REPORT ON THE 2013 IHA CONGRESS
Inform, Educate and Influence
Representatives from IHA member associations met in early May for the 2013 IHA International Congress in Las Vegas during the National Hardware Show. Delegates ratified revised statutes that gave all regular members equal status and allowed for greater flexibility for decision-making. “These new statutes are more inclusive of all members and position IHA for the future,” says Chris Patterson, IHA’s current Council chairman.
During the Congress, attendees had a general discussion regarding ways in which the IHA could better serve its members. Mr. Patterson suggested that members remember IHA’s mission, which is summed up as “Inform, Educate and Influence.” Members discussed ways in which IHA could fulfill this mission by continuing to allow its association member executives to meet in order to inform each other about their best practices. “As CEO of the North American Retail Hardware Association, I can say that I have received several great ideas from my IHA colleagues,” comments Bill Lee, IHA Secretary General. “For example, I learned about bira’s Oxford Summer School program during an IHA meeting and we went on to establish a management-level school in the U.S. as a result. My association with Alan Hawkins from bira at an IHA event made this possible.”
Influence Through Networking
IHA members also talked about opportunities to influence by agreeing to host meetings of IHA member associations during international and regional trade fairs in their countries. During these meetings, IHA will work with the local trade fair exhibition companies and invite other organizations to join them for networking opportunities and educational programs. An example of this new approach occurred during the 2013 Congress. In addition to its own program of meetings, IHA helped create a coalition of interested organizations to organize the Global Home Improvement Conference at the National Hardware Show. IHA, EDRA, Worldwide DIY Council, Hardlines and the Show worked together to organize an afternoon of seminars and hosted a networking reception to conclude the afternoon. Also, because the meeting was held at the Show, IHA attendees also had the opportunity to attend and learn from the two-day seminar program conducted by NRHA, an IHA member. IHA members were also invited to attend NRHA’s Young Retailer of the Year awards program. “By meeting during these larger events, IHA members have the opportunity for a richer experience that benefits our businesses,” says Mr. Dick Thomes, current IHA President. IHA is planning its next meeting in March 2014, during the Cologne Hardware Fair.
International Work & Learn Program
Preparing the next generation of leaders in IHA members’ stores is a common challenge. During the past Congress, delegates discussed and agreed to begin a new program called International Work and Learn. In this program, young retailers will have the opportunity to travel to another IHA member’s country to work for a short period of time. The IHA member association will offer to match a young retailer with a host-retailer in their country. The British, French, German, Swedish and U.S. members each agreed to participate and to coordinate up to three visitors. Details of the program are being refined and opportunities should be available in 2014.
“All in all, the 2013 Congress was a great success. Attendees enjoyed three days packed with opportunities to network and learn. And, of course, the opportunity to visit one of the world’s largest trade fairs was a great bonus,” comments Chris Patterson. “We encourage everyone to plan to join us in March 2014 in Cologne.”
NEWS FROM THE U.K.
Submitted by the British Independent Retailers Association (bira) and Hardware Today
Cookshop Retailer Sweeps bira Awards
The bira conference and gala awards, held May 16, were quite an event for north London cookshop owner Martha Ferguson. After giving one of the retailer addresses to bira Direct suppliers, the owner of Papylon was named Cookshop and Housewares Association (CHA) Retailer of the Year at the black-tie gala dinner in the evening. After all the young retailers had been named for various other bira divisions, former MP Gyles Brandreth–the after-dinner speaker–then crowned her bira Young Retailer of the Year. CHA is part of bira.
The award is in recognition of what she has achieved in Winchmore Hill, London, since quitting her job as a fashion buyer and opening her own cookshop in 2010. Although she has been recognized with other awards, such as the Excellence in Housewares Rising Star award and Enfield Retailer of the Year in 2011, the Young Retailer of the Year awards eclipse them. “They’re for me. The other awards were for Papylon,” she told Cookshop magazine.
