I’ve got the remote in my hand. Glass in the other. First time I’ve sat down all day. I’m surfing the channels for something to take my mind off that which I can’t control. Like Iraq, Israel vs. Palestine, the higher Australian dollar and pointy shoes that ruin women’s feet.
On comes one of the building shows. I’m not sure which one. (Renovation Rescue, The Block, Backyard Blitz, House and Wife Swap?) They all look pretty much the same. Butch guys in truckie tops laughing while trolleying trees into a backyard, girl in tight shorts and halter top leaning forward to paint a bookcase. I sit back, appreciate the crassness of Aussie cameramen, and learn.
I learn how to make a coffee table, how to make a garden seat, how to make a healthy, low fat, high fibre lunch and how to knock out a wall, safely, without the roof falling in. How to, how to, how to.
My kids like one of the ideas. “That’d be great in the backyard Dad.”
Three days later I find myself at Bunnings, buying. (I’ve spent about an hour walking up and down aisles of items. I’m told there’s some 15,000 in a Bunnings.) While I stand in the queue looking down at the $400 odd worth of gear I’ve got in my trolley, I look up to the sky. I close my eyes and say a little prayer to the great God ‘Television’.
I think about the selling power of television. The motivating, educating, ‘it’s so easy to do’ role that these TV shows play in our society. How the Do It Yourself TV shows are driving the Australian economy better than any interest rate toying by the Reserve Bank. Yes, they may all be similar, and some may be floundering this rating season, but I’m pretty convinced that these DIY shows are keeping the economy on the boil.
The funny side of these ‘reality’ shows (Don’t make out it’s reality – have you ever tried to renovate a room? Two days? You’d need 10 people!), call me a complete bastard, is the highest rate of injuries in the holidays ever – people putting nails through their finger nails, drill bits through their soft bits.
I can’t wait for the funniest home videos to get onto the screen – Dad up the ladder. Dad plugging in saw. Dad electrocuting himself. Mum trying to resuscitate. Gives mouth to mouth. Kids ringing the ambulance for both.
But they are not cheap. Not cheap to make with all those staff, and definitely not cheap to buy space on. Some advertisers are paying a million or more to be the key sponsor. Their 30 seconders are at the peak rate the stations dare charge. Their product placement charges are outrageous. But the que to be a product mentioned, used, is growing faster than the values of the houses they help us fix.
And what is it they sell? Hardware.
It’s not food, finance or I.T. that has their marketing act truly together in this country. It’s hardware. Simple, humble, bumbling-along hardware. What other industry has 10 or so shows about itself on TV? Heaps of magazines connected to those shows? What industry has the power to laugh in the face of the Reserve Bank? Hardware. God I love it.
Why is Hardware so interesting?
From a professional marketers perspective, hardware has a lot going for it. Especially as a career step. Most players don’t have real marketers in the traditional product management/marketing manager roles. They are often sales guys who’ve moved up, or builders who’ve moved down, if you know what I mean. Hardware companies are often miles behind HVPG or IT, so you could find a real opportunity taking them kicking and screaming into 2004.
But it won’t be that easy. It’s a cultural thing. If you’re a female, you may not stand a chance for a real job in a lot of these companies. They are often a touch old-fashioned, and plain sexist, reflecting the original customer as tradesmen. It’s a man’s world.
Even though many players are a bit backward in marketing theory and business culture, hardware is at the leading edge of technology. I defy you to walk into a big hardware store and not find a new invention. I do it weekly. I’m renovating two houses and one very expensive office and it’s all I spend money on. I can’t even afford a new T-shirt because all my money goes on tubes of no-more-gaps, cans of paint and packets of drill bits that I’m always breaking.
The hardware industry is worth about $20 billion per annum and according to Hardware Journal, about three quarters of that goes into the DIY market. That’s a heck of a lot of paint and screws.
And it’s a very competitive market. There are a number of established players in most of the big areas, like paint, electric tools, plastic piping and sealants. Many of the markets require large investments in capital equipment and good manufacturing operations, and many rely on off-shore manufacturers.
In retail competition is rife – and it’s getting tighter. The small guys are putting up a good rear-end fight, but being constantly wiped by the big players. Whenever a category killer opens up, it’s usually only a matter of time for the smaller players in that area. The discounting/buying chains of Home, Thrifty Link, Mitre 10 etc, are struggling against the colossus of Bunnings, rolling across the outer suburbs like a tropical cyclone, flooding the homes of the freshly married with everything their little imaginations can remember from last night’s show.
