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At Golden Hammer event: ‘Retail is Detail’

BY HBSDEALER Staff

Las Vegas — Ray Griffith kicked off the Golden Hammer retail awards presentation with a joke: "Does everyone have an hour? I have a long speech." He got an even bigger laugh when he called out a moderator for his use of the word "entertainment" to describe the panel discussion.

But the concepts that Griffith and the other retail honorees shared during the 29th Golden Hammer Awards ceremony held here during the National Hardware Show contained a serious tone as hardware stores appear to be poised to pounce on a swelling industry recovery.

Griffith, the recently retired CEO of Oak Brook, III.-based Ace Hardware Corp., entered the Home Channel Hall of Fame. He was joined on the ceremony’s retail-award panel by Rocco Falcone, CEO of Springfield, Mass.-based Rocky’s Ace Hardware, the 2013 Retailer of the Year. Also participating was Chris Borrego, general manager of Kearney, Neb.-based Builders, the HCN Tools of the Trade Award honoree.

The three retail representatives showed the proper amount of sportsmanship by congratulating each other and also sharing the recognition with the vendors in the audience and — most emphatically — the team members back at the home office and in the stores. They also discussed some important topics from the front lines of retailing.

On managing change

Rocco Falcone: The only thing consistent now is change. And if you go back to the time period when [my grandfather] ran the business, very few things changed. It would be a big event if he would take on three new products in a year. So I look at that and I think he would be amazed where Rocky’s has made it in 87 years of history."

On the ingredients of a successful hardware store

Ray Griffith: "I think we all believe in the same thing. I think the entry to a successful hardware or home center business is a great location, loaded with great product, in stock and helpful people. And if you put that all together, you have a very good store.

"But for a great store — that requires innovation. I mean, there is a reason customers want to come into your store besides just to repair a toilet. They want to see what’s new. They want serendipity. And the greatest stores on the planet are those that embrace innovation and new product lines."

Falcone: "I think [the people in the stores and the store managers] are the folks out there who really deserve the recognition. They’re the frontline people. They set the attitude in the store. They set the morale. And they kind of drive the business and drive the box."

On growth opportunities

Falcone: "At every meeting we talk about our game changers — paint, outdoor power equipment, pet supplies and tools. We’re driving those categories for our business, and paint is probably the largest one where we see the greatest opportunity."

Chris Borrego: "In the Midwest, we’re seeing significant strength in cabinet sales."

Griffith: "We’re big on paint. We think it’s got a long runway, and it’s our signature department. And I think the other department that has evolved in my lifetime is outdoor living. Holy cow — that has a lot more potential and a lot longer runway. And the third thing is you have to be intrigued by what Tractor Supply, Rural King and some of these other guys are doing in the farm and ranch segment."

On navigating DIY and pro customers

Borrego: "As [Builders founder] Myron [Andersen] says, ‘We’re a slave to two masters.’ At times, it does put you in conflict with the needs of both your customers with the limited resources you have available. We look for the advantages and the commonalities between both customers. We try to elevate our level of service to both of those — particularly our design centers. We have customer service reps that focus on the retail walk-in customers, and we have customer service reps that deal strictly with builder customers. Two different needs, two different wants — but we have a solid approach to both."

On energizing the customer

Falcone: "We were founded in 1920. What’s happened over that time is some of our customers have left us. Meanwhile, we have changed our business dramatically. We’ve done a lot more in terms of branding, getting national brands, including Benjamin Moore, Craftsman and Stihl. We wanted to get our old customers back in the store. And that’s where ‘Rediscover Rocky’s’ comes in.

"So we had to reenergize those people to come back and see what’s new. We instituted much more aggressive pricing, our endcaps, our merchandising. The theme is to come back to the old place and rediscover Rocky’s. We’ve always been here. You’ve missed us and we missed you. And we’re glad you’re back. It’s been an extremely successful campaign for us."

On technology

Borrego: "Companywide we probably have a dozen or more software programs that we utilize, whether it be for designing homes, estimating, engineering trusses, designing cabinets, so on and so forth. One of the initiatives we have is working to integrate all of these systems into one. You put the mobile applications with the tablets and it’s quite a challenge, but we feel like it’s an opportunity for project management working on integrating all these systems into one. To provide the customer with the ability to get more detailed quotes faster and quicker ahead of their competitors so they can bring business home and bring it back to us."

Griffith: "I think our industry is struggling with technology right now from the retailer perspective and from the consumer perspective.

"Many of you are spending a lot of money chasing Twitter and Facebook and social media, and now showrooming, and how is it going to work in our business when people can compare prices with their iPhones and smartphones.

"We’re never going to beat Amazon at its own game, but I think it’s important for the co-ops and the retailers to stay abreast of how the consumer is changing."

On the role of the co-op

Griffith: "I believe the co-op plays an important role in stimulating innovation and encouraging entrepreneurial spirit for the successful store."

Borrego: "The exchange of best practices and innovative ideas allows us all to exceed the expectations in our markets.… The folks at Do it Best Corp. sponsor numerous roundtables we belong to and provide us with the tools and resources to meet the demands of our marketplace."

