Ordering at House-Hasson market to be upgraded
House-Hasson Hardware is launching a new buying program at its upcoming Atlanta dealer market through which dealers can use hand-held electronic devices to order products straight from vendors on the market floor.
“With today’s technology we want dealers to have the option of electronic ordering, which eliminates paperwork and speeds products to their stores," said Don Hasson, House-Hasson president.
The House-Hasson Atlanta Dealer Market is scheduled Thursday, June 23, to Saturday, June 25, at Atlanta’s Cobb Galleria Center.
Beginning Friday of the market, House-Hasson dealers will be able to scan stock merchandise using CipherLab handheld units, about the size of a cell phone, said Mike Woolf, House-Hasson VP sales.
“Products — including coupon and bonus buy items — can be scanned using a bin or UPC code into the CipherLab and the order transmitted prior to dealers leaving the market,” Woolf said.
“CipherLabs are used by a great many House-Hasson dealers in their stores to order products,” Woolf added. “Most dealers transmit to us using a telephone or by downloading it into the House-Hasson Electronic Toolbox program.”
The sole previous method of market ordering was for House-Hasson to print a book of Bonus Buy items and coupons. A dealer sticker was put on a product order, along with the quantity, as the written order was made. That system also remains in use.
“Now, if the dealer chooses, CipherLab is there as well,” Woolf said. “Using a CipherLab is a time saver, and dealers will receive copies of their orders as they leave.
“Until now there wasn’t a reason for dealers to bring their CipherLabs to a market,” he said. “Our objective is to provide them the same convenience at the market that they have in their stores.”
Another Atlanta market shift from past practice is to open up Friday’s market session for Bonus Buy items, he said. Previously, Bonus Buy events were held on Saturdays.
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Declaration of Independents
“Buy from the merchants who are your next-door neighbors. They are the folks who go to church with you, buy from other local firms and keep the money flowing within the community. Your local independent retailer is a longtime resident of the area who actively participates in and generously supports the community.”
That passage was written by a retail store owner, who worried about large competitors encroaching on his turf. The year wasn’t 2011, 2001 or even 1991.
It was written in the 1930s by a James Lowry. He operated a retail plumbing and heating firm that felt threatened by a growing number of chain-store competitors. Back then, he was fearful of the rapidly expanding Sears, Roebuck and Co., and Montgomery Ward, which offered essentially the same lines of plumbing supplies that were available in his store.
More than 70 years later, the players have changed, but much of the story line has not. Independents are leery — and rightfully so — of big-box competition, and they’re looking for every edge.
Some of them are finding it in independent-minded vendors. In the corner of the independents are allies including Benjamin Moore, Stihl and John Deere — brands that have the power to decide how they are sold. Then there are smaller players such as Fertilome that might lack the mass following, but share the independent commitment.
But with the three leading big-box home centers accounting for about $125 billion in sales, is it a good idea to avoid them?
For Benjamin Moore, which has sold to independents since 1883, the answer appears to be “yes.” A spokesman said the company has no reason to switch allegiances. “We’ve seen hard times before,” he said. “We’ve had a very successful track record selling to our independent network.”
Ditto for Fertilome, which began 43 years ago selling only to independent garden centers. “We were built on a commitment to independent dealers and have never thought of deviating from that course,” said Geneva Aragon, marketing operations manager for Fertilome.
The company’s 1968 beginning pre-dated Home Depot and Lowe’s. Still, as Home Depot and Lowe’s have grown and prospered, Fertilome hasn’t budged from its position. “No. No, absolutely not,” Aragon said. “We have a loyal customer base of independent retailers and distributors, and they are adamant about making sure that their customers have access to their best product. At the same time, we are very customer-service driven. We are focused on the independents. It is a partnership that has served their needs and our needs very well, and so there is no need to change it.”
Steve Spiwak, Kantar Retail’s lead home improvement analyst, said not every supplier has the “luxury” to pick and choose channels of distribution. “Every sale is absolutely crucial to rekindling and sustaining growth,” he said. “Brands may feel the ‘big-box channel,’ such as Home Depot and Lowe’s, would dilute the brand’s equity and wish to avoid this, but such an attitude is a luxury in the wake of the housing bust and ‘Great Recession’ — with no end in sight to the housing pain.”
