July 2, 2018 Volume xxiv, #26

“Wisdom outweighs any wealth.”
—?Sophocles (Ancient Greek playwright, 496 B.C.-406 B.C.)

IN THIS ISSUE:

• Doug Skrepnek: expect more consolidation from Titan in Canada

• UFA focuses on upgrading its back-end systems with new ERP

• eRetailer Summit seen as a valuable way to stay ahead of the online competition

• Dealers selling online must blend e-commerce with a solid in-store experience

  PLUS: Two more Quebec stores join Home Hardware, Sears to close up to 100 more stores, Tesla will stop selling solar products at Home Depot, Kingfisher’s newest store achieves net zero energy usage, Home Depot to invest $1.2 billion to streamline supply chain, Preston Hardware co-owner remembered, retail sales down in April, and more!
  
  

Doug Skrepnek: expect more consolidation from Titan in Canada

VAUGHAN, Ont. — WSB Titan is on an acquisition trail. And it’s not being shy about using the Titan name, which refers to the three commercial dealers that came together originally to form Titan. They are Shoemaker in the West, Watson in Ontario, and Beauchesne in Quebec.

Titan is now part of GMS, a giant commercial drywall operation out of the U.S. GMS acquired Titan for US$627 million ($800 million) in a deal that closed early last month. The U.S. parent has been actively buying up business in the U.S., including Grabber Construction Products in the San Francisco area and CMH Distributing in Nebraska in April 2018. With the Titan acquisition here, GMS intends to keep looking for new acquisition opportunities in Canada.

The latest addition to Titan is a new outlet for its commercial roofing business, BC Ceiling Systems, which was acquired in 2015. The store in Langley, B.C., was not named BCCS, but called “Titan”. It’s part of a plan to expand the Titan name among commercial customers while infilling various markets. BCCS also has locations in Richmond and Vancouver. “We’re one branch away from saying we’ve got the Lower Mainland well served,” Skrepnek says.

But don’t expect Titan’s legacy businesses, Shoemaker, Titan, and Beauchesne, to change their names. “It would be foolish to get rid of the names that built the gypsum drywall business in this country.”

On the retail side, Titan’s ownership of Slegg Building Materials, a major dealer on Vancouver Island, with a dozen locations, is also shoring up its brand power. Titan bought up Dodd’s Lumber last year, another yard on Vancouver Island, in Duncan, and that was renamed a Slegg yard, Skrepnek notes.

UFA focuses on upgrading its back-end systems with new ERP
CALGARY ― UFA has been making a lot of changes at the store level with the refit of its Farm & Ranch Supply stores, but changes are going on behind the scenes, as well. The company has invested heavily in a new enterprise resource planning (ERP) platform.

The system, which will effectively tie in all the company’s various systems―including purchasing, inventory, and order processing―is replacing an existing POS system.

According to Glenn Bingley, COO of retail operations at UFA, the move signifies a big change for the company, and one whose time has come. “It is replacing some really aged technology,” he says.

Along with its lucrative petroleum business, United Farmers of Alberta has an agribusiness division. That business is represented mainly by 35 UFA Farm & Ranch Supply stores throughout Alberta, through which the co-op also drives its commercial agriculture side. Bingley oversees this division, and has been working with his teams to fine-tune assortments, update merchandising, and develop smarter relationships with vendors. Now he’s focusing, along with Mark DiGioacchino, UFA’s director of merchandising, on the back end, as well.

Using the Microsoft Dynamic 365 platform, the company is currently rolling this out to the retail and commercial division that Bingley oversees. He expects it to be completed during the next 16 months.

UFA focuses on upgrading its back-end systems with new ERP

CALGARY ― UFA has been making a lot of changes at the store level with the refit of its Farm & Ranch Supply stores, but changes are going on behind the scenes, as well. The company has invested heavily in a new enterprise resource planning (ERP) platform.

The system, which will effectively tie in all the company’s various systems―including purchasing, inventory, and order processing―is replacing an existing POS system.

According to Glenn Bingley, COO of retail operations at UFA, the move signifies a big change for the company, and one whose time has come. “It is replacing some really aged technology,” he says.

