After spending the last 16 months gathering information and talking to members, True Value President and CEO John Hartmann lifted the curtain on the co-op’s new strategic plan during the company’s Fall Reunion last week in Denver.
The plan, which Hartmann refers to as “transformational” for the co-op is built around three key pillars: engagement, growth and efficiency and it touches upon all aspects of the co-op’s business.
“Transformational change is not one thing at a time,” Hartmann told the retailers, vendors and guests gathered for the general session. “Rather it is changing many things concurrently, which results in quantum leaps forward. This is exactly the type of change we had in mind when we developed our strategic plan.”
The entire strategic plan includes more than 30 prioritized initiatives, each with its own fully developed business plan for implementation, and all 30 initiatives fall into one of the three pillars, according to Hartmann.
While True Value executives addressed many of these key points during the general session, some of the highlights came in the areas of advertising support for members and in changes to the co-op’s assortment planning processes.
One of the most enthusiastically received elements was clearly True Value’s renewed commitment to national advertising.
The co-op announced that it will be increasing its national advertising spend in 2015 with ad placements planned for all forms of media from TV and radio to social media.
While 60 percent of the advertising will be price and item based, the remaining 40 percent will focus on brand building.
These national ad promotions will support five national circulars, which will run during peak selling seasons. True Value told retail members that these circulars will be free and they will be able to receive a 100 percent co-op reimbursement for distribution costs.
“Providing our retailers with five national print pieces, basically for free, is a great start, but we need to drive people into our stores to buy what’s on sale,” said Blake Fohl, True Value’s senior vice president, Marketing and Chief Customer Officer. “I am so excited to announce that in 2015 we will be investing heavily in national TV.We are going from 8 weeks of low volume air time, to 21 weeks of air time with strong weight levels.”
The ability to increase their advertising investment this way is a key component of regaining relevance, according to Hartmann. The cost of this increased advertising presence is being covered primarily by True Value’s vendor community, which came together to get a preview of the plan recently during a Vendor Summit, Hartmann said.
Along with the commitment to gain greater consumer awareness through enhanced advertising initiatives, True Value also discussed plans to help retailers create assortments that are better tailored to the unique needs of the different markets True Value members serve.
Currently, True Value built its product assortments around three different levels of commitment – basic, expanded and dominant.
This new approach will add urban, suburban and rural, as well as low, medium and high-income price point assortments to the mix. It will also take into account geographic requirements for their retailers.
“We’ll make this happen through our line review process. We believe this is the best route to productivity,” said Ken Goodgame, senior vice president and Chief Merchandising Officer. “In our line review process we examine all aspects of merchandise assortment, pricing, ship packs, merchandising techniques and improved point-of-purchase messaging.”
One of the closing topics of discussion focused on the fact that 40 percent of retailers had not remodeled their stores in more than 10 years. The company made a strong commitment to helping its members create a road map to increase retail presentation and performance.
Hartmann also focused on growth citing that True Value was posting comp-sales increases of nearly 4 percent. He also said True Value has seen net gains in store count this year, but more importantly, the combined revenues of the stores added to the co-op were nearly double that of stores lost.
“The stores that closed represented an annualized value to your co-op of $20.8 million.The new stores, however, represent more than double at $49.6 million,” he said. “We haven’t been on the plus side of things in a very long time – over a decade – and the quality of the new stores joining our organization is fantastic.”
The True Value Reunion took place from Oct. 10 through Oct. 12. In addition to hearing from Hartmann and the executive team during the general session on Friday, guests, vendors, and retailers had the opportunity to walk through the Colorado Convention Center and browse through key product categories, talk to vendors and attend educational seminars.
Overall, retailers were excited and there was plenty of buzz in the convention center after the general session. Tim Robinson, of Dover True Value, said he is “pleasantly surprised and excited,” after listening to the general session, especially surrounding the new advertising plans.
Hartmann stressed that while the details of the strategic plan were just made public, elements of the plan have been taking active shape for months now and the plan will continue to unfold in months to come.
“Our strategic plan is not just a set of papers or random ideas that will sit on a shelf and collect dust,” Hartmann says. “It is an action plan based on the big picture of our markets, and addresses the opportunities we have to not just change – but to drive transformational change that puts us right where we want to be with consumers – now and in the future.”