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Vol. 64 • Issue 2 • February 2024 • PDRmag.com

Published by the North American Hardware and Paint Association

Halting Shrink 3 Ways to Mitigate Retail Theft in an Evolving Loss Prevention Landscape Page 20

New NHPA Board Chairman Ned Green Puts Service First Page 28

Covering Primer and Sealer Safety With Customers Page 34

FEBRUARY ISSUE SPONSOR

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Together for the Industry AUGUST 27-29 | MARCO ISLAND, FL Two respected industry events—the NHPA Independents Conference and The Hardware Conference—will come together to form the 2024 Independent Home Improvement Conference. Join retailers from across the industry and gain actionable solutions for today’s toughest retail challenges. Visit ihiconference.org to sign up for news, updates and offers.

Vol. 64 • Issue 2 • February 2024 • PDRmag.com

Published by the North American Hardware and Paint Association

Halting Shrink 3 Ways to Mitigate Retail Theft in an Evolving Loss Prevention Landscape Page 20

New NHPA Board Chairman Ned Green Puts Service First Page 28

Covering Primer and Sealer Safety With Customers Page 34

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R NHP A

COMING IN MARCH

1025 E. 54th St. Indianapolis, Indiana 317-275-9400 NHPA@YourNHPA.org YourNHPA.org

NHPA EXECUTIVE STAFF Bob Cutter President & CEO

COMMUNICATIONS

Dan Tratensek Chief Operating Ofﬁcer & Publisher

Lindsey Thompson Senior Content Manager lthompson@YourNHPA.org Melanie Moul Research & Enterprise Content Manager mmoul@YourNHPA.org Jacob Musselman Content Coordinator jmusselman@YourNHPA.org Autumn Ricketts Graphic Designer Olivia Shroyer Graphic Designer Austin Vance Production Manager Samantha Mitchell Production & Design Assistant Freda Creech Sales & Production Assistant Julie Leinwand Special Projects Manager Nathan Piper Marketing Coordinator

ASSOCIATION PROGRAMS 800-772-4424 | nhpa@YourNHPA.org Katie McHone-Jones kmchone-jones@YourNHPA.org Director of Member Outreach & Events

Season-Proofing Your Business For many retailers in the independent channel, the changing of seasons brings unique challenges and opportunities to capitalize on additional sales. Next month, Paint & Decorating Retailer uncovers best practices for navigating the ebb and flow of the seasons, especially when the weather doesn’t blow your way, and how you can protect your operation against the negative effects of wild weather.

Kim Pefﬂey kpefﬂey@YourNHPA.org Director of Organizational Development & Consulting Jesse Carleton jcarleton@YourNHPA.org Training Manager & Editor Renee Changnon rchangnon@YourNHPA.org Retail Engagement Specialist

SALES Jordan Rice 217-808-1641 | jrice@YourNHPA.org Regional Sales Director

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

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.

David Gowan Chief Financial Ofﬁcer & Executive Vice President, Business Services Scott Wright Executive Director, Advanced Retail Education Programs Whitney Mancuso Executive Director, Marketing, Sales & Partnerships

NHPA BOARD OF DIRECTORS CHAIRMAN OF THE BOARD Ned Green, Weider’s Paint & Hardware, Rochester, New York EXECUTIVE VICE CHAIRMAN Scott Jerousek, Farm and Home Hardware, Wellington, Ohio DIRECTORS Alesia Anderson, Handy Ace Hardware, Tucker, Georgia Jay Donnelly, Flanagan Paint & Supply, Ellisville, Missouri

PAINT & DECORATING RETAILER (ISSN 1096-6927): Published monthly except December by the North American Hardware and Paint Association, 1025 E. 54th St., Indianapolis, IN 46220. Phone: 800-737-0107. Subscription rates: January through November issues, $50 in U.S., payable in advance. Canada $75 per year. All other countries $100 per year. Single copy $7, except July issue, $25. Periodicals postage paid at Indianapolis, Indiana, and additional mailing ofﬁces. Postmaster: Send address changes to Paint & Decorating Retailer, P.O. Box 16709, St. Louis, MO 63105-1209. Returns (Canada): Return undeliverable magazines to P.O. Box 2600, Mississauga, Ontario L4T 0A8. PM# 41450540. Copyright © North American Hardware and Paint Association, 2024.

Ash Ebbo, Clement’s Paint, Austin, Texas Joanne Lawrie, Annapolis Home Hardware Building Centre, Annapolis Royal, Nova Scotia Michelle Meny, Meny’s True Value, Jasper, Indiana Michael Sacks, FLC Holdings, LaGrange, Texas SECRETARY-TREASURER Bob Cutter, NHPA President & CEO

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

February 2024 | PAINT & DECORATING RETAILER

N T E N TS

Volume 64 | Issue 2 | February 2024 PaintandDecoratingRetailer

PDRMagazine

DEPARTMENTS Viewpoint . . . . . . . . . . . . . . . . . . . . . 4 Fresh Coat . . . . . . . . . . . . . . . . . . . .12 New Products . . . . . . . . . . . . . . . . 14 Newsmakers . . . . . . . . . . . . . . . . . 38 Calendar . . . . . . . . . . . . . . . . . . . . . 40 Finish . . . . . . . . . . . . . . . . . . . . . . . . 42

EXPERT INSIGHTS

Business Strategy . . . . . . . . . . . . . . 6 Protecting Yourself From Loss DAVE GOWAN

Retail Operations . . . . . . . . . . . . . . 7

COVER STORY

Understanding the Roots of Loss JIM CLOSE

Addressing Retail Shrink

Concerns around growing retail shrink—and shrinking bottom lines—have been making headlines . Taking stock of the vulnerabilities in your business is the first step to mitigating loss and protecting your operation .

Retail Innovation . . . . . . . . . . . . . . . 8 Technology With a Human Touch ADAM GUNNETT

Marketing Minute . . . . . . . . . . . . . 9 Feedback Leads to Growth AUSTIN DIEHL

Ask Kim . . . . . . . . . . . . . . . . . . . . . . . 10 Leadership Lessons KIM PEFFLEY

ASSOCIATION

INDUSTRY EVENTS

CATEGORY FOCUS

A Living Legacy

The Industry Comes Together

Project Priming

See what you can expect at the 2024 National Hardware Show, the event that brings together members of the home improvement industry to discover the latest industry products, innovations and trends .

Priming and sealing the substrate are steps often overlooked by customers but ones that can make or break a project . Learn best practices from retailers on educating customers on these key products .

Newly elected NHPA chairman of the board Ned Green shares insights into the future of the industry and how his experiences owning a century-old operation will guide his tenure as board chair .

PAINT & DECORATING RETAILER | February 2024

I TO R I A L

CONNECTIONS

How to Reach Jesse jcarleton@YourNHPA.org

FROM THE EDITOR

Training, Not Triage

“If you defer training, you may find yourself triaging bigger problems later on.”

everal years ago I bought a home some of you might call a fixer-upper, others might call a teardown and rebuild. The 120-year-old house had suffered decades of deferred maintenance and abandonment. Deciding what to fix first was like doing triage in the emergency room. Most of the problems, I’m sure, started out small, but after years of neglect, they had grown into major issues. It took many, many trips to my local hardware store to make it a comfortable place to live. We all, no doubt, understand the importance of preventative maintenance. Running a successful business means being able to spot potential problems and fix them quickly. Yet very often when I hear retailers talk about employee training, they say something like, “I know I need to do it, I just don’t have time.” I propose that employee training doesn’t just help you sell more, it should be part of your preventative maintenance plan. If you defer training, you may find yourself triaging bigger problems later on. As a case in point, this month, starting on Page 20, we’re focusing on what might be one of your daily challenges, the pesky problem of retail shrink. We don’t suggest you can stop every criminal from stealing from you. But whatever the shrink situation at your business, any move you take to keep from losing money is time well spent. Employees, or rather, well-trained employees, can help. I can think of at least three reasons why. Good customer service is a shoplifting deterrent. If employees have the knowledge to help customers, they’re more likely to provide that service. Employees who understand operational processes like inventory are in a better position to help you stop paper shrink and other related losses. Employees who are engaged and feel like you’re investing in them through training are less likely to steal from you. NHPA offers training specific to loss prevention, and a well-rounded training program is even better. A complete program includes product knowledge, selling skills, retail operations, leadership development and much more. You can find every educational opportunity NHPA offers at YourNHPA.org/academy. Like a home, it takes a proactive mindset to maintain business. I encourage you to make training a priority this year. And when you’re ready, we’re ready to help.

