shelves could hold. From March to May, people in need trickled in every day to get the free supplies at the store. No one who was hungry left without food, McBride says, and everything extra went to the food pantry’s main location. “This was very easy to say yes to,” McBride says. “We have been blessed to stay open and phenomenally blessed to have business.”

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

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Lauren Melancon, co-owner of Melaco Sisters Hardware & Supplies in Cut Off, Louisiana, used an idea from a customer to meet a need in her community. A shopper shared a picture of a foot-operated hand sanitizer dispenser made from PVC pipe on the store’s Facebook page, and Melancon asked if people in the community needed it. When the answer turned out to be yes, Melancon asked employee Cade Guidry to see what he could do. Guidry watched how-to videos online and made 30 pumps, including several for a local private school that needed sanitizer dispensers and couldn’t get them elsewhere in time for school to start. Guidry keeps a few of the pumps on hand for customers to buy in the store and is willing to build more as needed. The devices are made from pipes, pipe fittings and glue and are sold barely above cost, Melancon says. “We priced them to help the community,” she says.

In Lieu of Summer Camp A Few Cool Hardware Stores, which has 13 locations in Maryland, Virginia and Washington, D.C., offered activity ideas for children who were social distancing at home during the summer. Owner Gina Schaefer came up with the idea because many employees’ children weren’t able to go to camp or do other school break activities, says Courtney Belew, senior manager of marketing and community engagement. Belew helped organize the event and created nine PDFs containing craft and activity ideas that related to the company’s core values. For example, for the value “Create raving fans,” Belew created a coloring page featuring hand-held fans, which taught children how to make folding fans out of popsicle sticks and paper. The stores promoted the activities to customers via social media and the company website.

Pandemic Pumpkins Customers at True Value Hardware in Troy, Ohio, were delighted when the store didn’t cancel its annual fall pumpkin painting event due to COVID-19. Store staff arranged tables outdoors far enough apart so families could stay socially distant. They also implemented rules to help families paint safely. Employees asked all participating adults to wear masks when inside the store. In addition, they changed the craft paper on the tables and discarded paintbrushes after every family. Participation was about the same as in 2019, and store sales got a bump of more than 20 percent due to the event, general manager Bruce Fisher says.

Free Cleanup Biedermann’s Ace Hardware in Fredericksburg, Texas, is giving away hypoallergenic disinfectant spray and hypoallergenic all-purpose cleaner. The store partnered with a San Marcos, Texas, company to get one of its patented devices to mix the products at Biedermann’s Ace so community members have an unlimited local supply. For a $5 donation, individual customers can get a spray bottle of each of the products, then return to the store for free refills. Arianna Lee from Biedermann’s Ace Hardware says the store is also providing the cleaner and disinfectant for free to local churches and schools. Store owners Kyle and Barbi Biedermann wanted to provide the products as a public service during the COVID-19 pandemic and plan to continue offering them for free through the end of 2020. November 2020 | HARDWARE RETAILING

C O V E R

S T O R Y

Shifting How They

SERVE Discovering What’s Truly Essential in Customer Service BY K AT E K L E I N TO D D TA B E R

KKLEIN@NRHA.ORG,

T TA B E R @ N R H A . O RG

ast month, Hardware Retailing explored how two retailers shifted their operations to keep customers and employees safe during the first months of COVID-19’s retail impact. From establishing new workflows to leaning into digital communication, Connolly’s Do it Best in Fort Wayne, Indiana, and Costello’s Ace Hardware in Maryland, New Jersey and New York, have modified their approaches to meeting customers’ shopping needs and preferences during the pandemic. This month, learn what changes will endure for these two operations and what the teams will remember from this period of retail history. Plus, get snapshots of how other retailers across North America adapted their businesses in the time of COVID-19.

HARDWARE RETAILING | November 2020

Customer Service Under Threat

As the way companies do business has changed due to COVID-19, Connolly’s Do it Best communications manager Lauren Mathews and the rest of the Connolly’s team worried customer service might slip in their four stores as employees and customers maintained social distancing and limited contact. “Our mission is to provide each customer with prompt, friendly and knowledgeable service. I think the biggest risk in changing our operations was that we might stray from that mission, even if we didn’t mean to,” Mathews says. The Connolly’s Do it Best team was already operating with fewer members as some employees decided to stay home to reduce their risk of exposure to the virus. As the employee

November 2020 | HARDWARE RETAILING

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RESPONSE Pioneer Home Hardware

Improving Team Collaboration Ongoing collaboration with staff has helped create a strong team environment at Pioneer Home Hardware Building Centre in Campbell River, British Columbia, but navigating a pandemic has made sharpened communication skills necessary.

“We had to make a lot of adjustments to the way we did things on the spot, and that meant we had to be there,” co-owner Theresa Handel says. “We were rolling up our sleeves and helping out in ways we may not normally have needed to help out. Collaborating with our staff was a huge part of what we did every day. They would often see an issue arising before we did and have ideas how to fix it.”

Handel and the other owners met every day to discuss what was happening in the store. She also spoke with every employee personally and asked for an email address where she could send them updates. “We asked our associates to check their email at least twice a day for updates from us,” she says. “That’s how quickly things could change and we wanted everyone to be up to date as soon as possible.” 28

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count temporarily dwindled, customer counts rose when the business was declared an essential operation in Indiana and was permitted to continue operating. Mathews says throughout the early days of COVID-19 disruption, customers were sympathetic and patient. “We’re three or four times as busy as normal now. COVID-19 hit at the start of the spring selling season, and we had staff staying at home and employees in the store had to maintain social distance in everything we did,” Mathews says. “It was a challenge to live up to that mission. We may have fallen short a few times, but we learned from those issues and got to improve.” Customer service may have temporarily destabilized at the 32 Costello’s Ace Hardware stores because employees had to help far more customers than usual, CEO and owner Michael Costello says. The company aimed to serve as many people as possible versus maintaining the stellar service for a smaller number. In addition, customer demand for online and phone orders, as well as socially distanced curbside pickup and home delivery skyrocketed, taxing the team in unprecedented ways. “This situation was particularly challenging because our people were already dealing with fatigue from serving more customers, added cleanliness requirements, personal fears and less staff,” Costello says. “We were asking a lot of them to do their usual jobs and it was asking even more to have them execute operational changes.”

What It Takes to Deliver

Building up the delivery fleet at Costello’s Ace Hardware was an important investment—a sign of the direction the Costello’s team believes business is headed in order to stay competitive. The company hired staff, bought three new delivery vans and mapped out 10 additional delivery routes. “When we decided to set up new delivery routes and add drivers, we had to consider how things were going to look after COVID,” says Rob Feiler, executive vice president of sales and marketing. “You always want to set yourself up for a scale that’s sustainable.” They had seen increased demand for delivery and growth in their online business prior to the pandemic, but self-quarantining customers wanted to make phone and online orders and get contactless delivery for a vast array of products.

