Lithium-ion puts juice into tools market
The market for cordless power tools may be feeling the effects of a soft economy, but a clear bright spot has been the advance made in lithium-ion battery technology, which has given new vigor to this category.
“Some of our customers have reported that it’s like their old tool is on steroids,” said Kevin Spicer, store and purchasing manager for Moynihan Lumber, of North Reading, Mass.
The introduction of lithium-ion technology has been a significant leap forward for the power tool industry, experts say, in that it has allowed manufacturers to develop cordless tools that better meet end user needs. Today, power tool suppliers and battery manufacturers are working to tap into the full potential of lithium-ion, which means continued lithium-ion chemistry development, battery cell development, electronic power management improvements, extreme temperature performance, run time, technology-user interface and storage and cycle life. The result is a spectrum of choice for users: the same power with less size and weight, or the same size and weight with significantly more power.
“The market for lithium-ion continues to expand dramatically, mostly at the expense of NiCd,” said Paul Fry, group product manager for Milwaukee Electric Tool. “Milwaukee is experiencing unprecedented growth in its cordless business, and the majority of this growth is due to lithium products.”
For years, power tool users relied on 18-volt NiCd batteries as the primary source for powering cordless tools because it was said to provide the best balance among performance, weight and price. But progress marches on.
Waters True Value, based in Salina, Kan., has seen the demand slowly move from NiCd and NiMH to lithium-ion. “Our customers look to us for the latest in power tools, and they have been looking for lithium-ion products,” said Berkley Buhrle, merchandising manager, noting that the compact series from Makita has been the most successful for them. “We also carry the regular lithium-ion products, but I believe customers like the price points of the lighter Makita items.”
For Moynihan Lumber, the new lithium tools have been a bright spot in the category, Spicer said. “The plus for selling these tools is that they are lighter, will run longer and can be charged or cycled more times,” he said. “These features are easy to sell to the contractor who may own the older tools with batteries that are getting ‘tired.’”
Lithium-ion batteries are much lighter than NiCd, making a switch a no-brainer for many users. In the 18-volt platform, for example, the technology takes about a pound off of each tool. The result: the user gets increased power in a smaller pack age. An individual NiCd battery can hold 1.2 volts, while a single lithium ion cell can hold and use up to 3.6 volts and still weigh less than a NiCd cell.
Less weight combined with compact size and more power make lithium-ion tools easier to handle and more productive, which is a major advantage, according to suppliers and dealers.
“Regardless of the manufacturer, the themes that seem to be coming through are increased run-time, number of recharges and storage life, with decreased size and weight,” Fry said. “There is also the ‘green power’ message of lithium-ion, which is more environmentally friendly than the NiCd alternative.”
While there is no doubt that lithium-ion has energized the cordless power tool market, is that message getting through to dealers at the s tore level? Buhrle of Waters True Value said his stores have effectively used promotions to drive sales. “Wekicked of f trying to tell this message last year by selling up an endcap that Makita made available, which we called the White Christmas promo,” Buhrle said. “A lot of customers came in already knowing about the technology, which I attribute to the Internet. It is a challenge to keep all of our team members up to speed, but we do it with a combination of face-to-face visits from our reps and company literature and sometimes DVDs.”
Spicer said the best merchandising method is to let customers pick up the tool. “The difference in weight gets their attention every time,” he said. “Then let ting them know that they will be get ting more power, run time and cycles gets them thinking. More productivity, less down time and fewer replaced batteries. This is the best way to soften the blow on the price of the new technology.”
Spicer added, “The difference in weight is dramatic. You can move up to a tool with twice the power of an 18-volt tool and be a third less heavy. Usually you are trading one for the other.”
Some manufacturers have offered to make the new lithium batteries “backward s compatible” to work with the older tools. This has all owed retailers to up-sell customers who are purchasing a battery to the newer technology with out the investment in a new tool.
However, Fry cautioned about retrofitting old NiCd products. “The message from the user base is clear: it is not enough to slap a lithium-ion battery on old NiCd tools,” he said. “The tools that are selling represent significant change in either form or function, with reduced size/weight and longer run time being the key drivers.”
Milwaukee is driving awareness by taking its message directly to the user with job-site marketing and demo events as well as new merchandising for distribution.
Dealers agree that the biggest challenge to lithium-ion power tools is the cost, which in this environment can be a deal breaker for some. Spicer said his lithium products can be almost twice the price of the older technology. “I believe that the pricing will moderate, and the customer will be more aware of the benefits of this technology over time, so that the decision to buy will become easier,” he said.
Other retailers contacted said the key is educating the customer and to drive home the point that while the lithiumion tools may be twice as expensive as NiCd, you’re getting three times more life with the product.
For the educated user, cost is not a huge barrier. Moynihan Lumber has already seen an improvement from the initial generation to the latest. As battery technology is pushed further in all industries, Spicer said they are certain to see more improvements in the cordless tool technology.
Lithium-ion technology is still new and advancing. Improvements in battery technology also drive innovation in other components, namely motors that run longer, stay cooler and are more durable. Many manufacturers are putting new motors on their lithium-ion tools, leading to such features as built-in LED lights, belt hooks, molded rubber grips and battery pack “gas gauges”—all things that make the tool more convenient for the user. “We continue to see dramatic amounts of money pour into lithium-ion battery research and development from sources far larger than power tools alone,” Fry said.
BMHC moves to OTC trading
Building Materials Holding Corp. (BMHC) has moved its stock listing to the Over the Counter Bulletin Board (OTCBB) following the company’s removal from the New York Stock Exchange. The San Francisco-based pro dealer will trade its common stock on the OTCBB under the symbol “BLGM.”
On Oct. 30, its first day of trading on the OTCBB, the stock closed at 28 cents a share.
The OTCBB is an electronic, regulated quotation service that displays real-time quotes, last-sale prices and volume information for over-the-counter equity securities not listed on national securities exchanges. Companies listed on the OTCBB are still subject to SEC filing requirements and other regulatory authority.
The New York Stock Exchange suspended trading of BMHC’s common shares on Oct. 29, because the company is no longer compliant with its market capitalization requirements.
BMHC is scheduled to report its third-quarter financial results on Nov. 6.
Orgill to distribute new stain remover product
Winning Brands, a Barrie, Ontario-based company, reports that Orgill, the Memphis, Tenn.-based distributor, has approved Winning Colours Stain Remover for representation by Orgill’s 250-member sales force.
“The decision by Orgill to let its sales force introduce Winning Colours to Orgill’s vast account base brings several thousand potential retail points of sale within reach, adding to a national structure of 250 professional sales representatives,” said Winning Brands CEO Eric Lehner. “That’s unprecedented reach for Winning Colours Stain Remover. I expect that it will have a significant impact.”
Winning Brands manufactures Winning Colours Stain Remover for consumer and commercial use as an environmental supplement to traditional solvents and cleaners. Large-scale production takes place in Canada as well as at an affiliated manufacturing facility in Grand Rapids, Mich.