Changing channels and partnerships
The retail landscape has blurred to such a degree, experts contend, that consumers will shop for groceries in Target and paint in Pottery Barn. The latter is one reason Benjamin Moore is pushing its relationship with Pottery Barn, Spiwak said. “Finding shelf space at Home Depot or Lowe’s in paint would be nearly impossible because of the strong lines of exclusives at each retailer,” Spiwak said. “So they need to find other channels out of necessity.”
Benjamin Moore is established with Ace, which is engaged in a five-year plan to expand its paint business to 8% market share, up from its current 4% level, according to the co-op.
Stihl at the top
Stihl has garnered almost as much attention for its top-selling power tools as it has for its bodacious advertisements championing the cause of independents. Stihl’s devotion to its independent dealers is the core of its marketing strategy. Hans Peter Stihl, chairman of the supervisory board of Andreas Stihl AG & Co. in Waiblingen, Germany, told The Virginian-Pilot recently why Stihl sticks to its declaration of independents. “These big boxes are not able to give service,” he said. “No service, no sale.”
Stihl’s advertising campaigns have both reinforced its commitment to the independents and tweaked the big boxes. “Why is the world’s number one selling brand of chain saws not sold at Lowe’s or The Home Depot?” one ad read. “What makes this handheld blower too powerful to be sold at Lowe’s or The Home Depot? You see, we won’t sell you a leaf blower in a box, not even a big one.”
Some market experts say Stihl’s approach works for manufacturers that can prove their products are worth a premium. Stihl insists its machines are worth the extra cost, pointing to features such as the quality of the chains, which are made in Switzerland and shipped worldwide.
Having it both ways
Some premium brands find ways to sell both mass merchants and traditional channels. John Deere & Co. sells to both independent dealers (its biggest channel) and Home Depot/Lowe’s, and represents probably the best example of a stellar home-related brand that has forged an innovative approach to reach customers in new channels while engaging its traditional channel in the process.
“John Deere may be the exception,” Spiwak said. “For the vast majority of suppliers — brand names and no names alike — the question is where do you go with your products? A channel like Home Depot/Lowe’s where untold numbers will shop? Or at independent dealers, where the traffic is much lighter, but the service could be much greater.”
Spiwak said Deere showed its dealer networks that it they could benefit from sales of Deere products through big boxes by being the go-to guys for setup and post-purchase service. “There’s not much overlap between Home Depot and Lowe’s and [Deere’s] dealer customer bases, so it’s a net win-win,” Spiwak said.
Briggs & Stratton Power Products Group also sells its products through multiple distribution channels, including home centers, warehouse clubs, independent dealers and mass merchants.
Benjamin Moore thinks so highly of its independent retail exclusivity that it invited outsiders to develop their own video that cleverly depicts its “Not in a Big Box” philosophy. Benjamin Moore offered prizes ranging from $500 to $5,000 for the top videos.
In its video message, the company wrote: “In an era where goliath retailers seem to have all but obliterated local shops, Benjamin Moore has stood fast in support of our independent retailers. We have done so since our company began back in 1883. … Our reasoning is simple: We produce outstanding quality products and want to ensure that our customers receive unsurpassed service and trusted counsel as part of their product purchasing experience.”
Why big boxes matter
Despite the expertise and customer care that many independent retailers are known for, studies show consumers shop at Home Depot/Lowe’s for their convenient locations and selection. “Big boxes will remain the big players in urban/suburban markets in core home improvement categories such as paint, outdoor equipment and tools,” Spiwak said. “As categories get more competitive, it will be imperative for older, venerable brands to innovate and refresh the offer, or the big boxes won’t be interested anyway.”
