True Value’s top merchant points to winners
With the message that relevant, up-to-date assortments are the lifeblood of successful hardware retailers, True Value Co.’s Mike Clark, senior VP and chief merchandising officer, identified winners during his presentation at the co-op’s Fall Market in Philadelphia.
Clark also introduced the Chicago-based co-op’s initial Farm & Ranch assortments.
True Value’s farm and ranch offerings range from towing, jacks, oil and air filters, electric fencing, baler twine and Miller plastic buckets, to name a few.
"We intend to continue expansion into this vital market to provide better merchandising support for our retailers who are in the farm and ranch business," he said. The goal is to provide more options for members, and allow them the flexibility to order from the warehouse, while avoiding the order minimums typical of other farm-and-ranch distributors.
Chief among his advice was to power up. Retailers that have adopted the Chicago-based co-op’s Master Mechanic portable power tool assortments are selling 45% more power tools than those retailers that have not, he said. With the exclusive brand, he encouraged members to "get back in the power business."
Introduced as a new line at a previous market, faucets are delivering year-over-year comparable-sales increases — up year-to-date 9% in dollars and 9.6% in units at retail, he said.
Grills also present an opportunity, particularly on the low end. "You may not know this, but 73% of all gas grills are sold below $300," Clark said. "Our Grill Zone grills provide you an awesome product, terrific margin and your opportunity to capture share of that under-$300 business."
Ideas emerge at True Value University event
During the True Value’s Fall Market in Philadelphia, a day spent on Retail Best Practices produced some actionable advice, according to organizers.
Some 500 True Value members attended the Retail Best Practices Conference (RBPC) and generated some actionable, take-home ideas.
Among the most popular ideas, as determined by those who participated, was a hardware happy hour — an after-work promotional period to attract commuters on their way home. (A possible slogan for such an event, according to one retailer: "Get hammered.")
Other ideas were gathered and collected from breakout groups throughout the day. They included Facebook Friday, Twitter Thursday and a Mother’s Day planters program that allows customers to arrange to grow their own customized gifts in the store.
Participants also concluded that propane sales and service is something that would benefit most hardware store retailers.
The event, organized by the Chicago-based co-op’s True Value University team, ran from 8 a.m. to 4 p.m. on the Thursday, the day before its Fall Market opened. The RBPC included some modifications this year designed to increase interaction.
A shift from monolog to dialog was one of the keys, said Lori Birkey, director of True Value University. "The retailers come to network with each other," she said. "They come to get tactical information that’s real-world tested that they can go back and apply right away. And they also come to get informal networking with the management team."
The event required careful planning, including assigned seating, to encourage friends and family to split up and share ideas with members of similar store size, urbanicity and years of experience.
"It worked," said Katie Stangel, manager of True Value University.
In Philadelphia, True Value CEO sees growth
Philadelphia — True Value Co. CEO Lyle Heidemann presented some positive numbers during the co-op’s Fall Market general session, as he encouraged members to remain visible to their customers.
Speaking here Friday morning at the Pennsylvania Convention Center, site of the company’s fall market, Heidemann pointed to positive recent sales gains across the co-op. Since the third week of May — a starting point selected because it was the beginning of this year’s delayed spring — retail sales are up 4.3% at True Value, with every department positive, he said.
He also addressed the four topics that are resonating across the country with dealers — the economy, gross margin, national advertising and sales growth.
• The economy: He pointed to macroeconomic forecasts — GDP to grow 1.9%, home improvement industry sales to grow 1.8% and hardware industry sales to grow 2.8%. "While these may not feel like great numbers, they are consistent with this year’s forecast and better than we’ve seen the past few years," Heidemann said.
• Gross margin: Pressures on gross margin continue, he said. The co-op said it planned to reduce the member cost on more than 500 items by an average of 9.1%.
• National advertising: Heidemann described several changes in the co-op’s national advertising strategy. True Value intends to increase its digital marketing in an effort to attract younger consumers. The co-op’s television ads will feature its retailers inviting consumers to shop True Value. In addition, the co-op’s paint advertisement reimbursement will increase to 75%, up from 50%.
• Sales growth: True Value has seen four consecutive quarters of sales increases and a 2.9% annual growth rate. Heidemann promoted the Destination True Value concept as a growth vehicle for the members and the co-op. "Not only are the DTV stores outperforming the non-DTV stores, they’re ‘way’ outperforming the industry and the economy," he said.
On the show floor in Philadelphia, the co-op unveiled a small-format DTV store measuring 5,270 sq. ft. — half the size of a medium DTV format, with about 75% of the SKUs.
"The purpose of this small store is to show you how the DTV principles can be adapted in a small store and to start you thinking about remodeling your current store," Heidemann said.
True Value expects to add more than 1.1 million DTV square footage in 2011, a 25% increase over last year.
"While the economy will probably still be a challenge in 2012, I believe we can control our destiny," Heidemann said.