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A Powershift Publication l Volume 20, Number 4 l September 2014
SPECIAL FEATURE CANADIAN REPORT ON DISTRIBUTION
Going Green 15 How To Save Energy And Money
Hand Tool Report 33 DIY And Innovation Drive Hand Tool Category
Retailing 38 By Design Showroom Learning Ground For Retail Stores
www.hirmagazine.com PM NO. 40008000
1 Go to page 3 CONTENTS Much More than 3 letters
It’s a way of being, thinking and behaving.
For more information, contact Pascal Houle, Executive vice-president Telephone : 1 800 361-0885
Go to page 3 CONTENTS 2 BMR ADS - HIR 2014.indd 2 2014-07-14 11:47 CONTENTS A POWERSHIFT PUBLICATION VOLUME 20, NUMBER 4 Departments September 2014 EDITORIAL DIRECTOR & PUBLISHER 5 Editor’s View Dante Piccinin Hacking Reaches New Low EXECUTIVE EDITOR Joe Hornyak 6 industry Update MANAGING EDITOR 7 in Store Nienke Hinton ART & PRODUCTION 9 Coach Your Team Keith Boa Bending The Rules VICE-PRESIDENT ADMINISTRATION & CIRCULATION 11 Focus On Customers Catherine J. McKerchar Brand Advocates Can 15 ADVERTISING SALES Greatly Increase Sales Dante Piccinin John Simmons 13 Front Lines (416) 494-1066 Fax: (416) 494-2536 Bathrooms Going HOME IMPROVEMENT RETAILING is published 6 Contemporary times yearly by Powershift Communications Inc., 245 Fairview Mall Drive, 5th Floor, North York, ON M2J 4T1, Faucet Technology Canada. Telephone: (416)494-1066, Fax: (416)494- Greatly Improved 2536, e-mail: [email protected]. Advertising, and Editorial inquiries should be made to the above address. Issue dates are: Jan/Feb; March/April; 15 Going Green May/June; September; October; Nov/Dec. Yearly How To Save Energy subscription rates: Canada: $76 plus GST*; U.S. and other: $110/yr. Single Copy prices: Canada: $15 plus And Money GST* prepaid; U.S. and other: $30 prepaid. HOME What Is ENERGY STAR? IMPROVEMENT RETAILING assumes no responsibility for the validity of the claims in items reported or for the t s our oney opinions expressed by our writers. All rights reserved. 42 I ’ Y M Contents may not be reprinted or duplicated without written permission. Publisher assumes no responsibility 43 Private Wealth for unsolicited manuscripts and art. Published by Powershift Communications Inc. PRESIDENT, D. 46 Publisher’s Perspective Brian McKerchar; VICE-PRESIDENTS, Dante Piccinin, Business Is Good, Despite Catherine J. McKerchar, John L. McLaine. Competition, Consolidation CANADIAN PUBLICATIONS MAIL PRODUCT SALES 17 AGREEMENT NO. 40008000 *Goods and Services Tax Registration Number R131006876. ISSN: 1204-3044 Features 17 Canadian Report On Distribution New Channels And New Competition Challenge Retailers
33 Hand Tool Report DIY And Innovation Drive Hand Tool Category 38 Retailing By Design Showroom Learning Ground For Retail Stores 40 Contractor Business Contractors Want Faster, Lighter, Smarter 38 Power Tools
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For all subscription inquiries, fax to Cathy McKerchar at 416-494-2536 e-mail: [email protected] HOME IMPROVEMENT RETAILING • September 2014 3
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4 48640_HIR_YvesMorel.inddGo to page 13 CONTENTS 8/15/14 9:30 AM 48640_HIR_YvesMorel Trim: 8.125" (w) x 10.875" (h) Publication: HIR Art Director: Mark Client: Home Hardware Safety: 0.5625" x 0.4375” Insertion September 2014 Copywriter: NA Client Code: HOM Bleed: .125" Colours: CMYK Mac Artist: Daniel Product Code: COR Editor’s View Hacking Reaches New Low ata breaches are not new. We the retailer revealed that the personal infor- a website that regularly offers stolen credit recall newspaper headlines trum- mation of as many as 70 million people cards for sale. So far, it’s just criminal. peting the horrific news that hos- had been stolen. This included customer However, he subsequently reported that D pital records had blown from a names, credit or debit card numbers, card there were signs that the perpetrators of dumpster and were liable to fall into the expiration dates, CVVs (card verification this apparent breach may be the same hands of unscrupulous individuals. After values), mailing addresses, phone numbers, group of Russian and Ukrainian hack- that, we saw the first tech data breaches. and eMail addresses. ers responsible for the data breaches at Typically, they involved an employee tak- The cost of the breach reached $110 Target, Sally Beauty, and PF Chang’s. The ing some work home, losing the floppy, and million as well as a decline in the share scary part is that the cards were listed for even, if memory serves correct, their laptop. price from the 65 cent range to the 60 cent sale as ‘American sanctions.’ He interprets Smaller scale efforts involved criminals tap- range, plus the reputational damage with this as “intended retribution for U.S. and ping into the card reader on gasoline pumps shoppers fearful of using their cards to European sanctions against Russia for its and instore chip readers. shop at Target stores. aggressive actions in Ukraine.” Now, however, the scale has escalated, The Identity Theft Resource Center So now we’ve moved from financial primarily because we have, first, become reports that have been 395 data breaches crime, data theft, to financial terrorism. And obsessed with data. And we have collected in the U.S. so far this year, a 21 per- that opens up a whole new area of concern so much data that we can no longer store cent increase over the same period last where hackers start using data breaches the information onsite, but need to upload year. Targets include eBay, PF Chang’s, and as an act of terrorism. While the terrorist it to the cloud. Of course, this is a case of Michael stores. And, of course, Home Depot attack of 9/11 was devastating affecting one hand shaking the other. The more we can now be added to that list. thousands of people, with this type of act we become obsessed with data, the more stor- Now, not all data breaches are serious. could be talking millions of lives affected. age we need. Right at the time that Home Depot was If the intent of an act of terrorism is to cre- investigating to see if it had been the tar- ate widespread fear, certainly this fits the Personal Information get of hackers, word broke that the cloud definition. So in recent months we have had a num- had been breached and nude photos of ber of data breaches starting with the one celebrities were in circulation. And, in a Industry Responding at Target last fall. Just before Christmas, perfect example of the misguided sensibil- Clearly, the industry is responding. Home ity of today’s news media, nude pictures of Depot will roll out ‘Chip and PIN,’ which Jennifer Lawrence were given more atten- requires the use of a chip in the card and a tion than the reports of the Home Depot PIN to complete a purchase. Apple’s latest breach. This was amusing, not relevant. versions of its phone will include Apple Pay, So now we have Home Depot as a tar- which replaces sensitive payment account get and this breach is not only for its U.S. information found on plastic cards with a stores, but the breach could potentially digital account number or ‘token’ that can impact customers using payment cards at be safely stored on mobile devices. its Canadian stores as well. There is no Still, that’s only solving the problem evidence that information of customers and sophisticated hackers will find ways who shopped online at HomeDepot.com to circumvent these technologies. The real was taken. And, while the company con- solution is aggressive global law enforce- tinues to determine the full scope, scale, ment which stops the problem at the source, and impact of the breach, there is no the guy with the computer, not at the cash evidence that debit PIN numbers were register. ❖ compromised. However, what makes these latest breaches perhaps more concerning is that there is a train of thought that they were not motivated by financ- es. This breach was detected by a computer security expert, Brian Krebs. On his KrebsonSecurity Joe Hornyak website, he reported that hackers Executive Editor had put stolen credit and debit cards from the chain on sale on [email protected]
HOME IMPROVEMENT RETAILING • September 2014 5
5 Go to page 3 CONTENTS Industry Update
Husqvarna To business, while the composites, filtration, Inc. The Weyerhaeuser Real Estate Company Discontinue Dixon and energy storage businesses will be man- (WRECO) will now be a wholly-owned sub- Husqvarna Professional Products Inc., a aged more globally. sidiary of TRI Pointe. Weyerhaeuser says the division of Husqvarna Group, will discon- separation of WRECO will enable the com- tinue the distribution of products under the Wolseley Opens pany to focus on its forest product businesses Dixon brand name in North America by One-stop Shop while enhancing shareholder value. the end of 2014. International markets are unaffected at this time. Husqvarna Group ROXUL To Begin will continue to process Dixon warranty Production In U.S. claims and provide service parts under the Stone wool insulation manufacturer ROXUL Dixon brand for an extended period of time. Inc. will officially begin production at Husqvarna will also continue to manufacture its first manufacturing facility located in and market similar products to the Dixon the U.S. The plant is located in Marshall line of movers and tractors under the current County, MS. The new facility will ensure family of Husqvarna Group brands. the company can meet its customer growing demands. Arauco Streamlines Businesses HD Supply All sales and operations of forest product Rebrands Units company Arauco in the U.S. and Canada are Wolseley Canada’s Mississauga HVAC/R HD Supply, Inc. has rebranded some of now combined under one organization oper- location now carries plumbing products. its units to reflect a unified, consistent, ating as Arauco North America. The primary This will provide customers access to a representation that visually showcases objective of the reorganization was to cre- wider range of products as well as combined the company’s one brand strategy as well ate a more effective and efficient operating specialists under one roof for a variety of as better communicate its business units’ platform, says the company. It is intended to services including hydronics, HVAC, refrig- specialized areas of expertise. The facili- strengthen and consolidate the headquarters eration, mechanical, and plumbing. This ties maintenance, waterworks, and power in Atlanta, GA, for all the North American location is the second of several new plumb- solutions business unit descriptors remain operations in terms of domestic and off- ing and HVAC/R branches it is opening over the same. HD Supply White Cap, Crown shore manufacturing. the next few years. Bolt, Creative Touch Interiors, and Repair & Remodel have been rebranded as HD Norman Caissie Weyerhaeuser Divests Supply Construction & Industrial, HD Acquires Don Park Homebuilding Business Supply Hardware Solutions, HD Supply Normand Caissie, of Richibucto, NB, has Weyerhaeuser Company has divested its Interior Solutions, and HD Supply Home acquired Don Park Residential Manufacturing, homebuilding business to TRI Pointe Homes, Improvement Solutions, respectively. ❖ a producer of HVAC galvanized duct, pipe, and fitting products based in Toronto, ON. The purchase includes the manufacturing facility in Toronto, but not Don Park’s commercial manufacturing (ICI) and fire divisions. The company will operate under the name of Don Park Manufacturing Inc. Caissie is a Canadian Hardware and Housewares Manufacturers Association Hall of Fame inductee. Johns Manville Merging Businesses Johns Manville plans to merge its American, European, and Asian activities for engi- neered products into one global business unit. It says this reorganization enhances its ability to serve increasingly global needs in the composites, filtration, and energy stor-
age markets. Previously, it operated two engineered products business units: one for � the Americas and one for Europe and Asia. For FREE Daily News Alerts, visit The realignment keeps some of the regional www.hirmagazine.com/home_improvement_news.php components, mostly within the non-wovens
6 HOME IMPROVEMENT RETAILING • September 2014
6 Go to page 3 CONTENTS In Store
RONA Represents it the largest show floor in Orgill’s history. in Motion (MiM), a proprietary logistics Ace In Canada In addition to its typical market-only deals, management design consisting of the ware- RONA inc. will be representing the Ace educational seminar lineup, and new prod- house management system and a transporta- brand in Canada. The retailer has signed an ucts, Orgill used the market to showcase tion management system. These new sys- agreement with Ace Hardware International special category-specific displays, new and tems will facilitate efficient operations and Holdings, Ltd. for master licensing. It gives remodeled retail concept stores, and pro- maximize resources. RONA specific rights and privileges with gramming which centered around modern respect to Ace Hardware brands, retail oper- advertising strategies and eCommerce. Target Staying ating systems, and web portals. RONA and On Schedule Ace have also signed a long-term distribu- Sears Canada Opens John Mulligan, Target Corp.’s chief finan- tion agreement giving RONA access to Fulfillment Centre cial officer, says if the retailer could start its products available through Ace Hardware’s Sears Canada Inc. is opening a 240,000 launch in Canada over, it would do things various channels of distribution including its square foot fulfillment centre in Calgary, AB. differently. That said, Target is not changing China direct programs. TruServ Canada will The centre will pick, pack, and ship small- its plans to have 133 stores in Canada by lead the new business unit dedicated to the ticket items such as apparel, home décor, the end of 2014 and 150 stores by 2017. He success of new Ace dealers. small appliances, and toys for customers in says Target probably should have launched western Canada who use the Sears Direct in Canada with only five to 10 stores, instead Lowe’s Rolling Out channel. The facility is expected to reduce of more than 100. It should have refined 3D Simulator delivery time to most western Canadian operations, the supply chain, the technology, customers by an average of one to two days. and sales staff, but, that’s all hindsight now. “We are where we are right now and we’re Castle Buying Expos focused on moving forward,” he says. A Success Castle Building Centres Group welcomed Home Depot over 240 participants to its ‘7th Annual Gets Connected Central Buying Expo.’ This year, 65 Castle members and close to 60 vendor partners from Ontario and Quebec took part to strengthen relationships and take advantage of one-of-a-kind buying opportunities. The western buying expo was held in Calgary, Lowe’s is rolling out a 3D simulator in two AB. It brought in more than 50 member Toronto, ON-area stores. The ‘Holoroom’ locations and 50 vendor partners from across will focus on bathroom remodeling, but the western Canada for a member update meet- plan is to add new categories and rooms ing and full-day of buying. over the next 12 to 18 months. The technol- ogy was designed by Lowe’s Innovation TORBSA Labs which focuses on ‘uncommon partner- Gets New Member Home Depot Canada has partnered with ships’ with organizations such as Singularity Crown Building Supplies Ltd. in Surrey, Wink to develop a smartphone app that University and SciFutures. There is no firm BC, is the newest independent member of allows users to connect and manage up to plan for rollout in the U.S. TORBSA Limited. The location is owned 70 connected products in their home from and operated by Gary and Gurpreet Sangha, anywhere in the world. The app replaces the Nelson Lumber who both have many years of experience in need for remote programs for each item by Joins Sexton the industry. Their business model mirrors combining all products within the one sys- Nelson Lumber Company is now a member many of the other shareholders in the group. tem. The system relies on a central hub that of Sexton Group. In business since 1949, it connects to all the products and is compat- is an independent lumber and building mate- Warehouse Management ible with different types of communications rial retailer and component manufacturer. System Goes Live including Wi-Fi, BlueTooth, ClearConnect, Based in Alberta, it has five retail locations, Home Hardware Stores Limited has Z-Wave, and Zigbee. The Home Depot and four truss plants, and two manufactured launched a warehouse management system Wink have partnered with a number of man- housing businesses. (WMS) at its distribution centre in Debert, ufacturers including Schlage, Honeywell,
NS. The new system is part of Merchandise Philips, and Dropcam. ❖
Orgill Concludes Biggest Market � Hardlines distributor Orgill, Inc. has For FREE Daily News Alerts, visit wrapped up its ‘Fall Dealer Market.’ The www.hirmagazine.com/home_improvement_news.php event occupied 865,000 square feet making
