October 8, 2018 Volume xxiv, #37

“Look to the future, because that's where you'll spend the rest of your life.”
—George Burns (American comedian and actor, 1896-1996)

IN THIS ISSUE:

• Home Hardware woos influencers to boost its brand in unconventional ways
• Big box market share slips, but format remains a force in retail
• These dealers are helping change perspectives about women in the industry
• Home Depot awards innovative vendors, then promotes them to consumers
• PLUS: Castle adds Alberta dealer, Lacolle Centre du Quincaillier joins BMR, FCL donates to junior hockey following Humboldt Broncos tragedy, Davis and Gingrich inducted, Canadian Tire partners with Husky, Giant Tiger finishes DC, True Value opens up its show, Amazon will raise its base pay, Shopify to invest in Toronto digs, B.C. Lumber Trade Council gives thumbs’ up to trade deal, U.S. construction spending and more!

Home Hardware uses influencers to boost its brand in unconventional ways

ST. JACOBS, Ont. — Home Hardware Stores is reaching beyond its traditional marketing and promotional channels in its efforts to connect with a whole new demographic. The company has set its sights on new homeowners and young families, recognizing the importance of creating a relationship with a new generation of DIYers and contractors.

One important but little publicized approach has been by working with social media influencers. Going beyond the bloggers of an earlier era, these tastemakers have large followings on social media platforms such as Instagram and Facebook, and dig deep into lifestyle areas that connect to Home Hardware and its wide range of products.

“We’re working with influencers to promote products and projects,” says Jessica Kuepfer, public relations manager at Home Hardware Stores Ltd. Kuepfer says Home Hardware works with up to 20 different influencers in general through the year, and that number can reach into the hundreds. But the co-op retailer focuses closely on just four or five of the more popular influencers, sending them products, often on an exclusive basis, for their review and evaluation.

The online style gurus Home Hardware has connected with include the individuals and teams behind accounts like “Modern Day Wonderland” and “This Little Estate.”

This latest initiative, she adds, shows that Home Hardware is moving ahead to appeal to a new generation.

Big box market share slips, but format remains a force in retail

WORLD HQ, Toronto — Big box home improvement stores in Canada continue to represent a significant piece of Canada’s retail home improvement market. But they’re not keeping pace with the overall industry.

According to the 2018 Hardlines Retail Report, an exclusive research report on the size and growth of the industry, sales by all big boxes grew by 3.1% in 2017. However this was below the industry average of 5.1%. As a result, the market share of these large format retailers edged down last year, to just under one-quarter of overall sales in the industry.

Nevertheless, the format remains a major force in the industry, especially considering that just two companies, Home Depot Canada and Lowe’s Canada, comprise the lion’s share of the big box market. Kent Building Supplies, which has eight big stores of its own, is the dominant big box retailer in Atlantic Canada.

Home Depot maintained strong same-store growth in 2017 that actually exceeded the industry average. The sector reduction comes from the estimated sales from Lowe’s big boxes last year. Lowe’s same-store sales in 2017 were positive, but not up to the industry average. The company continues to add stores and realign its RONA big boxes under the Lowe’s banner in markets outside of Quebec. Lowe’s is further investing in its Reno-Depot big box banner and, as of mid-year 2018, has 23 stores operating with that banner. It purchased all the big boxes that had been owned by RONA affiliate dealers in Quebec in 2015. All these initiatives, although crucial for long-term positioning, may have impacted the stores’ sales year over year.

The continued strength of the big boxes, as measured by sales and market share, confirms that this format is maintaining its viability and acceptance within the industry.

(The data is from the Hardlines Retail Report. This comprehensive analysis of Canada’s retail home improvement industry is available in either PDF or handy PowerPoint format. It has 200 slides, dozens of charts and graphs, and more photos than ever before. Click here for details and to order your Hardlines Retail Report now!)

These dealers are helping change perspectives about women in the industry

NATIONAL REPORT — In the 14 years since Geneviève Gagnon took on a leadership role at her father’s company, Groupe Yves Gagnon, she has been steadily breaking down gender stereotypes. As general manager of the company her father founded, she’s helped grow the business from four stores and 200 employees to six stores and more than 350 employees.

