Sales leaders: It’s in the cards
Costello’s Hardware, Home & Garden of New York’s Long Island has three stores ranked in the top 20 of Ace Hardware’s leading gift card sales stores.
It helps having high-traffic stores in densely populated areas, said David Faulhaber, marketing coordinator for the 19-store chain based in Deer Park, N.Y. It also helps having a high-ticket, "giftier" merchandise mix that includes outdoor living, holiday-related products, power tools and housewares.
The same can be said for Simpson Ace of Sumter, S.C., where an eclectic mix of merchandise is a factor in the company’s league-leading Ace gift card performance: $65,000 in the most recent year.
In-store merchandising matters, according to the Ace marketing team. A key area for gift card visibility is near the checkout. But the experts recommend promoting a gift card program throughout the store, with gift card displays, end-caps and signage.
The math is on the side of the gift card retailer, said Jody Allen, manager of Ace Rewards. "The average load of an Ace gift card is several dollars higher than the average redemption, which results in additional consumer visits," she said.
Success requires more than marketing, however. A major factor in Costello’s ability to sell stored value cards is the ability to satisfy them in other areas, said Faulhaber.
"We have a loyal customer base nurtured over time by delivering outstanding customer service," he said.
Tech Talk: ‘Insights’ into Information
Nashville, Tenn. — Bill Harrison of McGuckin Hardware was one of thousands of technology-focused professionals who spent several days under the science fiction-like glass dome of the Gaylord Opryland Hotel here during the Epicor Global User Conference last month.
One of McGuckin’s new efficiency boosters is a solution called Training on Demand, a Web-based video training program, of which McGuckin is a beta tester. "Videos are short and to the point — 10 to 15 minutes on POS, purchasing, inventory management," said Harrison, IT manager for the True Value member that’s also an Orgill customer. "A dashboard keeps track of who does what, and it gives you more control of the training."
But for Harrison, there’s a bigger IT mission behind his attendance. "We’re looking to adopt any applications to help," he said. "And maybe see if there is something we can do differently."
One of the themes of the Epicor "Insights" event, which drew some 3,000 customers from multiple industries, was the challenge and promise of managing the 24/7 connected consumer. During the show, attendees learned that tablets are going to surpass desktop PCs this year, and surpass portable PCs in 2014. And by the end of 2013, there will be more Internet-connected mobile devices than people.
According to Epicor’s Steve Bieszczat, senior VP marketing, taking advantage of progress requires from an independent retailer a strong foundation in the basics of IT. That means that items are loaded, prices are accurate, and a scanned item responds with "a happy beep," he said.
"When these new technologies come along — websites, loyalty programs, tablet point of sale — they magnify the need for best practices," Bieszczat said. "It’s the owner’s leadership within the business establishing best practices that makes a retailer great — not the technology."
For McGuckin, a recently reworked website represents one of the fruits of a busy IT program. (Check out the site’s Flatirons webcam at McGuckin.com.) But there is tough competition for today’s independent, both on the Web and in the form of the billion-dollar mega chains. Can the independent compete? The answer is a bit complicated.
"We’re ahead in that we can be more reactive to changes," said Harrison. "We’re behind them in terms of the money they can throw into something."
The Top 300 ride again
No matter how you slice them, the numbers of the HCN Top 300 Industry Scoreboard reflect the rising housing market, increased spending on the home and an easy comparison with the previous year’s performance.
Of the leading 300 home channel retailers, 277 show positive sales in the most recently completed finished fiscal year, and 12 show declines. Eleven others are listed as flat.
To download the full list of Top 300 retailers, sponsored by the National Hardware Show, click here.
/* Style Definitions */
mso-padding-alt:0in 5.4pt 0in 5.4pt;
font-family:”Times New Roman”;
mso-fareast-font-family:”Times New Roman”;
Key findings from the research:
• The 300 companies on the Top 300 Scoreboard generated home improvement sales of $214.2 billion in 2012, an increase of 4.6% compared with the same companies’ total from 2011.
• Gainers beat decliners by more than 23 to 1.
• Excluding the national home center chains and Walmart, which rank 1 through 4, sales of companies ranked 5 through 300 totaled $58.85 billion — up 10.6%.
The Top 300 list was dominated by LBM dealers, with 171 representatives; Paint stores, 17; Lawn & garden, 12; Home decor, 16; Home center, 50; Hardware store, 16; and Farm & ranch, 18.
Here are the top five revenue leaders from each sector and the sales growth of each sectors’ combined representatives on the HCN Top 300:
LBM(sector: up 13.5%)
• ProBuild (No. 8) • 84 Lumber (No. 11)
• Builders FirstSource (No. 13)
• Stock Building Supply (No. 15) • BMC (No. 17)
Skinny: The LBM field dominated the Top 300, with 171 representatives. The big are getting better: Both Builders FirstSource and BMC showed year-over-year gains of more than 30%.
