HD lights up awareness in key category
Bill Hamilton, merchandising VP electrical for the Home Depot, has a challenge on his hands. How do you explain simply and clearly the complicated changes taking place in the fast-changing category of light bulbs?
There are already more than 100 energy-efficient bulb options on Home Depot shelves today, and a multiyear phaseout of incandescent bulbs will begin in January 2012.
“We’re trying to make the messaging very, very simple,” Hamilton told HCN during a preview of new light bulb technologies that Home Depot hosted with a handful of vendors in a Manhattan hotel suite. “To tell the customer what the options are and what the benefits are.”
One of the key benefits is longer life. For instance, the majority of the stores’ LED assortment lasts at least 25,000 hours — that’s 23 to 46 years. At the same time, the quality has improved from the early days of squiggly CFLs.
According to the retailer’s research, customers don’t understand the technology, let alone the legislation. And as the planet’s largest retailer of light bulbs, Home Depot is stepping into the role of guide and advocate, Hamilton said. “Customers are saying: Don’t make it difficult for me; don’t make me have to become an expert about lighting technology,” he said.
Last month’s Light Bulb Showcase 2012 took place in a hotel suite retrofitted with innovations from vendors Philips, Cree, TCP and Lutron.
“We’re going to lead the way in this,” said Hamilton.
EPA lead rule suffers setback
“There is no need for a better ‘test kit,’ as highly reliable and affordable X-Ray Fluorescence technology has been in use for decades. There are many consultants who have XRF machines, and lead inspections are inexpensive. XRF testing produces no damage, while ‘test kits’ and chip sampling involves producing widely scattered damage (12 to 15 sample locations for a typical room in a house).
“The reality is that lead-based paint is rare in residential buildings constructed 1960 to 1978, and is not everywhere in older buildings. EPA’s big mistake was not requiring that the buildings be inspected, so that procedures for dealing with lead-based paint are only used where it is actually present.”
— F. Stephen Masek
On the President and the budget fiasco
“This fiasco, as you would call it, is all of their making. The President needs to tell the American people that if we default on our loans, the rumble would be worse that the last recession we had. We cannot continue politics as usual. They need to make decisions based on what the country really needs. He needs to tell the people that the Senate, the House of Representatives and he are going to cut their wages, go on Social Security (as we have it) and stop paying the retired congressmen their full salaries. That would be a good start.”
— John Stokes
“There should be no compromise on guaranteed benefits for low- and middle-class America. He needs to stay true to the values that got him into office. It has been well proven that tax breaks and corporate tax loopholes do not create jobs in America. There is no shortage of upper class in this country, but a shortage of middle class. It’s time to stand up for all Americans — not just executives, bankers and corporations.”
— Frank Douwes
“What he should say is: ‘You’re absolutely right Republicans, my policies have not worked up to this point, and raising taxes during these economic times is nuts. Therefore, I will recommend no new taxes, we will create a balanced budget amendment, and we will reduce spending to a percent of GDP that both parties will agree to.’ ”
— Mike Doogan
“How many households in the U.S. do you suppose can go out and spend way above their incomes and then go ask the boss for a raise, because of their spending habits? Where do the members of Congress lose this theory from their home to the Capitol building? It isn’t how much money you take in that is the problem, it is how much you spend that gets you in trouble. Washington, D.C., is a prime example of this.”
— Merle P. Higgins
“The President should say: ‘In the spirit of the American people, we will also be tightening our belts.’ I would also propose one thing that would probably save the country quite a bit of money and solve health care. No politician either past or present should have their health care paid in total.”
— Vicki Davison
Bloomington (Ind.) Hardware
Online taxation and a level playing field
“I do believe that there should be a level playing field, and now is the time, given the state of the economy. Governments are going to have to get more tax revenues somewhere, and this is a relatively reasonable and painless source. I particularly like the fact that it is a tax on consumption — in all ways more fair than a tax on income. The major problem with taxing online sales, of course, is the fact that every governmental entity in the U.S. apparently has a different rate and structure. It would be virtually impossible for an Internet retailer to manage that. As it is, it’s impossible for us to even get it right at the local level, as everywhere we deliver seemingly has a different set of rules and an ever-changing tax rate. My suggestion would be to charge a reasonable, uniform tax determined by the powers that be (perhaps the ICC), regardless of customer location. That would vastly simplify collection/distribution/payment/audit functions, and might even lead to a uniform sales tax structure at the state and municipal levels. That would be a godsend to all of us in the retail business.”
— C.K. Oram
“It is not fair to the people with a major brick-and-mortar investment. We need to have a level playing field.”
— Duane Lambrecht
“There should be one average rate per state that can be changed on a uniform date, say July 1 of each year. Internet retailers should remit to one central payment location with electronic information for each state. This would take away many of the problems for small Internet retailers.”
— Augustan Kittson
Real versus surreal
While attending a meeting with the Home Improvement Research Institute, a Home Channel News editor made a side trip to another important South Florida institution that could help us all better understand our industry.
This institution is called The Salvador Dalí Museum in St. Petersburg. (Note to accounting: The $10 admission ticket and $3 parking are now officially “business related.”) And it does so by preparing us for the surreal in our world.
The impressive waterfront building is home to a renowned collection of Dalí masterworks. Our tour was led by a woman who was wearing a shoe as a hat. On the surreality scale, we’ll give that a rating of two melting clocks, out of a possible five.
A painting called “Gala Contemplating the Mediterranean Sea which at Twenty Meters Becomes the Portrait of Abraham Lincoln” gets three melting clocks because, almost in defiance of reality, it becomes a portrait of Lincoln at 20 meters.
And around the corner is a hologram of Alice Cooper, as if he were miniaturized and trapped in a glass box. In reality, Cooper is playing golf somewhere in California, but there he is. Surreality rating: four melting clocks.
One can argue that the strangeness on display in the Dalí museum prepares home channel executives for the seemingly unreal nature of our own industry.
For instance: Here are some of the headlines describing June’s residential construction report: “June housing starts smash expectations,” “Home starts surge,” and “Housing starts soar.” All true. But what is surreal here is that these headlines describe a month, which in unadjusted data, produced 45,300 single-family starts, the slowest June on record. Surreality rating: four melting clocks.
In the home channel, Tractor Supply, on July 20, posted a record quarter. It beat earnings estimates. Sales grew by double digits, and comps increased 4.6%. The company made $91 million in profit, up 18% from the prior-year quarter. All without any hurricanes to boost traffic. The next day, the stock price sank more than 5%. Surreality rating: five melting clocks.
(Even after the dramatic decline, an investor who bought a share of TSCO a year ago has doubled his money. Surreality rating: two melting clocks.)
Saint-Gobain Adfors drywall tape previously made in China is now being made in the United States. Zero melting clocks, so far. But the tape in question is a product sold in Japan. It turns out the packaging and aesthetics have to be perfect, or it won’t sell in Japan. Two melting clocks.
At ProBuild Holdings, the sliding scale of surreality runs like this. Departure of former CEO Paul Hylbert: two melting clocks; the more recent departure of CEO Bill Myrick: three melting clocks; the subsequent departure of EVP operations Jim Cavanaugh, thanks to a cumulative effect: four melting clocks. Senior editor Brae Canlen looks into the company, its leadership and its challenges in a story beginning on page 12.
The Home Improvement Research Institute is doing its part to ground industry understanding in reality — pooling research spending across 80 companies. They are to be commended. (Full disclosure: the non-profit organization is managed by Lebhar-Friedman, parent company of Home Channel News.) And the Dalí museum is doing its part to brace the world for its natural strangeness.
— Ken Clark