When she started out, she faced some resistance from her male colleagues. Not surprisingly, they don’t dismiss her anymore.

For Jillian Sexton, it wasn’t always a foregone conclusion that she would work for her father’s business. She became COO of Hector Building Supplies in her 20s, when it had two locations in Nova Scotia. She’s since added a third in Prince Edward Island.

Sexton surprised even her own father by following in his footsteps. “My dad had two daughters and building supply is still unfortunately a male-dominant industry,” she says. “I don’t think he thought his daughter who was doing ballet five nights a week would be involved full-time.”

Like Gagnon, she put in the hard work to learn the business. Sexton started sweeping floors at their Stellarton location when she was 15 and worked her way up through store, learning the business inside and out. Her team respects her because she puts in the effort and they support her in everything she does.

She recalls a question her father used to ask her: “Are you going to work hard to make yourself successful, or to make someone else successful?”

As far as the climate for women working in home improvement retailing goes, Gagnon believes the industry has come a long way since she got her start. “The manufacturing industry is still a bit of a boys’ club, but on the retail side I’m seeing a lot more women,” she says.

For Sexton, she says her story is about more than being a woman in the industry. What she has accomplished stems from the same drive and passion that propels independent dealers across the country, regardless of gender.

Still, Gagnon says she’s happy to see things changing in this industry. “There are more and more young women now, in their 20s and 30s, willing to take over the family business, and I see them getting active in industry associations and working for vendors. Slowly but surely things are changing.”

(This story comes from a recent issue of our quarterly print magazine, Hardlines Home improvement Quarterly. If you want to read more content about exceptional dealers and what they’re doing across the country, make sure you’re subscribed to HHIQ. Click here for more information!)

Home Depot awards innovative vendors, then promotes them to consumers

ATLANTA — “Make life easier for your customers.” That was the advice Annette Verschuren, former president of Home Depot Canada, gave to an audience of vendors when she was inducted into the Industry Hall of Fame by the Canadian Hardware and Housewares Association in 2011.

It’s a mantra that Home Depot has embraced, regularly awarding select vendors for their innovative practices. However, with the announcement of this year’s Innovation Award winners, Home Depot has developed a promotional campaign to communicate these innovations to its retail customers, as well.

The company has created an official “Innovation Award” seal that will appear on the packaging of these products that Home Depot has identified as “best-in-class”, highlighting their status to customers.

“We appreciate the effort our vendor partners put into innovation each year,” says Ted Decker, merchandising executive vice president for Home Depot. Today, we’re celebrating their work by recognizing the most innovative products and releasing a Home Depot Innovation seal so that our customers can find those products in-store and online easily.”

The company recognized 12 companies in total. Here are the top winners:

• Overall winner: The Makita Sub Compact Program, which runs on an 18-volt battery system and claims to be 25% lighter and smaller than traditional 18-volt tools.
• First runner up: The LifeProof Slip Resistant Tile, which Home Depot says is 50% more slip resistant than ordinary tile.
• Second runner up: The Halo Colour Selectable LED Downlight Retrofits offer five different colour temperatures from warm white to daylight, offering flexibility for both homeowners and contractors.

(Click here to see all of this year’s Innovation Award winners.)

DID YOU KNOW...?

... that Home Hardware has 103 stores in Alberta, representing about 11% of the retail home improvement market in that province? That’s just one of the facts in our Hardlines Market Share Report. This incredible PowerPoint report includes sales and market shares by province and region of every hardware and home improvement banner in Canada, including year-over-year comparisons. Order the Hardlines Retail Report and Market Share Report together to have all the information you need to plan for 2019. Get 15% off when you order both reports!

RETAILER NEWS

LACOLLE, Que. — Lacolle Centre du Quincaillier is joining Groupe BMR under its BMR Express banner. Dealer-owner Henri Dauphinais, a prominent commercial landlord in Lacolle, Que., praised BMR’s “human approach”. The banner transition will see the addition of a new 10,000-square-foot warehouse to the store, starting later this fall. A reconfigured storefront will accommodate more products and building materials on site.