On sales growth

Borrego: "The Midwest has seen its share of wet days, and despite that, we had a really strong April. We made a major investment in outdoor furniture with the help of our Do it Best folks, and the encouraging thing is that — even considering the weather — we’re still selling a lot of outdoor furniture.

"Also, there is a lot of housing going up. There is a lot of remodeling activity. And I would say it’s fairly consistent across all customer segments. It’s broad. And that’s probably the most encouraging thing we see."

Falcone: "The spring was about a month later than it was last year. So we’re starting to see the seasonal business coming in. Our comp stores are growing and at a fair pace, and it’s nice to see things going in this direction."

On a career in the hardware industry

Griffith: "I couldn’t have landed in a better spot, being a kid from southern Illinois who grew up on a farm and had the chance to lead two different companies: Coast to Coast stores and Ace Hardware. And participating with our great retailers and doing whatever we could do to advance this industry has been quite an honor. I’ve been very blessed."

"I think our industry is in a really good position. It’s time tested."

Ray Griffith, former Ace Hardware CEO, Hall of Fame honoree

"Truly it’s the folks in the stores who make it happen."

Rocco Falcone, CEO, Rocky’s Ace Hardware, Retailer of the Year honoree

"Innovative ideas allow us all to exceed expectations."

Chris Borrego, executive VP and GM, Builders, Tools of the Trade Award

Golden Hammer Winner Stat Box

Retailer of the Year

Rocky’s Ace Hardware

• Springfeld, Mass.

• 33-store and growing neighborhood store format is strong in New England and Florida

• Family owned and operated since 1920

Tools of the Trade award

Builders

• 3 locations in Nebraska, 1 in Colorado

• Operates warehouse home center format, lumberyard and designer showroom

• Founded in 1977

Hall of Fame honoree

Ray Griffth

• 19 years at Ace Hardware

• Former CEO of Coast to Coast

• Retired March 31

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Sales leaders: It’s in the cards

BY HBSDEALER Staff

Costello’s Hardware, Home & Garden of New York’s Long Island has three stores ranked in the top 20 of Ace Hardware’s leading gift card sales stores.

It helps having high-traffic stores in densely populated areas, said David Faulhaber, marketing coordinator for the 19-store chain based in Deer Park, N.Y. It also helps having a high-ticket, "giftier" merchandise mix that includes outdoor living, holiday-related products, power tools and housewares.

The same can be said for Simpson Ace of Sumter, S.C., where an eclectic mix of merchandise is a factor in the company’s league-leading Ace gift card performance: $65,000 in the most recent year.

In-store merchandising matters, according to the Ace marketing team. A key area for gift card visibility is near the checkout. But the experts recommend promoting a gift card program throughout the store, with gift card displays, end-caps and signage.

The math is on the side of the gift card retailer, said Jody Allen, manager of Ace Rewards. "The average load of an Ace gift card is several dollars higher than the average redemption, which results in additional consumer visits," she said.

Success requires more than marketing, however. A major factor in Costello’s ability to sell stored value cards is the ability to satisfy them in other areas, said Faulhaber.

"We have a loyal customer base nurtured over time by delivering outstanding customer service," he said.

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Tech Talk: ‘Insights’ into Information

BY HBSDEALER Staff

Nashville, Tenn. — Bill Harrison of McGuckin Hardware was one of thousands of technology-focused professionals who spent several days under the science fiction-like glass dome of the Gaylord Opryland Hotel here during the Epicor Global User Conference last month.

One of McGuckin’s new efficiency boosters is a solution called Training on Demand, a Web-based video training program, of which McGuckin is a beta tester. "Videos are short and to the point — 10 to 15 minutes on POS, purchasing, inventory management," said Harrison, IT manager for the True Value member that’s also an Orgill customer. "A dashboard keeps track of who does what, and it gives you more control of the training."

But for Harrison, there’s a bigger IT mission behind his attendance. "We’re looking to adopt any applications to help," he said. "And maybe see if there is something we can do differently."

One of the themes of the Epicor "Insights" event, which drew some 3,000 customers from multiple industries, was the challenge and promise of managing the 24/7 connected consumer. During the show, attendees learned that tablets are going to surpass desktop PCs this year, and surpass portable PCs in 2014. And by the end of 2013, there will be more Internet-connected mobile devices than people.

According to Epicor’s Steve Bieszczat, senior VP marketing, taking advantage of progress requires from an independent retailer a strong foundation in the basics of IT. That means that items are loaded, prices are accurate, and a scanned item responds with "a happy beep," he said.

"When these new technologies come along — websites, loyalty programs, tablet point of sale — they magnify the need for best practices," Bieszczat said. "It’s the owner’s leadership within the business establishing best practices that makes a retailer great — not the technology."

For McGuckin, a recently reworked website represents one of the fruits of a busy IT program. (Check out the site’s Flatirons webcam at McGuckin.com.) But there is tough competition for today’s independent, both on the Web and in the form of the billion-dollar mega chains. Can the independent compete? The answer is a bit complicated.

"We’re ahead in that we can be more reactive to changes," said Harrison. "We’re behind them in terms of the money they can throw into something."

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