Power drills, by the numbers
Consumer research from The NPD Group shows that after a slight sales dip in the 12 months ended July 2011, the drills category has seen a boost back to levels above those of two years ago. Dollar volume from August to July rose 8.4%, with most dollars overall (61.9%) spent in warehouse home centers.
Driven by ever-improving battery technology, the majority of drills sold in the 12 months ended July were cordless drills, but sales of corded products have seen an uptick over the past two years.
Based on the data, the typical purchaser of a power drill in the past 12 months is 18 to 34 years old, lives in the South, earns less than $30,000 a year and is definitely a male (77.2% versus 22.8%).
Power drills are one of the few categories in which brand beats price by a wide margin as a reason for purchase. But as a reason to shop a particular retailer, price remains a top motivator.
Methodology: NPD data are based on monthly tracking of more than 30 home improvement-related categories and 30,000 opt-in consumers.
*2012 data reflects the period August 2011 through July 2012.
**Key: WHC: warehouse home center; MM: mass merchant; DS: department store;
SS: specialty store; HS: hardware store
*** More than one answer accepted
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A message made for TV
Even though he’s appearing on a prime time, national television commercial, Beyond Hardware True Value owner Matt Shapiro hasn’t gone Hollywood.
“I have to admit, I did very little besides show up and read my lines,” he said.
Shapiro, co-owner of stores in Canandaigua and Penfield, N.Y., and more than 20 other real True Value hardware store owners performed in the commercial by showing off their personalities, their storefronts (through the magic of technology) and their passion for the hardware business.
The TV spots employ quick editing that jump from store to store and feature owners completing each others’ sentences — especially the line: “We’re all different, but we’re all the same.” The 30-second spots ran in prime time in April and May, and are coming back for an encore performance in October.
Director of marketing Blake Fohl said there were several strategies behind the commercial. The co-op sought to showcase the true stars of hardware and to build the perception of the brand as a collection of local business people. “Your brand really lives and comes to life with the store and the people in the store,” he said. “Why not make them the center of the campaign?”
Casting for the commercials took place at the co-op’s Fall Market, as dealers were invited to line up and look into the camera. The casting team, a combination of True Value executives and agency professionals, were looking for retailers with a variety of accents and a consistent passion. With 200 retailers lined up for their turn to read and make eye contact, casting wasn’t easy, Fohl said. “Believe me, there were very few people who did not have passion.”
One of those passionate performers was Karen Duggan of Horn’s True Value.
“The idea was letting customers look at our stores and see that we may all look different, the stores might be different, but we are the same in how we do business and what we are trying to achieve,” she said.
For the participants in the commercial, the results were pretty consistent, too — a steady stream of recognition in the local market.
“It did generate a lot of customer response and excitement. People would say things like, ‘Wow, you were on national TV!’ ” Duggan said. “One person told me, ‘Oh my God, we were on a cruise ship in the middle of the Gulf of Mexico, and I saw you and Bernie on TV!’ ”
Though its difficult to pinpoint its impact on sales, given Horn’s other marketing efforts, she believes the exposure will pay dividends the next time a customer needs something for his or her home.
Shapiro feels the same.
“We were able to leverage the commercial into some great local PR, and lots of our customers recognized me and came in just to tell me,” he said. “Of course they also purchased a few items.”
Across the country, there was more of the same.
“In the end, what I was most surprised by were the number of our customers who continually come into the store and told me that they saw the commercial,” said Alan Bryant of True Value Homecenter in Oakhurst, Calif. “It has become a regular conversation with people at the store and around town.”
Bryant also saw an “explosion” of interest on Facebook, as people were sharing the commercial.
Measuring the success of the advertising campaign on a broader scale is a more difficult matter, but Fohl said the spots have succeeded on several fronts.
“We have done some pre- and post-analysis, and the commercial generated excellent scores on awareness of the brand,” he said. “If you look at the anecdotes and read the main message recall, they parroted back what we were trying to get across.”
One bright spot was awareness among Generation Y consumers, “people who grew up thinking the hardware store was a big box.”
