With approximately 3,000 residents, news has always spread rather quickly in Woodstock, Vt. Credit a tightly knit Northeastern community, a popular local newspaper, and Woodstock Home and Hardware, where for several years owner Larry Perry has kept his company the talk of the town with unique and creative messages posted on the store's main signboard. Updated on a monthly basis, the humorous messages are used to announce company sales, expansions, and renovations and take lighthearted jabs at competitors, all in an effort to generate some walk-in traffic and a positive buzz surrounding the semi-rural retailer.
Case in point: After a big box store landed in the local newspaper for apprehending a contractor who accidentally put a carpenter's pencil in his pocket after buying $117 worth of lumber, Perry's sign read, “Spend $117, get a free pencil.” Though there's no direct link to improved sales, plenty of curious customers are drawn into the store by the unique signage, Perry says in “Humor is a Sign of the Times for Woodstock Home and Hardware,” an article on the company in the May 2006 issue of Do It Yourself Retailing. “I think it gets people talking about us in a favorable way,” Perry says, “and I can't think of better advertising than free, positive, word-of-mouth.”
Inventive and resourceful strategies like Perry's are not out of the norm among progressive independent hardware retailers and building material dealers, said DIY Retailing publisher Kevin Hohman during a presentation on competing with big box retailers at the National Hardware Show, held May 9–11 in Las Vegas. According to Hohman, independents have the opportunity to grab more of the retail limelight back from the boxes as those retailers have simultaneously increased their margins while struggling with image, staffing, and service issues.
“Since 1998 both The Home Depot and Lowe's have raised gross margins from 28 and 26.5, respectively, to about 33 percent, which is a great opportunity for independent retailers,” Hohman said, indicating that competition for rock-bottom pricing should soften in tandem with margin increases. Moreover, it has been the observation of many that boxes are poorly lit and dirty and have high turnover, Hohman said. Independents, on the other hand, continue to offer locations where it is easier to park, easier to walk the aisles, easier to find product, and easier to check out and get back to the project. “Service in particular revolves around the people who work in your store,” Hohman said. “The boxes have turnover and poor staffing levels because they are working within a high-volume model where the focus is to get goods on the shelf. A smaller-volume independent model gives owner-operators the opportunity to empower employees to focus on knowledge and service.”
While the Hardware Show and Hohman's presentation were clearly geared toward retailers with an inclination toward the DIY side of the business, there are distinct parallels between professional contractors and the consumer of the future, a “Buy It Yourself” (BIY) customer who wants to specify product but wants others in the chain to assume installation and various other aspects of the project. “I'm sure that building material dealers on the pro side are feeling the same types of competitive scenarios, not only with big boxes but with consolidation on your side of the industry,” Hohman told PROSALES after the seminar.
For independents, key sales strategies moving forward will be to focus on core products and services while choosing one or two niche areas where you can out-muscle the competition—be it a national lumberyard chain or a big box retailer. Woodstock Home and Hardware, for one, re-branded itself after an expansion into interior design services in 2004. The message on the sign that month: “Now Under Old Management.” Emphasizing continuity and independent ingenuity in an industry flush with consolidation and change is a marquee message if I've ever heard one.