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Doors open for self-help kiosks

BY HBSDEALER Staff

There are about 60 million keys duplicated each year, and the makers of MinuteKey see no reason why automation shouldn’t play a larger role.

Armed with stats showing extreme ease-of-use (93% of kiosk users did not need or receive help duplicating their key, according to a customer survey), VP marketing Chris Lohmann said automation makes complete sense in the key arena.

He described traditional key service centers this way: “low ticket, little or no profit, customer dissatisfiers.”

Lohmann may be biased, but he also has some strong growth numbers in his company PowerPoint presentation — from 18 self-service key duplication kiosks in 2010 to 1,696 today. They’re scattered mostly in Lowe’s, but also in Menards, Walmart and Orchard Supply Hardware locations.

The U.S. market size for key duplication is about $1.2 billion, with 600 million total keys duplicated annually. Some keys — for instance, transponder-injected auto keys — need special assistance, but 90% of the market is kiosk-compatible.

The movement is bolstered by an array of new key designs and “Ultralite Metallic” keys, described as “engineered aluminum technology.”

But what happens if home automation and smartphone apps take over the door-entry business? Lohmann isn’t worried: “I don’t see keys going away any time soon.” — Ken Clark

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Before and After: Brown converts to Northern

BY HBSDEALER Staff

Established in 1904, Brown Lumber had been a household name in northern Michigan for the better part of 110 years.

Then, the recession came — revenues at Brown dropped 75% between 2005 and 2010, corresponding to more than 100 layoffs.

You can think of what happened next as a mutual bailout of sorts. Northern Lumber, of Suttons Bay, Mich., had already been affiliated with Brown Lumber through mutual ownership. When Chase Bank foreclosed on Northern in the fall of 2012, majority owner George Cochran bought its debt and assets, forming Northern Building Supply, LLC. On Dec. 4, 2013, Brown Lumber found itself at an auction after encountering similar problems with its bank. By Feb. 21, 2014, the new LLC had taken Brown Lumber under its wing by purchasing its debt and its assets. Were it not for the combined purchasing power, it’s possible neither company would be shipping lumber today.

“There was too much debt, and not enough sales,” said Phil Cochran, brother of George Cochran, who acted as CFO of both Brown Lumber and Northern Building Supply leading up to the merger. Today, he’s the COO of the newly combined company.

Under its new moniker, Brown Lumber is looking forward to flourishing in the near future with a more expansive and competitive inventory. Sales in March are already almost triple what they were last year.

“The name changed, and the capitalization. That’s basically it,” Cochran said.

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Got a niche? Scratch it, say experts

BY HBSDEALER Staff

During a presentation titled “Niches for every Market,” Mark Scheer, director of field marketing for Memphis, Tenn.-based Orgill, offered the following definition of a market niche: “a specific customer need that is not being addressed.”

“It’s not something you can make up,” Scheer said. “It’s listening to your customer base and evaluating what’s going on.”

During his seminar in Orlando, Fla., for Orgill dealers, Scheer explained that niche programs can help retailers be more successful. These range from paint to “As Seen on TV” to fasteners to dollar bins.

A few pointers:

  • “Frugality is the new norm,” Scheer said. Dollar store shoppers make about 10 trips a year, spending an average of $9.70 per visit. He suggested: “Merchandise this as a unique category. Don’t think of integrating this with the rest of your product mix.”
  • Rental is an opportunity. It’s a $32.8 billion industry, and it’s fragmented — 77% of the business is from independent rental dealers.
  • Harness the power of television — specifically “As Seen on TV.” For every one such product sold through a phone operator standing by, three to 10 are sold in retail stores, said Scheer, pointing to stats from the Electronic Retailing Association.
  • Featuring an item on an endcap can increase sales by up to 25%. Placing an item in a dump bin can increase that item’s sales by up to 427%, according to Orgill stats.

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