HOME IMPROVEMENT RETAILING • September 2014 7
7 Go to page 3 CONTENTS Just another case of window envy.
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000469 HIR AWW Ad.indd 1 14-02-05 3:03 PM 8 Go to page 3 CONTENTS Coach Your Team
In all organizations mistakes happen. Bending The Rules Things go wrong. Employees need to know they don’t have to follow a canned script. Sounds simple, but, in reality, as the rules They should be allowed to think like own- By: John Tschohl don’t always apply, make a decision to bend ers of the company. They need to know they some and to break some. Look at all the should treat every customer the way they here are rules for a reason: they policies, procedures, and systems you have would want to be treated, even if it means work for most people most of in place that make life miserable for your ignoring the official company rulebook. the time. Often scientific evidence customers. You could have the nicest people Employees must bend the rules and make T backs them up. But, as with almost in the world, but if you have stupid hours, empowered decisions to serve the customer. any other endeavour in society that doesn’t stupid rules, and stupid procedures, your cus- involve criminal activity, rules can some- tomers won’t be happy. If you have policies Cost A Pittance time be broken – or at least bent – without that slow down tasks or require two or three The best news is that most decisions will the world coming to an end. sets of eyes and signatures for approval, you cost the company less than $50, which is This is especially true in business. are wasting time and money. Speed up the a pittance when you consider the lifetime Company owners and top executives give process and eliminate time wasters. value of the customer and the good will a lot of thought to winning and keeping Rules stop employees from thinking for that empowered decisions can make. Every customers and they spend a lot of time and themselves and for the customer. In order company has something it can give to a money on things like PR, leadership train- to ensure customer satisfaction and deliver customer who experiences a problem. It ing, and social media campaigns. But, the against the very demanding expectation of doesn’t have to cost a lot, but its value as real frontlines of building a business are in your customers, you should try to widen far as goodwill and customer loyalty will the daily interactions employees have with your employees’ customer service skills by be priceless. Identify 10 to 20 products your customers. teaching them how to bend the rules. It’s not company has that have value in the eyes of about breaking the rules, but bending them the customer, but won’t cost you an arm Ridiculous Policies to keep the customer happy. Put yourself in and a leg when used as compensation for a One of the major roadblocks to cus- your customer’s place and ask, ‘Do you like problem. tomer service excellence is the policies and to feel valued, listened to, and have your When you are willing to bend the rules, procedures most companies have in place requests respected? How do you feel when your customers get what they need and to make sure that one per cent of their an organization solves your problem with- are happy. Your organization strengthens a customers don’t take advantage of them. out any hassle? How do you feel when they relationship with a client. The employee is Meanwhile, the other 99 per cent of their cannot or will not fix your problems at all?’ recognized for solving a problem and retain- customers are frustrated. When frontline ing business. employees are restricted with ridiculous Decisions On The Spot Remember, good service alone doesn’t policies and procedures, the process of It’s critically important for businesses to get anyone talking about you. Bend the rules serving customers is dramatically slowed give employees the power to make decisions a bit and get people buzzing about you. ❖ down and customers are essentially given on the spot because one policy can’t cover the boot and will soon be greeted with open everything. There are too many unexpected John Tschohl is founder and president of the arms by the competition. things that happen every day. Service Quality Institute.
HOME IMPROVEMENT RETAILING • September 2014 9
9 Go to page 3 CONTENTS 10 Go to page 3 CONTENTS Focus On Customers
For retailers, the message is clear: mak- Brand Advocates Can ing sure your sales associates have the prop- er expertise is good business. Experticity has the following recommendations: Greatly Increase Sales ◆ Invest in the right people – There are people out there who love and use your ustomers look for helpful exper- When asked to rate which services con- products and your competitor’s products tise from their sales associates. sumers most desire and value from retail every day. Yet, a recent study by Experticity, sales associates, the top four were: ◆ Train the people who love your stuff – CInc. says many customers are dis- ◆ Product knowledge (73 per cent) So often retail employees get trained in appointed in the lack of salesperson expertise ◆ Help selecting the correct product (71 things like how to improve service. That in retail stores. This should be alarming to per cent) has a place, but if they don’t know the retailers because the survey shows that after ◆ Category knowledge (69 per cent) products inside and out, they won’t be receiving helpful expertise, consumers will ◆ Help finding alternatives when the first able to provide the proper guidance. And spend 50 per cent more on their purchase. choice is not available (68 per cent) if your customers have a bad experience And, 75 per cent of people buy a specific item The survey says two in five consum- after they leave your store, that smiling when recommended by a brand advocate. ers are routinely disappointed by the lack face from your team doesn’t mean much. of expertise of the sales associates they ◆ Reward expertise – If your employees Brand Advocate encounter in retail stores. The biggest are in love with the stuff you sell and So what is a ‘brand advocate?’ shortcoming is in finding suitable alterna- know everything about it, then they Brand advocates are the retail associates tives, cited by 43 per cent of consumers. probably want to be rewarded with your and industry professionals who use and pro- Category knowledge, product knowledge, stuff—discounts, merchandise, tickets to mote retail products. Their actions influence and help selecting products were skills related events, etc. the purchases of the customers who shop at also cited as lacking. Yet, all of these are ◆ Evangelize the value of helpful expertise your store. problems that can easily be overcome with – We are all consumers and fundamentally ‘Retail Buying Experience,’ the first sur- proper training. can speak to how a great buying experi- vey of its kind by Experticity, uncovers a ence impacts your satisfaction. Leading striking expertise gap among sales associ- Talking To Someone people to the lowest price on your shelf ates. The study of 600 U.S. consumers Given the value consumers place on doesn’t build relationships. Ask custom- shows that customers value sales associate expertise, it is not surprising that when they ers what they want and expertise above all else, but often find such cannot find it at retail stores, they find it why they want it. ❖ expertise lacking. elsewhere. Consumers say the resource they “The survey shows that consumers still find most useful in terms of obtaining exper- fundamentally want helpful expertise from tise is talking to someone they perceive to retail sales associates to guide buying deci- be an expert (72 per cent). This is followed sions while many of today’s retailers have by online searching (71 per cent), online opted for low-cost employees, forcing buy- user reviews (66 per cent), and traditional ers to turn elsewhere for information,” says product reviews and articles (65 per cent). Tom Stockham, CEO of Experticity. “This clearly shows that consumers are not happy having to do all the research themselves and crave retail to play a hands-on role with their buying decisions.”
HOME IMPROVEMENT RETAILING • September 2014 11
11 Go to page 3 CONTENTS Introducing our extended line of ice melters, featuring the New Eco Platinum Series
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12 Go to page 3 CONTENTS Frontlines
Polished chrome earns the top spot in bathroom faucet finishes and is anticipated to have the most growth in 2014. The report, which surveyed 420 kitchen and bath designers, also says polished nickel faucets, now in fourth place, will be the second fast- est growing finish in 2014. White is the top fixture colour for the bathroom and is predicted to grow even more in 2014. Colours like beige and almond are expected to decline in popular- ity this year, although silver and grey may increase slightly. Almost half of designers specified water- saving faucets and fixtures in 2013, with 44 per cent predicting demand will grow in 2014. The report doesn’t expect much change Bathrooms Going in vanities, but quartz is expected to rise as the star product for vanity tops. Under- mount sinks continue to be the number one Contemporary style and are predicted to grow strongly this year. ontemporary style has now sur- we haven’t seen the end of the transitional As for flooring, tile, either ceramic/ passed transitional, taking over style just yet. Transitional was the top style, porcelain or natural stone, makes up the as the number one bathroom representing up to three-quarters of the mar- majority of bathroom floors with no major C style, says the National Kitchen ket, just a few years ago, but it is now the changes anticipated in 2014. Electric radi- and Bath Association in its ‘2014 Kitchen & third most popular style and designers don’t ant floor heating continues to increase in Bath Style Report.’ However, designers say expect any major changes this year. popularity. ❖ Faucet Technology Greatly Improved
mproved valve technology has reduced leaky faucets to a mini- often requires frequent repairs to stop leaks. A compression faucet mum, so choosing a faucet is more about style and less about uses a threaded compression stem with a rubber washer at the top quality these days. However, it is important for your customers to of the threaded area. When the compression stem is tightened, the I be familiar with what they are purchasing so they have an idea of rubber seal presses against a valve seat to prevent water flow. the maintenance required and their expectations for their purchase. Ball faucets usually have a single handle which moves over a rounded ball-shaped cap right above the base of the faucet spout. Valves The handle controls a plastic or metal ball inside A faucet (or tap or spigot) is basically a valve the faucet body. The ball has slots in it, with rub- controlling release of water and mixes the hot ber o-rings and spring-loaded rubber seals. This water with the cold. It is often below the handle. assembly controls the flow and mixing tempera- There are four different types of faucets: ceramic ture of the water. Ball faucets tend to leak more disk, compression, ball, and cartridge. They are than other washerless faucets. available in a variety of styles and designs. Cartridge, or washerless faucets, use rubber Ceramic valves consist of two ceramic carbide o-rings inside a cylindrical cartridge to control disks opposite each other. One is fixed and the the flow of the water. other moves. A rod connected to the handle will Another configuration for a cartridge faucet move the one disk, aligning the holes to allow is a stainless steel plate which is pressed against water through – hot and/or cold depending on how a spring-loaded neoprene seal. Customers should the disks are aligned. Because ceramic carbide Homeowners have many options be made aware that over time the neoprene or hardly wears out from friction, it is very durable when buying a faucet. Shown o-rings will wear out. However, these seals are and will last a long time is the stainless steel, pull down easy and inexpensive to replace, providing the A compression faucet is inexpensive, but Selia faucet by Pfister. homeowner is somewhat handy. ❖
