If you want to keep your core categories competitive, then always be looking for ways to refresh and improve what you already have. In the July 2021 issue of Hardware Retailing, three retailers share how they made operational changes that had a big impact on category sales. In addition to the ideas they shared in the pages of the magazine, here are two more ways they are creating category growth.
Give customers different price point options.
Perspectives in Lexington, Kentucky, recently boosted its paint selection, replacing one brand of ceramic paint with another. The store was carrying a ceramic paint that owner Jason Taylor says wasn’t selling well, so he decided to bring in a private-label ceramic paint that would hopefully appeal more to customers looking for that type of product. The new paint is still a premium product and also bears the Perspectives name on the label, giving the store its first private-label paint line it can sell at a competitive price.
“We’re getting the Perspectives ceramic paint at a really good price, so we’re going to be able to offer it to customers at a price point that competes well with our other lines,” Taylor says. “Customers looking for a ceramic paint will still get a premium product but at a better price.”
Pintura Paints, located in San Antonio, brought in a new line of a national brand of paint soon after it changed ownership. New owners Danny Garcia and JD McDowell implemented a new pricing strategy with the new line, giving the store the ability to offer paints at good, better and best price points. Garcia says he and his partner were hesitant at first to carry that national brand because they thought customers might think it was too expensive.
“Now we see that our partnership with them allows us to offer customers something for every budget and need, from inexpensive to mid-range to high-end,” Garcia says. “It also gave us more options to sell to both our contractor clients and DIY customers.”
Give department managers more inventory information.
Ryan Buck, owner of Buck’s Home Building Centre in Bridgewater, Nova Scotia, believes that empowering employees to take leadership of the departments where they work benefits everyone. He’s put that philosophy to work in specific ways to create category growth.
In 2016, Buck started a major remerchandising project in the paint department to increase its visibility. At the same time, he wanted to see if there were any changes to his buying habits that might yield a sales increase. Instead of tackling the inventory numbers himself, he decided to let his paint department manager begin to make important buying decisions.
“We realized our inventory was higher than it should be, especially in comparison to other dealers,” Buck says. “So we challenged our paint department manager to come up with a solution. We gave her all of the inventory data on the department and asked for her input. We wanted to see what would happen. Would giving her the data draw more results from the department?”
As the department head started analyzing inventory performance reports, she began suggesting specific changes for the category’s in-store inventory. Small adjustments, such as reducing their back stock of paint and changing their buying schedule, could yield big results.
Over the next three years, inventory turns in the paint category gained a percentage point, gross margin rose 20 percent and overall sales were up 50 percent. While Buck made some other changes to the department during the same period, including a reset, he says sharing transparent resources like inventory data played a key role in the growth.
That strategy worked until the pandemic and resultant supply chain issues caused Buck to do a direct turnaround on his approach to inventory management. He now carries a higher backstock so he can hedge against shortages. But whatever his inventory strategy may be, getting managers involved in buying decisions is still critical to category growth.