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Knives: Putting an edge on hardware sales

BY Bill Addison

While the utility knife is a staple of home channel tool sales, an array of pocket knives, multi-tools, folding knives and the like are getting shelf space at hardware retailers.

Brands like SOG, Buck and Gerber are finding their way into national retail chains where they say customers are looking for more options in cutting tools—and they’re not afraid of higher price points.

“We see the hardware business expanding,” said Bill Raczkowski, category manager for Gerber. “We have seen several stores being more open to offering more branded knives and tools. This tells me the consumers are asking retailers for more options other than the $5 knives.”

Raczkowski said one of the reasons the sporting category of knives is expanding in hardware stores past the traditional utility knife is their versatility.

“We call them ‘sporting’ knives, yet they are applicable to all uses,” he said.

Another reason is their aesthetic appeal. Raczkowski said that a lot of effort has gone into their style as well as their function.

“The sporting goods market is highly competitive, and one thing we need to do is differentiate with aesthetics and design,” he said.

He also pointed to the knife’s appeal as an impulse item, albeit a higher-end one.

“Hardware consumers also hunt, fish, bike, hike and spend time not working,” he said. “When they’re shopping for light bulbs and wrenches, if they see a knife they can use for these activities, they’ll buy [it].”

Gerber’s multi-tools are featured prominently in big-box retailers like Lowe’s and Home Depot, but the company sees the potential in utility blades as well. Currently, Gerber offers two products along its E.A.B. utility line, which stands for “Exchange-A-Blade.”

And while some retailers may view knives as items of opportunity, others use them as a hook to draw in customers. Retailers like Emory, Texas-based Hooten’s Hardware have seen their knives department become a customer attractant. They recently bulked up the department with the addition of a Case Knives shop, which features more than 800 varieties of knives.

But it’s not just the big knife brands like Gerber or Case that are eyeing independent retailers. Olympia Tools, which already has a large market share in utility knives, sees the potential in the other arenas of knives as well.

“I believe that [independent retailers] can compete because you really get into a specialty type of customer,” said Tony Lee, marketing director for Olympia. “You’ve got all different kinds of varieties and handles, and you really get into the high-end segment, where going upwards of $100 isn’t out of the question. It allows the independents to compete for a consumer who’s not in the big-box stores.” He also pointed out that sporting-type knives usually top out at $50 at the big home centers.

Olympia is eyeing the potential on the side of multi-tools and folding knives that sit at the under-$20 price point. It has even expanded into smaller knives, like its iWork hook knife, which features a multi-function carabiner.

Lee said that there’s a fine line between the sporting good and the hardware knife. He pointed to the development of the folding utility knife 10 years ago as an example of how one tool can marry both functions.

“It’s now the No. 1 tool at Home Depot,” he said.

But Lee said he believes there’s an opportunity for the utility knife to become a lifetime product, a perception Brett Seber, of Seber Design Group, is working to build.

“The only thing that’s really disposable is the blade. I liken it to buying a new car and throwing the car away when the tires wear down; that’s just not what you do.”

The problem, as Seber put it, is the retail market is locked by price point, with utility knives topping out at $14.99, making Seber’s latest model a hard sell at $29.99.

Seber’s newest take on the utility knife is its folding knife with rotation lock. The ratcheting lock system allows for the knife to be locked in any position, much like the brand’s sporting-type knives. In addition, the blade holder has a relief grind for more cutting clearance, allowing for 30% more cutting surface availability. The new relief grind also created the ability to introduce serration into the blade’s design.

The company is currently working on a private-label version with the same features that is made with more affordable materials and can compete at the $14.99 price point.

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Kleer Lumber gains distribution through iLevel

BY HBSDEALER Staff

iLevel by Weyerhaeuser is now distributing Kleer Cellular PVC Trimboard, sheet goods and other Kleer cellular PVC building products from its Baltimore, Md., and Easton, Pa., distribution centers.

iLevel is a new partner for Kleer as the company serves the key building markets of New Jersey, metropolitan New York and other Mid-Atlantic regions including Eastern Pennsylvania, Northern Virginia, Maryland and Delaware.

“iLevel is an ideal partner for Kleer Lumber because of its strong brand name, the products it represents in the marketplace and its commitment to outstanding service,” said Walt Valentine, president of Westfield, Mass.-based Kleer Lumber. “iLevel’s renewed commitment to focus on specialty product groups aligns perfectly with the core product development strategy at Kleer Lumber.”

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Construction industry loses more jobs

BY HBSDEALER Staff

The construction unemployment rate rose to 18.8% in November as the sector lost another 5,000 jobs since October, according to the Associated General Contractors of America, which just released an analysis of new federal employment data. The analysis indicates that the construction sector has been the hardest hit of any industry during the economic downturn, association officials said.

The industry’s 18.8% unemployment rate, not seasonally adjusted, was the highest of any industry and roughly double the overall unemployment rate. The construction industry has lost 2.1 million jobs since employment in the sector peaked in August 2006, according to the association. Since November 2009, the industry has lost 117,000 jobs, while the private sector added 1,088,000 jobs.

“The unemployment report shows construction still has not broken free of the recession that has gripped the industry since 2006,” said Ken Simonson, the association’s chief economist. “Other than the stimulus and other temporary federal programs, it has been a pretty bleak four yours for the industry.”

The only construction segment to add jobs in the past years has been heavy and civil engineering construction, which has benefited from federal stimulus, military base realignment and Gulf Coast hurricane-prevention projects, Simonson observed. Meanwhile, residential construction has lost 79,000 jobs over the past 12 months, while nonresidential specialty trade contractors and nonresidential building — the other two segments in the nonresidential category — have lost 62,000 jobs.

Association officials cautioned that the stimulus and other temporary federal programs would begin winding down in 2011, most likely before private, state or local demand for construction picks up. They urged Congress and the Obama Administration to act on a series of long-delayed legislative bills for water, transportation and other infrastructure programs.

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