While it looks like everyone is standing in front of their stores, the owners were actually shot in front of a giant green screen in Chicago. Architectural photographers were sent on location to get the backdrop for each store.
“I never realized how much was involved in filming a commercial,” Bryant said.
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Walking the Aisles
From the outside, the Mount Prospect, Ill., True Value hardware store looks a lot like any other True Value store. It’s only 2 years old, so the sign above the door appears extra bright red and white.
When you walk through the entrance, it still looks a lot like most of the Chicago-based co-op’s fashion-forward Destination True Value format stores. At 12,600 sq. ft., it’s a little bigger than most. The registers are ringing up front, and a racetrack is punctuated by 38 endcaps promoting product, as well as ideas for the home.
But this store is unique in the world. It’s the only company-owned True Value store, and its mission in life is to provide the co-op — and by extension, its members — insights into efficiency and productivity.
True Value CEO Lyle Heidemann recently guided visitors through the store. And there seems to be at least one story, or strategy, in every aisle. But it’s the big picture of the entire store that is most interesting to the folks at True Value headquarters.
For instance, take the six core hardware categories — the ones that are insulated from seasonal or calendar fluctuations. Heidemann identifies them as tools, electrical, plumbing, paint, automotive and decorative hardware. These areas represent about 65% of a hardware store’s business. (Lawn and garden and seasonal account for 25% typically, and the rest is made up of various niche businesses, he said.)
“What we’ve done here is reduced the lineal footage of the core day-in and day-out hardware business with the whole idea of testing to see whether we can get the same amount of business in 15% less space,” he said. “So the goal is to improve productivity by about 15%.”
Higher productivity gives the store owner options, Heidemann said. It makes smaller stores more marketable, it makes current stores more profitable, and it allows stores to reinvest their square footage into other categories. That last option is what True Value has done in Mount Prospect.
Here are some of the highlights of the tour:
Both sides of an aisle (a canyon, in True Value lingo) are dedicated to housewares. “Cleaning supplies is always among the top categories, and that’s about every week of the year,” Heidemann said. “You might not think of this as a hardware category, but this works in just about every store.”
In fact, he said, data suggest that it is difficult to reach the point of diminishing returns when selling housewares. “The more space you give it, the more it sells.”
The prices probably aren’t as low as Walmart, but they definitely compete with the Jewel-Osco across the street, Heidemann said.
• Dollar stores
The dollar-store aisle (another canyon) in the Mount Prospect store was established in August. After about nine months of testing, the co-op will be able to make conclusions about its productivity and profitability. Heidemann is optimistic.
“In a lot of our stores, the dollar-store concept will work, because they have the latitude to get into some things from a convenience standpoint that work for a female customer,” Heidemann said.
• Female friendly
One of the keys to the merchandise assortment and design of the Destination True Value format, according to Heidemann, is female friendliness.
“The female customers shop lawn and garden, paint, pet, bird, dollar, cleaning supplies and housewares,” he said, pointing to successive aisles around the racetrack. “So when that female comes in, picks up a cart, makes the round, she sees colors and the adjacencies, all to make it more friendly to shop for her.”
Heidemann said the industry as a whole needs to become more female friendly. Then he quickly corrected himself: “Actually, I don’t care about the rest of the industry, but we’re making Destination True Value geared to the female customer.”
Heidemann guided visitors back to the plumbing aisle where some of the maintenance and repair items displayed on rolling screens that added linear feet without taking up any space. He pointed to the faucet stems.
“Not many people under the age of 30 know what a faucet stem is,” Heidemann said. “But this is still a category for the maintenance and repair guys. You need to have faucet stems. You need to have O-rings. If you didn’t have these, you wouldn’t be considered a hardware store.”
The plumbing category will also require old-school knowledge to succeed.
“The homeowner doesn’t give the teenagers credit for knowledge, so you can’t have teenagers up and down the plumbing aisle,” Heidemann said. “The homeowner doesn’t think the teenager has installed a faucet or repaired a toilet, and I agree with them.”
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