Orgill anticipates return of promotions
NEW ORLEANS—Now that supply chain challenges are easing into some semblance of normalcy, here’s something else that might return to normal: traffic-generating, door-busting retail promotions.
“One of the themes for 2023 I believe is a return to promotions,” Orgill President and CEO Boyden Moore told HBSDealer here at the Orgill Spring Dealer Market.
The tradition of promotional advertising died down during and after the pandemic for a couple of reasons, he said. First, if the store didn’t have a steady supply of a particular product, it wasn’t likely to promote it. Second, with hardware stores benefitting from a surge of traffic and strong sales, who had time for promotional advertising?
“This year we’ll see more retailers giving people compelling reasons to get off their couches and come into stores,” Moore said. “And we have a lot more deals on the show floor to allow them to return to that kind of promotional activity.”
Another expectation for Orgill nation is growth, especially this spring. Moore is looking ahead to a strong spring, after a weather-induced poor spring showing across the home improvement industry in 2022.
“We have an opportunity to do a lot more spring business this year,” Moore said.
John Sieggreen, Orgill’s executive vice president of retail and president of Central Network Retail Group, a wholly owned subsidiary of Orgill, says CNRG expects overall sales gains in 2023 over 2022.
“There’s concern about the normal things anyone would read about in the news,” Sieggreen said. “But we’re not super dependent on housing start. And [high] mortgage rates are causing people to stay put in their home, instead of moving. So they’re probably going to invest some money into it.”
Another consideration: the average amount of home equity enjoyed by a home owner is running at about $330,000, a figure that marks a cause for optimism, Sieggreen said.
The Orgill executives have a number of other initiatives to be optimistic about:
• The distributor plans to build a 500,000 sq. ft. concept center adjacent to its headquarters in Collierville, Tenn. That’s twice the size of its current concept center, and will serve as a
showpiece to host vendors and customers, as a laboratory to plan for upcoming markets and new planograms, and host various industry events.
Moore said the new concept could be ready for use following next year’s Spring Dealer Market.
• Orgill’s Smart Start program is primarily used to help retailers update, upgrade or enhance their inventories while converting to Orgill’s warehouse-backed vendor programs. Smart Starts allow retailers who are converting product lines to swap out their current inventories seamlessly and receive credit to offset some of the cost of conversion.
The new Integrated Smart Starts go beyond the existing program by integrating a variety of vendors into the supported planograms.
“In the past, Smart Starts were based around removing the product from a non-supported vendor and replacing that product with warehouse-backed vendors,” said Chris Freader, Orgill’s senior vice president of retail services. “It is very efficient and effective in most categories. The new, Integrated Smart Starts, however, address those categories where a single vendor might not be the right solution. It basically broadens what we can do for a retailer to meet the needs of their customers.”
• In terms of synergies, Sieggreen pointed to improvements in data sharing, both across CNRG stores and Orgill in general. While Microsoft Power BI was rolled out about three years ago to get better visibility of sales across the organization. “We have made great strides in benefitting from it,” he said.
Also, a learning development system is in place across the 18 brands and 144 CNRG stores.
And here on the show floor in New Orleans, a model store of Germantown Hardware, a CNRG store in Tennessee near Orgill headquarters, was demonstrating technology ideas including an Orgill Fan Builder loyalty program at the checkout with full Epicor POS integration.
Orgill describes Germantown Hardware as a living laboratory to test retail concepts and showcase best practices in areas such as assortment planning, category management and retail merchandising.