STAYING IN CONTACT Connolly’s Do it Best employees wear masks when interacting with customers in store.

People shifted from desperately shopping for masks and cleaning supplies to settling in at their homes and starting small DIY renovations that could have a big impact on their new ways of life. They bought what they needed to stay comfortable and productive during the pandemic, and Costello’s delivered play sand, hundreds of bags of mulch, paint and grills to help those projects take root and deliver a monumental year for home improvement retail sales. Costello’s drivers rang doorbells, stepped away from the doors to keep comfortable distances and offered to place the products where customers needed them— even putting bags of mulch throughout a person’s yard in places where the customer would later spread the product. Customers will expect that kind of service going forward, even when COVID-19 is no longer an immediate threat, Feiler says.

“We did not want to grow delivery too much because we didn’t know if demand would back off a little,” Costello says. “But the other thing we were thinking is this is the future of our business. We’re really trying to build a business that serves customers in a better way and in a way they’re going to expect in the future.”

Maintaining the Mission

Mathews says Connolly’s Do it Best has revised almost every part of its business model since the arrival of COVID-19. As the team perfects its new processes and refines its curbside pickup protocol, she says one thing that will never shift is the team’s constant commitment to the business’s mission statement. “Our goal has always been to offer customers fast, friendly, knowledgeable service,” she says. “COVID-19 changed what customer service looks like, but it will never change how we do business.” Mathews says the past eight months of “How we put our mission statement operating during the pandemic—though at into action may have changed, but times chaotic, stressful and uncertain—have helped Connolly’s Do it Best solidify what is the core goals of customer service truly essential to customer service. never did.” “How we put our mission statement into action may have changed, but the core goals of —Lauren Mathews, Connolly’s Do it Best customer service never did,” she says.

November 2020 | HARDWARE RETAILING

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RESPONSE Clark Devon Hardware

Customers Still Prefer the In-Store Experience When Clark Devon Hardware in Chicago started offering curbside service, only a few customers used it, says floor manager Jay Fuentes. About 15 or 20 customers a day were using the service at its peak, and usage quickly dwindled when the stay-at-home restrictions eased. At the same time, online sales quadrupled, with many customers visiting the store in person to pick up their orders.

“When someone submits an internet order, we always suggest that they leave their phone number,” says Fuentes. “We often need to have a follow-up call. Homeowner traffic has picked up during the pandemic, and they usually need extra help as you walk them through their project and talk about their options.”

Safety measures like installing spit guards, offering hand sanitizers and disinfecting the store, have given customers the confidence they need to return to Clark Devon. While he’ll continue to offer the option for curbside delivery, Fuentes thinks the demand will be low enough it will be manageable as customers seem to prefer making an in-person visit to the store.

HARDWARE RETAILING | November 2020

Going Forward

The initial months of figuring out how to meet the new order and delivery challenges strained the Costello’s staff. However, the business has improved operations so significantly that Costello thinks few employees would want to return to the old ways they did business. They are also more open to constant adaptation after weathering a whirlwind of changes. “I think people like where we are at the moment. The stores are busier, but they have bigger staffs now,” Costello says. “It’s the job of leadership to help people see that where we’re going is a lot better than where we are now.” Taking phone orders and maintaining relationships with customers who prefer phone ordering are part of the plans, too. Stores now have employees who are dedicated to taking phone orders. Costello’s may add a call center not only to meet that ongoing need, but also to reach out to existing customers. “Customers usually need to talk through a problem and it requires a certain amount of care and expertise to help them,” Costello says. “We see an opportunity to not just have customers reach out to us, but for us to reach out to them and be proactive.” Maintaining a delivery fleet is a key part of Costello’s future plans. The management team is considering offering subscription services for customers who may want HVAC filters delivered quarterly or birdseed dropped off monthly. The Costello’s team is also considering loading a delivery van with high-demand seasonal products ahead of snowstorms and other weather events, then let customers know when the van will be in their neighborhoods. “I don’t think we’ll focus any less on our stores,” Costello says. “All customers want to shop different ways at different times for different things. The more we meet their needs, the more important we will be to them.” Connolly’s Do it Best will keep its curbside pickup services. Doing so is a simple way to ensure customers receive individualized service when they choose the business, Mathews says.

CURB CONNECTIONS At Costello’s Ace Hardware, delivering items to customers’ cars has become a new standard in customer service.

November 2020 | HARDWARE RETAILING

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RESPONSE Pioneer Home Hardware

Free Delivery for Household Items Typically, deliveries coming out of Pioneer Home Hardware are large items, such as grills, lumber or lawn mowers. But when her local province started encouraging people to stay home if they could, Handel made some changes to their delivery policy to allow for delivery of household items. While the change in policy was only meant to be temporary and help customers who shouldn’t be leaving their homes during the pandemic, Handel says the experience could possibly lead to more long-term changes.

“Our delivery service, as well as our curbside pickup, has really helped us reach out to a specific group of customers,” co-owner Theresa Handel says. “Most of them were elderly people who always had someone else doing their shopping for them. Now, they have a newfound freedom of being able to call in their order and have it delivered to them. We are considering keeping those options available in the future.”

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“We’re definitely going to continue curbside pickup,” she says. “I don’t know that we would advertise it as heavily, but we would always keep it in some capacity.” Mathews says even though the past few months have been trying, they have also served as a reminder of the basic values of Connolly’s Do it Best. “I think looking back on this time, I’m going to remember the hustle of it all,” she says. “We were working on a massive store reset, but every one hustled to make sure customers got what they needed.” Buy-in from employees at all levels made the past few months a success, and Mathews is proud of the employees for shifting their day-to-day tasks without losing sight of their overarching goal. “We’ve been lucky to be in an essential sector,” she says. “A lot of the changes we’re seeing are things that were happening already, but happened more quickly because of COVID-19.”

LOOKING AHEAD For teams at both operations, COVID-19 has challenged them to maintain safety while upholding the levels of service and engagement customers have come to expect.

BRIDGING THE GAP Plexiglass shields help safeguard employees and customers, while still allowing for personal connections. Many retailers have outfitted their checkout areas with similar safeguards.

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RESPONSE

“We thought business would slow down a little bit during that time. Instead we were constantly running around answering phones and filling orders,” says LaCoe. “Our employees have always been very good with customers, but doing curbside required a whole new level of service.”

Dalton Lumber Do it Center When that conversation happens on the phone, employees have to dig deeper into their product knowledge to describe how something works or what a product looks like.