Jesse Carleton Training Manager & Editor

February 2024 | PAINT & DECORATING RETAILER

P OI N

CONNECTIONS

How to Reach Dan dant@YourNHPA.org

Dan Tratensek

Dare to be Different

“Much like so many of the self-help gurus who emerged during the disco era, a lot of what we are seeing now with retail self-help is smoke and mirrors.”

s a child of the ‘70s, I grew up smack in the middle of the era flanked on one side by the counterculture movement of the ‘60s and on the other by the “greed is good” generation of the ‘80s. Aside from giving birth to inarguably the best music, movies and television of any generation (I’ll debate this with anyone), the ‘70s also saw the concept of “self-help” start to come into its own. Now, I’m not going to go on about the EST movement or self-actualization, but I do want to opine a bit on the concept of self-help as it relates to a phenomenon we are seeing in the retail world. There is a general trend for retailers of all types to push much of the responsibility for curating, selecting, picking, scanning and paying for products back onto the customer. Today, a customer’s in-store journey is likely to include researching, locating and purchasing the product by themselves. All of these innovations can empower the shopper to get in and out of the retail location as quickly as possible. They can also create efficiencies for the retailer by helping reduce headcount, speeding up or eliminating employee training and driving traffic. Here’s the problem. Much like so many of the self-help gurus who emerged during the disco era, a lot of what we are seeing now with retail self-help is smoke and mirrors. Sure, some customers want to have a contactless experience when they shop in-store, but oftentimes, this contactless experience can quickly turn frustrating when a shopper can’t find the right item or figure out how to work the scanner at the self-checkout. The retailer is still forced to employ people to help with the transactions, answer questions or troubleshoot the tech problems, but now there is also a frustrated customer. I think this concern is amplified for independent retailers who have typically professed to offer greater service, hands-on help and a generally more personalized experience. I’m not suggesting that independents should eschew technological advancements that can drive efficiencies for their operations. I am just pleading that you all look for ways to differentiate your operations from the trends we are seeing develop at larger retailers. As many large retail operations are buying into some of these self-help fads, there is an opportunity for you, as an independent. You can differentiate what you are doing by creating efficiencies with technologies like electronic shelf labels, digital signage and even self-checkout options, but by not abandoning your commitment to personalized service and product knowledge.

Dan M. Tratensek Chief Operating Officer & Publisher

PAINT & DECORATING RETAILER | February 2024

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S ST R A

BUS

RESEARCH

The Industry’s Benchmarking Tool Don’t miss your chance to access the industry’s key resource to benchmark your business. Buy your copy of the 2023 Cost of Doing Business Study at YourNHPA.org/codb.

E XPE RT I N S I G H T S

Meet Dave Before joining the North American Hardware and Paint Association (NHPA) over a decade ago, Dave owned and operated one of the largest Wendy’s restaurant chains in Indiana. His experiences as a small business operator inform his decisions and leadership strategies as chief financial officer and executive vice president of business services for NHPA. One key deliverable of his role today is leading the development of the annual Cost of Doing Business Study, a comprehensive benchmarking tool the association has been publishing for over 100 years.

CONNECT Email dgowan@YourNHPA.org LinkedIn Dave Gowan

Protecting Yourself From Loss

f you watch the national news on a regular basis, you’re more than likely to see a litany of coverage as it relates to retail theft and how it’s on the rise. While some experts are now disputing these stories, the NHPA 2023 Cost of Doing Business Study (CODB) has shown an actual reduction in shrink expense for home improvement retailers every year since 2018 (2.3%) before flattening in 2022 (1.6%). The increase in news coverage is likely the result of more brazen activity, as well as an increase in larger ticket items being stolen. Statistics from the National Retail Federation (NRF) show internal theft costs retailers roughly $50 billion annually, which accounts for nearly one-third of retail theft. External theft costs nearly double to $95 billion each year, according to NRF. We’re starting to see large retailers like Walmart considering removing self-checkout from states like Maine and Massachusetts after testing removing them at a handful of locations in New Mexico. This strategy is in response to data that suggests companies with self-checkout lanes have a loss rate of about 4%—twice the industry average. Retail shrinkage is such a hot topic and is so costly that NHPA updated its loss prevention series of courses in 2023. Let’s face it, there are steps you can take to prevent retail loss, and better employee training can be your best defense against issues that have a direct impact on the bottom line. NHPA’s Internal Theft Prevention course covers why employees steal, the financial impact of employee theft, methods of internal theft, how to confront various situations and most importantly, how to prevent employee theft. NHPA’s External Theft Prevention course will address how to recognize shoplifters, common shoplifting tactics, the most common categories shoplifted, how to deter shoplifting and how to confront a shoplifter. This course is a good reminder that the single most effective way to deter a shoplifter is to provide good customer service. Finally, NHPA’s Store Safety course assists retailers in creating a safer store environment by helping employees understand how to prevent accidents, what to do in emergency situations and how to report an accident. Since safety is everyone’s responsibility, this course is sure to help reduce costs related to insurance and workers comp claims. NHPA’s loss prevention courses are available for Premier Members. Reach out to us at nhpa@YourNHPA.org to determine your membership status so you can review these courses with your employees and take the necessary steps to prevent retail loss.

Dave Gowan

Chief Financial Officer and Executive Vice President, Business Services North American Hardware and Paint Association

PAINT & DECORATING RETAILER | February 2024

RET A

O PERAT

TRAINING

Loss Prevention Basics Give your team the tools to protect your operation with NHPA Basic Training. Learn more at YourNHPA.org/academy or email us at nhpa@YourNHPA.org to determine your membership status.

E XPE RT I N S I G H T S

Meet Jim Jim Close is a loss prevention professional with 24 years of experience working with independent home improvement retailers. Prior to working in loss prevention, Jim was an investigator with a major metropolitan law enforcement agency. He also teaches loss prevention in NHPA’s Retail Management Certification Program, and he helped develop NHPA’s Loss Prevention online training program.

CONNECT Email jim@rmslp.com LinkedIn Jim Close

Understanding the Roots of Loss

’m sure you have all heard about recent trends that are driving record high shrinkage rates for retailers. I know many of you have felt the pain in your stores. The reality of the situation is that independents do not have the same resources available as a big box to combat shrink. You face the same challenges, but your approach needs to be different and more cost effective. Since entering the loss prevention field in 2000, I have seen the financial impact of both internal and external theft change dramatically. In 2000, retailers reported losing $33 billion to shrink, based on the University of Florida National Retail Security Survey. In its annual Retail Security Survey, published in September 2023, the National Retail Federation (NRF) reported that retailers lost over $112 billion to shrink in 2022. For years, the largest driver in a store’s shrink number has been employee theft. Survey after survey reported that employees were responsible for losses at a higher rate than shoplifting. But for the past several years, shoplifting has outpaced employee theft. The 2022 NRF Retail Security Survey shows that shoplifting accounts for 37% of loss versus internal theft coming in at 28.5%. In 2010, shoplifting accounted for 33% and employee theft came in at 43%. One reason shoplifting is outpacing employee theft is the sharp rise in organized retail crime (ORC), which comprises two or more individuals shoplifting as a team. For years this type of shoplifter didn’t focus on independent home improvement retailers. This is no longer the case. More retailers are reporting ORC activity in their stores, ranging from brazen small groups entering stores and running out with merchandise to sophisticated counterfeit barcode schemes and refund scams. One possible reason for the increase is that the pandemic opened the door for people staying at home to supplement their incomes by shoplifting. As an independent home improvement retailer, your business was deemed essential, and since you were open for business while other retailers weren’t, the path for thieves led to your door. The other school of thought is that due to law enforcement departments needing to reallocate funds and local laws reducing the penalties for theft, retail crime has become a lower priority for police. I believe the answer falls somewhere in the middle. In future columns, I will take a deeper dive into shoplifting and ORC and discuss what techniques retailers find effective in deterring external losses and how you can implement them in your business to reduce losses to shoplifting.

Jim Close

Managing Partner Risk Management Services Loss Prevention

February 2024 | PAINT & DECORATING RETAILER

RET A

INNOVA

RESOURCES

Tech Smart

Browse NHPA’s technology resources for best practices, insights, guides and more at YourNHPA.org/tools-and-guides/technology.