Big stores arguably account for half of the business and are getting to the stage where they carry everything. I’ve seen video cameras, I already buy lollies, (Mars had a stand at the recent National Hardware Show in Melbourne) I’m waiting for band aids, panadol… Meaning they are touching at the edge of other category killers, like supermarkets.
I can see huge stores in outer suburbs one day where you would go in to get everything – meals, drugs, tools, flowers and clothes. Why have Bunnings, Office Works, Target, Amcal and Coles when you could just have BOTAC?
What should a Hardware operator do?
Ask, who is your customer?
There’s a strong chance that you have only two distinct customer types. Most hardware players target trades people and the DIYer.
The DIYer is quite likely to fall into several sub-categories. The young renovator (the suckers who buy ‘renovator’s dreams’ – Victorian/Edwardian era, inner suburbs, with rising damp, rotten timber framing, rusted pipes and plaster peeling down the walls) the older ‘professional’ renovator (the ‘Dulux make-over’ specialist – who does no more than apply paint and no-more gaps and makes twice the money for half the effort). The young family needing anything from a pergola to a new toilet cause the kids tried out daddy’s hammer on the last one – happy to get anything that does the job and keeps the kids entertained for the weekend. I could go on and on.
The tradies are much less interesting. If they are not female, and there’s a few that are, they are real blokes in the traditional sense. They do make good money, but they are not that great to marry (they don’t wash up, and have you ever seen a tradie pick up a broom or a vacuum?), mind you they are flexible with their work hours and locations (they may be working in Queensland next week) and some can cook up a treat on a Barbie.
But if you’re a customer, sorry householder needing help, they are hopelessly unreliable because Mum never taught them how to read a calendar or tell the time.
Tradies are reasonably easy to hit with certain media, if you just think through their day, (they listen to the radio all day. They answer their phone for the next gig. One day a week, they check their ad in the local paper) and they are the key influencer on DIY, because, if the pros use it, it must work, thinks the average DIYer. And the tradies do buy a heck of a lot of product for obvious reasons, so you must always aim to be a success with the tradies if you want real market share.
Research customer need/desire
They are often not driven by demand as much as by ‘look what we can do’. Partially it’s a belief that as men sell it, men buy it. So it has to be ‘logical’. Wrong. Women often buy it. (Over 80% of those attending learn-to-do-it nights at major stores are women.) More to the point, the ‘logical’ info is that all sealers are more or less the same chemicals, so you ought to sell only one. That doesn’t stop people buying the silicone window, the silicone roof, the silicone mirror seal…because they buy for job specific and trust you wouldn’t bullshit them.
So things like test markets are a rare thing. Why bother? If they do bother, the test is almost never done on a scientific basis – that is, to do in the test what you would do in a national campaign, on a smaller scale.
Many unknown products
Where you have unfamiliarity with products, you have uncertain purchase decisions and well-known brands rule by default. Even living with that golden rule, few have managed to build brands across a range of markets. Selleys have done it quite well. So have Nylex. And Ryobi. So have … nup, I can’t think of any others. (No doubt they’ll write and tell me off for not mentioning them.) When you compare hardware categories to high volume consumer goods, there’s big gaps in hardware for key brands. If you’ve got a star product in one area, consider rolling it through a bunch of other categories. Sidchrome do tools, why not nails and screws?
Packaging is king
Packaging takes over in most categories because POS is limited (stores can’t spare the space) and markets are often too small to justify mainstream ad campaigns.
Use the shippers for messages
The shippers are often the main display item in the big stores. They are free, large POS. They are cheap to change, being usually only one or two colour. You can change them to reflect your other advertising or make offers that are reinforced on swing tags etc. Almost no-one seems to have worked this out yet.
Do POS – posters/floor posters/gondola ends
Almost no other POS means that in-store promotions really work. You can pick up spontaneous sales. I don’t care if you have to start with a dinky one-man store in Tootgarook, POS in his market works brilliantly and it does rub off as better sales over time. Just track your sales in one store/region and roll it out once the buyers have seen the results go through the till.
Check your pricing
Pricing tends to be a standard retailer call when they can’t think of anything else, which is most of the time. As we all know, price only affects customers when all else is equal, which is, like, never. However, there’s a lot of angst that goes on in the punter’s mind when they pay $3.50 at a small store for something they can get at a big store for $2.00. There’s not much you can do about it if you’re selling to large buyers who demand discounts, but keep in mind that if you only satisfy the big guys with discounts, rebates and other benefits, you won’t have any little guys to offer you an alternative outlet soon. And the big guys don’t actually give a shit if you live or die. Like most major retailers, they are happy to replace your branded line with a house brand in a blink.