Curbside Service Sharpens Product Knowledge Learning to communicate with customers when they’re not standing beside you in the store adds to the challenge of offering curbside service, says Scott LaCoe, who along with his father, Doug, own and operate Dalton Lumber Do it Center in Dalton, Pennsylvania. For about a month this spring, Dalton Lumber closed the doors to customers and offered curbside delivery only. The temporary closure gave the LaCoes a chance to figure out how they could safely reopen the store. They encouraged customers to send their orders any way they could—email, phone, text, Facebook messenger—but most orders came in by phone.

Many customers, he says, have a general understanding of what products they need to complete their project. Typically, staff can usually help them find it by showing them different options in the store. But with curbside service, customers can’t bring in their old part and match it up with a new one or just point to what they need when they see it. When that conversation happens on the phone, employees have to dig deeper into their product knowledge to describe how something works or what a product looks like. “A lot of our employees learned a lot of new things because of that,” LaCoe says. “I think going forward our product knowledge has gotten better.” November 2020 | HARDWARE RETAILING

HARDWARE RETAILING | November 2020

C A T E G O R Y

S P O T L I G H T

Rules of the Road DON’T GET TICKETED WITH A S U B S TA N D A R D A U T O PA R T S S E L E C T I O N

BY TO D D TA B E R

T TA B E R @ N R H A . O RG

ach category you add to your home improvement business can help expand your customer base, boost your sales and grow your local reputation. Automotive parts are no different. From headlights to tail lights and everything in between, the category boasts a wide range of SKUs and price points. Craig Milburn, owner of Summit True Value and NAPA in Haskell, Texas, says carrying automotive parts and accessories helps differentiate his business from competitors and helps stabilize sales. “Many of our auto parts customers are DIYers, so they’re looking for a retailer who can match them with the parts they need,” he says. “Auto parts keep traffic up at the business and bring in new customers almost daily.” Discover what it takes to manage a vast auto parts category and what you should know before adding it to your business.

The Road to Auto Parts

Milburn says his business didn’t always feature automotive parts. When he joined in the late 1980s, he worked as parts manager, overseeing the inventory for components for large farm equipment and machinery. In the early 1990s, the team noticed the state of farming in Texas changing and diversified the operation by adding hardware and auto parts from their wholesaler and heavier-duty machinery from NAPA.

November 2020 | HARDWARE RETAILING

3 Fast Facts of the Auto Industry Understand where the rubber meets the road for the automotive parts and accessories market with these key facts.

02|

Match the pace of delivery vehicles.

As demand for contactless delivery grows, so will demand for delivery vehicle parts and accessories. Ensure your inventory includes commercial-grade parts. Source: KPMG

01|

Online sales are picking up speed.

E-commerce sales for automotive parts are expected to reach $16 billion this year, representing more than 10 percent of the entire category.

More than 90 percent of automotive parts shoppers research parts online before purchasing. Be sure your website includes a basic inventory overview and how-to information to capture these customers.

Source: Hedges & Co.

“Meeting the needs of the agricultural community was what our business was founded on,” Milburn says. “Agriculture was changing, we knew we had to meet our customers’ needs and offer them something different.” Milburn explains farms in Texas have grown larger over the past few decades. In years past, a farmer could make a living with 1,000 or 2,000 acres, but today, most farmers oversee much more land. As farm sizes grew, the number of active farmers dwindled. The business’s customer base steadily shrunk. “You have to adapt to the market, whatever that means in your region,” Milburn says. “That’s why we added auto parts. It was a way to keep the business going in an economy that had shifted. Tractors have water pumps and cooling systems, so many of the same parts as a regular automobile,” he says. “There’s definitely an overlap between farm equipment and automotive parts.” Today, the business features auto inventory from NAPA and two hardware distributors. Milburn says actual machinery and auto parts often come from NAPA, but his wholesaler’s selection of auto care products and accessories has helped deepen the business’s product selection and profit margins. “We buy auto parts from three vendors, so we have a lot of opportunities to compare prices on cleaning supplies, oils and other common items,” he says. Because they source products from several places, the auto category is comprehensive. Customers can browse brakes, water pumps, cooling systems and transmissions, alongside polishes, waxes and small accessories.

customers at the 03|Meet starting line.

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One of the key ways Milburn finds new products for his automotive inventory is by staying aware of product updates from NAPA and other suppliers. He and his parts manager regularly review product catalogs to see what’s new in the category and how they can save customers time and money. “I think looking to the suppliers for new product ideas is really helpful,” he says. “It’s important to know your customers, but you also need someone with outside eyes looking in and helping you understand trends in the category. When you’re inside your own business’s four walls, it’s hard to be completely aware of what’s changing in the category.”

In the Driver’s Seat

Milburn recommends thinking broadly about possible customers for auto parts. “We work with some customers who build race cars,” he says. “We’re always working with them to learn about the parts they need to fulfill their hobby. The category can go in a lot of different directions.” Milburn says his business is still heavy in machine parts for agricultural equipment, but that niche has declined in recent years. One challenge of integrating automotive parts from a supplier like NAPA alongside hardware inventory is managing differing computer systems. Milburn says his business currently uses two separate computer systems to manage inventory: one for auto parts from NAPA and one for hardware items.

Networking with industry peers helped Milburn learn how to troubleshoot common issues arising from the separate systems. Milburn says he learned tips and tricks to get the two systems working if not in tandem, at least harmoniously. Like with other categories, ensuring your sales team is knowledgeable about products is crucial. “If someone walked in wanting to paint a room, but they left my store only with a can of paint, that wouldn’t be a good transaction,” he says. “We’ve done them a disservice. By the same token, if someone comes in wanting a water pump but we don’t sell them any coolant or offer to check their hoses, we’ve also done that customer a disservice.” To remedy that, Milburn tries to hire workers with an automotive background, but is always willing to train new employees or pair them with more experienced staff members when they begin. For retailers who are considering adding automotive parts to their inventory, Milburn says not to sit idly by.

“Don’t just dip your toes into it,” he says. “Make your decision whether this is a category you want to add or not. Do it correctly or don’t do it at all.” Milburn says when he first added auto parts, NAPA determined the exact inventory they would sell. Milburn operates in a rural west Texas community, so the initial inventory wasn’t tailored to the needs of his specific customer base. “All that has to happen is for one customer to come in once looking for a specific product,” he says. “If you don’t have it, you won’t ever see them again.” He says the business struggled early to meet customers’ specific needs, but over time, the inventory has come to match the community closely. Milburn says many of his customers who take care of their own auto maintenance are extremely knowledgeable and have expectations for what retailers should carry. “If you don’t have the products that are common for the cars in your community, you’re not going to be able to maintain traffic in your store,” he says. “You’ve got to be in the category or not.” CHANGING GEARS At Summit True Value and NAPA, customers can browse light accessories and heavy-duty machinery. Owner Carl Milburn says customizing the category is key.

