Survey points to hardware optimism
How optimistic are 765 Ace Hardware retailers surveyed in the recent biennial Retailer Satisfaction Survey? Almost 90% say they “intend to grow and expand operations in the near term,” the co-op said.
Another 64% said they plan to create more jobs.
The latest data revealed by Ace Hardware Corporation from its biennial Retailer Satisfaction Survey that point to strong business optimism among Ace retail store owners, despite an otherwise uncertain small business climate in the U.S.
Survey results from 765 Ace Hardware retail store owners revealed a large majority of surveyed Ace retailers have ambitious growth and expansion plans charted for their businesses in the next two years.
Other stats from the survey:
• 82% of retailers plan to add new merchandise categories;
• 77% intend to renovate their stores or take on departmental renovations;
• 71% of store owners plan to add new target segments into their stores sales efforts (for instance, business-to-business );
• Nearly 20% of retailers plan to add square footage to their existing stores; and
• More than a quarter of surveyed retailers plan to open a new store.
Those indications of optimism in the convenience hardware space contrast with those of other industries. The Index of Small Business Optimism declined two-tenths of a point in August to 94.4 – a figure that sits well below the 42-year average of 98. A report from the National Federation of Independent Business attributes the decline to, “owners refusing to expand; expecting worse business conditions; and unable to fill open positions.”
True Value trolls the paint aisle
Denver — True Value isn't trolling us with its latest big paint announcement — at least not in the traditional sense.
Among the co-op's big announcements at the Reunion in Denver last weekend was its partnership with DreamWorks as it gets ready to hit the box office this November with its new animated feature film, Trolls.
In promotion of the film, True Value will be rolling out 24 exclusive EasyCare paint colors related to the movie, which will come in paint cans bedecked in a promotional Trolls label.
"Trolls is expected to be a box office smash," said chief customer officer and SVP marketing Blake Fohl at the General Session. "Trolls could be the most popular movie this holiday. You can leverage this unique sponsorship."
The partnership is mainly aimed at driving customers with young kids into True Value stores, but beyond that, SVP and COO Abhinav Shukla believes the partnership is a strong fit for True Value.
"It’s young, got a positive message, got a lot of positive energy behind it," said Shukla. "It’s obviously about finding your true colors, so there’s a direct correlation with paint and a direct correlation with colors. Our target demographic is the young achiever, young families, so I think this partnership makes a ton of sense for us."
The idea to promote the movie, says Shukla, began with a DreamWorks executive who had grown up in Wisconsin and shopped at a local True Value store. He was the one who initially made the connection between "true colors" and True Value paint.
According to senior director paint manufacturing John Vanderpool, there will be an exclusive Trolls color card (the main characters will each have 3 of their own colors, comprising 24 colors total).
"It ties perfectly into our strategy related to engagement," said Vanderpool. "We’re engaging the young achiever to get into our member store, we’re engaging with our members to make sure they have the right materials. It’s gonna absolutely help grow the business. It’s also very efficient because we make the paint. We do this in our factory. We’re working with the RDCs, and the paint's actually being shipped out on Sunday, and we’ve had a great response from our members."
In addition to the exclusive EasyCare paint colors, True Value will also launch circulars in the coming three months promoting the alliance, as well as on-air commercials.
Though over 1,500 members are participating in paint (and over 1,700 are participating in paint and POP kits), retailers that don't stock paint will have an opportunity to participate as well: Trolls-themed chia pets, lawn ornaments and keychains are also at the ready.
The other big paint announcement: True Value has scored a new alliance with Benjamin Moore and will now be stocking its Coronado paint brand. Not only does this lend the credibility of a national brand to the co-op, but it also expands its coverage of the market with a wider range of price points in the paint aisle.
"Paint for us as a company has largely always been about selling EasyCare paint," said VP and chief merchandising officer Heath Ashenfelter. "We manufacture it, It’s a great business for us, our retailers love the fact that we own our own paint factory. There’s a high level of passion around this business. But the reality with the EasyCare program [is that] we're only capturing about 25% of the price points that exist in the marketplace."
The Coronado by Benjamin Moore program will hit price points in the mid-$30s to low to mid 40$ range, which Ashenfelter says allows True Value to hit 75% (or more) of the price points that exist in paint.
