Market delivers tips to improve price image

BY Steph Koyfman

Boston — The phrase “price image” plays a key role in merchandising best practices, according to a seminar presented by Paul Ohrberg, Orgill’s Director of Retail Concepts.

The presentation, titled "Merchandising Techniques: Increasing Your Add On & Impulse Sales," covered merchandising techniques for dump bins, rolling racks, stackouts, counter displays, check out areas, queing fixtures, endcaps, clip strings, wing panels and specialty fixtures. 

Among the more prescient takeways was the golden rule of minding price image – that is, promoting aggressive pricing in highly visible locations as well as rotating promotional items frequently.

Ohrberg delivered the seminar Friday at the Orgill Fall Market, held at the Boston Convention and Exhibition Center. 

"You want to have a great price on an endcap or a power buy to promote the perception that you’re a low-priced store," said Ohrberg. "Some of you might have a lot of loyalty; customers who are there every day or week. People like to see change. Keep the store looking alive."

Ohrberg, who has years of retail experience under his belt working at Home Depot, lumberyards and various hardware stores, was partially responsible for the Cobblestone Hardware and Windsor Market concept stores, as well as the various product showcases on the Orgill floor.

Ohrberg highlighted the importance of using temporary dump bins, rolling racks, stack displays, main entrances, endcaps and checkout counters to promote a sense of urgency and stimulate impulse buys.

The presentation included some specific tips, including:

• limiting product selection for temporary dump bins, 
choosing items that can be stacked safely, 
displaying larger items at the main entrance to encourage the use of a shopping cart, 
using service counter displays to remind customers of something they may have forgotten, 
keeping checkout display items generally under five dollars; and 
using endcaps to promote new items with good price value.

"If you scare them away on price with the first thing they see, they’re going to think you’re an expensive store," he said. "Price image is key."


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Orchard Supply Hardware CEO to depart

BY Ken Clark

Moorsesville, N.C.-based Lowe’s said it expects to complete its West Coast acquisition of 72 Orchard Supply Hardware stores by the end of August. When that happens, current CEO Mark Baker will be replaced at the helm of Orchard Supply by Lowe’s executive Richard D. Maltsbarger, the retailer announced yesterday.

Baker, a former Home Depot executive, took over the Orchard Supply job back in March of 2011. According to the press release announcing the move, Baker "informed Lowe’s of his decision to accept a position as president and CEO of the Aircraft Owners and Pilots association following the closing."

Before joining Orchard, Baker served as president and CEO for Scotts Miracle-Gro. Previously, Baker served in a variety of senior roles at The Home Depot during his seven years there, including executive VP merchandising. In addition, he was CEO of the Gander Mountain Co., an outdoor retailer, and has held senior leadership roles at Scotty’s Inc. and Homebase, Inc.

Maltsbarger led the Lowe’s team that worked on the acquisition of Orchard.

"We are confident that Orchard’s talented management team, led by Richard Maltsbarger, will continue to execute their successful repositioning strategy and deliver long-term profitable growth," said Lowe’s CEO Robert Niblock. 

Orchard will also lean on executive leadership from Steven Mahurin, chief retail officer and Chris Newman, CFO and head of development.

Lowe’s says that it intends to run Orchard as a separate, standalone business and keep its headquarters in San Jose, Calif. 

To acquire the California-based hardware-store chain’s 72 stores, Lowe’s will pay about $205 million, and also assume the payables owed to nearly all of Orchard’s supplier partners. The deal was approved by the U.S. Bankruptcy Court for the District of Delaware yesterday.

Lowe’s currently operates 110 stores in California, compared to Home Depot’s California store count of 223. According to Lowe’s, Orchard brings locations in "high-density, prime locations" and smaller, neighborhood stores that are expected to complement its big-box presence in the state. 


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Who do you view as your biggest competitor?

Handy Hardware dealers return to business in San Antonio


San Antonio — Handy Hardware Wholesale has returned to normalcy — or pretty close — after a post-bankruptcy transition from a hardware co-operative to a for-profit wholesale distributor. 

The Houston-based company’s first show under the ownership of Greenwich, Conn.-based private investment firm Littlejohn & Co. — and the first under the watch of interim CEO Doug Miller — took place here Aug. 15-17. The show still had a lot in common with previous markets, including attractive giveaways (13 Honda ATVs) and a Saturday morning "breakfast specials" sale event that attracted some 500 dealers.

Foot traffic was expected to be off compared with previous years — a result of the bankruptcy fallout. The company says it lost about 10% of its dealer base from the conversion from co-op to distributor. But according to Miller, the former chief of Jensen Distribution Services of Spokane, Wash., the remaining dealers are "very loyal." 

Miller used the phrase "back to basics" to describe Handy’s new direction. He said the highest priority is to increase the lines-ordered-to-lines-shipped service-level fill rates to 95% or higher. It’s been running in the high 80s and, more recently, in the low 90s, he said. 

"You’re not going to see a lot of big changes at Handy Hardware," he said. "What you’re going to see is better performance." 

Pricing is one of the major competitive issues with the big boxes, and Handy is addressing it. In general, most hardware stores and home centers are too high-priced in popular items, Miller believes, and too low-priced at blind items. And if the hardware store beats the big box on the price of a half-inch galvanized elbow, it’s probably not getting the credit for it. It’s more important to be competitive on high-profile items.

In that regard, Miller is overseeing the introduction of a new retail pricing system: Distribution America Retail Pricing System (DARPS). "We used it for years at Jensen," Miller said. "And it works."

The company is also boosting its emphasis on a proactive sales force, and investing in training. Handy has hired industry veteran Bill Axline (check spelling), a Stanley veteran, as a consultant. 

Handy dealer loyalty was one of the reasons Littlejohn was able to convince Miller to come out of retirement and help right the ship at Handy, he said. The other two major reasons, were the level of vendor support, and the willingness of the new owners to "provide all the support necessary" to grow the business. 

The son of a hardware store owner, Miller was the first non-family member to run Jensen, which like Handy, is a member of Distribution America. "The distribution business is really pretty simple," he said. "We buy in big quantities, and we ship it out in smaller quantities when you want it. We don’t want to make it difficult for dealers."    


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Who do you view as your biggest competitor?