Along with its lucrative petroleum business, United Farmers of Alberta has an agribusiness division. That business is represented mainly by 35 UFA Farm & Ranch Supply stores throughout Alberta, through which the co-op also drives its commercial agriculture side. Bingley oversees this division, and has been working with his teams to fine-tune assortments, update merchandising, and develop smarter relationships with vendors. Now he’s focusing, along with Mark DiGioacchino, UFA’s director of merchandising, on the back end, as well.

Using the Microsoft Dynamic 365 platform, the company is currently rolling this out to the retail and commercial division that Bingley oversees. He expects it to be completed during the next 16 months.

eRetailer Summit seen as a valuable way to stay ahead of the online competition

CHICAGO ― The annual Home Improvement eRetailer Summit is less than six months away, and leading dealers registered to attend are already anticipating its benefits.

The third annual Home Improvement eRetailer Summit will be held November 7 to 9 at the Hotel Monaco in Chicago. It is a unique event that provides delegates with insights into all aspects of e-commerce. Presenters include leaders from the worlds of manufacturing, distribution, and online retailing, as well as service providers and business media.

“The eRetailer Summit provides an ideal forum to share key insights and trends that are evolving within the home improvement landscape,” says Alyssa Steele, VP of merchandising for eBay (shown here), who will be going for the second time. “As the lines of offline and online commerce continue to blur, it’s important for manufacturers and retailers to ensure an effective distribution strategy within today’s competitive environment.”

Jim Carpenter, director of marketing for Curtis Lumber, a 21-yard LBM dealer based in Ballston Spa, N.Y., says he’s looking forward to attending his first Summit, “to better understand how our regional, family-owned company can transition into integrated retail and grow for the future.”

“This Summit was designed to help the entire home improvement retail channel focus on understanding the internet as a distribution channel, and to become more competitive by understanding and capturing the growth opportunity of Home Improvement ecommerce,” says Sonya Ruff Jarvis, the event’s founder and organizer. It will be held this year from November 7 to 9 at the Hotel Monaco in Chicago.

(For more information about the Summit, click here, or contact Sonya directly at sonya@eretailersummit.com.)

Dealers selling online must blend e-commerce with a solid in-store experience

SPECIAL REPORT — There are few innovations that have changed retail as radically as the invention of the internet. The digital revolution, the shift from analog to electronic technology, was intended to create a “better tomorrow”. But who is benefitting from these changes?

What’s changed with online shopping, and the proliferation of access to smartphones and mobile technology, isn’t just the ways people shop, but what they’re looking for when they make a purchase. As John Williams, a senior partner at J.C. Williams Group, puts it, “it’s the most disruptive time to be in business, ever.”

“This has dramatic implications for your brand strategy and your product architecture,” says Williams. “You can’t serve this market with one product. There are huge gaps and shifts going on in the marketplace.”

Home Hardware saw that shift in the marketplace and, in response, turned its marketing strategy completely on its head. Rick McNabb, VP of marketing and sales for Home Hardware Stores Ltd., says when he was hired for the position, he looked at the strategy Home had been using for a long time and felt some aspects of it were too clinical.

Hoping to appeal to a younger demographic, Home Hardware launched a new marketing campaign, “Here’s How”, which shifts the focus from Home’s traditional product-centred commercials to projects big and small.

“We think it’s relevant to all targets, and particularly millennials, where they need help,” says McNabb. “Projects can be inherently personal; they can be emotional. They provide a sense of accomplishment. We really felt our sweet spot with Home Hardware is that we’re where expertise meets humanity.”

McNabb says Home Hardware is backing up the new marketing approach with an updated website, which was launched this spring. “We’ve made a significant investment there. We’re really excited to get that rolled out.” At this point, the company has a ship-to-store capability that has been working very well, but Home Hardware is also looking into being able to ship to home by the end of the year.

(This is an excerpt of a larger feature that appears in the current edition of our sister publication, Hardlines Home Improvement Quarterly. HHIQ is mailed to 11,000 dealers, owners, and managers. Click here to get your own subscription today!)

DID YOU KNOW...?

