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2014.No.3 of IHA Global Report


Submitted by the North American Retail Hardware Association (NRHA)

Home Improvement Industry on Growth Track Again

NRHA, and its industry trade publication Hardware Retailing, reported in its annual Market Measure issue that the total home improvement industry will grow at an compound annual growth rate of 5.1% during the 2012-2017 time period. Total sales volume for the industry is predicted to hit $324 billion in 2014. These sales include all independent hardware stores, home centers and lumber/building material outlets; including Home Depot and Lowe’s. This contrasts with the compound annual growth rate of -0.5% from 2017-2012. Increasing consumer confidence, a pickup in existing and new home sales and increased remodeling activity will continue to buoy growth.

For more detailed information about the U.S. home improvement industry, go to www.hardwareretailing.com; and visit the digital edition of the December 2013 issue of Hardware Retailing magazine.

NRHA Launches Successfull Management School

Students of the second class of the NRHA Retail Management Certification Program met for the first time in early February to begin work on developing their retail management skills. This new management school is designed to provide owners with a tool to develop the leadership and management skills of key employees. Whether it is for a son or daughter destined to lead their operation; or a new manager needing exposure to key management topics; the program is customized to meet their needs. The program was developed, and is conducted, in cooperation with the Butler University Graduate School of Business; and is a college-level course of study.

National Hardware Show Offers Scholarships to NRHA Students

Ed Several, Senior V.P. of the National Hardware Show, has announced that the show will offer two $5,000 scholarships to two of this year’s NRHA Young Retailers of the Year. The scholarships are to be used to help defray the cost of tuition to the NRHA Retail Management Certification Program. The scholarships will be awarded during the Young Retailer awards ceremony at the show. The scholarships are intended to demonstrate to the industry the commitment of the show to the success of the independent retailer.

The National Hardware Show is the largest hardware fair in the U.S., held in early May each year in Las Vegas. In 2013, more than 4,000 independent retailers attended the show, making it the largest annual gathering of independent retailers in the U.S.

Are You Honoring Your Young Retailers?

One of the North American Retail Hardware Association's most successful and recognized programs is the one which honors individual achievements by retailers 35 years and younger. It has been in operation for eighteen years, and achieves national and local for the association and the honorees.

For the last several years as NRHA has become more involved with the National Hardware Show in Las Vegas, the presentations are made during that event, garnering even more publicity. Awards are given to retailers based on their sales volume—under $2 million and over $2 million and for a retailer representing a multiple-store operation.

This may very well be a program other IHA associations will want to develop.



Important Highlights of a Major Industry Conference

In June 2013, DIY chain executives from around the world, but primarily from Europe, met with manufacturers belonging to the Federation of DIY Manufacturers (FEDIYMA) in Rome.

Here are some highlights which you might wish to include in member communications:

With the explosion of Internet information and retailing, consumers now expect well-known brands to show up in some way on social media channels. The most media-savvy customers are aged 26 and under, and retailers need to hire youths like this to help them understand and reach youthful consumers.

Online information is making consumers king. They are asking for more products to be available; they want service and help whenever and wherever they might be. Internet retailing is going to make consumers far more price-conscious, especially of higher-ticket items. For example, a speaker at the conference compared Amazon.com's price for a Bosch cordless screwdriver (£29.99) with that of B&Q's £39.98.

Garden Centers Beat DIY Chains

Snapshot research carried out by Which? Gardening magazine shows that to get great advice on plants, one should go to a garden center and avoid the UK’s largest DIY chains. During April 2013, its secret shoppers visited garden center chains and DIY stores posing as inexperienced gardeners. Homebase and B&Q say that a lot of their plant staff are trained in horticulture, but they gave the poorest advice during the visits. The Garden Centre Group came out top, with staff listening carefully to the problem and giving thorough advice. No information was provided regarding advice given by hardware retailers.

Smartphones are Impacting Email Marketing

The tremendous growth and acceptance of smartphones around the world is having an impact on the effectiveness of retailers' use of email marketing. According to a study of 2.85 million emails in the U. S. by Knotice Ltd., more than half of consumers sort through emails on their mobile devices before reading them on desktop computers. The figures likely are similar in other parts of the world.

What is disturbing is that 70% immediately delete emails that do not render well on mobile devices. It is something to keep in mind when working on one's email marketing program.

Are Our Members Fully Utilizing the Internet?

Earlier this year, we attended INTERNET RETAILER magazine's Conference & Show in Chicago, where we attended numerous seminars about email marketing and web retailing.

We came away with one major conclusion: It was amazing (and distressing) to hear web-only retailers doing so much, often from their homes, garages or basements, when brick-and-mortar retailers have so many more real advantages to offer consumers, such as opportunities to examine and compare different brands and price-points or to gain product knowledge from a retailer's web site or in-store employees.

Too many independent retailers apparently are using their websites only as static advertisements about the store, its hours, maybe a listing of products carried, and not for aggressive sales efforts.

What can be done easily and effectively? You can change product illustrations and descriptions by season, for example. You can also use PayPal as a means of encouraging web payments, as another simple example. Maybe there is a role in which we, as associations, can be more active and effective in helping our members combat these web-only competitors.

Where Youngsters Predominate

According to an article in RETAIL ASIA, two-thirds of the world's youthful population is to be found in Asia, with China and India accounting for 1.2 billion young people. Asian retailers, like retailers everywhere, need to understand the mindset and desires of young customers, which can differ markedly from those of older consumers. One sentiment is that the youth market, though not loyal, can be captured easily because of its penchant for variety. One thing is for sure—reaching the youth market calls for a blend of brick-and-mortar stores and a web presence, or clicks-and-bricks. It is a consideration our members need to bear in mind for future growth.

How are Tool Sales in Your Country?

Tool departments are one of the core departments for our members, but are very sensitive to broad economic conditions, such as housing starts or general construction disruptions. Now the Internet becomes another important factor. In some countries, it is now estimated that 20-25% of tool sales are made via the Internet. Power tools are especially vulnerable to Internet sources.

Employee Theft a Continuing Concern

Retailers everywhere realize that employee theft occurs, to varying degrees, based on a number of factors, such as country attributes, employer-employee relations, even store size. A recent article in England's DIY WEEK reported that 64% of retailers surveyed thought they were suffering from some employee theft. Thirty five percent felt it only a minor problem, but 29% felt it was a major concern.

Associations can do much to help retailers improve theft prevention by educating them as to effective loss prevention techniques.




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