Pet products emerge as retailer’s best friend
Chicago — Here is a statistic that is raising optimism within the True Value pet department: 72% of pet owners consider their pet a member of their family. And what’s more, 70% of dog owners think their dog understands how they are feeling better than most people do.
It’s no secret that home owners love their pets, but the category is attractive to independent hardware stores for more retail-centric reasons, according to panelists on a True Value seminar here at the co-op’s 2013 Fall Reunion.
The average pet owner spends $630 on pet food per year, said Bill Hancox, director of marketing insights and analytics for Chicago-based True Value. Pet sales across retail have grown at a clip of about 3% per year, even through a major recession. And no single retail channel dominates the pet market.
"There’s no reason that our stores can’t get their share of this business," Hancox said during the presentation titled "How Pet Can Be a Winning Business for You" here at the co-op’s 2013 Fall Reunion.
Pet is a growing part of the overall business at Kruegers True Value in Neenah, Wis., according to fifth-generation owner Jim Webb. "We want to create a culture in the store, and we want to be known as a welcoming place for pets," he said. "And customers love that."
Webb says Kruegers has been in the pet business to a serious degree for about a year and a half, dating back to the initial effort of the True Value co-op’s expansion and promotion of the category. A sign outside Kruegers reads: "Well-behaved pets on leashes are always welcome here." The store regularly takes pictures of pets and posts them online.
Webb and other panelists explained that the margin on a typical bag of dog food is below average, but the category is a big booster in customer traffic. "You’re seeing a repeat customer on a regular basis," Webb says. "The pet is always eating. And that gives us an opportunity to offer the pet owner something else."
Willis Qualheim, president of Qualheim’s True Value in Shawano, Wis., also believes in the drawing power of pet supplies. "If you told me a few years ago that people would pay $55 for dog food, I’d say ‘your nuts.’" he said. "But a lot of our sales are in the premium end at $45 and up."
Qualheim said the pet category lends itself well to marketing events. The store’s Pet and Petal event includes face painting, cotton candy and visits from pet food companies and the Humane Society.
The retailer also said True Value’s involvement makes it easier to order pet merchandise from one source, as opposed to five outside vendors.
In addition to its own Pet Expert private label brand, True Value recently introduced five new pet brands into the mix: Royal Canin, Natural Choice, Triumph, Nature’s Recipe and Iams. Marketing materials range from advertising programs to paw-print floor graphics.
"The real benefit for you is footsteps," said Kevin Rewerts, True Value’s divisional VP for farm, ranch, auto and pet.
"What we are offering here is guidance on how to be in the business, up to date products," he addid. "We offered a one-stop shop to make it easy for you to be in this business so that you can buy a single bag or a a pallet of goods to meet your needs."
Retailers starting in out in the pet business are advised to find space for the department, ideally in the front of the store in a female-friendly area, according to the panel.
The co-op’s wholesale sales of pet are expected to increase 77% in 2013, according to executives.
"Have fun with it," said Webb, by way of advice. "Business should be fun, and this is."
New CEO enters spotlight in Chicago
Chicago — During his first general session speech to the assembled body of True Value dealers, CEO John Hartmann expressed a willingness to embrace change.
He started by announcing a symbolic change at the True Value headquarters, which will be known from now on as the "Retail Support Center."
Hartmann’s background includes positions at Home Depot (which also describes its headquarters as "The Retail Support Center), HD Supply and New Zealand hardware co-op Mitre 10. He is also a former field agent of the FBI. He took over as CEO on May 31, replacing the now retired Lyle Heidemann.
"In retail, staying the same is actually going backwards," the new CEO told dealers. "We need to lead change."
He added: "We must change faster to support our membership more directly than we ever have in the past," Hartmann said.
Since taking the helm, Hartmann says he has traveled extensively to meet with members. "You shared with me back that in your opinion, we followed too much," Hartmann said. "You said, ‘John, we need to lead. We need to set our own course.’ And I couldn’t agree more."
Hartmann delivered his address here at the 2013 True Value Reunion in front of an audience of about 5,000 people. He generated spontaneous applause when he explained the co-op was looking for ways to make it easier for existing store members to adopt the Destination True Value store concept and other store upgrades.
He also referred to a project to create a "true one-on-one approach to marketing" for members. He added that he is committed to building a more responsive culture along with the three pillars of engagement, growth and efficiency.
Hartmann said he will be focused in the coming months on putting together the details of a strategic plan to map out the next five to 10 years.
To vendors, Hartmann offered his "personal commitment to continue to engage them on the development of our strategic plan."
To retailers, he said: "We have a terrific solid foundation to build on. We’re a recognized brand. We have a large number of passionate retailers committed to their organization." But, he added, "We have plenty to do."
Hardware Store All-Stars: Montana, Wyoming and Colorado
HCN congratulates the 50 hardware store, home center and farm & ranch retailers who made the annual HCN Hardware Store All-Star list.
Now in its third year, HCN’s annual list of high performers recognizes hardware stores — one from each state — that are outstanding in their field. The complete list and analysis can be found in the September issue of HCN. Meanwhile, HCN Daily will work its way across the country with mini profiles, continuing this week with Montana, Wyoming and Colorado.
Montana: When it comes to Missoula’s Montana Ace-Trempers, it’s kind of a long story. Owner Stewart Weis gives us the long of it on his store’s website, which is to say, in a nutshell, that big-box competition closed one door for his family in Chicago and opened another far more inviting one in Montana. Founded on his fortuitous move, Montana Ace -Trempers is now, at 38,500 square feet, one of the biggest Ace stores in the nation. As further proof that he made the right move, Montana Ace-Trempers has been voted best hardware store for eight consecutive years by the Missoula Independent’s Best of Missoula Poll.
Wyoming: Fancy a pair of new boots? Murdoch’s Ranch and Home Supply, scattered throughout multiple locations in Wyoming, is a requisite hardware-store-cum-farm&ranch-destination. Carrying everything from cowboy boots to veterinary supplies to corny farm-themed jokes on its website, Murdoch’s is the kind of concept that is born on the back of the napkin and comes to fruition as a cornerstone of its community.
Colorado: Joseph’s Do it Best Hardware, situated in Fort Collins, is a bit of an over-achiever. With exceeded marketplace expectations and a forward-looking prospect of further expansion opportunities, the community favorite lives and dies by its level of engagement. The store sponsors popular Handy Women’s classes run by employees, who also maintain the lively spirit of the location through collaborative and creative merchandising.
Next week, HCN will highlight All-Stars in New Mexico, Texas and Oklahoma. For the full state-by-state list of HCN Hardware Store All Stars, click here.