HOME IMPROVEMENT RETAILING • September 2014 13
13 Go to page 3 CONTENTS We think outside of the...
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14 Go to page 3 CONTENTS Going Green How To Save Energy And Money ith the good weather finally sign up for smart meters and smart here, Canadians are once thermostats to monitor energy usage. again purchasing or build- By better understanding energy con- W ing new properties and/or sumption, consumers can program and renovating their existing homes. This is the plan for the most efficient use. Even ideal time to pay attention to a home’s small changes can make a difference energy efficiency and make energy sav- such as replacing incandescent light ing changes where possible. Not only bulbs with compact fluorescent can consumers save electricity and light bulbs. natural gas, they can also realize ◆ Maintain Systems significant cost savings. Energy- Simple maintenance such as optimizing changes may require cleaning and sealing heating and initial investment costs, but these cooling ducts, replacing air filters, expenses can be amortized over the life- insulating pipes, and cleaning HVAC time of the home and reduce heating, cooling, equipment can greatly improve the effi- and water costs for years to come. Education ciency of heating and cooling systems. is the first step to helping homeowners navi- At a minimum, change the furnace filter gate the choices that they make when build- every three months. A dirty filter will ing, buying, or remodeling. slow down airflow and make the system The following are tips you can share work harder to keep you warm or cool, with your customers on how they can save caulking and sealing walls, windows, wasting energy. energy and money in their home. floors, and doors can also decrease ener- A clean filter will also prevent dust and ◆ Invest in Energy Efficient Appliances gy usage and costs. dirt from building up in the system, which Major home appliances such as ◆ Monitor Energy Usage could lead to expensive maintenance and/or refrigerators, washing machines, and Homeowners in eligible areas can early system failure. ❖ dishwashers contribute significantly to your customers’ monthly utility bills. By purchasing high efficiency kitchen What Is ENERGY STAR? and laundry appliances, consumers can save as much as half the energy of older NERGY STAR is an STAR for New Homes’ qualifies appliances. Consumers should look for internationally recog- new construction that is, on average the ENERGY STAR certification (see nized brand and a trusted across Canada, 20 per cent more sidebar). symbol for identifying energy efficient than a home built ◆ E Design Diligently energy-efficient or high-efficien- to the local building code. The first opportunity for homeown- cy products in Canada. Qualified Typical features of an ENERGY ers to save energy and money is during products meet strict technical STAR home include: the design and planning stages. Through specifications for energy performance. ◆ efficient heating and cooling systems space planning and intelligent design, These products save energy without that use less energy, reduce indoor homebuilders and contractors can imple- compromising performance in any way. humidity, and improve the overall com- ment design efficiencies that will result Typically, an ENERGY STAR qualified fort of a home in optimum natural heating and cooling, product is in the top 15 to 30 per cent of its ◆ high-performance ENERGY STAR reducing energy needs, and ultimately class for energy performance. Saving ener- windows, patio doors, and skylights expenses. gy saves money and reduces the impact on that keep the heat in during the winter ◆ Install and Insulate the environment. and out during the summer Homeowners should research the fea- A complete list of ENERGY STAR ◆ walls and ceilings insulated beyond sibility of installing solar panels on the qualified products is available online at what is required by the building code home or property for efficient electrical the National Resources Canada (NRCan) ◆ a variety of ENERGY STAR products and water heating. When remodeling, website (http://www.nrcan.gc.ca). which use less electricity by meeting existing single pane windows should be strict technical specifications replaced with energy efficient double New Home Designation ◆ a heat or energy recovery ventilation pane windows with low-E glass and all Since 2005, there is also an ENERGY system (HRV or ERV) to ensure a home windows and doors should be sealed. STAR designation for new homes. ‘ENERGY has controlled ventilation ❖ Insulating attics, walls, and ceilings and
HOME IMPROVEMENT RETAILING • September 2014 15
15 Go to page 3 CONTENTS Well Connected. No Membership Fees. No Mark-ups. No Long-term Contracts. No Kidding.
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For Building Supply Dealers On The Move.
16Yardstick MagazineGo to Bleed.indd page 1 3 CONTENTS 2014-01-22 12:38 PM CANADIAN REPORT ON DISTRIBUTION SPECIAL FEATURE SEPTEMBER 2014
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Go to page 3 CONTENTS 182012-20722 Buck Stops Here 8.125x10.875 v2.indd 1 2014-01-14 11:36 AM SPECIAL FEATURE New Channels And New Competition Challenge Retailers
By: Nienke Hinton
nified commerce, vendor con- solidation, and technology are top of mind for retailers, buying groups, and distributors in the Uhome improvement sector. More than ever, retailers are struggling to remain Efficient distribution systems is a key competitive in the world of omni-channel area where home improvement retailers retailing where the players seem to be can stay ahead of the competition. municate with, and serve customers at changing on a regular basis. Efficient every point in the purchase cycle. distribution is a key area for retailers provide a seamless shopping experience Today’s customer expects a consis- to stay ahead of the game by enabling whether in the store, on the web, or any- tent brand experience, accurate inventory them to offer lower prices and a real-time, where customers choose to shop on their availability, and visibility in real-time, says seamless customer experience across the mobile devices. BRP. Real-time bridges the digital and various touchpoint channels. physical worlds to empower and encour- The top company initiative among Real-time Retailing age customers to fully experience brands supply chain executives is to enable Not only are there more channels to whenever and wherever they choose. To a seamless customer experience online reach the customers, the number of prod- meet this generation of customers’ needs, and in the store, says a survey by Boston ucts available continues to increase as progressive retailers are shifting their busi- Retail Partners. Its ‘2014 Supply Chain well. “As the number of products offered ness organization and supply chain away Benchmark Survey’ says 93 per cent of increases, so does the demand on the dis- from distinct shopping channels and into retailers are transforming their supply tribution system,” says Trent Balog, execu- a seamless, unified, customer-facing expe- chains to enable real-time retailing. The tive vice-president, operations, and COO, rience. However, BRP says transforming survey defines this ‘unified commerce’ Taiga Building Products Ltd. This requires the supply chain to meet the needs of initiative as the evolution of both multi- retailers to provide real-time retailing the new consumer requires significant channel and omni-channel retailing to – being able to detect, understand, com- resources and investments.
HOME IMPROVEMENT RETAILING • September 2014 19
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“The supply chain is evolving at a ness at this point in time. For traditional This method also causes the dilemma record pace as customers demand more retailers, it is usually around two per of inventory ownership – who gets a services and value in shorter delivery cent – not enough to go out and invest product first? If there is a limited supply times at a lesser cost,” says Terry Davis, millions of dollars in capital.” of something, which customer gets the CEO of Home Hardware Stores Limited. Wulfraat says retailers know this per- priority? Is there room for the inventory? centage will go up, but how do they best Who is going to pick the order? “So Vendor Consolidations handle this new channel cost effectively now you have a logistics operation at Home improvement retailers are using and in such a way that they don’t disap- the store level, which you may not have various strategies for distribution. Some point their customers? Should they build had before,” says Wulfraat. And, there use in-house or ‘insourced’ systems, some a separate distribution infrastructure or is no rule book yet, he says. “Everybody use third-party distributors; some use use existing assets in their network that is making it up as they go along.” banner or buying groups’ distribution already service the stores? He says channels; and some use the distribution Home Depot started out by letting the New Competition systems provided by vendors and manu- supplier channel fulfill online orders. Meanwhile, Amazon is quietly com- facturers. However, the game continues However, when you do that, you are ing up the pipeline with its business- to change with vendor consolidations. basically relying on hundreds of other to-business supply chain. “We do not “Consolidation within the industry has become essential to cutting costs and keeping companies’ heads above water,” says Lou Valeriati, vice-president of operations for Chalifour Canada. In fact, many industry experts agree. Bill Morrison, president of TruServ Canada says, “The industry will likely need fewer, but larger companies who leverage both size and scale to meet customer needs.” Bob Holmes, general manager of TORBSA, says, “Vendor consolidation continues and will need to continue. This addresses some of the concern of too many choices.” “Consolidation will continue to be the A distribution centre to replenish retail stores is quite different from one designed to best route to long-term health,” says James fulfill eCommerce orders. Jones, vice-president of national market- ing with Castle Building Centres Group. people to get the job done and they’re hear much about it, but it is as big not always as good or accurate as they an opportunity as anything they are Powerful Forces should be. doing on the consumer side of things,” Marc Wulfraat, president of supply Over time, this model usually morphs says Wulfraat. “Once that technology chain consulting company, MWPVL into a model where the retailer takes cre- engine is built and the distribution infra- International Inc., says there are two ative control. Wulfraat says Home Depot structure is out there, the only thing they main forces going on that are pretty now has a dedicated eCommerce distribu- will not have is the heavy duty product powerful: self-distribution versus having tion centre tup and running with two more experience that comes with a wholesale others do the distribution. planned for the next 12 months. distributor. “The large big box retailers like the Wulfraat says it is important to note “If all of the supplies available at a Home Depot are making major moves that a distribution centre geared up to home improvement retailer start showing to take greater control over their sup- replenish retail stores is a different beast up online at significantly lower prices, ply chain and greater control over their altogether than one designed to fulfill we will see a whole new channel of inventory at the store level. To do that, eCommerce orders. The size of orders competition opening up and I guarantee they are building pretty comprehensive is different, as well as the number of loyalty will be low because if people can distribution networks, he says. employees and how and where items save money, they will.” Amazon Supply “The other powerful force taking place are delivered. There is also the reverse already has 2.5 million products. is driven by the whole Amazon effect logistics to consider when a customer Wulfraat says a lot of retailers may and what is going on with eCommerce. returns an item. not have been affected by Amazon That impacts not only the retailer, but all Another fulfillment method is to use yet, but they will, including the home of the suppliers to that retailer. existing stores. Here the retailer is add- improvement sector. “It is right around “The struggle a lot of companies are ing cost to the individual store business the corner.” Amazon has raised the bar facing right now is that online sales vol- model and would need some type of fair for what customers expect. It has sped up ume is a relatively small part of their busi- share cost and profit allocation. the market with consumers demanding
20 HOME IMPROVEMENT RETAILING • September 2014
20 Go to page 3 CONTENTS ORGILL CUSTOMER INSIGHTS
Now, Orgill Gives All Long-Term Dealers A Choice. Commitment For more than 160 years, Orgill, Inc. has helped home improvement retailers succeed by providing them with a reliable source for products, programs and services. Now, retailers throughout Canada have access to all of Orgill’s resources and can rely on a distribution partner that is going to be there for them over the long haul.
ORGILL HAS A LONG HISTORY OF EFFICIENCY, INNOVATION AND RELIABILITY! YOU CAN COUNT ON ORGILL!
A Simple Mission to helping retailers prosper. Orgill is fully committed to As Orgill has emerged as the world’s largest independent providing Canadian retailers with all of the products, hardlines distributor, its mission hasn’t changed. Like our programs and services they need to succeed now and into way of doing business, our mission is simple and to the the future. point… “help our customers be successful.” Everything we do at Orgill focuses on fulfilling that mission and ensuring A Unique System for Unique Retailers our customers’ success. With thousands of SKUs in stock, Orgill can deliver unique assortments to customers of all shapes and sizes throughout A Solid Partner Canada. With more than 160 years of distribution Not only does Orgill have a long track record of service, but experience, you know you can count on Orgill to deliver it is also known for its innovation, growth and dedication when you need it. Now, Retailers Throughout Canada Have A Choice!
To find out how Orgill can help you be more successful, call Phillip Walker
1-800-347-2860 EXT. 6780 • WWW.ORGILL.COM Worldwide Distribution & Retail Services Orgill, Inc. P.O. Box 140, Memphis TN 38101-0140
21 Long Term_HIR.inddGo to page 1 3 CONTENTS 12/11/12 12:45 PM SPECIAL FEATURE
faster delivery times and easier return and banners have exclusive technolo- around since the late 1990s, but its use policies and procedures. gies, such as Home Hardware. Home’s is expected to increase rapidly over the proprietary logistics management system, next few years. Technologies called Merchandise in Motion (MiM), Retailers will need to find a distribution Continue To Evolve uses a leading industry-standard sys- model that will support rapid response Home improvement retailers, banners, tem to decrease operating costs and to customer’s expectations, says Mario and buying groups are also utilizing vari- increase visibility of products as they Paradis, senior director, supply chain ous types of distribution technologies to move through the entire supply chain. and logistics for Lowe’s Canada. “You stay competitive. Technologies continue Chalifour launched its updated eCata- are already hearing about how retailers to evolve and offer more and more func- logue (ECAT) earlier this year, making want to get product to customers within tions. Indeed, technology can be the the search and purchase of products hours of an internet sale. These pressures differentiating factor in a successful dis- extremely easy and efficient for its mem- will only continue to mount and as soci- tribution and fulfillment system. bers. The ECAT is also mobile-friendly, ety’s expectations continues to increase; Since the retailer can fulfill the order giving members the freedom to access retailers will have to either find a solution from the store or the distribution centre the product selection anywhere, anytime, to support this expectation or potentially or the vendor’s distribution centre, the and from a wide range of mobile devices lose to the competition.” challenge now is to do a better job of – streamlining their entire purchasing Valeriati says, “For the long term, predicting and forecasting the demands process, says Valeriati. home improvement retailers and distribu- that are likely to occur for a product, ‘Voice Directed Warehousing (VDW)’ tors will need to broaden their definition says Dimitry Erez, vice-president with is also gaining in popularity with the of competition. Online retailers such as Boston Retail Partners. He says there are increased demands on logistics. Home eBay and Amazon introduce a wide tools now that do a better job of forecast- Hardware and Orgill recently imple- range of vendors who are willing to com- ing, including configurations for older mented voice picking systems in their pete for our members’ and customers’ management systems to support new warehouses. Voice picking is an ele- business. Distribution companies must business rules. These tools will manage ment of VDW. VDW uses voice direc- meet customer demands on delivery, product fulfillment and shipping as well tion and speech recognition software availability, lead time, pricing, and tech- as inventory for any type of distribution in warehouses and distribution centres. nology in order to remain competitive.” network. He says this makes it possible to Users give and receive voice commands have a variety of distribution facilities as instead of paper or barcode or key Nienke Hinton is managing editor of opposed to choosing one model. entry methods, freeing up their hands Home Improvement Retailing (nhinton@ Many home improvement retailers and time. The technology has been powershift.ca)
make it easier for members and vendors to communicate and Castle Building sell more products.” Centres Group Although the industry has its challenges, Jones says Castle’s business model is working and is successful so the company is not looking to change its plan at this time. “Our members do not want to go out and buy business or distribution systems,” he says. “Why take the risk and put the energy into that when we have a business that has lots of experts who can service the James T. Jones members? We have many vendors who can support us; we do Vice-president of National Marketing not need to compete against them.”
