The trend revealed by last year’s Hardware Age Consumer Profile (December 1992) that consumer preference for mass-merchant outlets was continuing to grow at the expense of some hardlines outlets, was particularly evident in the report’s hand tools section. For the first time in the survey’s history, mass merchants showed a clear edge over hardware stores for consumers’ surveyed hand tool purchases: 34% to 22%. Three years prior (in the 1989 Consumer Profile), hardware stores accounted for 33% of purchases, the highest percentage among store types.
Encouragingly, the shift has less to do with something that mass merchants are doing exceptionally well than with something that other types of competitors–namely, lumber and building materials centers–are doing differently. Mass merchants haven’t become aggressive hand tool marketers. They continue to chip away at weaker hardlines competitors by offering limited selections of hard goods at attractive prices. But lumber and building materials centers, by stocking broader selections of quality hard goods, are becoming head-to-head competitors with hardware stores and home centers in many markets.
The result, of course, is that the hand tools sales pie is being cut into ever-smaller pieces. How do you maintain your slice?
One way to do it, say retailers, is to stock high-quality tools–something mass merchants will never carry.
“Everybody and his brother wants premium-quality tools,” says Lou Strasser, president of 60,000-sq-ft Strasser True Value in Kansas City, KS. “People are more aware of the professional-grade tools than they used to be,” he says. “Before, people just wanted the lowest prices.”
Strasser says people have been upgrading their tools in the past few years, and that customers in his store have shown a marked preference for quality, American-made tools that will last longer.
But that’s in Kansas City. In Rawlins, WY, retailer Steve Olson has a different strategy for success: Cater to the D-I-Yer with a basic selection of good tools at affordable prices. As president of Build-Rite Lumber & Supply, Inc., Olson says that 70% of his customers are D-I-Yers, and that, generally, they don’t want to spend the money on professional-quality tools. “Fifteen years ago, it was just the opposite,” he says referring to his one-time contractor-based business.
Today, Olson’s customers, many of whom “will travel 100 miles to find something they need,” want outdoor equipment such as shovels, earth-working tools and “agricultural-type” hand tools. His 1,000-sq-ft hand tools department makes it easy for them to find, located right up front, on either side of the store’s entrance.
If you’re not catering to customers willing to spend the extra money on pro-quality hand tools, pricing is important. More than 46% of Consumer Profile respondents, for example, said they purchased hand tools where they did because of store pricing–up from 40% in 1989. This is where wholesaler assistance, which typically includes price comparisons and price recommendations, can be invaluable.
“They’re very helpful,” says Bruce Braunsten, president of Moreland Ace Hardware in Portland, OR, of his wholesaler’s pricing program. He says that “careful pricing” of hand tools has helped keep his department successful. So has variety.
“I have to have the merchandise” says Braunsten, who adds that “as our variety has improved, our sales have improved.”
Braunsten’s hand tools department is also near the front of his store, occupying three 24-ft aisles. Its above-average 51% profit margin is helped by top sellers like hand saws, tape measures and nail sets.
Unique and/or timely products can also help hand tool sales. In past issues, Hardware Age has identified timely hot-sellers in the category such as one-handed clamps, non-slip screwdrivers, neon-colored measuring tapes and safety products, all of which are worth stocking if you don’t already
And in Buffalo Grove, IL, retailer George Zimmerman suggests another: an inexpensive plastic tool box sold with “six or seven” basic tools such as pliers, a tack hammer, a screwdriver and a tape rule. Zimmerman says he typically sells one or two of the boxes a week, mostly to single women.
“We’re located in the suburbs of Chicago,” he says, “so we have a heavy single-woman clientele. The tool boxes appeal to women who have condos or small apartments.” The basic tools are perfect for the typical apartment-owner, he says, and he displays the boxes in the aisles beside the endcaps, near his selection of low-priced tools.
Another trend in hand tools is safety, say experts. Usage instructions are now often found attached to shafts of tools, or engraved right into their handles. More hand tools now come with lists of “do’s and don’ts” also.
Doug Hammer, tool buyer for Butler, PA-based Servistar Corp., says this is because “people are just more safety-conscious.” But he adds that retailers can benefit from the renewed focus on safety by taking advantage of cross-marketing opportunities. Products like ear protectors, dust masks and goggles and others can do very well if merchandised near hand and power tools, he says.
Ultimately, a strong selection of quality hand tools is one of your best inventory investments, and a hardlines outlet is likely to always be the store of first choice for all but the least-serious D-I-Yer. But it’s just as clear that even a “blue-chip” department like this one is not as invulnerable to competition as it once was. Don’t overlook it when searching for special merchandising opportunities. It will help you maintain traffic, sales, and your slice of the pie.
How have your sales of hand tools changed in the last 12 months?
No change 47
How have your profits from the sale of hand tools changed in the last 12 months?
No change 60
What percentage of total sales do you attribute to hand tools?
5% or less 50%
6% to 1 0% 32
11% to 15% 13
More than 15% 5
Have you changed your hand tool selection in the past 12 months?
No change 75
Will you change your hand tool selection in the next 12 months?
No change 77
What are your five top-selling hand tools? 1. Hammers 2. Saws including hack saws) 3. Screwdrivers 4. Tape measures 5. Knives Source: Hardware Age Retail Panel, 1993.
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