Hardware Retailing

NOV 2018

Hardware Retailing magazine is the pre-eminent how-to management magazine for small business owners and managers in the home improvement retailing industry.

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HARDWARE RETAILING | November 2018 10 B y most measures, it seems 2018 is shaping up to be a solid year for home improvement retailing. The housing market is strong, unemployment is low and consumers remain cautiously optimistic about spending. With all of this in mind, I'd like to pour a bucket of ice-cold water on this positivity parade and bring us all back to reality. While we are certainly in an upcycle for our industry, there are three warnings I would like to pass along as you begin planning for 2019. These warnings don't signal insurmountable challenges, but I truly feel it is imperative to point out several potential issues so we aren't overcome by the apathy that a strong business climate can sometimes breed. Warning 1: Stay on top of your pricing! Given the volatile international market for raw goods and the tariffs that are currently and potentially impacting access to these goods, it is crucial that you address your pricing strategies. Because so many items you sell could be heavily impacted by the costs of items like steel and aluminum, you need to work closely with your buyers to ensure you are staying ahead of any potential price increases. The last time we faced some of these challenges, too many retailers found themselves behind the curve—setting prices based on past acquisition costs and not on replenishment costs. With so many items potentially facing price increases, this strategy could be a dire mistake moving forward. Warning 2: You cannot wait any longer to address the internet! For the past decade or so, home improvement retailing has largely skirted the impact of online retailing. While more customers are going online for their home improvement needs, the shift hasn't happened as quickly as in other retail sectors. There is no reason to assume 2019 will be "the year" that online sales surge forward for home improvement. But every year that brick-and-mortar retailers in this industry do not address their online presence, they will continue to lose relevance in consumers' minds. Warning 3: If you aren't differentiating, you are dying! I've said this in past columns, but it has never been more serious of an issue than now. Because customers have so many choices for their home improvement needs, you must be looking for ways to create a difference, an edge, for your business—and "customer service" isn't enough! The nebulous concept of customer service isn't a differentiator anymore; it is the cost of entry for any retailer to remain in business. How will your business make customers feel special or create an environment unlike one of hundreds of other options consumers have? If you can't simply and clearly state why your business is different (and better) than the other options in your market, you have to address it! While I've listed three warnings here, there are certainly other projects you need to take on to ensure your business remains relevant well into the future. But as rapidly as change comes right now, if you don't address these three items, you might not have to worry too much about longer-range planning. Dan M. Tratensek, Publisher dant@nrha.org Not to Be a Downer, But… Taking Care of Business " These warnings don't signal insurmountable challenges, but I truly feel it is imperative to point out several potential issues so we aren't overcome by the apathy that a strong business climate can sometimes breed. "

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