From her talk at the bira Direct suppliers’ conference, it is clear she isn’t going to rest on her laurels. She is embracing omni-channel retailing with the launch of a transactional website and she is looking for a second location to open a “new, bigger and better store”.
The runners-up in the CHA Retailer of the Year award were Heather Ridout of Loose’s Cookshop, Norwich, and Sarah Franklin of Kooks Unlimited, Richmond.
Ridout is only 21 years old and graduated this year with a first-class honors degree from Norwich University. The owner of Loose’s, Claire-Louise Crane, said, “Heather is intelligent, thoughtful and creative.” Since originally joining as a temp, she has instigated and organized a program of product demonstrations, through which their customers get closer to the products they sell by trying them out firsthand.
Franklin manages a store within a store at Kooks Unlimited. Having learned the trade as an assistant manager of the shop, she was involved in the development and integration of a new bakeware store. Since being manager there, she has set up a cake-making service, thriving Facebook and Twitter accounts and numerous themed window displays. Bakeware was always in her blood as her mother was a cakemaker and she used to help her to bake cakes since she was 13.
NEWS FROM SWEDEN
A message from Goran Sundstrom, IHA Managing Committee Member
After a long winter, May was a good month in terms of sales in Sweden. The ROT-reduction (the Swedish tax reduction system for renovation work) continues to increase. For the period between January and May of this year, the deduction of SEK increased by approximately 2.6% compared to the same period in 2012. The number of projects has increased, and then by 3.5%.During the period above paid about 5.7 billion SEK in tax deduction to more than 590,000 projects. Figures released by the statistics supplied by the Tax Authority.
“Increase the attractiveness of the industry” has been our guiding principle in a project we conducted for 2.5 years, and where we also want to raise the issue of skills development in the industry. We have now created a digital competence cards easily and effectively shows what skills staff have in relation to their duties and the company's ambition. There is also a course catalog and other aids.
It is our belief that good skills are a competitive asset both commercially and for recruiting new employees to the industry.
Nordbygg 2014 is coming soon. Nordbygg, which will be held April 1–4, 2014, in Stockholm, has now booked 600 exhibitors. Nordbygg and the fair's organizer group has together with German-Swedish Chamber of Commerce started up a project with the working name “Large German Swedish wager for sustainable construction”. Read more on www.nordbygg.se.
NEWS FROM AUSTRALIA
Hardware Federation Luncheon
to Feature John Gillam
In September this year, the Hardware Federation of Australia will hold its annual luncheon where representatives from all facets of hardware will gather to hear John Gillam, managing director of Bunnings share his principles on staying focused and the benefits that follow.
The luncheon will be Thursday, Sept. 19, 2013, from 12 to 3 p.m., in the Limelight Room at the Etihad Stadium in Melbourne.
For more information visit the website or contact Carly Faragher, HFA Secretariat for further information by email.
NEWS FROM MEXICO
Reed Exhibitions Acquires Expo Nacional Ferretera
Expo Nacional Ferretera, the largest event in Mexico and the Latin American market serving the hardware, construction and electrical markets, has joined the Reed Exhibitions portfolio of brands and brings with it more than 1,300 exhibiting companies occupying 50,000 square meters and 80,000 buyers from 30 countries who attend the annual event in Guadalajara.
The acquisition of Expo Ferretera, founded in 1989, is the next step in Reed Exhibitions' strategic expansion into the Mexican market. Expo Seguridad, acquired at the end of 2011, is the largest event in Mexico serving the security and safety industry—and in its second edition under Reed's ownership this month it will enjoy a 17 percent increase in net square meters and a more than 38 percent increase in attendance. With Expo Ferretera, Reed is now planning on expansion of its infrastructure in Mexico.
"Mexico is an attractive, long-term market for Reed Exhibitions and with these two leading brands—both enjoying synergies with our events in the United States and Brazil—we are in a position to build the infrastructure necessary for developing a business platform to serve the Mexican market and help Mexican companies to expand their businesses internationally," says Chet Burchett, president of Reed Exhibitions America. "This was the critical step to propel our plans."