But here's where things get innovative: True Value has coordinated the EasyCare and Coronado color palettes so that dealers can implement the new brand without having to purchase any additional equipment or materials.
"The color center itself, the chips and the color cards, and all the equipment is the same," said Ashenfelter. "It’s significant in the respect that nobody else in the industry has the ability to do this. With an average of less than 10,000 sq. ft, space is at a premium. So having launched a national brand and you need to invest in another 20 ft., you need to invest in equipment and new color chips — that starts adding up quick. And the reality is the investment for the retailer is largely just the product itself."
True Value calls this its "2-4-1" concept: two brands, four price points, one color system — and also one color center, one colorant, one equipment, and one invoicing from its RDCs.
"It’s an industry first from a capability standpoint," said Shukla. "We are uniquely poised to make that happen. Because to have a single colorant system is really just the fulcrum piece. It can really be done because we’ve got the R&D lab and we’ve got the chemist and the manufacturing capabilities to make sure those colorants match, and we’re able to use a unique set of colorants. And then, from an efficiency standpoint, you're enhancing store productivity because you’re not tying up space with four color centers, which only make it confusing for consumers to shop for color. And then it also reduces the complexity from a store support standpoint, because now they don’t have to be experts on 3 color centers."
"I think we’ll inspire a lot of customers that didn’t consider us a paint retailer in the past to consider us a paint store in the future," added Ashenfelter.
Welcome to Assortment City
Denver — The view around the show floor was generally familiar: vendors promoting products, retailers on the prowl, computer stations scattered throughout to facilitate the ordering process.
But something about that last item was a little different this year. A row of kiosks was prominently featured on the floor, surrounded by signs that alerted one to their whereabouts: Assortment City, population 35,000 sq. ft. of product.
Part of True Value's efforts to get "focused," as was the driving message behind much of the event, has been to consolidate its assortments into a one-stop shop for ordering.
"Isn't it great to see all those assortments in one place?" asked senior VP growth Tim Mills at the General Session.
According to VP and chief merchandising officer Heath Ashenfelter, the Customized True Blue assortment program has contributed to major category increases: light bulbs are up 7%, builders hardware is up 11%, powertool accessories, 14%; construction fasteners, 23%; construction hardware, 24%; and stepstools are up 29%.
"These are tried, true and tested, and they're working," he said. "This is not an opinion. It's a fact."
As True Value's Customized True Blue program continues to flourish — Mills noted that by the end of 2016, members will have purchased 11,000 CTBs — the co-op has been thinking about ways to make the execution easier.
Part of that effort, Mills said, has involved updating the implementation guide with learnings from the past two years and offering a guide with best practices for resets, among other things. Additionally, True Value has come up with a new retail workbench report to maximize stocking strategy. There's also a new report to better track inventory when demand is high.
Assortment City fits into that larger picture as a user-friendly CTB ordering tool with cartleg functionality and faster entry.
"Assortment City is part of our next-generation Reunion strategy," said Ashenfelter. "What we’re trying to do is engage members in a different way. We’re trying to essentially make the buying experience a shopping experience — [one that's] easier for them. The idea is that we take all of our assortments, all of our “best thinking,” across all of our key product categories, and put them into one spot."
Not only does Assortment City make it easier to shop, but there's also a major technology component. Each kiosk features touchscreens with merchant videos, access to various planograms, and a platform for actually placing orders. Additionally, the booths are staffed with a combination of merchants and vendor partners.
Of course, that's not to say that retailers looking for inspiration wouldn't find it on the floor. But in the words of Ashenfelter, "Assortment City's going to convey our best thinking in one area. So I think that’s the place to start when a retailer’s looking to impact their shelves."
Members also get the benefit of seeing deals and discounts clearly laid out in front of them — not to mention the POP, the in-store materials, and perhaps some merchandising inspiration as well.
"The adjacencies are laid out; it flows like a store," said Ashenfelter. "So a hidden benefit is it creates inspiration; it does provide guidance in terms of what categories should sit next to each other in a store."
Of course, none of this has been a simple initiative for True Value, but the payoff will only continue to compound over time.
"It’s a monumental effort, but we’ll take that from show to show," added Ashenfelter. "It’s the new standard here. I think the reception to it has been really good."