Walking the Aisles

Inside True Value’s Retail Laboratory

From the outside, the Mount Prospect, Ill., True Value hardware store looks a lot like any other True Value store. It’s only 2 years old, so the sign above the door appears extra bright red and white.

When you walk through the entrance, it still looks a lot like most of the Chicago-based co-op’s fashion-forward Destination True Value format stores. At 12,600 sq. ft., it’s a little bigger than most. The registers are ringing up front, and a racetrack is punctuated by 38 endcaps promoting product, as well as ideas for the home.

But this store is unique in the world. It’s the only company-owned True Value store, and its mission in life is to provide the co-op — and by extension, its members — insights into efficiency and productivity.

True Value CEO Lyle Heidemann recently guided visitors through the store. And there seems to be at least one story, or strategy, in every aisle. But it’s the big picture of the entire store that is most interesting to the folks at True Value headquarters.

For instance, take the six core hardware categories — the ones that are insulated from seasonal or calendar fluctuations. Heidemann identifies them as tools, electrical, plumbing, paint, automotive and decorative hardware. These areas represent about 65% of a hardware store’s business. (Lawn and garden and seasonal account for 25% typically, and the rest is made up of various niche businesses, he said.)

“What we’ve done here is reduced the lineal footage of the core day-in and day-out hardware business with the whole idea of testing to see whether we can get the same amount of business in 15% less space,” he said. “So the goal is to improve productivity by about 15%.”

Higher productivity gives the store owner options, Heidemann said. It makes smaller stores more marketable, it makes current stores more profitable, and it allows stores to reinvest their square footage into other categories. That last option is what True Value has done in Mount Prospect.

Here are some of the highlights of the tour:

• Housewares
Both sides of an aisle (a canyon, in True Value lingo) are dedicated to housewares. “Cleaning supplies is always among the top categories, and that’s about every week of the year,” Heidemann said. “You might not think of this as a hardware category, but this works in just about every store.”

In fact, he said, data suggest that it is difficult to reach the point of diminishing returns when selling housewares. “The more space you give it, the more it sells.”

The prices probably aren’t as low as Walmart, but they definitely compete with the Jewel-Osco across the street, Heidemann said.

• Dollar stores
The dollar-store aisle (another canyon) in the Mount Prospect store was established in August. After about nine months of testing, the co-op will be able to make conclusions about its productivity and profitability. Heidemann is optimistic.

“In a lot of our stores, the dollar-store concept will work, because they have the latitude to get into some things from a convenience standpoint that work for a female customer,” Heidemann said.

• Female friendly
One of the keys to the merchandise assortment and design of the Destination True Value format, according to Heidemann, is female friendliness.

“The female customers shop lawn and garden, paint, pet, bird, dollar, cleaning supplies and housewares,” he said, pointing to successive aisles around the racetrack. “So when that female comes in, picks up a cart, makes the round, she sees colors and the adjacencies, all to make it more friendly to shop for her.”

Heidemann said the industry as a whole needs to become more female friendly. Then he quickly corrected himself:  “Actually, I don’t care about the rest of the industry, but we’re making Destination True Value geared to the female customer.” 

• Plumbing
Heidemann guided visitors back to the plumbing aisle where some of the maintenance and repair items displayed on rolling screens that added linear feet without taking up any space. He pointed to the faucet stems.

“Not many people under the age of 30 know what a faucet stem is,” Heidemann said. “But this is still a category for the maintenance and repair guys. You need to have faucet stems. You need to have O-rings. If you didn’t have these, you wouldn’t be considered a hardware store.”

The plumbing category will also require old-school knowledge to succeed.

“The homeowner doesn’t give the teenagers credit for knowledge, so you can’t have teenagers up and down the plumbing aisle,” Heidemann said. “The homeowner doesn’t think the teenager has installed a faucet or repaired a toilet, and I agree with them.” 

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