The president of Expo Ferretera, Eduardo Casanova, said Reed Exhibitions matched both commercial expectations and the values upon which he built the show.
"It was important to us that Reed Exhibitions was truly a global organizer, but more importantly that they share many of the same ideals that we do when it comes to delivering customer value. Ultimately we share the mission of delivering an event that provides a positive business outcome for all those who participate," Eduardo Casanova says.
"Reed Exhibitions has a long-standing and successful brand in the National Hardware Show® (in Las Vegas)," Casanova says. "They understand the industry space and will certainly add a great deal of value identifying new opportunities for Expo Ferretera."
What You Need to Know About Amazon
Less than 20 years ago, Jeff Bezos founded Amazon in Seattle, Washington, U.S.A., simply as an online bookseller. Last year the company racked up $61.9 billion in sales, selling everything under the sun including the kinds of merchandise sold in hardware stores and home centers, which makes it a growing competitive threat to hardware stores and home centers not only in the United States but elsewhere as well, particularly in many parts of Europe. Some retailing experts now predict that it will someday do more business than Walmart's $460 billion.
What should traditional bricks-and-mortar retailers (our members) know about this firm?
Thanks to an impressive research document developed by Cleveland Research Co., retailers around the world are now able to get an inside look at this company's amazing growth and its future plans.
- International sales now represent 40% of total sales. It already is operating more than 70 giant warehouses, of which 35 are located internationally.
- Its international distribution and fulfillment centers are located in the UK, Japan, China, France, German, Netherlands, Italy, Slovakia and Spain.
- Its gross margin of 22% is equaled only by Walmart and is about 10% below that of Home Depot and Lowe's, the world's two largest D-I-Y chains, enabling it to be very price-competitive with them and all other retailers, and well below the margins of members.
- It already operates separate retail web sites to court customers in Canada, UK, France, Germany, Italy, Spain, Brazil, Japan and China, and has announced future sites for Poland, Netherlands and Sweden.
- International sales are growing at a rate of more than 20% annually, far surpassing growth rates of traditional retailers.
- As a further competitive threat, it launched Amazon Supply in April 2012, which is geared to supply industrial and contractor accounts, intensifying its competitive challenges for D-I-Y retailers. It offers 600,000 SKUs units targeted for those customers. Hardware products are listed as one of its fastest growing categories.
- Internet Retailer magazine lists Amazon as the No. 1 European web retailer. Migros, a mass merchant, is far down the list at #28; Kingfisher DIY is 37 and France's Groupe Auchan, whose sales include DIY, is #63.
- In December 2012, 26.4 million European visitors accessed Amazon's web sites.
- Its Prime Membership (a $79 fee annually for free 2-day shipping) is now being offered in 7 countries and as such will encourage more web purchases.
The company also seems to disregard normal profits. While its sales exceeded $60 billion last year, it recorded a loss of $39 million due to expansion, new distribution centers and other growth-oriented actions focused on the future without worrying about current profits.
Its web sales are growing at a rate of seven times faster than those of other major regular retailers such as Home Depot, Walmart, etc.,
So important are D-I-Y products for Amazon that, in North America, it is among the top 10 customers for most manufacturers of D-I-Y products and tools. A visit to the company's website and a click on the D-I-Y category shows a wide range of name brand products and very competitive pricing. If our members have not done this kind of research, they definitely should.
To put in perspective Amazon's sales last year of $61.9 billion, the goal set by Walmart, the world's largest retailer, for its web sales in 2013 is only $9 billion.
How Does the Business Outlook for You Compare?
According to a report in DIY Week, the UK's leading trade publication, DIY and gardening appear to be the two leading merchandise categories for 2013 in that country. Overall, UK retailing is expected to grow a modest 1.8%, but that is the highest growth rate since the last recession.
Gardening suffered sales declines last year, making growth comparisons more favorable this year. D-I-Y growth is expected to be largely based on decorating and small D-I-Y projects, not major projects.