R E TA I L E R I N S I G H T S

Meet Adam Adam Gunnett embarked on his journey with Busy Beaver Building Centers in 2015, starting as an IT specialist and holding the roles of director of IT and then director of IT & marketing, where he skillfully merged the technical aspects of IT with the creative demands of marketing. Most recently, Adam’s career trajectory took another turn as he was promoted to director of IT & business intelligence. In this latest role, he seamlessly integrates IT solutions with insightful business intelligence strategies, aiming to optimize both operational efficiency and market impact. Throughout his tenure with Busy Beaver, Adam has been pivotal in fostering a technology-driven environment. His unique approach ensures the company’s associates are equipped with cutting-edge tools, enabling them to focus on delivering legendary customer service while reducing the time spent on manual, repetitive tasks. This evolution in Adam’s career at Busy Beaver highlights his adaptability, technical prowess and visionary leadership in the ever-evolving landscape of IT and business intelligence.

CONNECT Email agunnett@busybeaver.com LinkedIn Adam Gunnett

Technology With a Human Touch

t Busy Beaver Building Centers Inc. we’ve adopted a distinctive approach to retail technology, focusing not on reducing headcount and expenses but on empowering our employees to provide exceptional customer service. This philosophy sets us apart in an industry increasingly inclined towards automation—such as self-checkouts—which diminish the human touch. Our strategy uses technology to enhance our employees’ efficiency and engagement, ensuring the preservation of the invaluable human element in customer interactions. Central to our strategy is our partnership with 4R Systems for automated replenishment and forecast planning. Utilizing advanced analytics and machine learning, 4R proficiently manages our inventory, ensuring shelves are consistently stocked with the right items. This partnership allows our team to shift focus from inventory management to fostering vendor relationships and exploring innovative products. It helps secure favorable deals and brings new, exciting products to our customers, keeping us up to date with market trends and unique offerings. Badger Technologies’ autonomous robots have been a game changer in our stores. These robots efficiently patrol aisles, identifying out-of-stock items quickly and accurately. We often joke that these robots are handling the dirty work–those essential but mundane tasks that are crucial to our operation, yet not exactly the most sought-after jobs among our staff. These robots taking care of such tasks allow our team to focus on more engaging and customer-oriented aspects of our work. Implementing Pricer electronic shelf labels (ESLs) has transformed how we manage price changes, eliminating the need for manual updates per our store personnel. This innovation guarantees accurate and consistent pricing throughout our stores, greatly improving operational efficiency and bolstering customer trust. Additionally, the Instant Flash technology integrated within these ESLs has drastically reduced the time required to stock shelves and expedited the picking of online orders, streamlining both in-store processes and online order fulfillment. These technological implementations mark a strategic shift in how we conduct retail at Busy Beaver. By automating routine tasks, we empower our employees to excel in providing knowledgeable, friendly and exceptional customer service. While the trend in retail often leans towards reducing human interaction, we believe our associates are our most significant competitive advantage. Our use of retail technologies at Busy Beaver reflects our belief that technology should augment, not replace, the human element in customer service. By equipping ourselves with these advanced tools, we’re not only modernizing our operations but also reiterating our commitment to a customer-centric retail experience.

Adam Gunnett

Director of IT and Business Intelligence Busy Beaver Building Centers Inc.

PAINT & DECORATING RETAILER | February 2024

TING MI

N UT

MA R

RESOURCES

Marketing That Works Discover marketing insights and resources to get the word out about your operation at YourNHPA.org/marketing-guides.

R E TA I L E R I N S I G H T S

Meet Austin With an authentic and contagious enthusiasm and unrivaled data knowledge, Austin Diehl leads the team at Randy’s Do it Best Hardware as their director of retail operations. He was promoted to this position after serving as a store manager for nearly three years. Though the operation experienced a major store fire in 2022, Austin found ways to keep the employees staffed at other stores, lead the rebuild of the store in a new location and found efficient ways to operate the store.

CONNECT Email austin@randyshardware.com

Feedback Leads to Growth

ou did it! You jumped into the e-commerce world and built your own website. Or maybe you have a website you have spent the time and money to overhaul. Everything is great, except you aren’t seeing the expected web traffic. Recently, I was on a call being pitched a communication software when I was shocked to find out that even though we have a higher Google review score, a competitor could still show up first in the Google search ranking system based on the number of reviews they have. Even though your website could have all the keywords, be extremely user-friendly and be completely functional, people still may not find it due to a low Google search ranking. Google’s focus is to ensure that the first recommendation it makes to a user delivers what that user is looking for. There are many different factors that go into consideration when trying to lead Google users to the best result the first time. One of the factors is a combination of your overall review score, how many reviews you have and how often people write reviews for your business. Improving your search ranking can be a complicated process with many different roads you can travel down, but all great journeys begin with the first step. One thing you can do right now is to create a plan to increase your total number of reviews. Set a goal of how many new reviews you want to achieve by a specific date. Communicate these goals openly with team members, making sure to explain how consistently positive reviews drive customers to the website and can also drive them into the store. Create a sign you can post at the exits and registers that says, “Leave us a review on Google.” You can even add your website or social media accounts to the sign to help drive traffic to those channels. Once you start getting reviews, make sure to reply to them from your store’s account. Replying to both positive and negative reviews is also a factor in determining your search ranking. While at the NHPA Independents Conference last year I heard a statement that has stuck with me—feedback is a gift. Sure, some reviews are purely written from anger, but consumers have learned to see through those. Reviews can help us spot areas of opportunity we may have become blind to over time. If growth and improvement is the goal, increasing the number of reviews you consistently receive is a great place to start.

Austin Diehl

Director of Retail Operations Randy’s Do it Best Hardware

February 2024 | PAINT & DECORATING RETAILER

RET A

O PERAT IO

EDUCATION

Expand Your Leadership Potential Grow as a leader through NHPA’s Retail Management Certification Program. Learn more at YourNHPA.org/rmcp.

Meet Kim Kim Peffley is the director of organizational development and consulting with the North American Hardware and Paint Association (NHPA). With nearly 30 years of retail experience, her management and leadership knowledge enables her to offer professional training covering many aspects related to effectively leading a team in a home improvement retailing environment. Peffley leads retailers through comprehensive organizational change to improve internal communications and create stronger teams.

CONNECT Email kpeffley@YourNHPA.org LinkedIn Kim Peffley To submit a question to Kim, scan the QR code below

E XPE RT I N S I G H T S

Lessons in Leadership

e have two questions this month about leadership. Both questions are near and dear to my heart as I am passionate about leadership development and mentoring leaders. Being a leader is undeniably the most fulfilling aspect of my career.

What is the No. 1 quality you look for when promoting someone to a management position? —Ian Williams, Fresno Ag Hardware, Fresno, California In my experience, the No. 1 quality I look for in a management candidate is their willingness to learn new things. If a leader is willing to learn new things, they are mindful that they don’t know everything, which is true about all of us. Unfortunately, many people in leadership positions believe or act like they know everything, which can be detrimental to the business and the team they lead. If we pretend we know everything, it puts leadership on a pedestal that others won’t strive to achieve or worse, won’t connect with for support. Leaders who create a culture that values ongoing learning, fuels personal growth and humanizes leadership make that culture more relatable and less intimidating. Embracing a humble approach, acknowledging mistakes and showcasing how these experiences shape learning moments nurture authentic connections with the team. This genuine leadership style cultivates an environment where team members feel empowered to explore fresh ideas and evolve confidently. Ultimately, it establishes a leader as approachable, genuine and empathetic, fostering a team culture rooted in curiosity and progress. Sometimes, our employees become less engaged in the business. How do you re-engage these employees? —Dalton Meny, Meny’s True Value, southern Indiana Employee engagement is the heartbeat of a thriving workplace. When it dwindles, recognizing the individuality of each team member becomes essential to reigniting that spark. While standardized solutions might yield some success, they often fall short of addressing the diverse needs of your team. As leaders, our responsibility to those we lead goes beyond the surface; it requires a deep dive into understanding the distinct qualities of each team member. It is crucial to identify what motivates them, causes stress and the specific support they need. Investing time in these conversations reveals their engagement status and unveils the tools needed for their success. In our demanding schedules, allocating time to connect with our team members is a non-negotiable investment. Their satisfaction and engagement directly impact our collective success—they are the backbone of our achievements. As leaders, our commitment lies in understanding their individualities and delivering tailored support, creating an environment where each team member feels valued and empowered.