Change Of Pace Accelerating he biggest challenge facing home improvement retailing Yet, there are challenges. Jones says the pace of change is in 2014 was the delayed start to the 2014 year due to the accelerating. “We continue to see the pace of change move Tpoor spring selling season, says James Jones, vice-presi- to a faster level. We are not seeing different things change, dent of national marketing at Castle Building Centres Group but in three months the changes we see happening could Ltd. “Members have been playing catch up and are very busy. have taken two years in the past. I guess it is the information We expect to exceed 2013 sales and purchase volume in a age and the power of technology that levels the playing field. smaller shipping and execution window.” Knowledge is power and members do not like to be kept in the dark.” Electronic Communication Castle continues to look at the potential for changes in its Jones says Castle continues to invest in its electronic member technology. “The biggest changes that are on the way will be in service site. “The company continues to strive to migrate as the internet for sales and ordering areas for the contractors who much information to this as possible and on a timely basis. We are working with the members,” says Jones. “Going forward continue to add services and functionality for our members. in the next few years, online ordering and smart systems to get Long term, we continue to move all operations to the cloud to orders placed and re-ordered directly will take over.”
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Over the next year, distribution in general will see huge centre has increased capacity to support new growth in eastern challenges, says Jones. We’ll see “investment in systems to Canada and will continue to provide superior distribution to our improve efficiency and more cost cutting to become profitable. dealers. WMS moves products smoothly through the entire sup- The distributors who are not carrying any debt will be the ply chain and decreases operating costs, which allows dealer- survivors as debt-laden distributors will not have the ability to owners to concentrate on helping their customers instead of convince investors to throw good money at a sinking ship.” worrying about ordering products and tracking shipments. The combined result focuses on more orders shipped accurately, Best Route faster, and at a reduced cost. Jones says consolidation will continue to be the best route “It’s our goal to ensure we continue to provide the best ser- to long-term health. “You need consolidation and those compa- vice to our dealer-owners so they can provide the best service nies that do not realize it will end up with business models that to their customers. As Home Hardware grows and we add new may look successful, but they will not survive. They may win a dealers and customers, we continue to evaluate the capacity, few battles, but they need to look at winning the war. efficiency, accuracy, cost, and speed of our logistics system to “I feel strongly that some businesses are questioning why they ensure it best meets the needs of our dealer-owners and we committed so much capital and resources to grow distribution.” remain the industry leader.” Davis says Home is continually seeking for improvement and excellence in every area of its supply chain. Home Hardware Stores Limited Continuous Improvement Home’s greatest change in technology in 2014 was its Debert distribution centre expansion and the launch of WMS which added 236,000 square feet to the warehouse in Debert, NS. The new composition is part of the MiM logistics manage- ment system along with a transportation management system. Terry Davis “These new systems will facilitate efficient operations and CEO maximize resources to ensure the supply chain continues to be the best in the industry,” says Davis. “The implementation of the WMS this past year compliments the expansion with enhanced anadians continue to spend their hard-earned dollars systems such as voice picking. These changes accommodate fill with retailers that provide value. Since 2008, spending rate and continue to support Home Hardware’s goals to always Con home improvement has been bouncing back slowly be improving in supply chain efficiency.” but steadily and shoppers have been clear on where they Home also provides eCommerce to allow customers access choose to spend their money. Retailers that have not made to products, no matter their location. In addition, the com- investments in best-in-class systems and services in order to pany has introduced a proprietary point-of-sale software called deliver tangibly better customer value will be challenged to ‘Foundation’ to help dealer-owners be more efficient with inven- hold on to their customers. Customers simply will not be patient tory management, ordering, receiving, and sales. with less than the best when it comes to value, says Terry Davis, Davis says in the next year, Home Hardware will continue to CEO of Home Hardware Stores Limited. concentrate its focus on improving supply chain efficiency and Home Hardware is committed to providing that value. assisting dealer-owners in all of their needs to serve customers. “As we celebrate 50 years, Home’s focus is, as always, to He says, “Home’s success as a dealer-owned network contin- improve store systems and supply chain efficiencies,” he says. ues to be linked to our group buying and co-operative relation- “As a part of our ongoing commitment to improve supply chain ship. Our dealer-owner system works because we all support efficiency, Home has invested in the upgrade of its distribution one another through volume purchasing and shared support systems and is implementing best-in-class solutions for logistics services. By collectively buying together and sharing our mar- management. Home’s proprietary logistics management system, keting and other services, Home will continue to provide quality called Merchandise in Motion (MiM), uses a leading industry- distribution across Canada.” standard system to decrease operating costs and increase vis- ibility of products as they move through the entire supply chain.” Customer Service Top Value Competition will continue to be intense and customers will Supply Chain Is Evolving continue to shop where they feel valued, says Davis. “Shoppers The supply chain is evolving at a record pace as customers may not care whether a company is big or small, local or demand more services and value in shorter delivery times at a global, around for 50 years or for five years, but they care that lesser cost – ‘Warehouse Management System (WMS)’ has the they were treated with respect, served with genuine warmth, power to meet these demands, says Davis. “This comprehen- advised knowledgably, and offered great value for their sive level of logistics management, from product orders to quick money.” Home supports its dealer-owners to do that by con- and reliable delivery, can’t be found anywhere else. stantly improving its supply chain and providing greater buying “Our distribution system makes us competitive as it was power, ensuring its marketing always stays true to its culture of planned and designed for our needs, making it a best-in-class value, service, and dependability, and by providing caring and system in the industry. Our expanded Debert, NS, distribution knowledgeable service throughout the organization.
HOME IMPROVEMENT RETAILING • September 2014 23
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“Getting the hardware we needed from our previous Eastern Distribution Centre, banner was always dif- Debert, Nova Scotia: ficult. That made it hard 236,000 square foot expansion to compete with the larger big box stores – and that’s why Home was perfect for us. From the rebates to the special programs and hardware selection, they’ve been amazing. Thanks to Home, we see big things in our future.” Jacques Richard Baie Ste. Anne NB
One of the reasons Home Owners are able to Canada’s most recognized fleet of delivery vehicles. LOGISTICS MANAGEMENT SYSTEM Since our beginning in 1964, Home understood the help homeowners find what they need is the Home’s fleet consists of 150 power units and over (MERCHANDISE IN MOTION) importance of logistics. Now, 50 years later, Home is strength of Home Hardware’s logistics and 500 trailers. Keeping the environment in mind, 90% Home Hardware successfully implemented a new still committed to help the independent Dealer-Owner distribution. Four highly sophisticated of our fleet is equipped with low emission engines in Warehouse Management System (WMS) at their East- grow and succeed. Home will continue to invest in im- Distribution Centres across the country help our power units, pulling trailers with fuel saving en- ern Distribution Centre. This new WMS includes voice proving supply chain efficiencies so our Dealer-Owners our Dealers support their Home customers. vironmentally friendly side skirts. Home Hardware’s picking for improved accuracy and efficiency in fulfill- will be successful for the next 50 years. Located in St. Jacobs and Elmira, Ontario, Debert, professional drivers collectively travel over 17 million ing orders. Along with the WMS, a new conveyor sys- Nova Scotia and Wetaskiwin, Alberta - Home Owners kilometers a year. Safety has and continues to be a tem and software was implemented to track all cartons everywhere can depend on reliable fill rates and a critical part of Home Hardware’s Trucking operations. going to each store. The many features of each system high service level (averaging 95+%). Home Hardware’s fleet has been CSA Certified for will help Home maintain its distribution stronghold in With over 60,000 different items stocked in our the past 10 years. the Canadian retail market. Plans are underway for Distribution Centres and industry-leading shipping With Home Hardware handling the distribution, implementing the WMS and upgrading the conveyor times, Home Owners can rely on Home Hardware to delivery and logistics, Home Owners are free to focus at the Western and Central Distribution Centres. keep their shelves fully stocked. A special orders sys- on helping their customers find what they need instead At the Eastern Distribution Centre, a 236,000 square tem allows a Home Owner to offer products which are of worrying about ordering products and tracking ship- foot expansion is now complete. This will enable Home not available for customers at the store. These special ments. This comprehensive level of service, from prod- to meet the growing distribution needs in Eastern Can- orders are delivered to the Home Owner’s store. uct orders and logistics to quick and reliable delivery, ada. The additional space includes 16,000 new pallet Home delivers the goods from coast to coast through can’t be found anywhere else. slots, and a new shipping and receiving area.
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chain and logistics of Lowe’s Canada. “Although we were very Taiga Building grateful for the service and support of our third-party provider, Products Ltd. the decision was made to finally take distribution in-house in late 2010.” Currently, Lowe’s has a single 625,000 square foot national distribution centre located in Milton, ON, to support all of its 37 stores in Canada. This facility opened in February 2013 Trent Balog when the retailer exceeded capacity of its original distribution Executive Vice-president, centre (DC) in Milton. The previous facility opened its doors in Operations & Chief Operations Officer August 2007 and was 375,000 square feet. “Roughly 50 per cent of all items we sell in our stores flow through this national DC either as stock, cross dock, or vendor onsumers continue to want more and more selections in prepared cross dock channels,” says Paradis. “On average, many categories such as flooring, composite decking, we increase items flowing through the DC by five per cent C and roofing and companies like Taiga Building Products annually as we continuously review the most effective channel Ltd. meet that need by offering more variety in products, to flow product into our stores.” colours, and profiles. As the number of products offered increases, so does the Dedication And Commitment demand on the distribution system, says Trent Balog, executive When asked how Lowe’s distribution system makes the vice-president, operations, and COO. retailer competitive, Paradis says it begins with the dedication Taiga started with one distribution centre (DC) in Calgary, and commitment of the entire Lowe’s Canada team. “The entire AB, that evolved into 15 locations across Canada and two in team strives to ensure each customer who comes into our stores the U.S. over 41 years. However, the one thing that makes a walks away with what they were looking for and more. As a distribution centre successful, despite its size, is the people, supply chain and distribution team, it is our goal to ensure says Balog. Taiga offers a complete line of building materials stores have the highest in-stock position versus our competitors. and dealers cannot afford to stock all the skus, so the logistics Our team’s focus in 2014 has been ‘store in-stock’ and we’ve system is key to managing so many products. been able to provide significant improvements over last year by being more aggressive on inventory builds and investing Transportation Greatest Challenge more inventory dollars in our stores and our distribution centre. Balog says transportation logistics will continue to be the main “Another advantage we have is the ability to react to unex- issue “probably for years” as driver shortages continue. Taiga pected situations. Over the last 12 months, we’ve been hit with handles this obstacle by insourcing. “We continue to invest in our several ‘freak storms’ across the country (such as the flooding own trucking fleet and try and manage it from within.” in Calgary, AB, and Toronto, ON, and the December ice Another challenge is the continuous evolution of software storm in Ontario) and in all of these instances, our distribution and computer system, and Taiga faces that challenge by network was able to react to our customers’ needs, in some upgrading its systems regularly. cases within hours. Our supply chain team is aggressive with Going forward, Balog says the pressure on increasing distri- weather-related product both in stores and in our distribution bution capabilities will persist. “Dealers will continue to watch centre. When poor weather is coming, the team deploys inven- their inventories/cash and turn them as quickly as possible – tory in the markets expected to get hit and we always carry which means smaller orders, more often.” additional inventory in our distribution centre to react to strong demand within 24 hours. “We are able to do this because we pride ourselves on Lowe’s Canada being nimble. All the decisions we make are based on ensuring the customers leave our stores satisfied with their experience and want to come back in the future.”
