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Tuesday, May 20, 2008

GREEN PRODUCTS TOP TREND AT NATIONAL HARDWARE SHOW

Consumers are looking for ways to save time, money and energy and those trends were evidenced by the product innovations unveiled by manufacturers at the 2008 National Hardware Show®, held May 6-8 in Las Vegas.

Since consumers are demonstrating more concern for the environment these days, the latest in sustainable, eco-conscious and energy-efficient products was all the rage on the show floor. To help retail buyers discover these environmentally friendly items, show sponsor Reed Exhibitions introduced a special exhibit area called Green Product World™.

“Since the National Hardware Show is a representation of everything relevant to home enhancement, the show reflected the move toward more sustainable products at retail,” commented Dean Russo, senior vice president for the National Hardware Show.

Several seminars touched on how to turn green products into profitability, while exhibiting manufacturers unveiled innovative products that are made of recycled and biodegradable materials, feature non-toxic or organic composition or are designed to save water or energy.

The 63rd annual edition of the industry’s major trade event featured about 3,500 exhibitors in more than 150 product categories. For the first time independent retailers were given VIP status including private access to an Independent Retailers’ Lounge, Independent Retailers Rewards Card and VIP gift bag.

DDon Keller, owner of K&K True Value in Bettendorf, Iowa, said he really appreciated the extra attention he earned with his VIP status. “Manufacturers were actually interested in talking to us on the show floor,” he said. “I found it to be very beneficial to be there at the show.”

During the show, Hardware Retailing hosted a panel discussion—moderated by Editor Dan Tratensek—featuring the Industry’s Top Guns. Three leading independent retailers shared their insights into retail strategy (a fourth Top Gun—Jim Waters of Waters True Value in Kansas—was unable to attend):
• Steven Ai, president and CEO, City Mill Co. Ltd., Honolulu
• Frank Filmeck, president and CEO, Busy Beaver Building Centers, Pittsburgh
• George Smith, president and CEO, Westlake Ace Hardware, Lenexa, Kan.

Filmeck noted that the biggest change that has come over the industry during his career is consolidation. “I spent a lot of my career on the manufacturing side and many of the retailers I called on are gone,” he said. “The pace is so fast today and customers are much more educated and demanding. One of the advantages regional retailers have is we can make decisions faster,” he added.

Time has become more important than money, according to City Mill’s Ai. “With the Internet, customers can get information anywhere on products and prices. Customers will give you one chance to meet their needs,” he said.

Smith said product quality continues to grow in importance. “Retailers need to stand for something and have breadth of product,” said Smith, who noted Westlake was getting ready to open its 89th store./p>

The three Top Guns discussed how their companies have positioned themselves against the big boxes. “If price was everything, then Costco would put everyone out of the grocery business,” said Ai, whose stores adopted a Priced Right Everyday® strategy so they can be close to the big boxes on price but not cheaper. “We identified blind items and then we made sure we stayed in stock and had locations that were convenient.”

To win at retail you need to have the best price, selection or service, according to Filmeck. “We can’t out-assort boxes with our 35,000-square-foot format and we can’t underprice them, so we have to out-service them,” he says. “We have a very focused customer service program that starts with greeting the customer when they enter. Our sales associates are required to walk customers to the product and we make sure we talk about the project so they get what they need.”

Smith said Westlake competes against more than 120 different big-box stores in its markets. “Consumers come to us with problems and we offer solutions. Customers understand what we stand for,” he says, adding that people knowledge is critical. “You have to differentiate with service and be smart with assortment. You can confuse the customer if you over-assort.”

When asked what they’d like to see happen with their businesses going forward, all the Top Guns panelists mentioned a need to look at smaller formats. “We have a defined area of land so we have to go to a smaller format to fill in,” said Ai.

Filmeck said Busy Beaver tries to stay within two and a half hours of Pittsburgh, which means good store locations are getting scarce. “We have to look at new formats and we’re also looking at acquisitions. The challenges are to get consumers’ confidence turned around because people are holding onto their money and our markets are already mature,” he added, listing installed sales as an avenue for sales growth.

Smith said Westlake is playing with its store size to see if the company can generate the same volume with 3,000 to 5,000 less square feet. “The question is whether we can be more efficient with a smaller format. We’re testing now to maximize return on investment,” he said.

If he could change one thing, Smith wished that the independent retail channel could consolidate marketing. “We’re all fighting a common enemy. We should be working together to drive customers to independents,” he said.

Filmeck, on the other hand, wished there were more independent home centers. “I think they serve the market better. Lowe’s and Depot have positioned certain suppliers as sole suppliers for them and these (manufacturers) have stopped selling to other retailers. It’s hard to find suppliers who are not doing things the way the big boxes want,” he said.

In response to a question from the audience about what it takes to find the right people, Ai noted his company has been named the best place to work in Hawaii for the past two years. “We hire for attitude and train for product knowledge later. We spend on average 28 hours a year training employees and that shows them we value them as team members,” he said.

Attendee Vickie Davison, owner of Bloomington Hardware in Bloomington, Ind., and a member of Hardware Retailing’s Retailers’ Choice Committee, applauded the fact that many manufacturers are paying attention to the needs of the independent retail channel.

“I’m fiercely independent, and it’s gratifying to see companies recognize the importance of supporting independent retailers and developing the innovative products we need to drive sales at retail,” she said.

Another Retailers’ Choice Committee member, Ryan Moore, vice president-sales for Supreme Building Products in McMinnville, Tenn., said the show was a great venue to see the newest products available to retailers. “From established brands to upstart companies, the show provided insight for every spectrum of the do-it-yourself and contractor segments. This year more attention was given to the independent dealers, which was encouraging,” Moore said, adding that he liked having access to the Independent Retailers’ Lounge.

He particularly enjoyed his experience serving on the Retailers’ Choice Committee, which selected the best new products of the show. “The Retailers’ Choice Awards program was great. Vendors are really looking to see what we as retailers think is hot and what will sell in our stores. The awards are becoming more prestigious and more sought after as vendors are recognizing what a great marketing tool the Retailers’ Choice Awards are," he said.