Farm & Ranch(sector: up 9.3%)
• Tractor Supply (No. 7) • Rural King Supply (No. 21)
• Orscheln Farm and Home (No. 25) • Atwood (No. 26)
• Bomgaars Supply (No. 34)
Skinny: It was another growing year for the farm and ranch sector, where Tractor Supply continues to pace the field — up 10.2% to $4.66 billion in sales.
Hardware Store(sector: up 5.7%)
• Sears Hometown and Outlet Stores (No. 9)
• Harbor Freight Tools (No. 10)
• Northern Tool + Equipment (No. 14)
• Orchard Supply (No. 20)
• Westlake Ace Hardware (No. 32)
Skinny: For the first time, Sears Hometown and Outlet Stores makes its appearance on the Top 300. Harbor Freight, purveyor of low price-point, private-label brands online and in store, continues to ramp up its presence — now at 440 stores.
Home Centers(sector: up 2.8%)
• Home Depot (No. 1) • Lowe’s (No. 2)
• Sears Holdings (No. 3)
• Walmart (No. 4) • Menards (No. 5)
Skinny: The top five home centers rank 1 through 5 on the Top 300. Their combined sales of $165 billion is more than three times the total sales of companies ranked 6 through 300.
Home Décor & flooring(sector: up 11.6%)
• Lumber Liquidators (No. 18) • Great Floors (No. 87)
• Avalon Carpet Tile & Flooring (No. 97)
• Airbase Carpet Mart (No. 132)
• Western Wholesale Flooring (No. 161)
Skinny: There’s a long distance between first and second in the flooring category, where Lumber Liquidators showed the largest sales volume ($813.3 million) and the largest sales increase (up 19.3%) by a long shot.
Lawn & Garden(sector: up 9.6%)
• Armstrong Garden Centers (No. 92)
• Bachman’s (No. 104) • Stein Garden & Gifts (No. 110)
• Star Nursery (No. 140) • Meadows Farms (No. 148)
Skinny: Conditions were ripe for sales gain in the lawn and garden category in 2012, with an early and extended spring. Companies faced no such good fortune in 2013, which could make next year’s scoreboard comparisons somewhat painful.
Paint Stores(sector up 17.2%)
• Sherwin-Williams (No. 6) • PPG (No. 22)
• Kelly-Moore Paint (No. 37) • Frazee Paint (No. 41)
• Dunn-Edwards Corp. (No. 51)
Skinny: Sherwin-Williams’ Paint Store group was up double digits, crossing the $5 billion barrier.
Fastest-growing Top 300
The following companies showed the biggest percentage gain over prior-year sales:
- Kodiak Building Partners (No. 113), up 300%
- CNRG (No. 84), up 222%
- PPG (No. 22), up 175%
- Building Solutions (No. 281), up 82.1%
- Matheus Lumber (No. 56), up 45.3%
- 1. Home Depot: Company reports for total company sales.
- 2. Lowe’s: Company reports for total company sales.
- 3. Sears Holdings: Reported combined sales of “Hardlines” merchandise for Kmart and Sears Domestic. Employee count is pro-rated with sales.
- 4. Walmart:HCN sales estimate is based on assumption that home improvement sales make up 5% of total Walmart U.S. Stores sales. Employee count is pro-rated with sales.
- 6. Sherwin Williams: Company report for paint store division only.
- 9. Sears Hometown and Outlet Stores: Company reports. Formerly a division of Sears Holdings.
- 12. Amazon.com:HCN sales estimate is based on assumption that home improvement sales make up 2% of total Amazon.com sales.
- 22. PPG Architectural Finishes: Acquired 300 U.S. stores from AkzoNobel, including Glidden brand stores. Acquisition was completed April 2013.
- 24. US LBM Holdings: Brands include Bellevue Builders Supply, Edward Hines Lumber, East Have Builders Supply, H&H Lumber, Myers & Son, Millwood Lumber, The Kitchen Factor, Universal Supply Co., Wisconsin Building Supply, Lyman Companies, Carpentry Contractors Co., Automated Building Components and Shelly’s.
- 32. Westlake Ace Hardware: Acquired by Oak Brook, III.-based Ace Hardware Corp. in December 2012 for $88 million. Previously owned by private equity firm Goldner Hawn Johnson & Morrison.
- 76. ACO: Closed 14 underperforming stores in 2013.
- 84. CNRG: Central Network Retail Group brands include Lumber Center, Elliott’s Hardware, Home Hardware Center, Harvey Home & Hardware NFL Home Center, Town & Country Hardware, Habersham Hardware & Home Center and Town & Country Farm & Hardware.
The Home Channel News Industry Scoreboard research project combines Web surveys, phone surveys and industry estimates to create the HCN Top 300 rankings of retailers that sell to homeowners and home builders. The Scoreboard Series includes the HCN Top 200, ranking pro dealers; and the HCN Top 100, ranking two-step hardlines and LBM distributors. For more information, visit hbsdealer.com.