Supporting Strong Sales Growth “Our greatest challenge is to continue to support strong Mario Paradis sales growth in Canada while maintaining high levels of store Senior Director, in-stock,” he says. “We can’t sell what is not on our shelves so Supply Chain and Logistics this puts a lot of pressure on our supply chain and distribution teams to react to these strong sales and continue to be aggres- sive with inventory. You’ll never know what you can truly sell if hen Lowe’s entered Canada in 2007, “we strategi- you always run out of inventory. cally partnered with a 3PL provider to operate our “We are a growing company and change is part of our W distribution network while we focused on opening daily vocabulary. I’ve been with Lowe’s since we moved into stores and providing premier service to our customers, but it Canada in 2007 and I can honestly say that each year is was always our intention of taking distribution in-house when different than the last. Although we don’t have any specific the time was right,” says Mario Paradis, senior director, supply technology improvements planned for the next 12 months, we
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constantly look at our distribution model to ensure we continue some things have to change to meet their needs, one thing will to have the capacity and capabilities to support all of our not change, and that’s our commitment to serving them first and stores. Although we are a single distribution centre network foremost,” he says. today, we are looking at several opportunities that can improve service to not only our stores, but also our customers.” National Distribution System Paradis believes there will be two necessary changes “The TIM-BR MART Group distribution system is truly required long-term. The first is finding a distribution model that national, serving all markets across Canada from out west in will support rapid response to customer’s expectations. “You Gold River, BC, to the Maritimes in Shoal Harbour, NL,” says are already hearing about how retailers want to get product to Valeriati. “Our nationally integrated distribution system allows customers within hours of an internet sale. These pressures will us to co-ordinate our product offering to satisfy the selection only continue to mount and as society’s expectations continue required by regional markets. For our members this is huge to increase; retailers will have to either find a solution to sup- because they’re able to operate regionally and, at the same port this expectation or potentially lose to the competition.” time, enjoy the benefits of our national buying power. The second change is transportation. “There is already a “Recently our system has expanded into British Columbia crunch in the trucking industry with capacity and this will con- where we are now fully integrated into the province and avail- tinue to be a big problem as more and more truck drivers reach able to meet the needs of our dealers there more efficiently. The retirement age and have no one to replace them when they new warehouse will lessen the strain on our distribution system leave. I was part of a transportation forum with our core carriers as a whole, expand the amount of services we offer our BC recently and several commented that they’ve had to adjust their members, and allow us to solidify our overall national structure. hiring criteria in order to fill vacancies. Unless there is a surge in “The expansive reach of our distribution system is a core new drivers taking over the roads to fill these voids, this could put strength; we’ve placed our regional distribution centres in geo- a heavy strain on how product is distributed from point A to B.” graphically strategic locales across Canada which allows us to supply our members with the products they need when they need it. The sheer size of our distribution centres themselves is another important factor that makes us competitive in the market; we’re able to hold thousands of SKUs for our dealers, Chalifour offering not only a wide selection of products, but a very high Canada volume of them as well.”
Expansion A Proactive Step “The recent expansion of our distribution network is a Lou Valeriati proactive step in not only meeting the supply chain needs of Vice-president of Operations our members, but it will also prevent our memberships’ supply chain from drying up come a bad winter storm. This past winter brought with it more than just a few bad, isolated storms, but he trend that continues to be a major force in not only severe weather conditions across the country. Our distribution the home improvement retail industry, but in every retail network is comprised of strategically-placed warehouses which Tindustry, is eCommerce. makes it very resilient to adverse weather; we didn’t see much “While the wave of eCommerce across the industry may of an affect or strain on the warehouses or the network [during have been met with some apprehension, we’ve embraced the last winter],” says Valeriati. trend and leveraged technology to serve the needs of our mem- “One of the greatest challenges we have managing our bership,” says Lou Valeriati, vice-president of operations for distribution network is meeting the needs of dealers in different Chalifour Canada. Chalifour is TIM-BR MART’s wholly-owned regions. Every region has its own unique product needs and we distributor, responsible for shipping and allocating hardware, have to ensure that we remain competitive in our product selec- lumber, and building supplies to TIM-BR MART stores. “With the tion, prices, and fill rate. To do this, our operations department launch of our updated eCatalogue (ECAT) earlier this year, we works very closely with our category managers and inventory have made searching for and purchasing products extremely planning team to ensure that we have the right amount of on- easy and efficient for our members. The ECAT is also mobile- hand inventory in the stores, that we evaluate the velocity of our friendly, giving our members the freedom to access our product SKUs, the price sensitivity of our products, and overall market selection anywhere, anytime, and from a wide range of mobile conditions. devices – streamlining their entire purchasing process. As the “In addition to the launch of our ECAT in January, we’re also ECAT was created for our members, it is in a large sense, cre- leveraging another hot technology on the market right now: ated by them as well. web-based platforms. In November, we’ll be replacing our tra- “Our members drive the development of our ECAT; we ditional Chalifour Expo with a virtual one-week online version. regularly solicit feedback from them to adjust how the ECAT The web-based platform that the virtual show will be hosted behaves and gain insight on how to improve it. We know on will allow members and vendors to save time and forego that our members’ needs will change with the ebb and flow of the expense of travel while enjoying all the amenities and buy- technology and that our ECAT may forever be a work in prog- ing opportunities available at a traditional trade show,” says ress – and our members understand that. They know that while Valeriati.
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“As the economy recovers, we expect two trends to con- that our focus on distribution activities make us more competitive tinue within the distribution industry: consolidation and the than some companies that are ‘sort of’ in the business of distri- leveraging of technology. Consolidation within the industry bution, but not as their core focus. Over time, the independent has become essential to cutting costs and keeping companies’ distributor in LBM will grow further. We believe small items that ‘heads above water.’ Similarly, new technology has done the can be readily shipped by courier will erode the traditional chan- same; new types of software have been developed that com- nel in those markets, which we are not a part of.” panies continue to leverage to streamline their operations and CanWel is currently in the process of upgrading its ERP sys- become more cost effective. Our economy’s slow recovery has tem. The system should be completed in 2015 and it “will have forced many companies to become very lean and cautious. the most advanced platform in the industry, which our company With the industry’s strong focus on cost cutting and efficiency, is very excited about. The efficiencies driven will only further us we believe these trends will last well into the future.” in being the leader in our industry. We don’t see our competi- tors investing in technology, and we will lead.” Broaden Their Definition Of Competition “For the long term, home improvement retailers and distribu- Continued Growth tors will need to broaden their definition of competition,” he In 2013, CanWel acquired North American Wood Preservers says. “Online retailers such as eBay and Amazon introduce in Abbotsford, BC, and Pastway Planing in Combermere, ON, a wide range of vendors who are willing to compete for our to continue its growth in the wood planing and pressure treat- members’ and customers’ business. Distribution companies must ing world. The company also expanded its Calgary, AB, distri- meet customer demands on delivery, availability, lead time, bution centre, tripling the size of its former operation in order to pricing, and technology in order to remain competitive.” serve the growing needs for its services in this area. “We will continue to be the ‘just in time’ inventory for our customers as well as the ‘less than truckload’ solution as times CanWel Building call for higher turns and lighter inventory investment,” says Materials Group Doman. “Our customers look for us to be that connection – along with manufacturing certain items to complement our distribution activities. Stay tuned for more growth.”
TORBSA Amar Doman Chairman & CEO
n the past year, we have seen our retailers continue to right- size and evolve with the Canadian landscape, says Amar Doman, chairman and CEO of CanWel Building Materials Bob Holmes I General Manager Group. “There have been new arrivals to the scene along with closures,” he says. “We believe this will continue for the next few years and then it should settle down. We will see more banner consolidation in my view. ORBSA is a Canadian buying group that strives to offer its “Interest rates have remained flat, which we view is the shareholders a breadth of products from many suppliers driver of the housing market, coupled with a decent Canadian T rather than a single source. “Our shareholders have the economy, which we feel should get better as the U.S. continues option of choice,” says Bob Holmes, general manager. to heal. We forecast a ‘steady as she goes’ environment.” “On the building material side, the majority of products pur- Doman says, “CanWel has evolved and will continue to evolve chased through the group are in truckload quantities,” he says. as the distribution partner of choice for allied and construction Most manufacturers have Canadian footprints or load centres materials. With our 16 distribution centres strategically located allowing for timely and efficient supply. On the hardlines side, from coast to coast coupled with our six pressure treating and plan- TORBSA’s association with the OCTO Purchasing Group has ing operations, along with more than 700 excellent employees, we grown and become a true benefit to our shareholders.” have the ability to service our customers like no other. We will con- tinue to grow in this area through further consolidation and acquisi- Pent Up Demand tion. Being a publicly traded company also raises our profile for Over the past year, Holmes saw the entry of more manu- opportunities; we have just celebrated our 10th year on the TSX.” facturers offering a greater number of choices. At the same time, dealers have gotten lean – “it was a long winter.” In fact, Core Business Strategy the long winter caused a slow start to year, “about 30 days CanWel’s ability to partner world class manufacturers with behind,” says Holmes, causing pent up demand. However, the world class customers is our core business strategy, says Doman. summer season has been busy and it “should be a strong finish “Our large scale purchasing power and high volume efficiencies to the year if the weather co-operates.” allow us to deliver the savings to our customer base. We believe TORBSA’s distribution is done through its suppliers and
28 HOME IMPROVEMENT RETAILING • September 20142013
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third-party distribution centres. Holmes says members choose dynamic in nature for the channel specific demands of a hard- who they want to buy from. “Our role is negotiating discounts ware store, home centre, pro lumber, or farm and ranch busi- and then the members themselves make the choice. A lot of the ness model. With every decision made, we are committed to products that our members buy are products that have been analyzing our assortment offering with a retailer’s perspective specified by their clients or the jobs that they are delivering to. in order to make sure we have the proper variety of products, So that can really dictate what products are being bought and price points, and niche options that appeal to the multi-faceted how they are delivered.” range of consumers that shop our customers’ stores.” For example, if the member is buying plywood or a truckload of plywood, it would go through a distributor like Taiga or AFA Lower Prices Through Efficiencies Forest Products. “A lot of the products we buy would be things The second initiative is “looking for ways to enhance our like insulation and gypsum and steel,” says Holmes. “They would position as the price leader in our industry. This comes from not all come directly from the manufacturer to the members’ yard only negotiating better prices from our vendors, but looking to and the member would then put it on his truck and deliver these our operations group to become even more efficient. In turn, with other products to those jobs or those clients.” this translates to lower prices we can offer our customers so that they can effectively compete in their local markets. Communication Important “Most recently, Orgill has implemented a voice pick system Holmes says communication is an important piece in the in all distribution centres. This advancement has resulted in TORBSA network. “We use our website to keep all shareholders incremental gains of efficiencies that have, in turn, resulted in updated with respect to marketing plans, purchases volumes, cost savings for our valued customers,” says Beal. “Our mis- and vendor notices.” sion doesn’t stop at lowering prices for our dealers. We have The group continues to expand and now supports share- an industry leading retail pricing system in place to make sure holders in eastern and western Canada. Its head office has that retailers are not only priced competitively within their local transitioned to the cloud and it continues to provide sharehold- trading area, but it also ensures that they don’t leave potential ers with access to current technology through its distribution margin dollars on the table.” of computers and software every two years. The group also provides information and training through monthly meetings. Online Presence Holmes says that vendor consolidation continues and will need Thirdly, with current trends, it is clear that the majority of to continue. “This addresses some of the concern of too many retailers will need a web presence in the future to remain choices.” He sees manufacturers continuing to develop their web- viable in consumers’ minds, says Beal. “The current genera- sites and applications that detail the specifications of their product tion of consumers has come to expect retailers to have an offering. He believes manufacturers and dealers will begin to online presence. focus on social media as a vehicle for promoting their brand. “We have been diligently reviewing the latest trends and developing new solutions. During this process, we have identi- fied multiple opportunities that retailers can potentially capital- Orgill, Inc. ize upon. Within these opportunities, there are three distinct business models that can be explored by each retailer in order to find their niche. The identified business models for online sales are a price/volume model; an information is valuable model; and a niche product/enhanced assortment model. “Our eCommerce team continues to review and enhance programs to assist our customers in participating in one or Ron Beal more of these models to maximize their online sales.” Chairman, President & CEO
Sexton Group rgill, Inc.’s commitment to its Canadian customers includes channel-specific products, efficiencies from O operations, and unique business models to suit indi- vidual retailers. Orgill has three current corporate initiatives, says Ron Beal, chairman, president, and CEO. The first is an assortment review. “The merchandising team is currently working through Steve Buckle an ongoing assortment review. More than 30 professionals President are methodically reviewing each of their respected categories to ensure we offer our customers the right assortment to meet the demands of their local market,” he says. “We continue to n many markets, profit margins are being squeezed by fine-tune a regional assortment of more than 60,000 SKUs increased competition, higher labour rates, and other input that is unique to our Canadian customers. The primary goal of Icosts, says Steve Buckle, president of Sexton Group. He says, our efforts is to continue to offer a hardlines assortment that is “Smart retailers are examining the value of all costs including
HOME IMPROVEMENT RETAILING • September 2014 29
29 Go to page 3 CONTENTS SPECIAL FEATURE
national banners, buying group surcharges, and others that, in has 12 distribution centres – a total of three million square feet. the past, were often taken as ‘givens’.” “We have evolved from a ‘one centre,’ ‘one purpose’ system Buckle says the Sexton Group “believes that the existing two- to a ‘multi-centre’, ‘multi-option’ network, with new ways of get- step distributors play a valuable service role in our industry and ting the right product to the customer at the right time,” says Bill we support their efforts. Sexton Group also actively develops Morrison, president. opportunities for larger purchasers of building materials and hardlines to buy direct from manufacturers. This allows our More Connected, More Local members to enhance their margins.” Morrison says the key change he’s seen over the past year is the importance of local factors (economy, zoning, weather) to Staying Focused retailers. “Everything is now both more connected (macro) and Sexton members benefit from being able to buy directly from more local at the same time.” manufacturers at a substantial cost advantage. “In cases where He says to remain competitive is to constantly change and it makes sense for our members to pay a higher price for the ser- evolve to meet the need of the marketplace. “Our distribution vice offered by distributors, we support existing distribution com- system allows us to meet dealer’s needs [by being] flexible panies rather than form our own,” says Buckle. “In this way, we (from ‘one’ to a container); scalable (truckloads or 10 truck- are able to focus our resources squarely on sourcing competitive loads); and responsive (ability to adjust ‘in season’ or to meet pricing for our members day in and day out. In our opinion, this new trends).” is where a buying group creates the most value for its members.” As an example, he mentions this past winter. “The ‘coldest That said, Buckle says Sexton’s focus is on providing winter in 60 years’ certainly stressed all of our logistic abilities members with the lowest cost solution to their door. “We must from freezing equipment to highway closures to tremendous understand the freight trends and geographically optimize our demand for seasonal (winter) products,” he says. supply base with the best routes. “The biggest logistics issues this year have been challenges Main Challenges with truck and rail freight. As much of our members’ purchase However, Morrison says the main challenges for a distribu- volume comes direct from the manufacturer to their yard, timely tion network “are our tremendous geography, the expectation delivery is important.” of high performance at low cost, and retailers competing with new eCommerce and other competition. We work to continual- New Ways To Add Value ly improve all aspects of distribution and measure factors from Buckle says going forward that “two-step distribution continues the customers view.” to play an important role in our industry. Like all participants, To overcome these challenges, he says, “We have a pro- they must continue to honestly evaluate their performance levels gram of continuous improvement. We have invested in new and seek new ways to add value. At the Sexton Group, we will eCatalogue updates to increase data speed and allow for continue to contribute positively with these supply partners.” ordering on new platforms, we have updated shipment quality Specific to the efficient movement of products, Buckle says packing and wrapping equipment, and we have updated all there are opportunities for suppliers to work with the Sexton fleet tracking and route planning systems.” Group to consolidate orders, create central drop points, and Going forward, he sees a tremendously competitive market otherwise minimize freight costs. “To have maximum impact, with all companies managing higher energy, infrastructure, and this activity requires a higher level of trust and commitment technology costs. He says the industry will likely need fewer, between all participants.” but larger, companies who leverage both size and scale to meet customer needs. ❖ TruServ Canada
Bill Morrison President
ruServ Canada is a national company that offers both a dealer program and a wholesale customer program. T It is a wholly-owned subsidiary of RONA inc. and has been assigned to represent the Ace brand for RONA, which recently partnered with Ace to represent the brand in Canada. As part of RONA’s national distribution network, TruServ