November 2020 | HARDWARE RETAILING

What Makes a

FAMILY BUSINESS? HOW 2 FAMILIES HAVE PASSED OPERATIONS TO THE NEXT GENERATION

BY MELANIE MOUL | MMOUL@NRHA.ORG

he future of the independent home improvement industry in many ways depends on the next generation of retailers to take the reins over the course of the next decade. In a recent Hardware Retailing reader survey, nearly 75 percent of respondents were older than 46. Many retailers on the younger side of that spectrum could be in the middle of executing succession plans with their own families or already be in the beginning stages of developing their own plans with their children or employees. In generations past in this industry, it was often the expectation that children of owners would take over the business. That viewpoint has waned over the last 30 years. Many retailers who were unexpectedly thrust into leadership roles in their family business when their parents died made a commitment to not put the next generation in the same predicament. On the following pages, meet two industry families whose histories—and futures—mirror

HARDWARE RETAILING | November 2020

each other in remarkable ways. Learn how they have navigated the intricacies of family business for three generations and how they developed comprehensive plans to ensure the operations’ growth through the fourth generation and beyond.

Growing Up Retail Gary Thulin, owner of Pioneer Home Hardware Building Centre in Campbell River, British Columbia, grew up in the business his grandparents opened in 1937. His story is similar to many retailers, starting in the business at age 12 doing odd jobs. “It was a great way to learn the whole business,” Gary says. “It also allowed me to earn the respect of the other employees because my brothers and I were not just handed the business. We had to work our way up from the very bottom. I have carried this ideology through my entire 50 years in the business: No job is too good for the boss.”

Theresa Handel (left) and her sister Allison Kilby entered into a succession plan with their dad to eventually take full ownership of Pioneer Home Hardware along with a third partner, Amber Spring.

Eventually, Gary’s parents took the business over from his grandparents, and then his older brother Glen got involved. Gary and Glen’s other brother Dean returned to help when their father became ill with cancer. Working alongside their father’s second-in-command, the brothers learned the ins and outs of the business quickly so they were prepared to take over when their father eventually died from his illness. For Danny Baumstark, owner of Hermann Lumber Co. in Hermann, Missouri, and New Haven Lumber in

New Haven, Missouri, he always knew he wanted to take over the business his grandfather Albert Baumstark started working for in the 1920s. Albert and his son Charles eventually bought out the business in the 1970s so it was completely owned by the Baumstark family. “My brothers and I grew up working in the business the same way my dad did,” Danny says. “We did odd jobs and worked our way up. We all had choices about how we wanted to be involved as we grew up, and we figured out a good split of the responsibilities.”

November 2020 | HARDWARE RETAILING

Pioneer Home Hardware has been in Gary Thulin’s (left) family for more than 80 years. The business continues to the fourth generation with his daughters Allison Kilby and Theresa Handel (right) and business partner Amber Spring.

PIONEER HOME HARDWARE Smoothing Transitions

I always insisted that the next generation had to prove themselves before they were allowed to join the business as an owner. —Gary Thulin, Pioneer Home Hardware

HARDWARE RETAILING | November 2020

Because Gary and his brothers had unexpectedly needed to take over after their father’s death, Gary says he knew early on he wanted to establish a more formal succession plan for the next generation. Across the three brothers who represented the third generation of ownership, there were now seven children in the fourth generation who could potentially join the business. “It was an ongoing conversation as five of the seven children all worked in the store at various times,” Gary says. “I always insisted that the next generation had to prove themselves before they were allowed to join the business as an owner. We had some family dynamics between the brothers, and I wanted to make sure that did not happen to the next generation that took over the store.” To get started on the formal plan for the next generation—Gary’s daughters Allison Kilby and Theresa Handel—Gary consulted his attorney and his accountant for guidance. The result was a share purchase agreement that Gary says helped negate the possibility of emotional decision-making and set up the company for all possible scenarios. As the company saw significant growth, the next step was to get a share valuation and freeze the current shares into preferred shares and reissue new common shares. Gary set up his common shares into a trust that his daughters are each named in. “Allison came to me about joining the company after she graduated university,” Gary says. “She showed the passion I had expected from a future owner, so she became part of the ownership with my brothers and me.” Two years later, Glen and Dean retired from the business, and Gary and Allison bought them out. It was at that point that Theresa surprised them both by expressing interest in returning to the operation. Because the business arrangements had already been established, Theresa’s priority was proving she was a good fit. Around the same time, another employee was starting her path to ownership. Amber Spring started at Pioneer Home Hardware when she was a teenager, eventually leaving for another job after college. She moved back and was hired for a new role in the office. She eventually worked her way up to replace a retiring employee and then expressed interest in accounting. Amber pursued an accounting degree part time while continuing to work for the company. Two years after completing the program, she joined in the ownership agreement with Allison and Theresa. “It’s always a good thing to have someone with that type of knowledge on staff,” Gary says. “I was the financial guy, so for me moving out and trying to teach Allison and Theresa the retail side, it was good to have Amber on the accounting side.”

PIONEER HOME HARDWARE THROUGH THE YEARS

1937 The business that would become Pioneer Home Hardware Building Centre is founded in Campbell River, British Columbia, by Carl Sr. and Margaret Thulin.

1952 Carl Thulin Jr. and his wife Florence join the operation. Their four sons eventually work in the business as young teenagers, with three of them continuing through adulthood.

1970s Growing up in the family business led to an opportunity to gain ownership in it for the Thulin’s sons, Gary and Glen, who because part owners in the 1970s.

1980s When Carl Jr. dies unexpectedly in the early 1980s, Gary and Glen took over operations. Their brother Dean joined the ownership team later in the decade.

2010s Gary’s daughter Allison Kilby joins the ownership team, and Glen and Dean retire. Employee Amber Spring earns her accounting degree to manage the company’s financials.

2016-2018 Gary’s younger daughter Theresa Handel returns to the business, and she and Amber join the ownership team. Theresa had spent a decade as a nursing instructor before coming back.

Pioneer Home Hardware Building Centre and the Thulin family have a long history in Campbell River, British Columbia. Carl Thulin Sr. and Margaret Thulin, pictured here in 1918, founded the company in 1937.

4 WAYS TO LIMIT SUCCESSION PLANNING STRESS To initiate a succession plan that is as stress-free as possible, both Gary Thulin and Danny Baumstark have recommendations to other retailers.

Write down the details of the plan.

Have future owners work in a variety of roles.

Develop a formal buy-sell agreement.

Don’t procrastinate to avoid a difficult situation.

“Create a realistic, detailed plan so it takes the guesswork out of the transition,” Gary says. “Make it easier for the next generation.”