... that Canada’s retail home improvement industry grew at a healthier rate than anticipated in 2017? Or that business is expected to keep pace for most of 2018? These statistics are just part of the 2018-2019 Hardlines Retail Report, which has just been completed. This in-depth analysis of the top players in Canada, including Home Depot, Lowe’s, Canadian Tire, and Home Hardware, is exclusive to Hardlines! With 200 PowerPoint slides, dozens of charts and graphs and more photos than ever before. Check it out here to get started on your planning for 2019!

RETAILER NEWS

SAINT-HENRI, Que. — Two of Groupe Brochu’s L’Outilleur stores have adopted the Home Hardware banner, joining the firm’s other two Home Hardware stores acquired just over a year ago from George Laflamme inc. The Saint-Henri-de-Lévis and Saint-Lambert-de-Lauzon stores each held celebrations last month, to which owner Guylaine Brochu welcomed local officials, suppliers, and customers. Groupe Brochu has maintained a rural focus since it was founded in 1913, and today operates four stores under the banner of L’Outilleur Centre de renovation.

HOFFMAN ESTATES, Ill. — Sears Hometown and Outlet Stores Inc. will close up to 100 of its 882 stores. Sears Hometown and Outlet Stores mainly sell appliances, hardware, tools, and lawn and garden equipment. Most of these locations are operated by independent dealers and franchisees. The company has already closed about 20 stores so far this year.

ATLANTA ― Electric car maker and technology company Tesla will stop selling its solar products at Home Depot by the end of the year, ending a brief retail partnership. Tesla began selling solar panels and batteries in Home Depot stores early this year, planning to create dedicated space for the products in 800 of the home improvement stores.
The electric car manufacturer announced that it was pulling out of Home Depot stores at the same time as it is cutting jobs and undergoing a company-wide reorganization.

LONDON — Kingfisher announced that its new Peterborough Screwfix store will become the first of its stores to achieve net zero energy usage, DIY Week reports. In its annual sustainability report, the company said the store will generate electricity equal to its usage, with the surplus being returned to the grid. “Our net zero store in Peterborough represents a significant milestone in our ambition to embed sustainability across the business and help customers to create good, sustainable homes and businesses,” said Screwfix CEO Graham Bell.

ATLANTA — Home Depot will invest $1.2 billion over the next five years to update and streamline its supply chain infrastructure, the Wall Street Journal reports. The goal is to remain competitive with e-retailers like Amazon by adding 170 warehouses across the U.S. so that nine out of 10 Americans are only a day away from receiving deliveries, according to Mark Holifield, EVP of supply chain and product development. “This is part of an $11 billion overall plan to re-engineer our company to ensure that we are prepared for the future in retail,” Holifield said. Home Depot has been focused on bringing down transportation costs and integrating its online and bricks-and-mortar operations.

BARCELONA — Delegates at the sixth annual Global DIY Summit participated in an electronic voting exercise at its conclusion, with 60% rating the experience as “very good” or “excellent”. A further 28% deemed the event “good”. A record 1,100 delegates from 55 countries attended the congress, which included 300 retailers, a dramatic increase from last year’s Summit in Berlin. Suppliers still make up the largest proportion of the attendee categories, just shy of 60%.

IN MEMORIAM
Sam Giannetti, co-owner of Ottawa’s Preston Hardware, died last week while on holiday in Italy. Sam and Mario Giannetti teamed up with Mario Frangione to buy their store in 1973, and oversaw its growth into a business boasting 110 full-time staff. Visitation will take place on Tuesday, July 3 between noon and 5 p.m. at Kelly Funeral Home on Somerset Street West, with the funeral mass the following morning at 10 in the Church of St. Anthony of Padua.

ECONOMIC INDICATORS
Following three consecutive monthly increases, retail sales in April declined 1.2% to $49.5 billion. Building material and garden equipment and supplies dealers saw a 3.3% drop in in sales, the fifth decline in six months. Retail’s poor showing was primarily due to lower sales at motor vehicle and parts dealers. Inclement weather in many parts of Canada may have contributed to the overall decline in April. Excluding sales at motor vehicle and parts dealers, retail sales were down 0.1% in April. (StatCan)

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