The North American Retail Hardware Association (NRHA) conducts research every year to gauge the health of the independent home improvement sector and provide retailers with benchmarking tools and insight into topics ranging from employee benefits to tariffs.
How can you use industry research to better your business? Here are some suggestions.
1. Benchmark Financial Performance
NRHA’s annual Cost of Doing Business Study is the industry’s only benchmarking tool. Use the study to check if your operation is below average, typical or high profit, and then set goals for how to improve your business’s performance.
The owners and managers of about 1,000 independent hardware stores, home centers and lumberyards contribute detailed financial information that NRHA compiles into one study that shows industry averages for data such as sales per employee, payroll percentages and operating profit, among others. Some information from the study is available every year in the December issue of Hardware Retailing magazine. Back issues are available online.
2. Support Your Case When Seeking Financing
A healthy operation is a growing one. That means you and other retailers are often seeking financing for projects, such as new store locations. Take the Cost of Doing Business Study with you when you sit down with bankers and financial advisors, so you can show them if your operation is healthy or, better yet, a high performer and merits further investment.
3. Teach Employees About Important Financial Metrics
Scroll to the bottom of the 2018 Cost of Doing Business Study purchase page to find free PDFs and videos for training employees about key financial metrics. Workers who understand the importance of average transaction size, payroll productivity and gross margin return on inventory will be stronger contributors to your team because they will understand how they individually impact your business.
4. Understand the Context for Your Operation’s Challenges
NRHA hosts an annual research conference for retailers and other industry professionals. The 2018 State of Independents Conference is free for retailers to attend and is slated for Dec. 6 in Chicago.
Register for the conference to learn from other independent retailers about how succeeded despite the variety of challenges they face. Check out some of the 2017 data to get a taste for the upcoming conference and learn from past research participants.
5. Spot New Growth Opportunities
For the annual State of Independents Conference, NRHA surveys home improvement retailers about the opportunities for growth they’re seeing in the home improvement sector. Through the research, you can get ideas for ways to expand your operation or gain inspiration for adding a new niche.
6. Get Motivated to Plan Ahead
NRHA’s recent Succession Planning Study reveals some sobering numbers, but also encouragement, for planning transitions in ownership. Many independent retailers do not have succession plans in place and their businesses are vulnerable if an unexpected accident, deteriorating health or a retirement dream makes an ownership transfer necessary. Operators who have succession plans say they have found peace of mind about leaving their businesses in good hands because they have planned ahead.
The full study is available to download for free.
7. Benchmark Employee Pay and Benefits
About every five years, NRHA conducts an in-depth study of employee pay and benefits in the independent home improvement industry. The most recent version of the Employee Compensation Report provides pay and benefit information, broken down by job and store type, to help you get an idea of how your operation compares to similar businesses. The study results may show you that you’re on track, offering less competitive pay or could compete better for top-notch workers with nontraditional benefits.
8. Promote Your Operation’s Local Impact
NRHA has partnered with shop-local organization Independent We Stand to commission studies on the powerful local economic impact that independent home improvement retailers make on their communities. The results of the organizations’ research are exhibited in the Home Sweet Home Study, Home Sweet Home: Pros’ Edition and Home Sweet Home: Locals vs. Amazon.
The research reveals just how big of a local impact that money spent at independent home improvement stores makes compared to the same money spent at big-box stores and Amazon.
NRHA has provided marketing tools—including signs, posters, social media images and press releases—to help you promote what your customers’ communities gain when people choose to shop at your store. The marketing materials are available to download for free here.
9. Get Inspired to Motivate Your Staff
Beyond using the Home Sweet Home research to promote your business, you can take a look at the numbers for inspiration. You know your business has an impact on your local economy, but have you looked at data showing just how powerful that contribution is? Use the Home Sweet Home research to remind yourself why your daily grind is so important, even on discouraging days. In addition, highlight the data as you train employees to help them buy into your operation’s mission. Mission-minded workers understand why their jobs matter, and they tend to be more loyal.
10. Gain Insight Into Challenges Manufacturers and Distributors Face
NRHA recently surveyed top manufacturers and distributors in the home improvement sector to learn how they feel about new and proposed tariffs on imported aluminum and steel. Find the research here, and use the information to better understand the challenges your industry partners are facing.