HIRI event starts strong, raises cautions
Chicago — Before the first speaker could take the podium at the Home Improvement Research Institute (HIRI) Fall Conference, a residential construction report for September stole the show with news of a 15.0% increase in total starts.
The tone was set. One presenter pointed to an average forecast of 924,000 starts in 2013, a figure drawn from 10 estimates ranging from a high of 1.1 million and a low of 800,000.
But home improvement retailers were also warned of various challenges — among them were the rise of the mass merchant and the move to online shopping.
A Stevenson Co. presentation pointed to the emergence of discount retailers as a source for home improvement project materials (see chart). Lurana McParland of Stevenson described the 27% shopping rate for stores such as Walmart, Target and Meijer as a possible “game changer” for home improvement retailing. And Walmart is going hard at home improvement with a Projects Made Simple that blends in store simplicity with online details.
Amazon, meanwhile, is expected to expand in home improvement. Keep an eye on Amazon’s Subscribe & Save program, according to Kantar’s Laura Kennedy. It’s an automatic-replenishment program that started in grocery and is spreading to new categories — including the hardware store staple of pet supplies — with 5% to 15% discounts. The online giant is also looking to “snag pros” with a replenishment program called Amazon Supply, she said.
Hardware stores were offered a slice of good news, also. As Kantar stats showed 11% of all shoppers said they are visiting hardware stores more often than they did in the previous year, younger customers said it more. Generation Y had 13% step up their hardware store shopping, and Generation X had 14% do the same.
Hovering over all the numbers are societal trends that are changing the way we shop. As a result, home product marketers need to adapt to a world of instant communication and online damage control, according to Winston Ledet, chief operating officer for Premium Retail Solutions and former Home Depot merchant.
Almost 40% of consumers are using social media to research home improvement, Ledet said. “If you’re not managing this part of your business, then you’re leaving a huge amount of value on the table.”
Scotts’ way forward?
The following refers to the article, “Scotts Miracle-Gro names senior VP independent channel.”
“My opinion on this topic is that Scotts needs to improve its relationship with the independent garden centers and hardware stores, many of which represent the backbone of the formative years of their great brand. Recent years have seen a great deal of realignment, repositioning, regional shuffling, employee turnover and relocation, all of which have not, in my opinion, helped solidify this relationship.
“Several years back, Scotts launched the LawnPro/GardenPro concept, designed to help the independent stores differentiate themselves from the boxes, regain some market share and improve their margins. I don’t believe this program has worked to plan for either Scotts or this segment of its customer base. Strong independent retailers, both garden centers and hardware stores, will continue to find ways to differentiate themselves and remain strong in their markets. The role of a key vendor like Scotts should be:
“1. Continuing the great branding strategy that has given them their dominant position in the marketplace.
“2. Creating purchasing programs for these retailers to help level the playing field with the boxes.
“3. Implementing marketing efforts designed to differentiate this segment helping to increase footsteps in their stores.
“4. Reallocating some marketing funds for regional- and group-level campaigns to drive market-specific awareness for the independents and, in my case, the hardware groups.
“The boxes will serve their purpose to move massive amounts of product from vendor to consumer. It is the independents that will continue to provide the knowledge in the field to support all of these products, and to do so an improved vendor/independent retailer relationship is critical. I will be cautiously optimistic that these recent changes at Scotts will prove to be positive for the independents.”
— Greg R. Gold
Miller’s Ace Hardware
Why people steal
“Greed or a sense of entitlement is not relevant to income level.
“Poor people steal (sometimes out of real need). People making six figures steal. Bernie Madoff stole his billions. Imelda Marcos ‘acquired’ her 2,000 pair of shoes and more. Robert Mugabe helped himself to all of the resources of Zimbabwe and diamond mines in South Africa.
“In short, people of all social and economic levels steal because they want to and because they see an opportunity.
“I recall from a forum about security the rule of thumb that 10% of people will attempt theft no matter what, 10% will never steal, and 80% will not steal unless the opportunity presents itself. We can’t do anything about motive, but our task is to reduce the opportunity as much as possible, and to apprehend and prosecute when applicable.”
— Brian Hoiem
More on paint and primer
The following is a response to: “Paint and Primer in One: Breakthrough? Gimmick? Who cares, as long as it sells?”
“Your article writes: ‘Independent retailers were divided on the issue’ of self-priming paint technology and messaging, and let me say the sentiment has never been more pronounced! To keep pace with this marketing trend started by the ‘big box,’ independents are forced to adopt this product. Unfortunately, this pressures them to also relay the convoluted description of its performance to customers. With the influx of countless cleverly worded paint-and-primer products, understanding the difference between ‘One-Can’ paint and a ‘One-Coat’ paint is lost at the expense of time and money for the retailer and customer.
“A true one-coat paint means exactly this: never a primer or second coat but a single application to achieve a finished result over any surface, prepared or unprepared.
“ ‘Big Paint’ companies have been manipulating independents and customers through the toughest economy in generations. Paint-and-primer products abuse misdirection through the fantasy of a true ‘one-coat’ capability but rely on multiple coats for a finished result, which is no different to conventional paint. They simply retail for more money and are quietly generating a massive material- and energy- waste system that nobody is talking about. Every paint-and-primer or self-priming paint is a ‘one-can’ product and nothing more. Don’t customers deserve a clear message?
“The true value in paint-technology advancement today must be a product that cuts labor and material costs to the absolute minimum, simultaneously preventing the maximum in wastes through raw material extraction, production and usage. Only this aligns with the economic and environmental objectives of today’s customer. When this reality is digested, there is no going back, for the unprecedented incentive is too great. It’s time to change the way the world thinks about paint by recalibrating its relationship with people.
“If we are to break this movement that carries a casual responsibility to customers and our natural resources, independents must lead the market and hold manufacturers accountable for the paint they produce and, more importantly, their messaging.”
— Tony Margani
VP sales and marketing
Brannigan to lead Lebhar-Friedman Residential Products Group
Construction and publishing industry veteran Jack Brannigan has joined Lebhar-Friedman, owner of Home Channel News, as VP and group publisher for the New York-based company’s Residential Products Group.
In addition to overseeing growth for the print and digital products under the Home Channel News banner, Brannigan will guide the company’s new Residential Products Group as it develops new products for new markets. He will be based in Chicago.
Brannigan has successfully launched and guided to success numerous trade and consumer magazines and websites in the residential construction industry during his 25-year publishing career.
“I am very excited to join the team at Lebhar-Friedman and help the Residential Products Group develop solutions that help our customers grow,” Brannigan said. “The underlying fundamentals of the building trade are strong, and I believe this is a great time to be in the business of serving that industry.”
Brannigan has served in senior executive positions with HomeSphere Inc. and Hanley-Wood. He currently serves on the board of directors of BuilderFusion, a building and technology company based in Orem, Utah.
Early in his career, Brannigan held sales and executive positions with Cahners Publishing (Reed) and Penton Media.