If you’re a retailer reading this, do house brands then screw the brand marketer by telling them no-one wants them, delete their stock out of a couple of key stores, in a month tell them you haven’t missed their trade. Get them to make under your house brand. When you have enough sales in that line, take the new ‘brand’ to your opposition and become the key brand in that category. Simple, isn’t it?
Rebates, commissions, and all that stuff
Check the Trade Practises Act. Get your lawyer to look at your plans. Consider your brand as a long-term prospect versus the desperate desire to satisfy the retailer buyer who is usually only bluffing about deleting you – unless you happen not to have a well-known brand. Consider advertising as an alternative to being a house brand next week.
Merchandisers are Mandatory
In all the big stores you have to send in your own people (or contractors) to check stock levels and complete the re-order documentation, so get over it.
Do CRM
Keep their names from warranty cards etc. and convince the drill buyer to get extra sets of bits and batteries and chucks and another drill so they don’t have to change bits during the job and …
Move products around
Take shovels out of the tool section and into the garden section, screw driver sets in the lighting dept – you’ll be amazed at how items sell better away from the competitors.
Do freebies and offer relevant prizes
Everyone loves a freebie, especially in this market. But so many promotions have brain-dead prizes. Trips, golf clubs, esky’s, yawn. If they are buying paint, give them a spray gun or digital camera to photograph it with…make it new and interesting. If it’s sales you want, you need to fire their imagination – it doesn’t have to cost a fortune.
Simple to follow instructions on how to use
Give the DIYer a project and they’ll love you for life. Mitre 10 did a fantastic series of ‘How to build’ books about ten years ago. I can see a canny supplier doing a regular leaflet drop of small project brochures to the outer suburbs.
Replace without question
Do the right thing by guarantees and warranties with a smile on your face and sympathy for the punter who had to waste their time coming back to you. Handled well they will be a customer for years. Handled badly and you’ll never see them again.
Never be out of stock
A recent industry poll put ‘out of stock’ as the key deletion reason. Way ahead of poor customer service, products that didn’t work, no technical back-up or over-priced goods.
Media Options for hardware suppliers
Product placement
As I said earlier, there is nothing that compares with TV. But product placement can’t give you frequency – there’s only so many times you can get a mention on a renovation show (the exception is Kennard’s Hire, who seem to be in every show I ever watch). So consider serious TV – 30 seconders run as real, paid for ads.
Direct Mail
I’m a VIP member of three large hardware chains. I said on my ‘application’ form I was renovating two homes. That must translate to ‘spending thousands on hardware’. I’ve never had a letter.
Telemarketers
Tradies and domestic consumers alike are very rarely targeted with telemarketers. I can’t understand this, given tradies numbers are in the pages of the local paper, and most of you have the warranty cards of consumers.
SMS
“50% off Dulux paint for trade accounts at Home stores this arvo” would really work.
Local Papers
All tradies read the local paper to check if their ads have run. And where do you find a plumber? When you really just need a sealant, if you saw the ad, wouldn’t you just Do It Yourself?
Daily Papers
Blokes read the sports pages. Tradies are blokes, you figure. If you want women, try the horoscope or the news sections.
Magazines
The traditional media for hardware products, both trade and mainstream. But use a decent designer/photographer or the Belle, Home, Vogue Living’s etc, won’t have a bar of you. Co-ordinating with the related TV show works very well, especially if you’re running a competition etc.
Videos in stores
DVD’s, repeated at infinitum may bore the hell out of the retail staff, but a small screen, in the aisle where the product is, can have a crowd watching and then buying all day long.
Radio
Tradies listen to radio – especially duff-duff and (sexist) talk-back. Which is why John Laws is still in business. Women make a lot of purchases. Try the 3-4pm pick-up-the-kids time.
Use other outlets – supermarkets, newsagents, direct
Only a few hardware players have moved into supplying other retail chains, but with the demand for some products, it’s quite justifiable. You can now buy No More Gaps at Coles.
And if you’re a small hardware store, look at the writing on the wall. You’re probably potentially a mid-sized flower shop or nursery and quite a large specialist tools store. Because where there is a sea of mediocrity, the specialist floats. Wouldn’t you prefer to have your own chain? Call me if you want a strong brand.