Kim Peffley

Director of Organizational Development & Consulting North American Hardware and Paint Association

PAINT & DECORATING RETAILER | February 2024

S H COA

RESEARCH

Help the Independent Channel

Visit YourNHPA.org/research or scan the QR code to join the NHPA Retailer Research Panel and contribute to exclusive industry research.

ACTIONS TO TAKE TO IMPROVE KPIs

E V E R Y Q U A R T E R , the Independent Retailer Index asks retailers to share key performance data from the previous quarter to measure year-over-year changes. See highlights from Q3 2023 here, along with some action items you can offer your team to help boost these KPIs in your own operation. Head to YourNHPA.org/retailer-index to download the report from Q4 2023.

Inventory Investment

Over one-third of respondents said their inventory investment greatly decreased in Q3, while 44% said it increased somewhat. Respondents were evenly split between no additional investment and a small investment planned for Q1 2024.

Transaction Count and Size

Over half of respondents reported transaction counts were down year-over-year. The same percentage of respondents (41%) said transaction size increased or stayed the same.

Staying on top of cycle counts and rotating high-impact merchandising displays can help move inventory more quickly and make room for new items.

Gross Profit Margin

In Q3, the same percentage (42%) of retailers reported gross profit margin staying the same or greatly increasing.

Take Action Take Action

Take Action

Encourage your staff to greet each customer within a few seconds upon entering and ask open-ended questions about their projects.

Price-shop your local competitors—both locally and online—and revisit your price-matching policy. Don’t pass up margin opportunities.

About 1/2 About 3/4

About 1/4 Source: Independent Retailer Index, Q3 2023, NHPA and The Farnsworth Group

PAINT & DECORATING RETAILER | February 2024

Amount of Gross Margin Increase Respondents Attributed to Inflation (Q3 2023)

None

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MULTIPURPOSE SCISSORS BLACK+DECKER

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baldwinhardware.com The Gramercy Knurled Entrance Trim combines clean lines with a modern aesthetic design. Customize the trim by substituting any knob or lever of your choice or by utilizing the escutcheon plate to create passage, privacy or dummy sets. This handleset can fit thin and thick doors, can be accommodated with alternative-length spindles and mounting hardware and comes in 24 finishes.

PAINT & DECORATING RETAILER | February 2024

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COUNTERTOP FINISH CLAPHAM’S

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February 2024 | PAINT & DECORATING RETAILER

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PAINT & DECORATING RETAILER | February 2024

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February 2024 | PAINT & DECORATING RETAILER

WORK SOCKS

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PAINT & DECORATING RETAILER | February 2024

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February 2024 | PAINT & DECORATING RETAILER

R STO Y

Stop-Loss Practical Ways to Protect Your Operation Against Shrink

JES S E

ike a dull headache, shrink has always been an unfortunate reality of running a retail business. But for some retailers lately, that ache has grown into a splitting migraine. Anecdotal evidence suggests shoplifters in some areas are growing bolder, sometimes violent,

CARLE TO N

and local laws often make it harder to prosecute them. Cybercriminals threaten online data, posing yet another threat to businesses. Regardless of what specific threats are impacting your operation, retail shrink is a drain on your profits and left unchecked, can grow to a larger problem.

STOCK CHECK Tightening inventory controls in receiving and stocking at West Side Decorating Center has helped store manager Maverick Spoke reduce loss due to reporting errors.

PAINT & DECORATING RETAILER | February 2024

EDUCATION

Stay Safe Online Shut down scammers with NHPA’s free training course—How to Protect Yourself Against Phishing Attacks—available at YourNHPA.org/training-store.

Paint & Decorating Retailer interviewed loss prevention consultants and independent retailers for insights on the trends in retail loss and how to address them. While some of the tried and true methods of deterring criminals may still work, now is a good time to review the effectiveness of the tools in your loss prevention arsenal. By understanding your operation’s vulnerabilities, you can effectively create the best practices for facing these new threats.

Cybersecurity

Now, more than ever, retailers must contend with keeping their online data safe. Hacks, ransomware, e-commerce fraud and even customers who get their credit cards stolen can be costly to retailers. Nearly 60% of retailers responding to the National Retail Federation’s (NRF) 2023 Retail Security Survey said loss from e-commerce fraud was more of a concern than it was one year ago.

Employee Theft

According to numbers taken from the Annual Retail Theft Survey, compiled by Jack L. Hayes International, a loss prevention consulting company, recovery dollars from employee thefts increased in four of the last five years. “Some of the issues contributing to the employee theft issues include more opportunities due to less management and staff and sales associate burnout resulting in them rationalizing their thefts,” says Mark Doyle, president of Jack L. Hayes International. “Dishonest employees also exploit promotional and reward programs, and when they see shoplifters getting away with theft, they think they can too.”

Shoplifting

Shoplifting now consistently eclipses employee theft as the No. 1 loss. NRF’s 2023 National Retail Security Survey reports that external theft accounts for 36% of a typical retailer’s loss, while internal shrink is 29%. “In the home improvement industry, I’ve always spent most of my time helping retailers detect and prevent employee theft,” says Jim Close, managing partner at Risk Management Services Loss Prevention. “Rates of employee theft have always been higher than shoplifting. But for the first time in a long time, shoplifting has become a bigger concern.” Shoplifting incidents and dollars lost to theft have increased over the past few years. According to the most recent Annual Retail Theft Survey from Jack L. Hayes International, the average shoplifting case value increased from $301.97 in 2018 to $802.01 in 2022.

Organized Retail Crime

While it’s not new, organized retail crime (ORC) is a concern for the independent sector. These professional criminals steal merchandise with the intent to sell it later.

“Thieves are looking for easy targets, and many of these are professionals rather than opportunists.” —Jim Close, Risk Management Services Loss Prevention Independent home improvement retailers are prime targets for professional thieves because they have highly desirable and valuable items and are typically less likely to have comprehensive theft prevention systems. The 2023 National Retail Security Survey from NRF listed batteries, mechanic tools, household chemicals, wire, plumbing, tools and kitchen accessories among the items most frequently targeted by ORC groups. Also in the same survey, 78% of retailers said ORC ranked higher in priority than one year ago.

Trends in Theft Deterrent

Some independent retailers may see an increase in shoplifting because they’re not keeping up with deterrent measures. If big-box retailers make it more difficult to steal by using technology such as electronic article surveillance (EAS) or radio frequency identification (RFID) chips in power tools that disable them until they’re purchased, and their independent counterparts are not, thieves will choose the easier target, Close says. Retailers should evaluate what security measures their competition uses and consider if it’s feasible for their operations. It provides one less incentive for shoplifters looking for a place to steal. “Thieves are looking for easy targets, and many of these are professionals rather than opportunists,” Close says. “From the anecdotal evidence I’ve seen, these thieves are coming into the store ahead of time, pre-shopping the store and coming back with the intent to steal. They’re also becoming a lot more brazen. They’ll grab and run, cutting security cables that might be on merchandise and run out the door.” When shoplifters hit a store, rather than call 911, retailers tend to delay their reporting of the incident. “I’m seeing a lot more post-incident documentation,” Close says. “Employees are more likely to document the incident first and then contact law enforcement later, a big change in the way

February 2024 | PAINT & DECORATING RETAILER

Sources of Loss 27%

36%

Process, control failures and errors

External theft

29%

Internal theft

1% Other

Unknown Source: 2023 National Retail Security Survey, National Retail Federation

1.6%

The average shrink expense as a percent of sales

Source: 2023 Cost of Doing Business Study, NHPA

PAINT & DECORATING RETAILER | February 2024

retailers used to approach theft. In some areas, law enforcement won’t even respond to theft if it’s not over a certain dollar amount, so shoplifting incidents often go unreported. Retailers also have real concerns that local prosecutors won’t take their cases seriously.” In response to higher shoplifting rates, camera systems and EAS remain the most cost-effective and preferable ways for retailers to protect their merchandise. Where those fail to deter criminals, retailers resort to placing more merchandise behind lock and key. Anecdotal evidence suggests that retailers are preferring to utilize locks and chains over expensive new technologies. “I’ve seen retailers who would have never locked up their products are now encasing entire aisles in glass,” Close says. “It’s not just city retailers, either. It’s spreading to suburban operations.” Other tactics include only displaying a sample product and keeping sellable inventory in the backroom, an approach that works well with power tools. Other retailers place high-theft items behind the counter so they’re highly visible but harder to steal. While the lockdown approach is effective, retailers must make provisions for the ensuing customer service challenges. Locking items up can frustrate customers, especially if staff are slow to respond to a request for help. Close recommends that as many employees as possible have keys to access locked cases, and that there be enough staff on the floor to help everyone. If you’re going to lock up merchandise, follow through by walking the product up to the counter. “That’s the part that sometimes gets left out,” Close says. “Skip that step and you could be just handing a shoplifter what they’re looking for.” Overall, customer service remains one of the best tools independent retailers have to combat theft. More eyes on the salesfloor mean fewer opportunities for thieves to do their work. If you must lock up merchandise, outstanding service will help make the best out of a potentially frustrating situation for the customer.