“Have your staff do all jobs so they realize what is really involved,” Gary says. “They need to realize it is hard work and is not just a gravy train like so many people believe.”

“Make sure it’s all spelled out, especially with a shareholder buy-sell agreement, so there are never any questions,” Gary says.

“If you want your children to be involved in the business, get them involved from an early age and make sure they’re suited to the job,” says Danny.

November 2020 | HARDWARE RETAILING

In 1922, Albert Baumstark worked in the office of Klenk Lumber when the company’s owners decided to sell. At that time, he was offered a job managing the newly chartered Hermann Lumber Co. Today, three of his great-granddaughters are poised to take ownership.

HARDWARE RETAILING | November 2020

HERMANN LUMBER CO.

HERMANN LUMBER CO. THROUGH THE YEARS

1922

Mitigating the Potential for Conflict Danny eventually took over the retail side of Hermann Lumber Co. while his younger brother Denis took over the construction company that operated out of the New Haven location. Their youngest brother Don pursued a career outside the business. When it comes to having a formal succession plan, Danny’s father and grandfather followed a verbal agreement that eventually led to his father buying the business. Danny and his brothers had a similar arrangement but was controlled by a buy-sell agreement. “Being family, we wanted to be sure there wasn’t any conflict. My brothers and I initiated a buy-sell agreement, and we all agreed I would be the one who would control the business as far as stock ownership was concerned,” he says. “We determined the stock ownership percentages based on that agreement.” Not having a formal succession plan worked well for Danny and his brothers, but he says he did want to pursue a more formal arrangement to pass on the business to the three of four of his daughters who are involved in the company. “Megan was the first to come into the business, and I let her buy into stock at that point,” he says. “Once my next daughter expressed interest, I thought it would be a good idea to set up a plan.” Danny consulted his attorney to come up with a big-picture goal for the business and considered how the next generation or two would fit in to accomplish it. It also instituted a formal ownership exit plan for Danny. “The result was getting the family business under a solid plan for the next generations,” Danny says. “As long as things work out the way we think they will, my goal is to put the business into my daughters’ hands and by the time I’m 80, I’ll be out completely from an ownership perspective.”

Klenk Lumber office worker Albert Baumstark is offered a management position by the company’s new owners. At that time, Hermann Lumber Co. was chartered.

1970s Over the course of many years, Albert was given opportunities to buy stock in the company. He and his son Charles bought the remaining stock in the 1970s, making them the sole owners.

1972 Danny Baumstark, Charles’s son, buys his first stock in the company at 18 years old. He and his brothers eventually develop a buy-sell agreement and distribute stocks among them accordingly.

2002 Megan Stiers, Danny’s oldest daughter, joins Hermann Lumber Co. after attending college on a volleyball scholarship. She earned a degree in business, intending to return to the company.

2005 Rachel Korman, the second oldest Baumstark daughter, joins the business after graduating from college with her degree in business.

2012 Chelsea Rohlfing, the youngest Baumstark daughter, returns to Hermann Lumber Co. after earning a degree in marketing and working in that field for several years after college.

As long as things work out the way we think they will, my goal is to put the business into my daughters’ hands,

and by the time I’m 80, I’ll be out completely from an ownership perspective. —Danny Baumstark, Hermann Lumber Co.

November 2020 | HARDWARE RETAILING

Three generations of Hermann Lumber Co. (left to right): Danny Baumstark; his daughters, Chelsea Rohlfing, Rachel Korman and Megan Stiers; and (front) Charles Baumstark, son of founder Albert Baumstark (not pictured).

The Thulin family has owned Pioneer Home Hardware Building Centre in Campbell River, British Columbia, since the 1930s. Gary Thulin (center) is the founder’s grandson, and his daughters Allison Kilby (left) and Theresa Handel (right) are poised to carry the family business through the fourth generation.

HARDWARE RETAILING | November 2020

Becoming a Decision-Maker Theresa and Megan approached their family businesses with different visions. They both had been involved at various levels since they were young, which is usually standard operating procedure for children of small business owners. For Theresa, the family business wasn’t in her sights. In fact, after high school, she earned a degree in nursing and worked as a nursing instructor for more than a decade before considering coming into the family business. “In 2015, I discussed my hope to return to the store with my dad and my sister,” Theresa says. “They were looking at the succession plan very closely at the time, as my dad was planning to retire. They were discussing finding a business partner for my sister, and although I was living in a different province at the time, I mentioned my desire to fill that role.” For Megan, leading the business was never in doubt. She attended college on a volleyball scholarship and graduated with a degree business with an emphasis in management, preparing her to come back to Hermann Lumber Co. “I knew when I graduated high school that I wanted to have a career in the family business,” she says. “But I also knew I wanted to continue my education in business first. While a lot of what you learn in this industry is hands on, there is a lot you can gain from a four-year program.” As the oldest Baumstark daughter, Megan was the first of the fourth generation to join the business, while two of her younger sisters have returned over the last 16 years. “My next youngest sister Rachel also attended college on a volleyball scholarship and pursued a business degree with the goal of returning to the family business,” Megan says. “Our youngest sister Chelsea, who also played collegiate volleyball, studied marketing and advertising and had a career in that industry for about three years before coming back.” There was a sales position available at the family’s second location, New Haven Lumber, and like any other employee, Chelsea interviewed to make sure she was a good fit before joining the team. “She’s a very hard worker and very driven, so I knew she would be a great addition, but it was important to go through that process with her,” Megan says.

“We’ve all had to prove ourselves over time. Nothing was given to us and nothing was guaranteed.” While the transitions for both families have been without significant conflict, that doesn’t mean there haven’t been difficult conversations and learning curves. “When I told my sister I wanted to come back to the business, I didn’t know yet in what capacity,” Theresa says. “She and I both have different strengths, and we’re very different people, but that plays well into our business. There were some intense conversations— we’re sisters. But the one good thing about family is you know everyone is trying to make the best for the business. There’s a trust there inherently.” Theresa says she and her other managers are trying to learn everything they can from Gary before he officially retires because “you don’t know what you don’t know.” “I had no idea how much my dad had in his head from over 50 years in the industry,” Theresa says. “I’m glad I still have him as a resource. Every time he goes on a vacation, we learn a little more about what we don’t know. There are sometimes hiccups, and we have the confidence to work through them.” While making big-picture decisions in their fathers’ absences can be daunting, Theresa and Megan agree that it’s just part of the succession process. “There are a lot of hard decisions that will need to be made, and I know that especially in the beginning, as I do now, I will think about what Dad would have done or said when making those decisions,” Megan says. “In the end, you have and trust your knowledge and instincts and realize you will make some mistakes, but you learn from them and move on.” The buy-sell agreements both families have established also set up the fifth generations for an even smoother transition if they have a desire to take over. Megan says her oldest child has started asking questions after he spent the summer working at the business, and she’s prepared to continue to answer them in an age-appropriate way. “He was asking questions about who owns the business, who makes the decisions and how it all works,” she says. “His curiosity has been ignited, so we will see what the future holds.”

