Hardware Retailing

OCT 2016

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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49 October 2016 | HARDWARE RETAILING The Challenge Wilco is not your typical home improvement retailer. With 18 stores throughout Oregon and Washington, Wilco's niche in its competitive arena is that of a regional farm and home lifestyle destination store. It caters to a higher end clientele that includes consumers and hobby farmers living in suburban and rural markets throughout the region. These upscale customers value the quality products Wilco offers. In fact, "quality" is one of Wilco's core values, and there is a tremendous emphasis placed on stocking quality products and providing quality service. While the retailer stocks a full-line hardlines assortment, overall hardlines sales account for just 15 percent of overall revenue. And sales in Wilco's paint and sundries department only accounted for 1.6 percent of overall store sales in 2013. In contrast, many home improvement retailers in the industry rely on their paint and sundries department to generate between 8 and 12 percent of overall sales, according to past NRHA research. The problem at Wilco was that paint and sundries sales were flat in 2012 and 2013 during a period when overall store sales were growing at a double-digit clip. The department was clearly underperforming. Potter, Ricksger and Colson were tasked with two goals for their project. First, they had to find a strategy to bring departmental sales back in line with the overall store growth figures the company was experiencing. A departmental Space Productivity Analysis revealed Wilco was dedicating 400 square feet of salesfloor space (2 percent of overall square footage) to paint and sundries, but the department was generating just 1.6 percent of sales and showing no signs of growth. Second, Potter, Ricksger and Colson began researching and selecting a premium brand of liquid paint to help foster the same quality perception in paint and sundries that consumers have for other key areas of the store. Wilco's strategy lies in finding categories of the store that complement each other from a competitive standpoint, according to Sam Bugarsky, Wilco's Chief Operations Officer. "Big boxes don't do garden well, and nurseries can't do hardlines well, so the combination is key for us," he says. Wilco's merchandising strategy also includes stocking what they call "Market Leader" categories. "We want to have the best selection, the right pricing and some expertise in our Market Leader categories," says Bugarsky. "We want to be known as a destination store for these categories, and we have about 20 or so that are consistent from store to store." So the plan for Potter, Colson and Ricksger was clear—try to find a way to turn paint and sundries into a Market Leader category for Wilco. (And, if that wasn't possible, they would have to find a better use for the space.) Cross-Country Research Trip The first step for the Wilco trio was to plan a cross-country trip to Aubuchon Hardware's corporate office in Westminster, Massachusetts, in March 2014, for a meeting of the minds. Two Aubuchon employees had shared details about the recent reset of the paint and sundries departments in each of Aubuchon's 107 stores. They also shared pictures of how they had " Big boxes don't do garden well, and nurseries can't do hardlines well, so the combination is key for us. " —Sam Bugarsky, Wilco's chief operations officer

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