The Art of Retail 2016
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HARDLINES.CA CONNECTING THE HOME IMPROVEMENT INDUSTRY FIRSTFFIIRST QUARTERQUQ AARRTEER / 202017177 HOME IMPROVEMENT QUARTERLY THE ART OF RETAIL 2016 The 2016 Outstanding Retail Award winners show us how it’s done. PLUS! THE BATTLE FOR QUEBEC: DIFFERENT, SHELF SPACE BUT THE SAME What manufacturer’s Retailers weigh in agents really do and on Quebec’s home how it impacts your store improvement market Canadian Publications Mail Agreement # 42175020. POSTMASTER: Send address changes to Hardlines Home Improvement Quarterly, 528 Queen Street East, Toronto, ON M5A 1V2 THE POWER TO BUILD Teamwork reflected in results For more information, contact Pierre Nolet, Senior director - Business development Telephone: 1-800-361-0885 Is your brand beating out the competition? King’s brand ambassadors give our represented manufacturers an unfair HOME IMPROVEMENT QUARTERLY advantage FIRST QUARTER / 2017 • VOLUME 7, NO. 1 528 Queen Street East, Toronto, ON M5A 1V2 • 416-489-3396 As manufacturer’s agents our sales EDITOR & PRESIDENT Hardlines Home Improvement Quarterly is representatives and Michael McLarney published four times a year by Hardlines Inc., merchandisers ensure your [email protected] 528 Queen Street East, Toronto, ON M5A 1V2. products are always “front $25 per issue or $90 per year for Canada. PUBLISHER Subscriptions to the Continental United States: of mind” with the hardware Beverly Allen $105 per year and $35 per issue. buyer and “front of shelf” in [email protected] All other countries: $130 per year. the stores. (Air mail $60 per year additional) VP BUSINESS DEVELOPMENT David Chestnut Subscriber Services: To subscribe, renew [email protected] your subscription, or change your address or contact information, please contact our MANAGING EDITOR Circulation Department at 289-997-5408; Sigrid Forberg [email protected]. [email protected] Canadian Publications MARKETING DIRECTOR Mail Agreement # 42175020 www.kingmkt.com 877 844 5464 Katherine Yager [email protected] POSTMASTER: Send address changes to Hardlines Home Improvement Quarterly, CONTRIBUTING WRITERS 528 Queen Street East, Toronto, ON M5A 1V2. John Caulfield, Geoffrey McLarney, Bill Wilson All editorial contents copyrighted 2017 by Hardlines Inc. No content may be reproduced ACCOUNTING without prior permission of the publisher. Margaret Wulff [email protected] www.hardlines.ca ADMINISTRATION Maggie MacKinlay [email protected] ART DIRECTION Shawn Samson TwoCreative.ca There’s a better way NUMBERIN THE HOME IMPROVEMENT ONE INDUSTRY. ONLINE AND PRINT. to manage Installed Sales HHIQ is just one facet of the t Hardlines Information Network. Since 1995, we’ve been delivering the most up-to-date information directly to you online, in print, and in person. Find out how you can get your message out with us. Contact Beverly Allen, Publisher: CRM • Estimating Integration• Contracts • Project Management PHONE: MOBILE: EMAIL: [email protected] renoware.ca 416.489.3396 647.880.4589 [email protected] VOLUME 7, NO. 1 CONTENTS FIRST QUARTER / 2017 2016 COVER STORY 22 THE ART DEPARTMENTS OF RETAIL EDITOR’S MESSAGE The 2016 Outstanding Retail Award winners show us how it’s done. 7 Is it all about bricks and mortar? BUSINESS CONDITIONS AGENCIES OF TODAY THE BATTLE FOR 8 Third quarter 2016 MARKET REPORT SHELF SPACE 10 Home improvement Hear from agents about industry growth varies 34 how their role has changed PRODUCT SPOTLIGHT over the last few decades 18 Hammer Tacker, Mid-Century Modern MILLENNIAL REPORT entry door, and more MARKETING YOURSELF NEWS SPOTLIGHT NEWSROUNDUP 12 TO MILLENNIALS 20 TIMBER MART wants Uncovering what retailers to keep costs down 36 for independents Lowe’s continues need to know when selling expansion with Toronto, to these shoppers SHOW REPORT Victoria-area stores 38 Lessons from the 2016 Home Hardware recognized Hardlines Conferenceence as one of Canada’s top brands NEWS FEATURE Doug Lemieux recognized 40 “Chaos” of by WRLA with Industry gypsum pricing Achievement Award REGIONAL SPOTLIGHT ASSOCIATION CONNECTION TIMBER MART announces QUEBEC: DIFFERENT, 42 Regional roundupp new location for B.C. BUT THE SAME distribution centre of business conditionsitions Retailers weigh in 38 STORE MANAGEMENT Canadian Tire looks to on catering to the 46 strengthen its retail business Quebec shopper Start the year on a with proprietary brands solid financial footing Anticipating 50-year SELLING TO PROS ENDCAP anniversary, BMR show TAPPING INTO THE 50 Family business focuses on technology COMMERCIAL MARKET finds its forté Dealer associations announce formalized union Selling to commercial contractors under CRBSC umbrella 44 is a different kind of business FIRST QUARTER / 2017 5 NEW YORK • PARIS • TORONTO • MUNICH • LOS ANGELES CHOSEN FOR GREAT PROJECTS OF THE WORLD. PERFECT FOR YOUR CUSTOMER PROJECTS. For over 30 years, major projects around