Paper Shrink

The retail loss landscape isn’t only populated by criminal activity. The supply chain disruptions and staff shortages of 2020 brought with it other lingering issues. In 2015, NRF’s National Retail Security Survey reported that retail losses from paper shrink made up 16.5% of all losses reported. The 2022 edition of the same NRF study reported that number jumped to 27%. What has traditionally been called paper shrink, or losses due to discrepancies between actual

STOCK CHECK The team at West Side Decorating Center can help customers fill all their decorating needs, including paint, wallpaper, countertops, flooring and window coverings.

inventory and what’s recorded on the books, is typically due to reporting error and seems like it would be the most preventable of all losses. Doyle says there are several factors impacting why paper shrink isn’t as preventable as it seems it should be. “Prior to the pandemic, retailers were getting a pretty good handle on paper, or operational, shrink,” Doyle says. “Better systems and controls of operational losses were paying dividends, but on reopening after shutdowns in 2020 with less staff and more focus on external theft, paper losses have started to increase.” The increase of services such as curbside pickup and buy online, pick up in store have also increased retailers’ vulnerability. “With each new way of moving, picking and delivering merchandise, there comes a new set of opportunities for paper and operational loss,” Doyle says. “Retailers have to establish and maintain control points in each new procedure to reduce their vulnerability to loss. Limiting multiple tasks where the same associate picks, prepares and delivers merchandise and requiring second-person verification are key components to reducing theft and paper shrink.”

Effect on Consumers

Theft doesn’t just affect profits. Increased crime negatively affects customers and a retailer’s brand perception. According to a survey by Coresight Research, 73% of consumers were concerned that retailers would raise prices to cover the cost of theft, and 25% said they would do more shopping online if their local stores began using theft prevention methods such as locking up merchandise. Some shoppers may even be afraid to shop at stores that have frequent shoplifting incidents, particularly when they become violent. All of these factors can devalue a retailer’s brand if they don’t take steps to control them.

Legislators’ Response

Retailers have appealed to local and national legislators to respond to the increase in crime. In 2022, Congress passed the bipartisan INFORM Consumers Act, which requires online marketplaces to verify the identity of high-volume, third-party merchants. This increase in transparency will make it more difficult to sell stolen goods online. The NRF is currently advocating for passage of the Combating Organized Retail Crime Act (CORCA), which will increase the coordination between federal, state and local law enforcement to fight retail crime.

February 2024 | PAINT & DECORATING RETAILER

N LOA DA

SA LES

Does an employee greet each customer within 10 seconds of entering the store?

Are high-theft items either locked up or behind the sales counter?

Are all areas of the store brightly lit?

Do all employees have access to keys for locked merchandise?

Have you eliminated as many blind spots as possible?

OFFI CE

CASHI ER

Do you have camera coverage throughout the store?

Are cashiers processing all returns, defective items and adjustments through the POS? Are cashiers scanning each item, checking the shopping cart to make sure it’s empty and double-checking manual entries?

Are you regularly scanning for out-of-stock inventory? Do you have a shoplifter response policy so employees know how to handle a shoplifting incident? Do you have a code of conduct that addresses employee theft and other unethical behavior?

BACKROOM

ONLINE

Does your insurance policy cover cyberattacks?

Do you regularly make software and OS updates? Do you utilize a password manager? Have all employees taken cybersecurity training?

Are employees asking for a receipt and ID before delivering customers’ online orders? Are employees double-checking order quantity and SKUs against purchase orders for deliveries? Is backroom access limited only to authorized personnel?

PAINT & DECORATING RETAILER | February 2024

Are all employees trained in loss prevention policies and procedures?

Do you regularly run and review exception reports to check for irregularities in transactions? Do you conduct regular, unannounced cash drawer audits?

Are you conducting background checks on all new hires? Do you have an inventory control system to track stock levels?

Are you backing up all POS data to a cloud server? Is antivirus software installed on every company computer? Does each employee only have the minimum level of access they need to do their job?

Are you checking invoices to make sure you’re not billed for items you may not stock? Are you keeping a log of incoming and outgoing shipments?

O RES URCE

How well do you know the vulnerabilities of your business? Take this short self-audit to look at some of the key areas around your operation where you may be the most susceptible to retail loss. While you will need to tailor your own audit to the particular risks and needs of your business, this guide can get you started. Download a PDF version of the self-audit checklist at YourNHPA.org/operations.

Loss Prevention Store Audit

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OPERATIONS

Reduce Your Risk Find a list of loss prevention best practices, with separate lists for owners, managers and sales associates at YourNHPA.org/operations.

Managing Delinquent Payments at West Side Decorating Center Some of the retail shrink you write off at the end of the year may be easier to fix than stopping shoplifters. Discrepancies in inventory reporting and issues in accounts receivable can often be fixed by implementing tighter controls. At West Side Decorating Center in Saginaw, Michigan, manager Maverick Spoke says the operation minimizes inventory reporting issues by having its employees double-check their work or having redundancies in place. “A lot of the inventory discrepancies we had were when one person was receiving a shipment,” he says. “So we started having two people do it—one to check the order quantity and the other to mark it off on the PO.” However, one of the biggest sources of loss in recent years has come from the accounts receivable department. Installed sales of flooring, window treatments and countertops are a major part of the business, and they’ve recently had a more difficult time collecting payment from customers. “Before the pandemic, most of our shrink was due to inventory errors; we didn’t have a big problem with

shoplifting,” Spoke says. “But in the past couple of years, as people are unsure about the economy, more people are having buyer’s remorse and not paying their bills.” An unpaid bill—another form of theft—can leave the West Side team spending more time with calls to the customer asking for payment. They’ll hire a collection agency for larger bills, but even then, collectors aren’t always able to recover the funds, leaving the company to write off the loss. Up to this point, the staff has only collected a deposit of half the invoice for custom installations, with the balance due upon completion of the job. That system is changing. Store policy now requires payment in full several days before the installation can begin. “We’ve had a little pushback from some of our customers, but most people understand that this is how most retailers operate these days,” Spoke says. “We are working with a lawyer to come up with contracts specific to the different products we sell. It’s important to clearly communicate payment terms upfront so customers know what to expect.”

Battling Cybercrime and Other Scams at Island Lumber Even though it is on an island in the Pacific Northwest, Island Home Center and Lumber in Vashon, Washington, isn’t isolated from the threat of crime. Shrinkage and theft issues still threaten the business, and like many single-store operations, there’s no dedicated loss prevention team. However it does have an advantage when it comes to securing the store’s online integrity. Manager Rob Hord draws on his background in IT and cybersecurity to create robust protective measures for the store to reduce the likelihood of suffering a cyberattack. One of the keys to effective cyber protection is having the proper policies in place to govern employee’s use of company email and data systems. He uses the “least privilege” security model, a common security practice that gives employees the lowest level of access to computer systems they need to do their job. This includes managers and owners, who may not need continual access to admin rights. “Users can run basic point-of-sale applications and browse the web, but they cannot make changes to the system or install applications,” Hord says. “This protects our staff from accidentally installing malware. The key is restricting the business owner and IT team to also using regular accounts in their daily routines. It’s unfortunately very common that many

PAINT & DECORATING RETAILER | February 2024

business owners insist on having full administrator privileges on the network, and as a result, the owner is often the culprit who clicked on something they should not have.” Another safeguard is a data backup plan. Hord recommends a cloud-based daily backup system with version history and a system like Office 365 where employees can back up documents to the cloud. “Migrating to the cloud offloads the hardware risk from our local business and significantly reduces our responsibility to the threat surface area,” Hord says. “Version history is critical because if our backups also get infected, which can happen if a backup happens before we catch the infection, then we can retrieve a prior ‘clean’ backup.” If your store’s computers get hacked, it’s important to have an insurance policy that will give you complete coverage and some peace of mind. “If an event happened to us tomorrow, we’d call the insurance company and put it in their hands, move to handwritten receipts for our daily transactions and trust that our inventory levels could carry us through the remediation process until we’re back online,” Hord says. For more of Hord’s suggestions on preventing a cyberattack, go to PDRmag.com/island-lumber.

