A forecast fit for shovel makers
Button up your coat.
According to data gathered by Weather Trends International, provider of long-range weather guidance and sales analytics for businesses, much of the United States will trend colder than last year.
Things will likely get much wetter, also, across the South and East, according to the data.
Some temperature trends, meanwhile, are likely to depend on the time of day. Nighttime temperatures in the East are expected to run above normal levels, while daytime temperatures will be closer to normal, or even below normal trends.
There is something for shovel makers and others with an interest in snow removal to celebrate in the forecast. Snowfall will surpass the previous year’s levels and appears likely to hit the second highest level in 10 years. The final week of November presents the best chance for snow in the Northern Plains and in New England.
One of the tenents of Weather Trends International weather analysis is that a retailer must concern themselves not so much with the weather on any given period, but rather how the weather on any given period compares with the same period in the previous year.
November 2013 will start off with complicated comparisons with the previous year, especially in the Northeast, where Superstorm Sandy brought parts of the region to a halt for a prolonged period of time. In areas where stores remained open, demand for cleanup and emergency supplies will be lower. However, for stores that were closed following the storm, this year will be more favorable.
Colder and wetter weather across the western and central states will help to drive demand for seasonal categories, like space heaters. Much colder weather around the Black Friday week will bring stronger demand for cold weather items during this unofficial shoppers holiday.
Snow removal categories will see stronger demand than last year in the Northern Plains and New England.
The evolution of the U.S. Hispanic construction market
For many years, the U.S. Hispanic construction market was considered “nice to have” but reaching this segment had little or no impact on the marketing budgets of retailers and manufacturers. However, with the dramatic growth rates, documented industry penetration and impressive purchasing power of that segment in recent years, the U.S. Hispanic construction market has gained serious attention in marketing budgets and is now a legitimate discussion in the C-suites when considering how to achieve positive change in the bottom line.
Growth of the market
The U.S. Hispanic worker accounts for a large percentage of the construction and building maintenance occupations. In fact, more U.S. Hispanic men work in construction and building maintenance than any other field (Simmons Spring 2011).
In addition, the growth rate of the Hispanic construction and building maintenance workforce is increasing rapidly, even as the total construction workforce is declining (2000 – 2010 Bureau of Labor Statistics, U.S. Department of Labor). With projections on a linear trend, we forecast that by 2025, 43% of the entire U.S. construction workforce will be Hispanic.
Some construction fields are already dominated by Hispanics and, as such, are driving those industries. According to the U.S. Bureau of Labor Statistics, 77% of plasterers and stucco masons and almost 60% of drywall installers in this country are Hispanic. Further, 52% of concrete finishers, 46% of roofers and 41% of painters are Hispanic.
“In surveys and other research, Hispanic men typically list multiple professions when asked about the work they do,” said Kevin Kilpatrick, publisher of Constru-Guía al día magazine. Digging deeper into this in qualitative research, we found the U.S. Hispanic male does whatever he needs to do on the job site and from job to job his role may change. As a direct result of the varied types of work he does, he buys product from many products categories.
There is a common misconception that all U.S. Hispanics are laborers only and do not influence purchasing decisions. However, there is strong evidence to the contrary.
“Constru-Guía al día magazine is written for the U.S. Hispanic construction market,” said Kilpatrick. “Our 2013 Readership Survey found that while 26% of those who receive Constru-Guía al día are non-supervisors and/or laborers, the majority (74%) are owners or supervisors. They are decision-makers at the retail purchasing level and will have direct impact on which brands and services will be successful in the future.”
Reaching the U.S. Hispanic
Marketing to this segment presents some challenges — with language being the first concern.
Most Hispanic men in construction blend Spanish and English in their businesses − 42% of Hispanic owners, i.e. purchasing decision makers, say they “only or mostly” speak Spanish on the job, and another 37% report speaking “about the same” amount of Spanish and English.
At home is a different story, where the majority speaks Spanish, and in the media they prefer. “Our research has found that the Hispanic construction segment prefers their newspapers, magazines, radio and television in Spanish,” said Kilpatrick.
The issue is not whether retailers and manufacturers should market to the U.S. Hispanic, but how they’ll reach out to this dynamic, vital and growing segment.
Kevin Kilpatrick is publisher of Constru-Guía al día magazine, the website MiConstruGuia.com, an electronic newsletter and syndicated radio segments on 115 radio stations. Kilpatrick can be contacted at [email protected].
Feeding the beast at Tractor Supply
During a recent Goldman Sachs investor conference, analyst Matt Fassler described Tractor Supply as “one of the most unique differentiated growth stories in retail.”
That was the cue for CEO Greg Sandfort to share some of the Brentwood, Tenn.-based company’s insights into its large and growing brand of farm-and-ranch retailing. And he shredded a few myths of rural retailing in the process.
How large? Tractor Supply’s annual sales hit $4.7 billion in 2012 as store count swelled to 1,176. The company sees an opportunity for 2,100 stores in the United States, and it’s working diligently to get there.
Tractor Supply plans to open about 100 new stores this year, and another 100 next year. To illustrate the level of planning involved for that amount of growth, Sandfort said the company already knows who the store manager is going to be for each store opening through the first nine months of next year.
The chain could conceivably grow faster, he said, but why? “As a growth company, you have to feed the beast. The No. 1 thing is you have to be able to service that store base. You have to get ahead of the supply chain formula. You can’t get behind. Because catching up is very painful and very costly.”
Looking in the western region, where the company currently has 42 stores across 11 states, it sees an opportunity for 307. The company’s westernmost distribution center is in Nebraska, and that will have to change. Tractor Supply plans to add a western distribution center in 2015. Beyond that, the company is eyeing the Pacific Northwest for another distribution play.
Through its growth, the company points to its internal processes as a competitive advantage. “We’re really proud of, and stress every day, our ability to execute,” Sandfort said. “Many retailers have great ideas, but one of the things about Tractor is when we say we’re going to go and do something, we go and we do it.”
That discipline is on display as the company rolls out new products, the development of which is considered an important responsibility by Tractor Supply executives.
“It’s our job to bring in new products,” Sandfort said.
At any time and in any store, there’s probably three different types of product testing taking place — not just single SKUs, but 4-ft. sections, “center court” presentations, entire gondolas of product mix or various combinations of the above.
During his presentation, Sandfort explained that Tractor Supply does not mind seeing a test fail. In fact, that’s what the tests are designed to reveal.
The process, which involves 60-plus tests at any given time, “teaches us to fail early, often and cheaply,” Sandfort said. “If the customer doesn’t respond, I don’t want to take it to more than 25 stores if we’ll just have to liquidate it.”
Responding to a question about guns and ammunition — a category not found in Tractor Supply stores, even though a high percentage of its rural customers are known to hunt and fish — Sandfort shared another piece of tried-and-true merchandising philosophy. “If we can’t be meaningful in a category, don’t dabble,” he said.
The company’s strategy for continuous improvement includes another unusual tactic: Three times a year it holds a vendor day open only to new vendors — existing vendors need not apply — meeting with buying teams in half-hour increments. “It can be guys working out of their garage, or maybe some from Asia,” Sandfort said. “It’s another process that allows us to fill the pipeline with newness.”