In the end, you have and trust your knowledge and instincts and realize you will make some mistakes,

but you learn from them and move on. —Megan Stiers, Hermann Lumber Co.

November 2020 | HARDWARE RETAILING

P R O F I L E

Starting Small HOME ACE HARDWARE’S STORY OF GROWTH BY K AT E K L E I N

HARDWARE RETAILING | November 2020

KKLEIN@NRHA.ORG

ary Johnson’s initial investment in Home Ace Hardware was all he could afford in 1986—$200. That small down payment was the beginning of building a flourishing $6 million company. Johnson now operates two Home Ace stores with his son Seth Johnson in Columbus, Georgia. The business sells an array of products from the core hardware categories, paint, outdoor power equipment and some smaller niches. Johnson and Seth work closely with their customers to understand their wants and needs. They also work hard to retain quality employees, find creative ways to boost store traffic and invest in their community.

November 2020 | HARDWARE RETAILING

A Humble Start

After Johnson put down $200 in cash to buy the business, he settled in for some hard work. He left a corporate career with a hardware distributor to grow roots in an industry he already knew from the wholesale side. At the time, he was in the process of buying a 1,200-square-foot hardware store in Columbus, Georgia, with $75,000 in annual sales. Johnson’s wife Paula got a separate job teaching to help them pay their bills. Johnson kept the prior owner on staff because he wanted to work in the store instead of running the operation. The former owner enjoyed serving customers, but he was financially comfortable and didn’t need to expand the business. Johnson wanted the business to grow because he needed the operation to pay for itself and support his family. His approach was to get to know customers, ask them what they wanted the store to carry and experiment with bringing in products the store had never sold. “That is the most important thing you can do,” Johnson says. “Listen to the people who do business with you.”

“That is the most important thing you can do. Listen to the people who do business with you.” —Gary Johnson, Home Ace Hardware Listening to customers meant expanding the range of products the original store sold. Then Johnson moved the store so it could keep getting bigger. In 1991, he built a new 8,000-square-foot building. The business grew steadily but gradually because Johnson wanted to avoid borrowing significant sums of money to expand. He invested in Home Ace Hardware over time, paid down debts and then expanded some more.

Continuing to Grow

He and Seth opened the second location in 2017 and expect it to surpass their more established store’s sales soon, Johnson says.

HARDWARE RETAILING | November 2020

Over the years, niche products have contributed significantly to the operation’s consistent growth. Johnson has brought in new products, such as live vegetable plants, peanuts they roast in the store, fresh pecans, pine straw and outdoor power equipment. Each has become a profitable category for Home Ace Hardware. People from around the world order pecans through Home Ace Hardware because Johnson has relationships with Georgia pecan growers and is able to sell pecans that are fresh each growing season. Pecans sold in grocery stores can be two or three years old and have a more bitter flavor than when they are fresh, Johnson says. Bulk pecans now bring in $200,000 in sales per year, pine straw has become a powerful 40,000-bale niche and outdoor power equipment produces more than $1 million in annual sales. In addition, Home Ace has become an outdoor power equipment destination for many customers, who go to the stores to buy equipment and parts and get their tools repaired. Offering repair services for outdoor power equipment is an important part of supporting the category, because it brings customers back repeatedly, Johnson says. “You have to have innovative niches, helpful employees and competitive prices to give people reason to come into your store,” Johnson says. “And you have to put your personality into your store.” An annual spring initiative Johnson started was originally an experiment. Now it is an ongoing Home Ace tradition. Johnson orders roughly 18,000 tomato plants and sells them for 19 cents each. The plants sell out in four days, providing a significant boost to in-store traffic. Though Home Ace sells the tomato plants below the company’s cost, store sales jump because customers also buy fertilizer, tomato cages and products to protect their gardens against insects. Niches and employees contribute to a store’s personality, but so do memorable quirks. For example, customers notice Johnson’s red, white and blue suspenders at the store and out in the community, too. “Your personality must show through to your customers. You need to do things so people remember you,” he says.

LEADING GROWTH Gary Johnson (left) made a humble cash investment in 1986 when he bought into a small hardware store, but he has since grown the business significantly. His son Seth Johnson (right) will take over when he retires.

November 2020 | HARDWARE RETAILING

Business Now

The Johnsons are active in their community and sponsor visiting allied military personnel who come from countries all over the world to Fort Benning, Georgia, to study for six months at a captain’s course with U.S. Army captains. The business also hires at-risk teens for the store staff to train and mentor. In response, the community remains loyal. “When we opened the second store, I can’t tell you the number of people who came to us saying, ‘I’m so glad you’re here. Thank you for putting your store here,’” Johnson says. “These are not only my customers; these are my friends.” Home Ace Hardware’s original 1,200-square-foot store is now a distant memory. Seth joined the business full

THE NEXT GENERATION Seth Johnson (right) began working full time with his dad, Gary Johnson, in 2004 at Home Ace Hardware. They plan to grow the business together by potentially adding another location and attracting more footsteps into the stores.

HARDWARE RETAILING | November 2020

time in 2004 and helps operate both locations, which are each more than 20,000 square feet in size. Together, the two existing stores bring in $6 million in sales. The Johnsons hope to add a third location within the next few years. Continuing to build the business is important to Johnson, especially since Seth will eventually take over the operation when he retires. However, like in the past, adding locations is not Home Ace Hardware’s primary approach to expanding. Bringing footsteps into the store has always been their main strategy for producing growth because sales volume follows traffic counts, Johnson says. “When I first arrived, customers bought into the concept of us being here and they have helped us stay here,” he says. “They come to us first before shopping anywhere else.”

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P R O F I L E

Ready for the Need W H O L E S A L E L U M B E R S U R V I V E S T R A G E D Y, S E R V E S T H R O U G H P A N D E M I C BY K AT E K L E I N

hen Joe Burks devoted much of 2018 to remodeling the Wholesale Lumber location in Clint, Texas, he had no idea the redesign would allow the store to serve customers better during a pandemic. At the time, Joe was working through the grief of losing his sister Tina Bearden to a long illness and taking on the business operations of the store she had owned and operated. Prior to Tina’s death, she and Joe each oversaw one of the home centers their father started. Alma Burks, their mother, still operates a third location in El Paso, Texas.