30 HOME IMPROVEMENT RETAILING • September 20142013
30 Go to page 3 CONTENTS Delegating Your Store Design to a Hardware Distributor? Uh, oh...
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31 Go to page 3 CONTENTS ACE HIR Ad_Layout 1 8/20/14 8:00 AM Page 1
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32 Go to page 3 CONTENTS HAND TOOL REPORT
DIY And Innovation Drive Hand Tool Category
rise in do-it-yourself (DIY) home for effective product differentiation in the that can be removed and used as a hand improvement and consumer expec- market. Manufacturers are responding by tool. “They can un-chuck it from their drill, tations will continue to drive inno- coming up with innovative solutions to set chuck it into a handle and they can use it by A vation and build sales in the hand their brand apart. These include ergonomic hand to do the last bit of work when there tools and accessories category over the next improvements, incremental increases in per- is a little more finesse needed,” says Palese. four years, says Global Industry Analysts, formance, and increases in tool functions. Inc. (GIA). In an upcoming report, it says the need to reduce costs is a prime factor spur- New Functions ring the popularity of the DIY trend. Other And Materials factors driving growth in the market include One major trend is making tools capable increases in the number of home remodeling of more functions. and redecoration projects. On top of that, there “People are being asked to do more with is growth in the number of households and an less so they need to do more things with increase in disposable incomes. less tools,” says Greg Palese, vice-president These trends, plus commoditization of marketing with Klein Tools. “They need of the hand tools market, intense pric- tools to do double duty and have double ing pressures, and shrinking profit mar- functions.” As an example, Klein Tools has Klein Tools’ Switch Drive power nut gins are forcing manufacturers to invest introduced a new tool called ‘Switch Drive’ driver. in product and technology development which is a screwdriver blade used in a drill
HOME IMPROVEMENT RETAILING • September 2014 33
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Klein Tools communicates regularly Milwaukee Electric Tools, which also with its end-use customers to understand manufactures hand tools, also works with its their needs. It learned, for example, that end users. “We are constantly getting feed- contractors using pliers all day complained back and looking at how we can improve it was hard on their hands. The company on things for contractors,” says Keith Potts, came up with a process for manufacturing national trainer. Contractors said they cut pliers so the handles are softer. Yet, “the off the plastic from the handles of pliers to cutting blades are hard enough that they get a better grip. Now Milwaukee makes a Milwaukee’s reaming pliers with can cut through a lot of different things line of pliers without plastic on the handles. clean handles. and they will last you 30 years,” says With plumbing levels, the company has put Palese.
Stanley’s Fatmax hammer.
These types of changes will continue as pricing of materials and technologies come down, says Scott Moore, director of marketing for hand tools and storage with Stanley Black and Decker Inc. “A hammer used to be basically a rock and a stick,” he says. “Now they are made of titanium and have newer handle designs. Manufacturers are using an MIG weld process instead of titanium in hammers. You take three compo- nents and weld it together and, as everybody knows, when you weld something, the weld is actually stronger than the material. Now you can create a lightweight hammer at a lower price. “That is really what feeds our new prod- uct development in the hand tools market. What can you do differently to make things last longer, be safer, and maybe help solve a problem for the contractor? Inevitably, you want to make the job easier.”
DeWalt’s five-in-one hacksaw.
Along that line, Stanley Black and Decker has come up with a five-in-one hacksaw, a professional hacksaw that breaks down into five different hacksaws including a mini hacksaw, which is a hand-held for sawing – in tight spots.
HOME IMPROVEMENT RETAILING • September 2014 35
35 Go to page 3 CONTENTS MC11324 CanadianDealerAd-HIR.indd 1 6/18/14 8:24 AM 36 Go to page 3 CONTENTS HAND TOOL REPORT
magnets on them so they actually stick to when RFID-type technology will be avail- the pipe. Electrical contractors would wrap able in tools. electrical tape around the shaft of the screw- Moore says this technology is already driver to provide an insulating barrier; now available, but is not in widespread use in Milwaukee offers a screwdriver with an Canada yet. He says with this technology, insulating barrier. there would be a chip in each tool so con- tractors will know who is using a tool and Quality Over Price where it is at any given time. He adds, as Although consumers want to save money, the demographics in the trades change and they are willing to pay more for quality. new generations come in, it will spark more Moore says, “A lot of people in our change in technology. business are starting to realize that price is not everything. If you design the tool New Competition to the application, people will spend the Task Tools’ home page. Finally, competition – existing and money because you are solving a problem new players entering into the Canadian or merging two tools. They are not afraid of things differently. “Mobile has grown for us marketplace – is also on the mind of hand spending money if it is the right spend for and has had a pretty big impact on what we tool manufacturers. “We are a big country the right product.” do by forcing us to think about our business. and I think we are gaining a lot more rec- Task Tools sees the same trend. “We are We need to think about eCommerce, social ognition on a global scale and everybody seeing attitudes of consumers and our cus- media, how to interact with people, how to wants a piece of the pie,” says Moore. tomer base shifting away from the lowest talk to customers, and offer the content they “We see global manufacturers that may possible cost and towards a preference for want. We have to talk to our customers dif- have never even existed in Canada starting better quality,” says Chris Waldner, group ferently than we used to. We have to present to enter through different buying groups product manager at Task Tools. “In many them information differently and we have and such.” cases, even if we have a lower cost option to make sure that we are engaging them in With all the innovation and interest in the within our line, our premium grade items are conversations as opposed to a one-way push hand tool category, it will likely grow for the best sellers.” as it used to be many years ago.” many years to come. No matter how experi- Another technology manufacturers are enced a person is in home improvement or Internet Creates hearing about more often is tool tracking. how much work they do, they will always Educated Consumer Palese says contractors regularly ask need hand tools. ❖ On the technological side, the internet continues to play a big part in the sales of hand tools. “It gives our customers new ways to find us, new ways to learn about our products, and new ways to engage with us,” says Waldner. “In the not-too-distant past, it would take a lot of work to see a product video on one of our products. Now, you can just fire the internet up on your smart phone, with a halfway decent mobile connection, and watch it from anywhere.” Waldner says the advancement of tech- nology will lead to more educated consum- ers. “Now, by the time they show up at a store, they know exactly what they are looking for. Contractors that come into a store, they know what they are looking for because of their experience. Now, a con- sumer can have that similar level of product knowledge based on the availability of that information.” Internet technology also levels the play- ing field for smaller manufacturers like Task to compete against the larger companies. Waldner says, “We are never going to have the marketing budget of some of the big guys out there that have huge marketing companies, but now we have a chance to engage people more with social media and video on the web.” Palese says he finds that the growth of mobile technology is definitely impacting business and forcing people to think about
HOME IMPROVEMENT RETAILING • September 2014 37
37 Go to page 3 CONTENTS Showroom Learning Ground For Retail Stores
anadian Tire Corporation, Ltd. play types including box displays, gondolas, it very quickly and we also brought in a lot (CTC) has opened a new concept and custom fixtures. There’s even a real car of new fixtures and things that you would store to develop displays and featured with the automotive products. One of not see in typical stores. There is a lot of C technologies for all of its retail the unique features of the store is the lighting. wood treatment here. Other than the gon- stores. The CTR Showroom will be a ‘test Because it is a showroom, the lighting needs dolas, there is no fixture in [the showroom] and learn’ environment where CTC will get are different than typical retail stores. “We that you would find inside of a typical reactions directly from customers and staff actually brought in somebody from the movie Canadian Tire store.” to enhance the shopping experience at every business to do lighting and that is something channel. we do not historically do,” says Hicks. Learning Process The one-of-a-kind showroom, located in He says the store features some smaller It’s a learning process, says Hicks. CTC Toronto, ON, is open to the public and uses products that shoppers could put in a shop- is listening to responses from customers and innovative displays to showcase a variety of ping cart, but a lot of items are bulk product seasonal product assortments. which customers would pick up at the load- “We carry a lot of products that custom- ing area. Behind the store is a 20,000 square- ers just do not know about,” says David foot warehouse, which is organized very Hicks, senior vice-president, store opera- meticulously. A drive-through pick-up area tions and dealer relations. He says these is in the back of the warehouse and there is a products can take up a lot of room to dis- clean area with two bays that customers can play, so the showroom provides that space. drive into to have their merchandise loaded. “The goal is to test and learn and see how The showroom concept was put together displays work over here and then we can in a short time this year because the former take them into stores across the country.” tenant vacated early in 2014 and CTC wanted to open the doors by spring. When the unit Variety Of Displays first became available, CTC executives knew The showroom is basically a 16,000 they wanted it for extra retail space, but they square-foot retail space that is filled with weren’t sure how they were going to use it. various displays to best exhibit seasonal prod- “After a couple of iterations of what we uct lines. It includes an assortment of single wanted to do with the space, we ended up product, multiple product, and thematic dis- with the showroom,” says Hicks. “We did
The CTR Showroom has 40 digital screens across the store, some are interactive.
