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Changing what a store sells

Looking for new products and services

Dorothy uttered those famous words many years ago in the movie, "The Wizard of Oz". The scene was one where Dorothy was looking about at the landscape and deciding that she and her dog, Toto, were not in the Kansas that she knew.

Perhaps, that type of scenario could also be played out today in our hardware stores. If we had closed our eyes some twenty or thirty years ago, and were to open them in the summer of 1997, few of us would recognize our own hardware stores.

One of the hardware adages is that if a store were completely and freshly stocked, and then closed its' doors for seven years, then the store would have 40% of the stock outdated when it reopened.

We might agree that the majority of our inventory would be different - fiberglass handle tools, sophistication of the latex paints, pvc in plumbing and electrical, and the various chemicals - added and deleted to the lawn and garden departments, just to name a few of the changes in the past twenty years.

There are also a number of changes that have affected the physical layout of our store. Remember when in the early 1980's, the loop became the newest idea in store design? Then, we went to the power aisle. There have also been many changes that show up in regards to staffing, hours, advertising, cash registers, and services offered.

Some stores, and they appear to be few, have remained as hardware purists. It would probably be a safe assumption that those that have been able to remain as purists in the face of competition, are even fewer.

Those that have made the change have done so in many various ways. There is the story of the hardware dealer in Australia that, when faced with new competition, decided to staff his store with women - all topless. One of the reports stated that this store had a sales increase of 700%. Most of us would agree that this retailer is no longer a hardware dealer.

There is also a recent report of a hardware store operated in the United States by a woman, who has staffed her store entirely with women. The article went on to state that "suggestive or tight fitting" clothing worn by her staff, met with her approval.

Looking past these two examples that have appeared in the trade press, let's take a further look at the mainstream of the stores today.

During the first six years of the 90's, we found that our store became more than a hardware store. We had to. We first became a fax and copy center. Our fax machine was placed under the counter at the front check out area, and our copy machine was placed at the rear of the store. To achieve add on sales from copies, our register receipt printed a coupon for a 50 cent discount on each $10 purchase. When the coupons began to show up on a regular basis, and neighborhood business people printed our fax number on their business cards, we knew we had a success. By the Christmas season of 1996, we added a full service post office that was open all of the hours that our store was open. The post office was even located in what had been a storage closet.

We created a drop off point for vacuum and sewing machine repair. A customer that owned a vacuum and sewing machine shop decided to retire and close his store. But in retirement, he wanted to keep busy. A new service was created.

Bicycles were next. When the bicycle shop in our shopping center moved, we added that department, including repairs also done by a customer.

One of the most unique was our addition of cookies and coffee. The uniqueness was that the cookies were baked in our store using an air oven. The fresh aroma of baked cookies and brewing coffee was much more pleasant than the smell of lawn chemicals.

From an community and ecological standpoint, we added oil recycling and fluorescent bulb recycling. Although neither produced much in revenue, they did show to our community that we were active, concerned, and on the leading edge of products and services.

Truck rental and United Parcel Service were two that were added by eliminating our warehouse space. With truck rental gross income projected to be over $250,000 within three years, surely this made the warehouse more profitable. For each of the first four years of our parcel shipping, we showed a double digit increase over the previous year, and with a handsome profit.

There are several others that we looked at, that were done by other stores that we did not add: grandfather clocks, hot tubs, fine china collectibles, pager and cellular phone sales. The store that had the pager and cellular phone sales reported that their profit from this unique sales niche was in excess of $50,000 per year.

With each of the stores that we asked why they added a new area, the answer always came back to the need to have product areas that were not carried by the mass merchants or warehouse stores, as well as to minimize the number of areas in their store where they were forced to have single digit margins.

With falling margins, or situations where a warehouse store or mass merchant had developed an overwhelming product selection, the dealers made these choices of deleting products and services in their effort to continue to maintain margins. Some of the most frequently dropped departments were lawn mowers, ceiling fans, water heaters, and light fixtures.

"Looking for the electrical tape, m'am? Let me take you there. It is just past the clothing and deli departments. I will be glad to help you" No, Toto. This sure isn't like the hardware store used to look.

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This article is copyrighted by Tom Shay and Profits Plus Solutions, who can be reached at: PO Box 1577, St. Petersburg, Fl. 33731. Phone 727-464-2182. It may be printed for an individual to read, but not duplicated or distributed without expressed written consent of the copyright owner.

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Profits Plus Solutions, Inc.
PO Box 1577
St. Petersburg, Fl 33731
(727) 464-2182
Fax: (727) 898-3179