HARDWARE RETAILING | November 2020

KKLEIN@NRHA.ORG

Joe and his wife Jody now co-own two of the stores, and work in conjunction with the location his mother oversees. Tom Burks, Tina and Joe’s dad, started Wholesale Lumber in 1974 when he was temporarily out of work due to an employee strike at the electric company where he worked. Tom began selling lumber from the bed of his pickup truck and never returned to his electric company job, eventually selling an array of lumber and hardware products at his own retail stores in the El Paso area. When Tina died in 2017, Joe took over her store and began looking closely at her business to find ways to improve it and make it more profitable.

Jody and Joe Burks, owners of Wholesale Lumber in Clint, Texas

November 2020 | HARDWARE RETAILING

Tina’s warm personality and relationships with people in the Clint community had helped her establish a strong customer base, but Joe saw opportunities for further growth. He worked with a store designer and his wholesaler to update and maximize the use of the 45,000-square-foot home center. During the remodel, Joe updated everything from the flooring and aisle widths to the exterior paint.

Joe didn’t realize the steps he took to improve the store were simultaneously preparing it to serve better during a pandemic.

Even the in-store background music was changed to heighten the customer experience. He expanded every department, more than doubling the number of SKUs on the shelves to 15,000. During the first six months after the remodel, sales doubled. Widening the aisles, cleaning up the store, growing sales and getting active in the community to follow Tina’s example were readying Wholesale Lumber to meet local people’s changing needs during the COVID-19 pandemic. Tina had been well loved in Clint, where she had not only worked but had also given generously of her time and resources. Customers were loyal to the business because they were loyal to her, Joe says.

GROWING A BUSINESS Joe Burks remodeled his sister’s store to grow the operation after her untimely death in 2017.

HARDWARE RETAILING | November 2020

Hitting the Ground Running When local businesses began to close due to the Texas governor’s orders that only essential businesses remain open to reduce the spread of COVID-19, Joe’s dedication to community service and Wholesale Lumber’s wide aisles were ready to accommodate customers’ needs during the pandemic. “The way it was laid out before, there was no way we could have safely brought in the number of people we have now,” Joe says. He saw firsthand at his Fabens, Texas, location what a better shopping experience the remodeled Clint store provided, especially when people attempted to stay 6 feet apart while walking the narrower aisles. When he has a better idea of what the future holds for the coming months of the pandemic, he wants to plan renovations for the Fabens location, as well as his mother’s El Paso store.

While primarily designed to add convenience and comfort to customers’ shopping experience, the remodeled aisles at the Clint location created space allowing for social distancing inside the store. The parking lot’s 30-vehicle capacity and entry gate made it simple to limit the number of customers coming into the store at the same time to keep shoppers and staff safe. Customers line up in their cars outside the gate waiting to be let in and most of them appreciate the well-thought-out safety measures the store’s team has taken, Joe says. Sales have grown even more and are now triple what they were before the remodel. Joe Burks (top) and his team at Wholesale Lumber in Clint and Fabens, Texas, have implemented many safety measures to protect customers and employees from COVID-19. These protocols include requiring masks for staff and in-store shoppers, limiting the number of people entering each store at one time and cleaning the facilities carefully. November 2020 | HARDWARE RETAILING

Uniting Safety and Giving

Giving away free, handmade protective face masks has helped employees and customers follow national guidelines from the national Centers for Disease Control and Prevention (CDC). Providing the masks is also in keeping with the store’s history of generosity. “As soon as the CDC said a mask was a good thing, we made them mandatory for everyone coming in,” Joe says. “We decided to give customers the option of a free mask instead of turning them away. I didn’t think it was fair to require shoppers to buy them.” Joe recruited employees, his wife and two volunteers in the community to make masks to give to everyone who came to the store without one. Joe provided the materials for making the masks and employees and volunteers sewed them. He provided the masks to people in the community through his two stores and a neighboring business. Between the three operations, Joe gave away at least 2,000 disposable masks and 1,000 cloth masks, which he sees people wearing around town. He is also looking for ways to support other small businesses that need to modify their facilities to improve safety for customers during the pandemic. Joe recently launched a program offering $1,000 in supplies from Wholesale Lumber to up to 20 local business owners who need to install sneeze guards and implement other safety measures.

“Everything you invest in a community comes back to you in loyalty,” Joe says. “The more you can do to get every business owner on board and doing their part during the pandemic, the more you’re going to help everyone in the long run. You can only be as healthy as the community you’re in.” SAFE SIGNS Wholesale Lumber implemented a variety of safety measures to protect employees and customers from possibly getting exposed to COVID-19.

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LEADERSHIP

Applying the Disney Experience U S I N G P R O F E S S I O N A L D E V E LO P M E N T TO I M P R OV E A N O P E R AT I O N BY K AT E K L E I N | K K L E I N @ N R H A . O R G

ood leadership requires constant individual growth. That’s why Brian Kabat, owner of Kabat’s Ace Hardware in Arizona, considers ongoing professional development to be an important part of his career. Kabat has stepped away from daily operations at his five stores in the Phoenix area to give his managers the space to flourish, and he is constantly working on the business behind the scenes. He participated in Disney Institute training at Disneyland Resort in Anaheim, California, to learn best practices for imitating the entertainment company’s employee culture and service. The employee engagement training he attended in 2019 gave him insight into how Disney operates before and after making hiring choices and sent him back to his own business eager to make changes.

Disney resorts and parks offer experiences that spark emotional memories for their customers—and the company has intentional business practices, an expert staff that pays close attention to tiny details and consistent customer service that drive results, Kabat says. The Disney’s Approach to Employee Engagement class Kabat attended focused on employees’ experiences with the company before they are hired and during their employment. He learned about the company’s interviewing, onboarding and training processes. “They believe it’s possible to hire a workforce that produces desired behaviors on a consistent basis,” Kabat says. Disney’s onboarding process starts with teaching new hires the company’s history and engaging them in a carefully designed culture that allows employees to build lifelong careers.

In this three-part series, we have highlighted lessons retailers learned from leadership development and management programs inside and outside the industry. Visit TheRedT.com/leadership-series to read each installment.

HARDWARE RETAILING | November 2020

Brian Kabat Kabat’s Ace Hardware Stores 5 Locations, Arizona

Sessions One daylong experience Program Disney’s Approach to Employee Engagement Disney Institute

Key Audience Business executives, entrepreneurs and hiring professionals

DISNEY INSTITUTE TA K E A W AY S NOTICE DETAILS “Disney has consistent results because they pay particular attention to details. We have learned to be intentional where other businesses may have learned to be careless. I created new normals in a lot of areas. We now call our associates team members. We train them to say when customers enter, ‘What can I help you find today?’ and ‘Thank you for choosing us’ as they exit. We also audited all staff uniforms, and we’re getting rid of the ones that don’t meet our standards.”