MISSISSAUGA, Ont. — Castle Building Centres has added another dealer member in Western Canada. Thermo Pro Insulation and Drywall in Lacombe, Alta., was established a decade ago. The company provides area contractors in commercial, agricultural and residential construction with drywall, spray foam and spider insulation. Thermo Pro also supplies and installs steel studs and suspended ceilings. Castle added two other Western dealers back in the summer: Bucksaw Timber in Carman, Man.; and Imperia Wholesale and Retail in Morden, Man.

SASKATOON — Contributions by Federated Co-operatives Ltd. to the Saskatchewan Junior Hockey League Assistance Program have surpassed $768,000. The fund was launched in the wake of the Humboldt Broncos bus crash to support mental health in the province's junior hockey community, with FCL as one of the earliest donors. “Co-op has always rallied to support our communities,” said FCL CEO Scott Banda, “which is why we partnered with the SJHL on a program that will help people heal across the league and eventually across the Junior A hockey community across Canada.”

TORONTO — Canadian Tire is expanding its Triangle Rewards with the addition of Husky gas stations. Customers will be able to earn electronic Canadian Tire Money on fuel purchases through the new partnership. They already can earn points for fuel purchases at Canadian Tire Gas+ locations.

OTTAWA — Giant Tiger’s Johnstown, Ont., distribution centre is now operational. The 600,000-square-foot counts 300 full-time employees and features Canada’s first Symbiotic system. This new technology gives the centre the benefit of 210 autonomous robots that move freely up, down and across racks of inventory to deposit or retrieve cases at speeds up to 40 kilometres per hour.

DENVER — Thousands of retailers gathered in Denver, Col., for the True Value 2018 Fall Reunion, which was held September 28 to 30 at the Colorado Convention Centre. What set this dealer show apart from other True Value shows, and just about any other bannered dealer event in this industry, was the fact that it was open to all independent home improvement retailers across the industry, regardless of which group they belong to. The change came after private investment firm Acon Investments made a strategic investment in True Value in March.

SEATTLE — Amazon has announced it will raise its base pay for employees to $15 per hour. The company has also said it will lobby the U.S. federal government to raise the minimum wage in that country. That rate has been stuck at $7.25 for close to a decade. The new rate, which goes into effect November 1, will affect 250,000 Amazon workers, plus another 100,000 seasonal workers who will be added during the upcoming holiday season.

OTTAWA — E-commerce platform Shopify will pour as much as $500 million into a new office in downtown Toronto. The company is set to be the anchor tenant when the 38-storey skyscraper The Well opens at Front Street and Spadina Avenue in 2022. The company plans to consolidate its three existing Toronto offices, along with one slated to open next year, at the new building.

SUPPLIER NEWS
WASHINGTON — The B.C. Lumber Trade Council has issued a statement welcoming the new USMCA (U.S./Mexico/Canada) trade deal agreed on by the three countries to replace NAFTA. The council congratulated Foreign Affairs Minister Chrystia Freeland and her government on the carryover of NAFTA’s dispute resolution mechanisms, while expressing concern over the still-unresolved softwood lumber dispute between Canada and the U.S. “Chapter 10 of the new agreement maintains, for Canada and the U.S only, a binational panel review mechanism for reviewing anti-dumping and countervailing duty determinations by either country,” said Council President Susan Yurkovich.

ECONOMIC INDICATORS
U.S. construction spending in August was estimated at a seasonally adjusted annual rate of $1.32 trillion, 0.1% above July and 6.5% above August 2017. The bulk of the increase was concentrated in the non-residential sector. Residential construction spending dipped 0.7% from July to a seasonally adjusted rate of $548.9 billion.—U.S. Census Bureau

NOTED
Space will be limited for this year’s Hardlines Conference. We’re holding it at Queen’s Landing in historic Niagara-on-the-Lake, Ont., which is a smaller venue than we’re accustomed to. So we encourage you to book now. Click here to learn more and secure your seat today!

Terry Davis, president and CEO of Home Hardware Stores Limited, and Stew Gingrich, vice- president, human resources, have been inducted into the Home Hardware Stores Builders’ Circle. The Builders’ Circle program was launched in commemoration of Home’s 50th anniversary in 2014 to honour and recognize retired members of the Board of Directors and corporate officers of Home Hardware for their past service and contributions to support Home Hardware dealers. Davis will retire on October 10 after 48 years of service. Gingrich will retire in January after 46 years of service. 

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