A May circular from Home Depot reflected a perceived advantage of the big boxes. “If anyone tries to go lower, we’ll beat their price by 10%.” e
In the June 6, 2011 issue of
In the June 6, 2011 issue of Home Channel News, Ken Ryan wrote a good piece entitled “Declaration of Independents.” In the article he wrote about some building material vendors who sell only through the independent dealer channel. For most of these vendors, the independent channel is as relevant today as it was 100 years ago. I agree with the vendors Ken Ryan cited who believe the independent channel provides the services, the expertise and the care that customers look for when buying big ticket building product items. I applaud Mr. Ryan for highlighting the strength of a channel that some experts think cannot compete with the big boxes. I think he is wrong, however, when he suggests that supporting the local independent dealer involves paying a price premium. Mr. Ryan cites “some market experts” who argue that selling through independent dealers can only work “for manufacturers that can prove their products are worth a premium.” This implies that the independent channel prices are typically higher than the prices on the same items at the big boxes. This is not true. The resilience of the independent building material dealer is not based on loose sentiment or vague loyalty. While service levels and expertise are typically very high at independent dealers, prices are just as low as at the boxes – sometimes lower. The fact is, customers need not pay a premium to take advantage of the many virtues they find at independent dealers. In fact, given the efficiency of today’s supply chains, most independent dealers can provide both extra services and competitive prices especially where big project items are involved. The idea that customers have to pay a premium to shop at independent dealers is a myth. At Wolf, we know independent dealers can compete with the big boxes on price as well as on quality. That – more than loyalty and friendship – sustains the independent dealers today, and it will sustain them well into the future. As Ken Ryan notes, experts were pronouncing last rites over the independent building materials dealer in the 1930’s. Some experts are still doing it today. They were wrong then and they are wrong now. The independent channel is very much alive, well and competitive and as a result Wolf is proud to reaffirm its own declaration [on behalf] of independents.
Golden advice from retail winners
Las Vegas — The retail panel discussion started with customer service and advanced to strategic planning. From there, it detoured at automatic doors — apparently still a novelty in rural Texas — and finished with a somewhat optimistic economic forecast.
Not bad for the first-ever Golden Hammer Retail Winner Panel, held in Las Vegas during the National Hardware Show. The breakfast event panel discussion, which followed the Hall of Fame induction of Lowe’s president Larry Stone, showcased the collective wisdom of Lenexa, Kan.-based Westlake Ace Hardware, Price Hardware True Value of Atlanta, Texas; and Leeds, Ala.-based Marvin’s Home Centers.
Some of the highlights from the panel are below:
On customer service
George Smith, CEO of Westlake Ace Hardware, the 2011 Retailer of the Year, explained his company’s new G.R.E.A.T. service model — starting with G for “greet the customer proactively,” and finishing with T for “thank them for their business.”
Smith added: “It’s fairly simple and basic, and that’s what you want — keep it easy, and keep it simple.”
Craig Cowart, executive VP and chief merchandising officer for Marvin’s, said “aggressive customer service” at Marvin’s isn’t based on staffing level, it’s based on attitude. “We don’t have numbered aisle signs,” Cowart said. “We want the associate to walk the customer to the aisle and sell as a solution, not just sell a product.”
On store design
John Price, co-owner of Price Hardware True Value — the 2011 Golden Hammer “Tools of the Trade” winner — said the company’s move to a Destination True Value format has had a big impact on how the customer shops. The 28,000-sq.-ft. store has new flooring, a new layout, new signage and a new feel, he said.
“We no longer have somebody come in and get a half-inch PVC elbow and go to the checkout and walk out,” Price said. “I’ve noticed people get shopping carts and they shop, and we’ve never had that before. So that hard work was well worth it.”
At Marvin’s, Cowart described the company’s new format store as a combination of big home center with home town hardware store. “What we did was design the store around our mission statement, which is ‘making our customers’ lives easier,’” he said.
“But it’s not just store design,” Cowart added. “What makes that work is our store associates.”
Price explained the origins of his Price Hardware’s “Kitchenette” store within a store. The brainchild of his wife, Carol, it reflects a move beyond basic housewares to a high-end gourmet kitchen center. Classes and events in the kitchenette draw people from as far away as 90 miles, he said. “More importantly, she has brought a strong female focus into our store,” Price noted. “Our paint department, which is right across from the Kitchenette, is up 23% since we did this. So, it works.”
On automatic doors
A surprising result of Price Hardware True Value’s renovation: excitement over the entry system. “Atlanta, Texas, is a town of 6,000 people,” Price said. “One thing we noticed was that a lot of the people seemed to be fascinated with the automatic doors.”
On strategic planning
Said Smith: “When we redefined our mission statement, we did it in three ways. We looked at things we were good at and should hold onto. We looked at things we should jettison. And we looked at things we should add to our business model from a values and commitment perspective.”
On the economy
Price said the bigger-ticket items have seen a small increase. “People seem to be getting a little more comfortable about buying larger-ticket items,” he said.
The 28-store Marvin’s, which last month opened a new store in Monroeville, Ala., remains optimistic that eventually business conditions will turn around, but right now it is maintaining a very conservative approach to spending. “We’re still trying to do more with less,” Cowart said. “We’re very critical of the decisions we make, because every move counts.”
Visit homechannelnews.com for more from the Golden Hammer awards.
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