HIRE CAREFULLY Engaged staff members who are committed to a consistent set of values and work constantly to improve their and the company’s performance are important to Disney’s model, Kabat says. “It was fascinating because we basically spent the day being onboarded as if we were being hired by Disney,” Kabat says. “Disney is really consistent because they don’t deviate from their core principles. It’s all about training. Their trainers have been there forever and they’re constantly providing continued education. They’re perpetually checking if someone is getting jaded or stale or if a concept is no longer relevant.” Customer loyalty requires what the Disney team calls a chain of excellence that starts with a common purpose and brand promise, involves leadership excellence, employee engagement and quality service, Kabat says. The result is sincere loyalty from fans, he says. “I found the classes important because all of the topics relate directly to our retail model,” he says. “The concepts that they covered were basically how to build a great business, how to deliver quality service over and over again, how to recover from a service failure and how to develop a service strategy.”

“Disney has a carefully designed culture that creates an environment in which every employee has the opportunity to be fully engaged and build a career for a lifetime. We raised our standards. At Kabat’s Ace, we look at having a certain quality of team members instead of a certain quantity of team members. I increased wages. I would rather pay someone double than have someone at minimum wage acting like they make minimum wage.”

LISTEN WELL “Disney strives for continuous improvement and feedback to achieve sustained results. Disney employees give tons of feedback, and they’re heard. I recently hired someone just to focus on employee engagement. I’m paying him to listen. We just finished anonymous employee engagement surveys, which allow employees to give feedback on managers. We are creating a safer atmosphere for feedback, and we listen better than we did before.”

November 2020 | HARDWARE RETAILING

Newsmakers

Changing the Channel How COVID-19 Has Impacted DIY Shopping Preferences

he Home Improvement Research Institute (HIRI)’s annual Summits Conference transitioned to a virtual event this year in light of COVID-19, but attendees still had the chance to hear the latest home improvement data and analysis from key researchers. Among the presenters was Joe Derochowski, home industry adviser for market research firm The NPD Group. Derochowski shared key insights into how the home improvement channel has shifted amid the COVID-19 pandemic, insisting it’s no longer a question of where customers shop, but how. Read on to discover key takeaways from his presentation. For more information on HIRI, visit the company at hiri.org. To explore additional research from The NPD Group, visit the firm online at npdgroup.com and turn to Page 62 for more data. Understand What Motivates Shoppers One immediate insight Derochowski shared is that even as retail sales overall stuttered during the early months of the pandemic, some key drivers still motivated many consumers to shop.

HARDWARE RETAILING | November 2020

Among those motivating factors that had specific ramifications for home improvement were buying supplies for new pets, establishing at-home offices and general home improvement. Online Shopping Accelerated in Q2 The NPD Group’s data makes clear how prevalent e-commerce transactions are now. Walmart reported 97 percent digital growth in its second-quarter earnings, and many other retailers saw similar results. Home Depot’s online growth doubled, while Ace Hardware’s online sales grew 493 percent over the same period in 2019. Shoppers Prefer Brick and Mortar for Home Improvement Even as e-commerce sales rise to new peaks, shoppers still seem to prefer buying their home improvement goods in brick-and-mortar locations, The NPD Group’s data reveals. More than 90 percent of lawn and garden purchases tracked by the firm took place in stores, while 93 percent of tool purchases and 97 percent of paint purchases were also made in stores.

In light of COVID-19, many industry events are either postponing or transitioning to online platforms. For the latest information on major upcoming home improvement events, head to TheRedT.com/calendar.

Canadian Headlines • Home Depot Canada Names New President Jeff Kinnaird has been promoted to executive vice president of merchandising for Home Depot, while Michael Rowe has been promoted to replace Kinnaird as president of Home Depot Canada. Most recently, Rowe was vice president of e-commerce, marketing and contractor services, where he led all marketing and advertising efforts across Canada. Before that position, he served as Home Depot Canada’s CFO.

• WRLA Cancels In-Person Event The Western Retail Lumber Association (WRLA) has canceled its in-person event due to COVID-19 concerns, which was previously scheduled for Jan. 21-22 in Winnipeg, Manitoba. Instead of the in-person event, WRLA has developed an online platform for attendees to engage with vendors and dealers, explore educational opportunities and grow their awareness of the industry safely. Visit wrla.org to register for the event.

• Single-Family Permits’ Value Rises The total value of Canadian building permits rose nearly 2 percent in August to $8.1 billion, StatCan reports. Permits for single-family homes rose 9.9 percent to $2.5 billion, continuing month-over-month gains that began in May.

“The WRLA board and staff are disappointed that we had to cancel one of the industry’s largest shows,” says Liz Kovach, WRLA president. “We recognize this event is important to members’ business development and these alternatives will allow everyone to still collaborate, network and showcase innovation to the industry.”

START 2021 IN THE KNOW Subscribing to Hardware Retailing’s print and digital communications has never been easier. Visit TheRedT.com/subscribe to ensure you receive the latest industry news, research and profiles the moment they’re released.

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Hale Chain ........................................................................................ 22 www.wirebelt.com; 603-644-2500

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Hardware Retailing Podcast ............................................................. 22 www.hardwareretailing.com/pod

Sellars ................................................................................................. 5 www.sellarscompany.com; 800-237-8454

Mayhew Tools.................................................................................. 23 www.mayhew.com; 800-872-0037 *This index is provided for the convenience of our advertisers and readers. The Publisher assumes no liability for errors or omissions.

November 2020 | HARDWARE RETAILING

Last Word

COVID-19’s

IMPACT ON 2020 AND BEYOND

ew consumer information from market research firm The NPD Group (NPD) shows the popularity of DIY home improvement projects is a trend that looks poised to continue. NPD’s Checkout service tracks consumer behavior across all retail channels, illuminating trends in shopping preferences, including online shopping by category and specific buyer demographics. The service tracks the same consumers over time, presenting a valuable resource to chart new trends. Take a look at some of the latest findings from NPD’s Checkout to explore how COVID-19 has changed business as usual for all retailers. For more information on The NPD Group, visit the company online at npd.com.

M A KI N G P LA N S

DO IT YOURSELF

INVEST IN IT

NPD data shows more than 40 percent of respondents have DIY home improvement plans for the future.

1 in 10 customers has taken on projects they would normally have outsourced to pros during the pandemic.

The average money spent on a DIY shopping trip grew by 10 percent in 2020 over 2019.

HARDWARE RETAILING | November 2020

B U Y I N G O NL INE

ON THE RISE

TOP O F M IND

E-commerce sales for lawn and garden, tools, paint and hardware saw purchases grow by double digits.

Home improvement was the second-fastest growing retail channel in the first seven months of 2020.

Hardware stores are seeing roughly 10 percent more sales in 2020 compared to 2019, NPD reports.

November 2020 | HARDWARE RETAILING

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