R PR O

ILE

Helping Hand Service Comes First for NHPA Board Chair Ned Green

LI NDSEY

or the past 145 years, the Weider’s name has been synonymous with customer service. In 1879, John A. Weider opened his horse and harness supply business to serve customers in Rochester, New York, adding hardware in the early 1900s. The legacy he started is still seen in the operation over a century later. Ned Green and his wife Lisa, current owners of Weider’s Paint & Hardware, along with their children Mitch and Mikayla, have taken up the banner for the Weider family name.

TH OMPSON

John’s same commitment to “give them what they want” can be seen across all three Weider’s locations in Brighton, Honeoye Falls and Perinton, New York. Ned, newly elected board chairman for the North American Hardware and Paint Association (NHPA), has been a part of Weider’s and the home improvement industry for over 40 years. He brings a wealth of experience in the independent channel and a commitment to serving customers to his role as board chair.

Photos by Olivia Shroyer | NHPA

SERVICE WITH A SMILE Ned Green (left), Athan Marzen (middle) and Lisa Green lead Weider’s Paint & Hardware, focusing on service.

PAINT & DECORATING RETAILER | February 2024

RESOURCES

Answers Are Here Find solutions to grow your business by downloading the NHPA Academy Catalog at YourNHPA.org/catalog.

Joining the Family

The owners of Weider’s Paint & Hardware were family friends of the Greens, so Ned started his career at Weider’s in the early 1980s, spending time in the store as a teenager. He earned an official position in 1982 when Greg Lull, son of the owner and Ned’s future brother-in-law, left for college and left a position open. “I was able to be a support for the company when Greg left for college, and I enjoyed it,” Ned says. “What caught me and kept me there was the combination of helping people solve problems and selling hardware products. I really enjoyed connecting with people.” In 1991, Ned and Greg purchased the business from Greg’s parents, Robert and Joanne Lull, and they ran Weider’s Paint & Hardware together until 2004 when Ned became sole owner. “The business has been an evolution; there have been a bunch of smaller stepping stones to get us where we are now,” Ned says. “There is a lot of history here, it’s an honor for me to be a part of that legacy.” The operation’s evolution hasn’t been easy. When Ned took over, the business was facing some challenges, which Ned says he overcame by maintaining relationships, keeping employees happy and selling the products and services customers needed and wanted. He purchased the business on a handshake and after taking over, adopted a slower timeline to revitalize and rebuild the company in a way that respected all the parties involved. “I’m proud of the fact we were able to transition the company into something that can still exist in this day and age. It’s on track to be left in a much better position than when I got here,” Ned says. “Righting the ship while still placing a focus on maintaining relationships was key to getting us where we are now.”

Building on Success

During his time leading Weider’s, Ned says he has placed a heavy focus on store services and pushed the boundaries of service offerings. These services include automotive chip keys, B2B sales, rentals, handyman services, repairs, sharpening, paint matching, window and screen repair, lamp repair and more. “I believe service work carries our industry over the ups and downs of the merchandise and keeps us from being vending machines,” Ned says. “It’s hard to put in service work—in fact it is the hardest thing we do—but it’s the area we can incorporate into our businesses that makes a huge difference.” Along with helpful services and depth of product selection, dedicated team members have contributed to the success of Weider’s. Each of the 75 employees at Weider’s share Ned’s enthusiasm for solving problems, walking customers through projects and

providing a high level of customer service. Ned says he also has numerous employees who champion specific departments and take ownership of those areas of the stores. “It’s not the actions of one person on any given day, but it’s the strength of the entire team that makes everything come together,” Ned says. Ned and Lisa make a concerted effort to provide quality training to employees and implement policies and processes that systemize standard operating procedures, allowing each employee the time and space to better serve customers. Recently, the Greens promoted Athan Marzen to operations manager. Athan works closely with Ned and his family to help oversee a consistent level of training and service across all three locations. When looking at the reasons why Weider’s Paint & Hardware has been so successful for over a century, you’d be remiss to leave out the company’s commitment to its community and industry partnerships. The company gives generously to local organizations through donations, and Ned stays active in various volunteer roles. Community connections have also been built thanks to the operation’s B2B relationships with fellow local business owners. “So many different partnerships have been created in the industry and outside it to support our business,” Ned says. “From our suppliers and vendors to our customers and investors to industry partners like NHPA, we couldn’t be successful without the support of our community.”

Independent Opportunities

From his vantage point as a business owner and board chair, Ned sees several opportunities the independent channel can take advantage of in the future. These opportunities include using technology to help retailers become more profitable and efficient, focusing on employee engagement and taking an omnichannel approach to serving customers. During his tenure as board chairman, Ned says he is looking forward to helping the industry come together for education, training and networking through all the programs NHPA offers. He wants to continue fostering a welcoming environment for independent retailers and see the organization’s vision come together to unite the industry. “NHPA is the organization at the center of the industry that brings everyone together with the mission to make independent retailers more profitable,” Ned says. “NHPA is really an asset for the industry. I want to continue to help raise awareness and build those relationships among retailers.”

February 2024 | PAINT & DECORATING RETAILER

What 2024 National Hardware Show Where Las Vegas Convention Center, Las Vegas

T R Y E VE TS

When March 26-28

Products, Insights, Connections Grow Your Business at the 2024 National Hardware Show

JU L I E

re you ready to revolutionize your business? Registration is now open for the National Hardware Show (NHS), taking place March 26-28 in Las Vegas. Representatives of the home improvement industry from all over the world—including independent retailers, online retailers, distributors and wholesalers—attend NHS to discover the latest products, innovations and trends shaping the future of the home

L E I NWAND

improvement and DIY industry and network with fellow attendees. “Beyond access to thousands of new products and trends, the 2024 National Hardware Show has so much value to offer attendees,” says Beth Casson, NHS event vice president. “Our goal this year was to elevate the Show experience so attendees can make the most of their time in Las Vegas and go home with new insights and connections to help grow their businesses.”

Learn more at nationalhardwareshow.com.

PAINT & DECORATING RETAILER | February 2024

INDUSTRY EVENTS

Retailers Attend Free Registration is now open for the 2024 National Hardware Show. Visit nhs-24.com/NHPA and enter promo code NHPA for free attendee registration.

What’s new in 2024? A new and improved exhibit hall layout will make it easier than ever to navigate the Show and explore exhibitor booths. New product categories include hobby, gift and specialty, sport and outdoor recreation, paint and decor and more. Retailers will also have the opportunity to gain insights and make connections at the new Independent Retail Center. “We are excited to offer sessions on succession planning, ensuring a prosperous future for your retail venture,” Casson says. The Independent Retail Center will provide a space for retailers to network with their

peers and connect with industry professionals, with topic-focused roundtables led by the North American Hardware and Paint Association (NHPA). “The Independent Retail Center offers a unique opportunity for members of the independent home improvement industry to come together to discuss important topics and engage in idea sharing and networking,” says Dan Tratensek, NHPA chief operating officer. “In addition to facilitating conversations between attendees, we’re pleased to offer roundtable discussions centered around driving sales, leadership and succession planning.”

Why Attend? VIP Treatment New for 2024, all independent retailers will enjoy VIP status with exclusive hotel accommodations and access to the VIP lounge. Networking Forge meaningful connections at networking events and within the NHS exclusive lounges. Be sure to visit the Global Resource Center, where you can connect with international sellers, distributors and industry experts to learn more about shopping global and selling local. Retail Insights Access Colleqt post-Show data to stay ahead of trends, understand what inﬂuencers are scanning and make informed decisions on what to stock in your stores. Plus, don’t miss the NHPA Retailers’ Choice Awards to see what products stand out on the Show ﬂoor. Education Attend roundtables on driving sales, leadership and succession planning at the Independent Retail Center. Come, learn, network and take new ideas and information back to your business.

Want to learn more? Scan the QR code for the latest 2024 NHS event information and to register today. Use promo code NHPA for free registration.

Hands-on Learning NHPA’s Foundations of Merchandising Management Live! event is back at 2024 NHS. Visit YourNHPA.org/foundationslive to learn more.