the world have been using Techniseal® products such as the Ground Zero Memorial in New York City. You can trust Techniseal® for the projects of all your customers as well: pavers, concrete, wood, asphalt and roofing. CHOOSE TECHNISEAL® AS A “ONE-STOP-SHOP” FOR YOUR DIY CUSTOMERS. • Complete product lines for the protection of pavers, wood, asphalt, roofing and concrete • Offers tailored to your needs – multiple palletizing formats • Comprehensive assistance, from product selection to after-sales service POLYMERIC SAND • PAVERS • WOOD • ASPHALT • ROOFING • CONCRETE EDITOR’S MESSAGE IS IT ALL ABOUT BRICKS AND MORTAR? Who are the leaders in hardware and home improvement retailing? Guess what: independents are lagging. Why leave leadership to the big boxes? MICHAEL McLARNEY, EDITOR he focus of most dealers remains Depot, Lowe’s, and Canadian Tire have business, and e-commerce—will be eroded on the business in front of them. On committed huge resources to developing if you don’t have a strategy to build them T the bricks-and-mortar sales that you this aspect of their business. Don’t be con- yourself. Can an independent win with can see going out your door every day. The tent to leave the leadership in this impor- online sales? We’ve had numerous examples sales that are driven by the great customer tant sector to these competitors. in these pages recounting just such wins. service and product knowledge you and your In fact, the big guys are leading the way Can you expand or improve your dealings team can provide for customers, whether in a number of areas. Besides e-commerce, with pros? Turn to page 44 of this issue to they’re DIYers or contractors. That business Lowe’s and Home Depot are going after see examples of dealers doing just that. was, for most dealers this past year, better the commercial and contractor business To change your business takes planning. than expected. But will that be enough? And with laser focus. They are also developing Are you doing a business plan to measure what about online sales? installed services (for Home Depot, it was your store’s successes and identify weak- nesses on a quarterly or even monthly basis? Check out NRHA Retail Advisor Bill Okay, independents have enough to worry Wilson’s column on page 46 for details on about day to day. But so many aspects of your how to do that. Finally, are you stepping back from your “business—installed sales, contractor business, own business enough to imagine what it can and e-commerce—will be eroded if you don’t look like in five years? If you don’t, then that have a strategy to build them yourself. business may not be here in 10 years. Some perspective here: Home Depot’s a standout growth area in the” company’s online sales now account for more than five third quarter). Canadian Tire remains percent of all its retail sales. And the rate of committed to developing new productduct growth of the company’s online sales is up lines, many of them under the company’sany’s around 25 percent annually—well ahead of own private, or proprietary, brands. bricks-and-mortar sales. Okay, independents have enough to worryorry So, let’s ask the question again: what about day to day. But so many aspectsts ooff about online sales? Big retailers like Home your business—installed sales, contractoractor [email protected] www.hardlines.ca Hardlines Home Improvement Quarterly FIRST QUARTER / 2017 7 QUARTERLY BUSINESS CONDITIONS In our latest survey of dealers and suppliers, there was overall optimism for the future coming off a year when both vendors and retailers are anticipating increased sales for the 2016 year end. Last year, retailers took it upon themselves to offer more products and services to better compete in Q3. From the vendor side, expectations for the year remained high with a dramatic 20 percentage-point reduction in those expecting decreased sales over the year. The top issues right now for retailers are customer retention, increased competition, THIRD and staffing, while vendors are concerned with the exchange rate with the U.S. dollar, QUARTER 2016 higher raw material and shipping costs, and retail consolidation. How did your business compare Do you expect your sales to with the same time last year? increase over the next six months? 14.7% 22.2% 2.9% UNSURE 26.0% 26.5% UNSURE NO SAME SAME 37.0% UP 40.8% RETAILERS VENDORS RETAILERS YES VENDORS 11.8% 61.7% DOWN UP 37.0% 37.0% 82.4% DOWN NO YES Year-over-year, the percentage of The percentage of vendors experiencing The percentage of retailers expecting Year over year, the percentage retailers experiencing better sales better sales in Q3 2016 was up from sales to increase in the next six months of vendors anticipating sales than in the previous year has dropped Q3 2015, when 54.6 percent of vendors is up significantly from 21.9 percent in increases in the next six months from 50.0 percent to 37.0 percent reported increased sales from Q3 2015.