Hardware stores seize the market opportunity

During the height of what some call the Great Recession, as the country was struggling to reverse the economic slide, Tom Hardman was looking for positive themes his hardware store could use to project an attitude that said: “We refuse to participate in the recession.”

“I wanted something to lift our employees’ and customers’ attitudes. One was to make them feel that individually they could make a difference,” said Hardman, co-owner of Hardman Supply Co., of Spencer, W. Va.

Hardman began promoting a “Made in the USA” campaign, framing the message this way: “By choosing to buy American, you are helping to put our friends, family and neighbors back to work. Let’s all buy American and bring those jobs back to the U.S.”

Other hardware retailers have taken similar paths, stocking more Made-in-USA products; in some cases they have created sections, or even entire stores, around Made-in-USA goods.

“As with many other industries, demand for products Made in the USA and a desire to support the domestic economy continues to grow,” said Mike Clark, chief merchandising officer of True Value Co. “As consumers continue to face an uneven economy, the new consumer value equation that emerged from the recession is now the new normal.”

Mike Petro, manager at The All American Store, with two locations in Ohio, said with many jobs outsourced, he wants customers to know that they’re helping keep people employed here in America by buying his products. “We believe an effective and simple solution to end our country’s decline is to buy what Americans produce,” he said. “When you purchase an item made or assembled in America, you are supporting a fellow American’s job.”

Sourcing and merchandising

While manufacturing products overseas may be cheaper, hardware store operators feel there are compelling reasons to buy and sell American products.

Hardman said he was pleasantly surprised to find so many domestic products in his company’s inventory. The Do it Best dealer searched the corporation’s catalog to find each product’s country of origin. He found that categories, such as building materials, paint, flooring and heating, had a high percentage of American production. Other departments had select categories that fell into this range.

Once the domestic products were chosen, Hardman adhered a “Made in the USA” label next to the bin label of that product. “In our circulars and on the radio, we identified qualifying products so our customers could ‘choose’ to buy Made in the USA,” he said. “At the Do it Best markets we search for products to add to our assortment.”

Two years ago, Petro issued a “call to arms” to the American retail industry, urging fellow dealers to make a commitment to Made in the USA. “No matter how small or large your store, you should dedicate at least 4 ft. of retail space to products made or assembled in America,” he said. “If everyone had at least a 4-ft. endcap of a Made-in-the-USA product in their stores, the repercussions would be substantial. Everyone can do it. It is time for the retail industry to step up to the plate and get this economy going. As retailers, we have tremendous influence on the buying habits of consumers.”

Petro even took some credit in Walmart’s new emphasis on U.S.-made goods. “A story title that linked Walmart and the All American Store was the headline in a article written by Motley Fool for the AOL business section just over one year ago. It was the No. 1 story on AOL’s front page for four straight days. We had so much traffic on our website it crashed our site for eight hours and generated well in excess of 50,000 visitors.”

Products that sell

Clark said basic plumbing and electrical sundries are benefiting where commercial users have a preference for U.S.-made products; and he noted that customer groups in certain farm and ranch categories appreciate American-made products, such as fencing and long-handled tools.

Petro said in his stores, virtually every product sells. Two of the better performers are Lodge Cast, which makes a line of iron skillets, and Tifco fasteners. “What fascinates our customer base is the amount of everyday products we inventory at our company,” he said. “What has surprised me is the number of companies that have contacted us to inventory their products, as well as the distance our customer base will travel to shop at our stores.”

Made-in-the-USA label

In a 2013 study, Perception Research Services International found that 4-out-of-5 shoppers notice a “Made in the USA” label on packaging, and 76% of them said they would be more likely to buy a product because of the label. The Boston Consulting Group in a separate study found that 80% of consumers surveyed said they would be willing to pay more for Made-in-the-USA products than for those carrying a Made-in-China label.

This revelation does not surprise dealers. Petro said his customers would pay more for American-made as long as there was a difference of approximately 20% versus the Chinese-made.

True Value’s Clark said customers “in many cases” would pay a premium for American products. “While price remains an important consideration, the value of Made in USA is important to many consumers,” he said. “Of course, the media helps keep the Made-in-USA discussion top of mind for both our consumers and retailers. There is strong sentiment for keeping jobs in the USA.”

“It is time for the retail industry to step up to the plate and get this economy going.”

Mike Petro, manager, The All American Store

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