(continued from imex.com) STORY: 091209-HTSATC by Bob Vereen, Worldwide DIY Council HOW TO SUCCEED AGAINST TOUGH COMPETITORS Competition is tough everywhere around the world for independent retailers and small chains, but especially so wherever big-box retailing is firmly entrenched, yet there are survival strategies that can be employed to increase one's sales and net profits. Too often, experts say, smaller retailers worry most about expense control and their pricing image, but they can't rely on those alone. More attention must be given to increasing revenue and that can be achieved by increasing the satisfaction of present customers as well as devising ways to attract new customers. Easier said than done, of course, but there are decisions that can be made to improve one's performance. Typically, there are 4 core competencies retailers can develop: Product breadth and/or depth "Signature" departments Service excellence and distinction Pricing leadership In view of the buying power of big-box stores, pricing leadership is difficult if not impossible, for smaller chains or independents. That leaves the others. However, one can demonstrably become "the absolute leader" in a category or department. Doing so would enable one to expand a store's reach or market share beyond its normal trading area, according to Brad Farnsworth, president of The Farnsworth Group, Indianapolis, IN., during a seminar held in conjunction with a U. S. trade show. In the U. S., research indicates that consumers typically make 9.4 trips annually to a hardware store, home center or consumer-oriented lumberyard. Adding a new department or new service, such as rental, provides an opportunity to increase the number of store visits in one's trading area. Other services can be offered, such as shipping, screen and window repair, even fax and copy services if these would be a convenience for local customers. Increasing one's average sale is another option, and this can be accomplished by better merchandising (end caps, for example) and advertising, as well as by providing superior customer service and the addition of new categories, mentioned earlier. One should ask one's self a few simple questions: What is my message to the marketplace? In other words, what does the customer think of me? Am I the store of first choice-whether for convenience, selection or service, or not? Research conducted by Farnsworth's consulting firm showed that in some cases, only 62% of consumers found the items they were looking for when they visited hardware stores or home centers, and only 8% bought items on impulse. Both percentages can-and need to-be improved, he said. The 3 main reasons why customers don't buy what they came to buy are: Couldn't find it Didn't know what to purchase Not sure if it met their need Unfortunately, the reasons for (1) could be that the store stocked the item but the customer couldn't find it or it could be out of stock. And, of course, it could be that it simply wasn't stocked at all. In-store signing, improved inventory management and better customer service will boost the number of customers finding what they came to buy, and in-store merchandising and suggestive selling provide a great opportunity for increasing sales. But all 3 reasons can be eliminated in many cases by training employees to help customers buy. In some major retail chains like Meijer now, employees MUST escort customers to a product's location when customers inquire if the store stocks an item. If a store doesn't stock an item customers inquire about, perhaps there is a substitute the employee can suggest? Retail management also must focus on helping consumers navigate their stores to find what they need, helping them determine what they need and then educating them on how to use the product or complete the planned project. One of the simplest ways to create unplanned purchases is the use of reminder messages-a reminder sign or, even better, a pass-out list of related-items needed for jobs, i.e.-sandpaper, brush cleaner, brushes and/or rollers, etc., to be given to everyone buying paint, for example. "Don't forget" signs" also can be effectively used in many departments. Cross-merchandising is another basic and effective technique, such as stocking batteries by electronics as well as in their primary location. Too often, such reminders are not regularly utilized. According to Farnsworth, it is far easier and more profitable to make minor improvements in customer transactions in order to increase sales and net profits than it is to focus entirely on expense control. By increasing the "closure rate" on customer transactions or increasing the transaction size by selling-up and/or adding related-item or impulse items, one can substantially improve sales and net profits from existing customers. By becoming a destination store for a signature department, one increases store traffic. Together, these strategies are bringing success to thousands of small chains and independent retailers in the U. S., even as major chains such as Home Depot and Lowes continue to open hundreds of big-boxes around the country each year. A full listing of special services, including faxes, is prominently displayed on the wall of this Indiana store's service center. This Utah store's departmental signing is outstanding-large signs to identify major departments, plus smaller signs above gondola ends which explain categories to be found on gondolas. (Photo courtesy of Hardware Retailing) All American Home Center, a huge store in Downey, CA., has signs in both Spanish and English to accommodate customers. Photo courtesy of Hardware Retailing Keim Lumber in Ohio uses handsome gondola ends to feature new products, special offers or related-items to boost sales. Photo courtesy of Hardware Retailing Knauber, a small chain of German home centers, uses upscale display treatments in its paint department to boost related-item sales.

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