DISTRIBUTORS/CO-OPS

Do it Best builds on momentum

In turbulent times, a co-op flexes its muscle at its Fall Dealer market.

BY Ken Clark

Indianapolis — Do it Best Corp. amplified its plan to be the first and best choice for independent home improvement here at the 2018 Fall Dealer Market at the Indiana Convention Center. The company handed out more than $100 million in rebate checks to members during a market that embraced a theme of constant improvement.

The co-op promoted its financial highlights for the year — member purchases increased more than 14% to $3.7 billion, up from $3.2 billion in the prior fiscal year. Operating costs for 2018 were a low 1.96%, down from the previous year’s figure of 2.12%.

Sales gains included records in three categories: warehouse, up 5.4%; directs, up 9.2%; and lumber, up 37%.

The member rebate figure surpassed the $100 million mark for the 15th consecutive year. And the message from key executives during the market kick-off event was an encouragement to embrace change to ensure future success and remain relevant to a new generation of customers. Rich Lynch, VP of marketing; and Steve Markley, VP of merchandising, stressed to dealers the importance of reaching customers where they consume media, and maintaining the cutting edge of innovation on their store shelves.

In his annual address to shareholders, Do it Best President and CEO Dan Starr said the co-op has made critical planned investments that include IT programs such as transportation management, order management and a product information database and catalog. The company has also invested in people, particularly in the sales area.

The investments come at a time of high operating expenses, caused by transportation costs and tight labor, and more recently tariff concerns.

“From an expense side, it boils down to this,” Starr said. “There are continued pressures on logistics and labor and some unpredictability with product costs. But let’s not lose sight of the fact that we’re also in an active and vibrant economy. Interest rates are at historic lows. Consumer confidence is strong. And we have many long-standing and brand new members experiencing growth. That’s been good for every member of the co-op.”

Investments have been paying off already, Starr said.

Steve Markley

A new transportation management system has effectively removed an annualized driving distance of one million miles from the distributor’s routes. And a nocturnal delivery system called OWL — Orders Without Labor — is gaining interest by tapping the efficiencies of making deliveries to empty stores at night.

On the marketing side, the co-op revamped its approach by creating a consumer marketing department with specialists and representatives to work with members strategically and individually. And Lynch stressed the importance of finding new ways to reach customers.

On the distribution side of the business, Do it Best pointed to steps it is taking to mitigate the pressures caused by driver shortages and economic factors affecting any business that moves products from place to place. The co-op expanded its backhauls program to a larger radius, meaning that fewer trucks return to distribution centers empty.

Also at the Fall Market, the co-op promoted the strength of the community-oriented, independent hardware store to win at retail — especially in categories that require knowledge and advice. “A big theme at the market in addition to all the buying opportunities is the education to stay informed of all the trends,” said Markley. “Today’s consumer is a different consumer from just a few years ago.”

“It’s a big advantage when you have local ownership and you have people in your communities who are the trusted advisers,” Markley said.

Do it Best described its fall market as a way to help members, including new and prospective members, explore the value of a co-op partnership. “We want to make sure that Do it Best members enjoy a distinct advantage with us because it matters in their results – and we believe there’s no better place for them to understand the full scope of that advantage than at the market,” said Starr. “From the industry’s most effective supply chain to our innovative programs and products to our experienced team, we want to be recognized in this industry as the first and best choice for independent home improvement – known the world over for our dedication to excellence and our commitment to helping our members grow.”

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