February 2024 | PAINT & DECORATING RETAILER

CA T

O RY FO

A PRIMER ON PRIMER 4 Best Practices to Help Customers Make the Most of Their Projects BY

JACO B

M US S E LM AN

hen it comes to painting projects, taking the necessary steps in the beginning is what leads to a high-quality finish with longevity and visual beauty. Priming and sealing the substrate is often overlooked by customers, but a step that can make or break a project. Paint & Decorating Retailer spoke with two retailers who have taken new approaches to help their customers purchase primer and sealer and share three best practices for creating a profitable primer and sealer category.

The Starting Point

Jason Taylor, president of Perspectives in Lexington, Kentucky, says each sale starts with his employees becoming educated on the customer’s project. The store’s employees ask customers what type of substrate they are working with, the scope of their project and the climate—all important factors in choosing the right primer and the best applicator for the job. Taylor says roughly 60% of his customers are DIYers, who often need

34 PAINT & DECORATING RETAILER | February 2024

more education than contractors, but he also sees professionals who need guidance. “Some contractors don’t necessarily have the background knowledge for some of their projects,” Taylor says. “They may have only done interior walls and now they have somebody wanting them to paint the exterior of a house. Every situation requires a different skill set, and we try to provide that knowledge to every customer.”

OPERATIONS

A Fresh Look Cabinet refinishing is a popular way to refresh a kitchen. Learn how to capture this audience and increase sales in primers and sealers at PDRmag.com/primers-and-sealers.

Safety First

Another piece of education Taylor instills in his customers buying primer and sealer is how to safely use these products. “With any solvent-based product, you need to keep ventilation moving through the area,” Taylor says. “Air needs to keep moving through the space because almost everything sold now is oxygen-cured, meaning you need to exchange the air in the area, not just move it around.” Taylor says wearing the proper personal protective equipment (PPE) is also crucial when working with these kinds of materials. Waterborne products have been trending, with more options coming from suppliers, Taylor says. These waterborne products are cutting his customers’ job times in half and often are a safer option. Waterborne primers dry much faster than other kinds, allowing the user to apply multiple coats per day. “Oil-based polyurethane used to be one of the only types of products on the market,” Taylor says. “Now we have a lot of waterborne ﬁnishes that are as good, if not better, than traditional polyurethane options.”

Navigating Regulations

With 18 states and Washington D.C. having enacted restrictions on volatile organic compounds (VOCs), retailers have had to stay educated on compliance when ordering and stocking products. Colorado is one of the states with restrictions on VOC products and where Adeline Smith, president of Old Western Paint Co., works. Smith has worked at Old Western Paint for 48 years and has seen a major shift in what kind of products her suppliers are selling, including a move away from oil-based primers. Fortunately, manufacturers have pivoted to oﬀer more VOC-compliant options. “We are seeing a lot of VOC-compliant primers being used, but not as much as waterborne primers,” Smith says. “Non-VOC compliant products are shrinking in availability, so we adjusted our product selection accordingly to still meet our customers’ project needs.”

“Oil-based polyurethane used to be one of the only types of products on the market. Now we have a lot of waterborne ﬁnishes that are as good, if not better, than traditional polyurethane options.” —Jason Taylor, Perspectives

February 2024 | PAINT & DECORATING RETAILER

VOC Compliance Rules by State Every state in the U.S. is divided into four separate allegiances to the various rules and regulations regarding VOCs. Most of the U.S. resides under the Architectural and Industrial Maintenance (AIM) Coatings rule, created by the Environmental Protection Agency (EPA) in 1998. The second biggest group of states follows the Ozone Transport Commission (OTC) rule and are either in phase one or two. Several Midwest states are under the Lake Michigan Air Directors Consortium (LADCO). The majority of California falls under the California Air Resources Board (CARB), however, much of Southern California follows the South Coast Air Quality Management Plan. Some counties in the U.S. have their own air quality regulations, like Maricopa County in Arizona.

EPA National Architectural and Industrial Maintenance (AIM) Coatings rule

EPA National AIM

OTC Phase II

CARB

OTC Phase I

LADCO

South Coast

Maricopa County, AZ

Source: PPG

PAINT & DECORATING RETAILER | February 2024

Product Testing

Smith says her team tests the VOC-compliant products before putting them on the shelves. “You don’t want to bring anything into your store without first knowing what to warn your customers of,” Smith says. Taylor has also found success in testing products before stocking. When a salesperson comes to him with a new product line, he runs it through multiple tests. One such test includes testing out different primers and sealers on various substrates to see how they take to different materials. If an employee is working on a project in their home, Taylor sends them home with a product for them to use and give their feedback on. The third way Taylor tests products is by giving them to frequent commercial customers. Contractors working on jobs usually don’t want to try out products that will cause them extra work, but for paint, primer and sealer, the work can be painted over. Taylor values everyone’s feedback because knowing if a product will perform like its counterpart is important with new eco-friendly products. “You want somebody to give you an honest opinion on the product,” Taylor says. “It’s not a formal process but we like to know what our customers think of a new product before we start to carry it.”

February 2024 | PAINT & DECORATING RETAILER

S M A KE

INDUSTRY AWARDS

Nominate an Outstanding Young Retailer Learn more about NHPA’s Young Retailer of the Year program at YourNHPA.org/yroty. Nominations are due on Feb 28.

What You Need to Know in February U.S. Adds 216,000 Jobs, Unemployment Stays Steady

Total payroll employment increased by 216,000 in December and unemployment rates also remained unchanged at 3.7% and 0.2 points higher than the same point in 2022. December brought 17,000 more jobs than November, which grew by 199,000.

Kelly-Moore Paints Announces Immediate Cease in Operations As it begins to cease operations, the company will continue to fulfill previously placed orders from its existing inventory at its Union City, California, distribution facility. All other company operations will be permanently closed.

Holiday Spending Up 3% Over Last Year Retail holiday spending during the 2023 holiday season rose just over 3% year over year, according to data from Mastercard SpendingPulse.

To read these news stories and other news, visit PDRmag.com/news.

PAINT & DECORATING RETAILER | February 2024

Import Cargo Enters Winter Lull With the holiday season over, inbound cargo volume at the nation’s major container ports will gradually slow during the first quarter of 2024, but is expected to ramp up in the spring.

NHS Offering Free Exhibit Hall Passes to Retailers Retailers can receive a complimentary exhibit hall pass for the National Hardware Show in Las Vegas, taking place March 26-28. This event unites members of the home improvement industry to discover the latest industry products and innovations.

ASSOCIATION

Be in the Know NHPA offers a wide range of newsletters and digital content. Subscribe to get industry news, trends and information at YourNHPA.org/subscribe.

In Other News Houzz Announces Winter Home Design Trends Houzz, the online home renovation forum, announced its trending patterns and decorations for the holiday season. From connecting to the outdoors, entertaining guests, hidden spaces and earthy color palettes, Houzz compiled the four biggest trends of the winter season with data collected through searches on its website from the U.S.

Connecting to the Outdoors

Secret or Hidden Spaces

Houzz says homeowners are looking to connect with the outdoors from the comfort of their homes all year long. Searches for “bedroom window seats” and “living room bay windows” grew nearly 360% and 134% respectively.

Homeowners are gravitating toward the inclusion of “trap doors” and “kitchens with hidden pantries,” with searches for those terms up 255% and 148%. Searches for “speakeasy home bar lounge” or “wine bar and cellar under the stairs” were 108% and over 105%, showing homeowners want to add a fun element of surprise. This trend extends to children’s spaces too, with searches for “kids’ reading nooks” up 60%.

3 Green Color Palettes

The new year brings new color palettes. Houzz is seeing interest in incorporating the color of renewal in various shades throughout the home. Searches for “light green kitchen cabinets,” “sage green walls,” “teal living room,” “dark green exterior,” “green bathroom tile” and “pewter green” have all increased compared with the same period in 2022.

4 Entertaining Gathering Spaces

Winter brings cold weather, making it the perfect time to hang out with family and friends in a common area during winter gatherings. Searches for “sectional with coffee table” rose over 4,600%, “family room with TV over fireplace” grew 339% and “living room with built-in entertainment” grew 253%. Searches for a “small home theater” grew 106%.

February 2024 | PAINT & DECORATING RETAILER

L E N DAR

NETWORK

Make a Plan Visit YourNHPA.org/cal to find more industry events online.