38 HOME IMPROVEMENT RETAILING • September 2014
38 Go to page 3 CONTENTS The CTR Showroom has an assortment of single product, multiple product, and thematic displays.
CTC has a lot of training programs for all of its stores, but since the showroom is close to the head office, it decided to bring in the experts. It brought in vendors and manufacturers to explain the features and benefits of its products. “You do not need a lot of staff in an environment like this, but the staff needs to know the answers to questions or they need tools to help them get those answers.” If the associate doesn’t know the answer, they can look it up on one of the interactive screens. The CTR Showroom has 40 digital screens across the store, which is more than in a typi- cal store. Some of the screens are interactive making changes to reflect their expectations. The original staging was done when the so staff and customers can search for a prod- “We have already removed quite a bit of store was not yet open, so changing over uct or product information. It will list items product from this store,” he says. “We have for the next few seasons will be a learning and the customer can also compare them. removed about 30 per cent of the SKUs that curve because the store is open to the public. Some products also feature QR codes so we had in here from day one because cus- “When you are all displays, it is amazing customers can scan the product and immedi- tomers are not looking for it here. They are how quick you can set it up. We can do a ately have access to more information. not looking for it to be on display. They are segment and we will do it overnight. We One of the advantages of setting up the telling us what they are looking for so we are will have a crew in, they will complete that new store is the ability to test new technol- swapping out [products] on a regular basis. zone, and the next morning it will be done. ogy. For example, the showroom is the test- “The other thing we are learning are the The next morning, we will just keep work- ing ground for one interactive screen which peaks and valleys in a season.” He says ing our way through.” projects onto a mat as footprints. Kids can patio and barbeque product lines are fan- can follow these to actually play hockey tastic in the showroom space. “When we Type Of Transactions right in the aisles. “We certainly want to start getting into the in-between seasons, we Another change for CTC was the type make it a much friendlier environment for start to bring in camping and summer fun, of sales transactions occurring in the show- families and kids,” says Hicks. There is also some of the big summer products or cot- room. Hicks says the amount of pick-ups X-Box set up on a couple of screens in the tage products that you would expect in July at the drive-through area in the back of the store. and August. We will transition into our fall store surprised him. This meant they had Another tool being tested, called Fast assortment and then we are actually going to learn how to manage the customer and Find, helps staff and customers find product. to transition this into a complete Christmas the product in this new environment. In the “It obviously helps on the retail floor,” says store. The plans on it are pretty amazing.” showroom, there are not the typical lineups Hicks, “but it also allows staff to find [prod- Hicks says, “We do a good job display- at the cash register because there are not a uct] quickly in the warehouse.” Fast Find ing a product family on Canadian Tire lot of customers buying small items. “They will signal warehouse staff of the customer’s online. We do a good job of saying, ‘this buy large ticket items from this store so the purchase and that they’re coming around to is the Lakeside Collection. Here are the average sale is really high,” says Hicks. pick up the item. “It is not an option to be accessory items that you would expect to “The customer count going through the wandering around in a warehouse looking see.’ We have not done a good job of till is actually much lower than we would for a [product]. Everything here is located taking that inside the store.” What they see in a traditional store. That will change like you would find in a typical distribution have done inside of the showroom is build when Christmas comes. People will be centre or warehouse. Everyone has RF guns.” the colours, the naming, and the products coming in for Christmas ornaments, hooks, around the buying of the product online and etc. So the tills are going to be much more Dedicated Staff then brought it inside the store. important than they were at the begin- There are dedicated warehouse staff so ning. That will cause some configuration floor staff can stay on the floor. The ware- Staging The Store changes we will have to make at the cash house staff picks product and also helps load CTC starts designing a concept and registers because they are set up for more the product into the customer’s vehicle. ordering inventory about eight months prior bulk purchases.” “This has been a big win for this store to a selling season. “You have to have your The showroom also offers more staff and a big learning for us on how true pick- design at the same time you order the inven- interaction than the typical store. Because up centres can work for all our stores,” says tory or else the two will not mesh together,” the showroom does not have as much traffic, Hicks. He says it is just one of the many says Hicks. The team will use some of the it allows customers to browse and shop for ‘learnings’ that will take CTC forward. same fixtures and condense existing product high-ticket items and take the time to under- Hicks says he won’t rule out doing more lines, such as barbeque and patio, so they stand the features and benefits. showrooms in the future, but, for the time are represented all year. Sales staff are trained on every product. being, this location will remain unique. ❖
HOME IMPROVEMENT RETAILING • September 2014 39
39 Go to page 3 CONTENTS Contractors Want Faster, Lighter, Smarter Power Tools Old Versus New Technology “The big buzz in the industry right now is brushless technology and lithium ion bat- teries,” says Mark Emmerson, lead category manager, Stanley Black & Decker Inc. He says contractors like the increased amp hours, high capacity battery packs, and the expansion of cordless tools so they can run a variety of tools off of one single or dual platform. As an example, Black & Decker offers both the 12-volt max and 20-volt max system and they both use the same charging system. Emmerson says the price-point of power tools has come down, which is great for contractors, but a challenge for manufactur- ers. “When I started in this business 15 years ago, we used to sell a four-tool kit, a cord- less combo kit for more than $1,000. Now you can pick them up for $250,” he says. However, the quality of the lower price- points isn’t the same. He says the older technologies have drastically come down in price but the newer technologies, like brush- less motors and lithium ion batteries, cost significantly more. Black & Decker hasn’t changed its bat- tery technology 100 per cent to lithium ion aster, lighter, and smarter are the of tools, which entices users to upgrade to yet. “We are still one of the last professional qualities contractors are looking for better performing versions or to switch from power tool companies to still sell nickel in their power tools, and they’re plug-in to cordless versions. cadmium technology today and have not F willing to pay for it. completely made that shift to the lithium Power tool sales will outpace hand tools Larger Share platform,” he says. over the next few years, a reversal from the The professional market holds the larger “We had such a large user base that we 2008-2013 period when demand for power share of power tool demand, accounting for did not want to disappoint. We needed to tools were adversely affected by a decline two-thirds of sales in 2013. Additionally, be able to support that user base and we in professional employment levels, says the this market will experience faster gains will continue to support that user base in Freedonia Group, a market research firm. through 2018, says the Freedonia Group. the future. When you have millions of these The ‘2014 Power & Hand Tools’ report says Professionals generally use higher-value battery packs out there, you cannot just U.S. demand for power and hand tools is power tools more intensively than consum- convert to a new system and leave all those forecast to rise 2.9 per cent annually through ers and they are often willing to pay more people behind. So essentially, we have two 2018 to $12.7 billion. Among professional for higher quality tools since the initial platforms out there.” users, growth will stem primarily from a investment will pay off over the long run recovery in construction activity, especially through better performance and longer tool Better Run Time in housing starts. life. Since professionals use their tools more As for the new technology, Emmerson Among power tools, cordless electric intensively, they must replace tools, espe- says brushless motors improve run time. tools will offer the best opportunities for cially power tools, more frequently. “Essentially, there are a couple of varia- growth. Ongoing improvement in lithium- Power tools continue to evolve as tech- tions of motors that we use, a brush motor ion battery density and the increased popu- nology and manufacturing costs come down and a brushless motor. Brushes will wear larity of technological innovations such as and contractors veer towards tools that are on a motor and create heat and friction brushless motors that extend usable lifespan faster, lighter, and smarter. This provides which absorbs some of that energy from per charge will bolster sales. The report says plenty of opportunities for manufacturers the cordless battery. In a brushless motor, cordless electric power tools experience which must stay at the forefront of this evo- there are no brushes. Everything is trans- more product innovation than other types lution in order to remain competitive. ferred via magnet. You have less heat and
40 HOME IMPROVEMENT RETAILING • September 2014
40 Go to page 3 CONTENTS less friction. It significantly increases your reduced repetitive motion, and dust control the biggest challenge is transportation with run time.” systems. The platform is so successful that the price of fuel. “Right now, we are local- Keith Potts, national trainer with DeWalt has a dedicated YouTube channel izing,” he says. “We have a tremendous Milwaukee Electric Tools, says feedback about it. amount of cordless product now. They are from contractors shows they find tools too being built in the U.S. with global materi- heavy and too big, they want more run time, Challenges Of Change als.” However, although efforts are being more battery power, and they want the bat- Keeping up with the changes in the made industry-wide to localize as much teries to last longer. power tool industry does present chal- as possible, he foresees manufacturing Brushless technology was the answer to lenges to manufacturers. Emmerson says becoming global. ❖ all these problems. “We took the brushes out and that allowed us to put more copper in the magnet portion of the motor. More cop- per equals more power. We can work with a 12-volt motor, which is smaller and lighter.” Milwaukee has also implemented a circuit board in its power tools that creates a three- way communication that will sense how much power the tool needs for any specific application. By using only the power needed, the run-time of the battery is maximized. On the repair side of things, this makes the tools easier and faster to fix because instead of replacing a bunch of parts, assem- blies can be replaced. Milwaukee offers a single footprint for a series of power tools. The footprint is how the battery connects to the tool. Contractors often purchase combination kits with more than one tool that shares the battery. Now contractors can purchase additional tools that will work with the same footprint so they don’t need to buy additional batteries and chargers. However, 12- and 18-volt tools and batteries cannot be interchanged. Safety Focus Another area having an impact on the power tool industry is safety. Emmerson says new legislation continues to come out to protect the professional power tool user. These laws are put in place to limit exposure to things like dust and vibration. This offers power tool manufacturers another opportu- nity for innovation. DeWalt has developed its ‘Perform and Protect’ platform, which offers tools with clutch control systems, reduced vibration,
HOME IMPROVEMENT RETAILING • September 2014 41
41 Go to page 3 CONTENTS It’s Your Money
Home Depot Ace in the same quarter last year. Net earnings The Home Depot had sales of $23.8 billion Ace Hardware Corporation had total rev- for the first quarter increased to $5.6 million for the second quarter of fiscal 2014, a 5.7 enues of $1.33 billion for the second quarter from $1.5 million last year. per cent increase from the second quarter of of 2014, an increase of $157 million or 13.4 fiscal 2013. Comparable store sales for the per cent, from the second quarter of 2013. Valspar second quarter of fiscal 2014 were positive Net income was $66.5 million for the sec- The Valspar Corporation had fiscal third 5.8 per cent and comp sales for U.S. stores ond quarter of 2014, an increase of $24.2 quarter 2014 net sales of $1.2 billion, an were positive 6.4 per cent. Net earnings for million or 57.2 per cent from the second increase of 10 per cent over the prior year. the second quarter were $2.1 billion com- quarter of 2013. Total wholesale revenues Third quarter 2014 adjusted net income was pared with net earnings of $1.8 billion in the were $1.25 billion, an increase of $155 mil- $103 million compared to third quarter 2013 same period of fiscal 2013. lion, or 14.1 per cent, as compared to the adjusted net income of $96 million. prior year quarter. Increases were noted in RONA virtually every department with the paint, Canadian Tire RONA Inc.’s consolidated revenues from electrical, and lawn and garden categories Canadian Tire Corporation, Limited’s same continuing operations were $1,193.5 mil- showing the largest increases. store sales for the second quarter of 2014 lion, down 4.4 per cent from $1,249 mil- were up 2.8 per cent at Canadian Tire, 8.2 lion for the second quarter of 2013. This Taiga per cent at FGL Sports, and 3.2 per cent decrease primarily reflects the closure of Taiga Building Products Ltd. sales for the at Mark’s Work Warehouse. Consolidated underperforming stores and a late spring in first quarter ended June 30 increased to revenue increased 4.8 per cent or $145 Quebec and Ontario which had an adverse $374.8 million from $335.8 million in the million to $3.2 billion in the second quar- impact on sales of building materials and same quarter last year. The 12 per cent ter. Consolidated retail sales in the quarter seasonal goods in the first half of the quarter increase in sales was primarily the result increased 4.8 per cent or $170.2 million to coupled with a decline in housing starts in of pent-up customer demand caused by the $3.7 billion over the same period last year. Quebec, RONA’s biggest market. Same- severe winter conditions in the preceding The retail segment revenue increased 4.7 per store sales in the retail segment were down quarter. Gross margin for the first quarter cent or $129.9 million to $2.9 billion in the 0.7 per cent. However, the strength of the increased to $33 million from $25.4 million quarter. ❖ economy in western Canada and successful repositioning of the TOTEM stores in this COMPANY SYMBOL OPEN HIGH/LOW 52-WEEK INDEX region, combined with the positive impacts of the redeployment of the Reno-Depot Allegion ALLE 51.63 58.29 – 40.24 NYSE stores in Quebec, have generated positive Canadian Tire Corp. CTC.a 177.41 194 – 111 TSX same-store sales for corporate stores in CanWel CWX 6.15 6.44 – 4.58 TSX the retail segment. Same-store sales of the Dow Chemical Co. DOW 53.27 54.97 – 38.04 NYSE corporate stores in the retail segment have Fastenal Co. FAST 46.24 52.21 – 42.48 NASDAQ grown for the first time since 2010. General Electric GE 25.98 28.09 – 23.5 NYSE Lowe’s Home Depot HD 88.67 93.52 – 73.74 NYSE Lowe’s Companies, Inc. had net earnings of Louisiana-Pacific LPX 13.9 18.96 – 12.71 NYSE $1.04 billion for the quarter ended August Lowes Cos LOW 53.11 54.14 – 44.13 NYSE 1, a 10.4 per cent increase over the same Masco Corp. MAS 23.8 24.12 – 19.11 NYSE period a year ago. Sales for the second quar- Newell Rubbermaid NWL 34.29 34.47 – 26.27 NYSE ter increased 5.7 per cent to $16.6 billion Owens Corning OC 34.49 46.64 – 33.71 NYSE from $15.7 billion in the second quarter of Richelieu RCH 49.56 52.88 – 42.01 TSX 2013 and comparable sales for the quarter RONA RON 14.5 14.75 – 10.8 TSX increased 4.4 per cent. Sears Canada SCC 15.78 19.89 – 11.03 TSX Sherwin-Williams Co. SHW 217.11 219.21 – 170.63 NYSE Beacon Stanley Black & Decker SWK 91.61 92.76 – 74.13 NYSE Beacon Roofing Supply, Inc. had 5.9 per Trex TREX 38.79 43.42 – 22.52 NYSE cent growth for its third quarter ended June USG Corp. USG 29.86 36.22 – 24.98 NYSE 30. The company says its diversified product Wal-Mart WMT 76.79 81.37 – 71.51 NYSE offering allowed it to take advantage of the West Fraser WFT 56.42 59.5 – 42.98 TSX strength of the current commercial roofing WD 40 WDFC 68.09 79.31 – 60.76 NASDAQ market. In addition, its investment in new branch openings continues to fuel its growth. As of September 11, 2014 Total sales for the quarter increased 5.8 per cent to a third quarter record $663.4 million in 2014 from $627.2 million in 2013.