Retailing in the U. S. is expected to show modest growth. What is the outlook for your members?
How Wholesaling is Different Around the World
DIY Week, an English trade publication, recently published a list of the major wholesalers in that country, which demonstrated how different distribution is among IHA member countries.
England's largest wholesaler, Toolbank, did a sales volume of £128.9 million, which would be approximately $150 million. This contrasts with Ace Hardware in the U. S., which did more than $3 billion in sales last year, including its sales to retailers in more than 50 international countries.
American and Canadian retailers, it seems, are served by wholesalers providing a wide range of products, whereas most other IHA retailers are served by wholesalers concentrating their efforts on just one or two merchandising categories.
There are a few full-line wholesalers in England, but they are relatively small. Another difference between England and the U. S. is that cash-and-carry wholesaling continues to exist in England, but did not survive its postwar emergence
in the U.S.
Study Shows the State of D-I-Y Activity in Europe
Nine out of ten households in Europe carry out D-I-Y projects, according to a report on DIY Global's web page and reported by EDRA, the European DIY Retail Association. Home improvement, or giving the home a facelift, is so important to consumers that they will spend more money on it than on a holiday in the next twelve months (75% to 59%). Nearly two-thirds of them intend to invest more than they did last year. These are some of the most significant results taken from the European Home Report 2012 published by the D-I-Y retailer Kingfisher. This survey involved questioning 15,000 consumers in Britain and Ireland, France, Poland, Russia, Spain, Turkey and Germany. Increasing the value of their properties ranks no higher than fifth among the reasons given for carrying out D-I-Y projects. Consumers are more interested in "refreshing" their homes, making them more comfortable or adapting to the changing needs of the family because of children staying on longer, for example, or older members requiring alterations, instead of moving to a
German consumers have the most confidence in their D-I-Y skills, while consumers in Turkey are less self-assured. French customers spend more than DIYers in other European countries. Looking after their gardens is a priority for the British, Irish and Germans.
Understanding Smartphone Shoppers
There's been much speculation about the impact of showrooming on actual retail sales. It's generally agreed that hardware stores likely will suffer less from the practice than some other types of retailers, such as those selling electronics or major appliances.
Despite rampant showrooming concerns, a new study finds smartphones "contributing to—not taking away from—in-store sales," with smartphone shoppers 14% more likely to convert and make a purchase in the store than non-smartphone users. That was a study recently in the U. S.
According to the Mobile Influence Factor study from Deloitte Consulting, through activities such as product research, price comparison or other mobile application use, smartphones currently influence 5.1% of annual retail store sales, translating into $159 billion in forecasted sales for 2012. By 2016, Deloitte anticipates mobile's influence, based on consumers' smartphone use, will grow to represent 19% of total store sales, amounting for $689 billion in mobile-influenced sales. By comparison, direct mobile commerce sales will pass only the $30 billion mark by that time, according to industry estimates.
Whether smartphones are being widely used in hardware stores and home centers around the world is not known. What is known, and no surprise, is that the young are the most active mobile shoppers, with nearly 7 out of 10 smartphone users between 14 and 34 using the devices to shop, and more than half saying their smartphones influenced their decision-making.
Lessons from E-Retailers of Hardware Products
Member retailers of our associations, we believe, need to do a better job in selling some of their products via the Internet. Of course they should have a website, and some of our associations offer website building services or recommend reliable consultants who can do this for member stores.
But too many sites are informative only, and do not actively encourage sales. To help IHA retailers change their sites to develop more sales, below are web addresses of some e-retailers, which should give them some ideas for their own sites:
Our members can learn good and bad from these sites. For example, the hardware and tools.com site uses a very dark background on one of its pages, which makes it quite impossible to read the messages on that page.
www.ironmongerydirect.com, which operates in the UK
www.hardwareandtools.com, which operates in the US
www.hardware.com, a small, privately owned chain in the US which does a very good job in selling off the Internet
www.hardwareworld.com, another web-only retailer
www.thehardwarecity.com and still another web-only retailer