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

2024 Independent Home Improvement Conference .................. 43 ihiconference.org 3M ..................................................................................5 3m.com Armstrong-Clark ............................................13 armclark.com

2024 Lancaster Buying Show February 2-3 | ORLANDO, FL

True Value Spring Reunion February 2-4 | NEW ORLEANS, LA

PCA EXPO February 26 - March 1 | ORLANDO, FL

NAHB International Builders’ Show February 27-29 | LAS VEGAS, NV

Benjamin Moore ........................................ IBC benjaminmoore.com Fine Paints of Europe ..............................27 finepaintsofeurope.com Golden Paintworks ....................................40 goldenpaintworks.com IBIX USA .................................................................17 ibixusa.com NHPA Foundations of Merchandising Management Live! ...41 YourNHPA.org/foundationslive NHPA Retail Marketplace ...................44 YourNHPA.org/marketplace

Old Masters ..................................................... IFC myoldmasters.com PPG .......................................................................... BC ppgpaints.com Richard’s Paint ............................................... 18 richardspaint.com Rundoo .......................................................... 30-31 getrundoo.com Rust-Oleum ........................................................25 zinsserprimers.com Tower Sealants ............................................... 19 towersealants.com UC Coatings ....................................................... 16 uccoatings.com Vibac ........................................................................37 marketing.vibac.it/maskingpainting Wooster Brush Co. ........................................11 woosterbrush.com

Kitchen & Bath Industry Show February 27-29 | LAS VEGAS, NV

The Inspired Home Show

27 NEW COLORS!

March 16-19 | CHICAGO, IL

TINTED ON DEMAND

PACOA Spring Dealer Market March 16-17 | FLUSHING, NY

Do it Best Spring Market March 23-25 | HOUSTON, TX

National Hardware Show March 26-28 | LAS VEGAS, NV

Foundations of Merchandising Management Live! at NHS

MADE TO STAND OUT.

*Events are current as of press day.

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To add your event to the industry calendar, send an email to editorial@YourNHPA.org.

New Berlin, NY  607-847-6154  paintworks@goldenpaints.com

March 26-27 | LAS VEGAS, NV

40 PAINT & DECORATING RETAILER | February 2024

CALL FOR 2024 NOMINATIONS

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

• 20

Nominations are now open for the 2024 Young Retailer of the Year awards!

Youn Reta g iler Year

NHPA

North American Hardware and Paint Association

of th e

28TH Do you know an inspiring young retailer? Submit your nomination by February 28, 2024. Learn more at YourNHPA.org/yroty.

N G R E TA U O Y IL

L A

WARDS PR

FINISH

ASSOCIATION

Become an Industry Beacon Want to learn more about how to become an ambassador? Reach out to Renee Changnon at rchangnon@YourNHPA.org.

N H PA A M B A S S A D O R

COMMUNITY CONNECTIONS

Cody Goeppner Thrives on Serving Customers and His Community What is your proudest moment as part of the independent channel? Growing up in the independent channel, I’ve had a lot of proud moments, including working as the seventh generation of the family business at our hometown hardware store. My proudest moment is when I mentored six employees through NHPA’s Retail Management Certification Program (RMCP) over a four-year time period.

AM B AS S A

D OR

What is your favorite part of your job? Since my first day working in the hardware store, connecting with the customers has been my absolute favorite part of the job. Throughout my career, it’s been a joy to anchor myself to the customer’s experience when I’m working through challenges with employees, company policies and procedures and everything else that comes with running operations within the independent home improvement channel.

What is the best piece of professional advice you’ve ever been given? When I was going through RMCP in 2017, Wil Davis led a purpose-driven discussion with the entire class that became a turning point for my personal life and my career. He addressed the fact that often times in the independent channel, a manager’s purpose is tied to the purpose of the company. We had an exercise where we developed our own personal purpose and out of this exercise, I developed my personal purpose: To create, inspire and stand for excellence for generations to come. How do you stay involved in the community? When I moved to Washington, I quickly became involved in the local chamber of commerce serving as president for two years. This opportunity created networking opportunities where I was introduced to people who benefited the business and myself. Today, I work closely with several community organizations, I sit on advisory boards for the local school districts and I’m involved in the local community theater

CODY GOEPPNER Store Valley Wide Cooperative Location Grandview, Washington

as a board member and director for their main stage shows. It’s a passion of mine to connect the world of theater with other parts of the community since the arts created so many opportunities for me in my professional life. What did you want to be when you grew up? As a child, I truly believed people when they told me, “You can be anything you want to be.” I took that to heart and dreamed of becoming a surgeon, (solely because of “Grey’s Anatomy”), a Broadway star or president of the U.S. To read the rest of the interview, visit

hardwareretailing.com/cody-goeppner.

About the Program The North American Hardware and Paint Association (NHPA) is excited to introduce the newly formed Ambassador Program for 2024. The program brings together a small group of NHPA members from across the industry who are passionate about the independent home improvement channel and have a deep involvement with the association. NHPA Ambassadors help connect their retailer networks to NHPA, encouraging retailers to become more involved with the association’s offerings, like online training, consulting, college-level courses and more.

42 PAINT & DECORATING RETAILER | February 2024

INDEPENDENT HOME IMPROVEMENT CONFERENCE

The industry’s marketplace for buying and selling independent home improvement businesses and posting jobs. BUSINESS FOR SALE

BUSINESS FOR SALE

Northwest Farm & Home Supply Co.

Home Improvement Supply Store Location: Missouri Gross Revenue: $1.04 million

Location: Lemmon, SD Gross Revenue: $3.21 million The main building is a total 27,213 sq. ft. of retail and warehouse space on 4 acres. The main bldg. was constructed in 1994 with additions constructed in 2002 and 2004. Single story with 22’ clear height in 11,459 sq. ft. of lumber warehouse, three grade level doors and two dock height doors. BUSINESS FOR SALE

This historic home improvement and hardware store is a staple of its community and operates from its headquarters in the Kansas City Metropolitan Area of Missouri. The Company is a long-standing retailer and installer of consumer and commercial improvement products.

BUSINESS FOR SALE

Hoosick True Value

Albrights Hardware & Garden Center

Location: Hoosick Falls, NY Gross Revenue: $1.26 million Price: $1.875 million This opportunity offers a turnkey sale of a general hardware business located in northeastern Rensselaer Co., New York. The business serves five towns and southwestern Bennington Co., Vermont, and 25 miles east of Troy, New York.

Location: Allentown, PA Gross Revenue: $1.9 million Price: $1 million

BUSINESS FOR SALE

Central Vermont Paint, Flooring and Decorating Business Location: Vermont Gross Revenue: $2.82 million Price: $1.1 million

Full-service decorating store providing flooring, paint, window treatments, kitchen/bathroom remodeling, cabinetry product offerings, design assistance, specialized service, and professional installation. BUSINESS FOR SALE

Private Business

Location: Alabama Gross Revenue: $2.21 million Price: $649,000

Albrights Hardware is an established hardware store with strong neighborhood ties and has been a Lehigh Valley staple for over 50 years. The current owners have owned the store since 1992. Albrights serves its loyal customer base by providing quality products and exceptional customer service.

BUSINESS FOR SALE

SEEKING BUSINESSES

For our next acquisition, we are looking for:

We are looking for:

The Aubuchon Company

• • • •

Single-store and multi-store hardware operations Located in northeast and southeast United States Store size of 5,000-30,000 ft2 At least $3 million in average store sales

Bolster Hardware • • • • •

Private Business

Location: Pennsylvania Gross Revenue: $1.6 million

Gold Beach Lumber Yard

Geography agnostic With or without real estate Store revenues of $1.5M+ We prefer to honor the family name and heritage in the local community by not changing the name We prefer to keep all employees as part of the acquisition

• • •

Single-store and multi-store hardware operations Located in the Pacific Northwest Store size of 5,000 ft2-30,000 ft2

Now Offering Business Valuations Post a Job | Sell Your Business | Buy a Store | Public and Private Listings Available To see full listings, visit YourNHPA.org/marketplace or email marketplace@yournhpa.org

PROTECTION YOU CAN TRUST When you’re ready to choose the best safety products for your customers’ painting needs, we’re here to help. Honeywell has the highest quality respirators and safety equipment available in retail-ready packaging. LEARN MORE

Become a Subscriber Stay up to date on news, products, events and more when you sign up for any of our e-newsletters.

YourNHPA.org/subscribe

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