42 HOME IMPROVEMENT RETAILING • September 2014
42 Go to page 3 CONTENTS Private Wealth Supplemental Pensions And Key Employee Retention
By: Allan Mosher Income Tax Act make these another option. to provide them with ‘living money’ in A group RCA is established for the key retirement. Owners gain the advantage employees/executives. The company makes of structuring a vesting agreement that ost business owners will agree annual deductible contributions to the group will ensure that key employees/executives that the most important com- RCA segregated internally relative to ben- remain with the company until retire- pany asset is key employees. efits for each employee. A corporate trustee ment as it becomes increasingly expensive MThey will also likely agree that is appointed so all group RCA funds are for another company to match benefits key employees and executives are vital held separately from the company providing for senior employees as they get closer to the transition and succession process full security. to retirement. Since succession or sale (whether passing the business to children or There are three benefit selections which arrangements often hinge on the reten- selling to a third party). the company can elect. These can vary tion of key employees and executives, How then to keep key employees/execu- by employee group and can be integrated the advantage of a supplemental pension tives motivated and with the company to with a group RRSP or other pension plan plan’s vesting agreement is attractive. If it retirement? if desired. is a family business, the children gain the In private companies, share ownership is Key employee/executives enjoy the advantage of retaining the expertise of key often not an option. Cash bonuses are effec- comfort of knowing they will receive executives for a period of time. tive, but the portion they want to save for the guaranteed or adequate retirement benefits Another advantage is that while reg- future is often taxed at high marginal rates istered pension plans are not allowed thus reducing asset growth. Of more con- to own a mortality component on plan cern, the employee/executive might build members, a group RCA can. The long- up savings from bonuses term investment risk is eliminated from allowing them an earlier the mortality guarantees on the individual retirement. Key people contracts holding each member’s share could retire at 55 to of contributions. Insurance compa- 60 when the company nies today provide policies that needs them from 60 to can be structured to be used for 65, reversing the logic retirement purposes providing of a bonus as a retention both investment and mortal- arrangement. ity components, the latter for survivor benefits and fund- SERP ing mitigation. Solution In group RCAs, some Supplemental pension members will live longer, arrangements can be a solu- others die short. New mem- tion. Often called SERPs bers are added as other mem- (Supplemental Employee/ bers are closer to retirement Executive Retirement or life expectancy. Some of the Plans), they provide the same members will retire after other deductibility to the company members have died. as a bonus, but for the employ- Proper design allows for the ee/executive, personal tax can security of the guarantee without be deferred to retirement when the same risk and expense of a tra- benefits are taken. As such, asset ditional defined benefit plan. Target growth is higher and personal tax benefit SERPs can be affordable and rates might be lower at retirement. From sustainable. ❖ the company’s perspective, benefits com- mence at normal retirement age eliminating Allan Mosher is a senior vice-presi- the concern of pre-mature retirements. dent of Retirement Compensation Funding Utilizing the retirement compensa- ([email protected]). tion arrangement (RCA) provisions of the
HOME IMPROVEMENT RETAILING • September 2014 43
43 Go to page 3 CONTENTS manager of Pittsburgh Paints where he was integral in the growth and awareness of this People brand in the Atlantic region. He has been in the industry for almost 30 years.
Castle Wolseley Terry Mulock is business development Eric Whaley is vice-president, informa- manager for Atlantic Canada with Castle tion technology with Building Centres Group Ltd. He will serve Wolseley Canada. Castle locations in Nova Scotia, New He brings more than Brunswick, and Prince Edward Island. 20 years of experi- Mulock previously worked as regional sales ence in the IT indus- try. Previously, he was chief information offi- cer with the Investment Industry Regulatory Organization of Canada ERIC WHALEY (IIROC). ILDC Gord McCusker will take over as gen- eral manager of the Independent Lumber Dealers Co-operative (ILDC) at the end of 2014 when Andrew Battagliotti retires. McCusker joined ILDC in August and will work with Battagliotti through the transition period. He was previously business manager of Euromax Canada. TIM-BR MART Yves Guérin is sales development super- visor for TIM-BR MART Group at the St-Nicolas, QC, lumber and building mate- rials (LBM) division. He has more than 28 years of experience in LBM sales in sales management and supervisory roles at CanExel, (J. Géo. Chalifour) Chalifour Canada, and Guardian Building Products Distribution. Kurt Norlen is hardware pro- curement manager. Based in Calgary, AB, Norlen will be responsible for managing the buying group hardware programs and Spancan buying programs. Ian Cook is regional director of member services for Ontario. He will act as the liaison between its dealers, vendors, and group manage- ment team. Tristan Flanagan is category manager for national paint programs. Based in Brossard, QC, he will be responsible for tintable liquid goods and control brand products. RONA Serge Éthier is vice-president, purchasing, at RONA inc. He is responsible for national purchasing for hardware and other related sectors such as paint, tools, and seasonal. Before joining RONA, he was respon- sible for merchandising for the Patrick Morin organization. He has also worked at the Home Depot, Provigo/Loblaws, SERGE ÉTHIER and Costco. ❖
44 HOME IMPROVEMENT RETAILING • September 2014
44 Go to page 3 CONTENTS BUILT TO WITHSTAND THE HARSHEST CLIMATES. AND THE BIGGEST STREET HOCKEY GAMES.
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45 Go to page 3 CONTENTS Publisher’s Perspective Business Is Good, Despite Competition, Consolidation here is a continued increase in online business-to-business retailer hasn’t companies that do not realize it will end up U.S. retailers and manufacturers officially launched, it already offers 2.2 mil- with business models that may look suc- infiltrating the home improvement lion products categorized under business, cessful, but they will not survive. They may T sector in Canada, yet the industry industrial, and scientific supplies. The site win a few battles, but they need to look at is reporting strong gains. even offers a corporate credit line. winning the war.” Competition is cited as one of the biggest “If all of the supplies available at a home challenges facing manufacturers in both the improvement retailer start showing up online Business Is Good hand and power tool categories and it con- at significantly lower prices, we will see a In the meantime, despite the heavy com- tinues to increase. Scott Moore, director of whole new channel of competition opening petition and consolidation, business is good. marketing for hand tools and storage with up and I guarantee loyalty will be low because The economic indicators remain positive, Stanley Black and Decker Inc., says, “We if people can save money, they will,” says and retailers are riding the wave after a dif- are a big country and I think we are gaining Marc Wulfraat, president of supply chain con- ficult start to the home improvement season a lot more recognition on a global scale and sulting company, MWPVL International Inc. this year. everybody wants a piece of the pie. We see Wulfraat says a lot of retailers may not Net income and sales soared in the second global manufacturers that may have never have been affected by Amazon yet, but they quarter with some home improvement retail- even existed in Canada starting to enter will – including the home improvement sec- ers and manufacturers reporting double digit through different buying groups and such.” tor. He says Amazon has raised the bar for results. Just about everyone was in the black what customers expect. It has sped up the except Sears Canada (revenues down 11.9 Unofficial Competition market with consumers demanding faster per cent year over year) and RONA. RONA One player that hasn’t had a lot of delivery times and easier return policies did see gains in same-store sales in the corpo- press is Amazon Supply. Although the ‘beta’ and procedures. “Anyone who is the least rate retail stores for the first time since 2010. bit sloppy at how they manage their supply Target Corporation tipped the scale at a 63.1 chain is going to get hurt badly,” he says. per cent increase in sales in its Canadian seg- “The only way they are going to continue is ment for the quarter. Its digital sales (over- if they have some type of exclusivity.” all) were up by 30 per cent, approximately double the industry growth rate. Industry Alignment And, despite its slow start in Canada, However, the industry seems to be align- Target says it is not changing its plans to ing itself and the experts agree that consoli- have 133 stores in Canada by the end of dation will continue, and it should. This past 2014 and 150 stores by 2017. It says it has couple of months saw Ace Hardware and implemented new initiatives to improve TIM-BR Mart Group part ways and Ace business performance and better deliver the signing on with RONA inc. to represent Target brand experience to Canadian con- its brand in Canada. RONA has assigned sumers and, based on the numbers, it looks TruServ to lead the new business unit. like they are working. Bill Morrison, president of TruServ The good news is housing expectations Canada, says in terms of distribution, “The are on the rise and housing has become industry will likely need fewer, but larger more affordable due to a decline in mort- companies who leverage both size and scale gage rates. That, coupled with a continued to meet customer needs.” growth in household income, will hopefully “Consolidation within the industry has allow retailers to continue to ride the wave become essential to cutting costs and keep- for the remainder of the year. ❖ ing companies’ heads above water,” says Lou Valeriati, vice-president of operations for Chalifour Canada. James Jones, vice-president of national marketing with Castle Building Centres Dante Piccinin Group, agrees. “Consolidation will continue Publisher and Editorial Director to be the best route to long-term health,” he says. “You need consolidation and those [email protected]
46 HOME IMPROVEMENT RETAILING • September 2014
46 Go to page 3 CONTENTS ORGILL CUSTOMER INSIGHTS
Now, Orgill Gives All Dealers A Choice. ATTENTION Orgill Helps You Find Opportunities TO DETAIL for Growth “I am definitely a believer in Orgill. Since Expanding Your Market “We are a pro yard, but we are slowly trying to build our retail trade. we have converted to Orgill, I can’t say Since we started our relationship with Orgill, there is no doubt that enough good things about them. They we have been able to improve our walk-in traffic.” see opportunities for our business that we Helping Your Operations might not have even seen ahead of time.” “Throughout our entire remerchandising process, Orgill was heavily involved. They had a whole team of people that made the Brent Perry process go so smoothly.” Alf Curtis Home Improvements Peterborough, Ontario Living Up to Commitments “One of the biggest differences between Orgill and our old supplier is Alf Curtis Home Improvements the fill rates. With Orgill, fill rates are just fantastic.” Alf Curtis Home Improvements is a third-generation family Presenting Options business that operates two lumber and building materials “Since we started working with Orgill we have returned to and facilities with locations in Peterborough and Lindsay, Ontario. expanded a number of categories because we can be competitive, even with 11 competitors in our market, which has a population base of only The company primarily services contractors and tradesmen but about 80,000 people.” has begun to expand its operation to meet the needs of more walk-in D-I-Y traffic. “If I could say one thing to Alf Curtis’ Peterborough facility sits on approximately 18 acres and includes other dealers about doing a 1,400-square-foot showroom, a 42,000-square-foot of warehouse space business with Orgill it and a 17-acre yard. would be—do it yesterday!” The Lindsay facility, which was opened in 2005 is a 4-½ acre site with 25,000 —Brent Perry square feet of warehouse space, a 1,400-square-foot store and a 3-½+ acre storage yard.
For more information about how Orgill can help you grow your business, please contact:
1-800-347-2860 EXT. 6780 • WWW.ORGILL.COM Worldwide Distribution & Retail Services Orgill, Inc. P.O. Box 140, Memphis TN 38101-0140
Canadian_AlfCurtis_HI.indd 1 9/6/12 12:06 PM 47 Go to page 3 CONTENTS “We are Cook Street Castle, a successful downtown Victoria hardware store, a city block long, featuring a convenient drive-thru lumberyard. Since we joined Castle, we easily compete with stores many times our size. And, we have the freedom to buy exactly what’s right for our Vancouver Island market. I believe 100% freedom and 100% transparency are the most important promises Castle makes to its members. That’s also why Castle is one of Canada’s fastest growing buying groups today. If you want to maximize your profits and maintain your freedom, talk to Castle. Or, call me. I’d be happy to hear from you.”
Vicki Hagel Owner Cook Street Castle
Get the facts. Contact the Business Development Manager in your area: Western Canada Alan Schoemperlen (204) 771-1509 [email protected] British Columbia Les Gillespie (250) 469-4744 [email protected] Ontario Bruce Holman (647) 228-1414 [email protected] Quebec & Northern NB Robert Legault (514) 208-4158 [email protected] Maritimes Terry Mulock (902) 471-3985 [email protected] Newfoundland & Labrador Bob Delaney (709) 649-7173 [email protected] castle.ca/freedom
48 Go to page 3 CONTENTS