Color me customer friendly: Home improvement retailers coat their stores with paint lessons and demonstrations
Painting is the number one DIY activity among American consumers, and home improvement retailers—from the big boxes, to the co-ops, to small mom-and-pop stores—have shored up their departments and paint-related educational opportunities to take advantage of this trend in the last few years.
The goal is to establish consumer loyalty and to gain the reputation as a destination in the profitable paint & sundries category. In many cases, this has meant expanding the actual square footage of the department, giving it prime placement in the store and—in some cases—holding special demonstrations and clinics to bring consumers in and sell more related products.
Home Depot and Lowe’s began making a push in this category in the early 2000s, trying to appeal to women as important decision-makers in the DIY market. The Home Depot paint department now offers in-store design centers, more designer paint brands and more extensive paint color samples from Behr, Glidden, Ralph Lauren and Disney. Lowe’s has also expanded its offering to include brands like Valspar, Olympic, Zinsser, American Tradition and Enterprise, offering customers a Paint Color Matching Service that includes trendy Martha Stewart Colors and Eddie Bauer designer palettes.
On the educational side, Home Depot continues to hold “Do-It-Herself” workshops to give female home improvement enthusiasts instruction in faux painting and other decorative techniques. Home Depot customers can also use touch screen ColorSmart kiosks from Behr to view large selections of color palettes, coordinate colors and see how those colors will look in a room or on a home’s exterior—all while receiving tips about color coordination and painting supplies.
The big boxes aren’t the only ones making a push in the area of paint products and information. Each of the big three hardware co-ops—as well as the distributor Orgill—has expanded its product offering in the last few years and encouraged its retailers to step up their departments and customer service in this area.
For example, Do it Best showed a commitment to paint products and education at its fall market last month in Indianapolis, presenting a paint exhibit area that placed special emphasis on departments and programs—both branded and private label. This included an expanded 36 feet of color racks for a striking in-store presentation and half-hour manufacturer demonstrations designed to show retailers how to instruct their own customers in weekend projects.
“I think the demonstrations are very valuable to help retailers train store employees to become better sellers and to bring more information to the end user—the consumer,” said Christina Ganzer, brand manager for wall covering products for Zinsser (known for DIF wallpaper removal products). “Hands-on is always the best way to teach.”
Do it Best’s branded program features Valspar labels such as Integrity, Laura Ashley and Medallion, which are complemented by Do it Best private label products, including Best Look, Color Solutions and Master Touch—all made by Sherwin-Williams. The idea is for each store to choose a product mix that distinguishes it in the marketplace, according to Dick Wise, merchandise manager for paint & sundries. “Whatever market you’re in, we have a program to address that—from basic to high-end,” he said.
Do it Best encourages member stores to hold clinics on everything from caulking and stripping to faux finishing and wood staining. Sometimes a manufacturer will send a representative around the country to do in-store demonstrations, or the individual owner can learn the process and present his own clinic. Both of these present a good way for the store to establish a rapport with customers and allow them to become familiar with the paint department and other sections of the store as well.
“I think if merchandised and presented correctly, consumers will start to look at that store as a paint destination, not just a paint department within a hardware store or lumberyard,” Wise said. “And if you do the demos, the consumer might look at them as an opportunity to get some ideas and get the products they need to do a project.”
In addition to clinics, an increasing number of hardware stores are beginning to install computerized color matching to help bring color to life for their customers. For example, Cole Hardware, an Ace store in San Francisco, has an extensive paint department featuring the Benjamin Moore and Ace paint brands. In mid-October, the store brought in a new interactive software system from MatchRight to help customers choose colors and allow them to download images for color matching.
“They’re able to mix paint to match what they’re looking for. Up until now, we didn’t have that available,” said David Schindler, manager of the paint department—which takes up about a quarter of the store’s ground floor. “The customers are very excited about it.”
Hahn True Value in Hartford, Wis., gave its paint department a $10,000 makeover last year, putting a new L-shaped paint counter up front, perpendicular to the main aisle so an associate can make eye contact with customers when they enter the store. Owner Perry Hahn had the counter custom-made, with a 10-foot main section and a four-foot section jutting out of the side to give people room to lay out their paint samples and match them with tiles, fabric swatches and throw pillows.
In addition, Hahn sent four members of his part-time staff to True Value’s Color School, an intensive, hands-on, two-day seminar that teaches things like the psychology of color impact on customers’ decision-making, how to use in-store proprietary color sales tools, how to develop consultative selling skills to make recommendations for projects, how to color match by eye and how to faux finish.
And just this fall, Hahn also brought in the MatchRight Color Visualizer, which allows his consumers to plug a photo of a room into the computer and with each click see that room in different color combinations.
“We’re always looking to reinvest in that category, which is a very profitable one,” Hahn said. “It’s kind of a natural for a hardware store because it takes a lot of personalized customer service, knowledge, advice. And I think it’s one of those categories that no matter what happens in the marketplace, you can still do well with it.
Lumber Liquidators closes IPO
Toano, Va.-based specialty hardwood flooring retailer Lumber Liquidators has closed its initial public offering.
The company offered 10 million shares of common stock at a price of $11 per share, including 3.8 million shares offered by the company and 6.2 million shares offered by selling stockholders.
The company intends to use the net proceeds of approximately $36.4 million from the offering to repay outstanding debt and support the growth of the business, which includes plans for 25 stores in 2007, followed by 30 to 40 new stores per year until 2011.
Goldman Sachs and Merrill Lynch acted as joint book-running managers with Lehman Brothers, Banc of America Securities and Piper Jaffray serving as co-managers for the offering.
Lumber Liquidators has seen same-store sales growth of 8.5 percent to 9 percent each quarter this year. According to the company’s S-1 filing with the Securities and Exchange Commission, in 2006 Lumber Liquidators had sales of $332 million, up 35 percent from sales of $245 million in 2005.
The retailer currently operates 111 small-format stores in the United States. The company is traded on the New York Stock Exchange under the symbol “LL.”
NKT Holdings withdraws initial public offering
Providence, R.I.-based HVAC company NTK Holdings has canceled its initial public offering according to a Securities and Exchange Commission filing this week.
The company said that the application was withdrawn “due to the unsettled market conditions.” The company had planned to use the IPO proceeds to repay debt.
The announcement was part of Nortek’s third-quarter earnings statement. Nortek, which reported a 4 percent increase in sales, is a subsidiary of NKT.
The company reported net earnings of $37.6 million for the period ended Sept. 29, down 44.9 percent from last year’s earnings of $67.7 million in the same period last year. Nortek also reported net sales of $602 million, up 4 percent from $579 million last year.
NTK Holdings manufactures air conditioning, heating ventilation and home environmental control technology products.