This is the first installment of a special series sponsored by the National Hardware Show exploring how select home improvement retailers are implementing progressive new strategies to transform the channel and propel it toward future success.
The True Value Company’s transformation from a co-op to a private wholesale organization is coming into focus as the company rolls out new programs aimed at supporting the innovative growth of its affiliated hardware and home improvement retailers in a rapidly changing retail environment.
In the following interview, John Kacedan, vp/merchandising at True Value, details key affiliate and consumer initiatives; and why the National Hardware Show is a valuable B2B marketplace for key product, trends and developments in the home improvement retail space.
How have True Value store owners benefitted from the transformed corporate structure giving store owners equity in the new company while eliminating the co-operative membership fees?
John Kacedan: Transitioning the company from a co-op to a pure-play wholesaler allowed us to modernize our business structure without changing the fundamental relationship with our members and customers. It allowed us to unlock over $230 million of trapped equity to more than 4,000 independent hardware retailers to reinvest in their business through the purchase of new stores, remodels, new assortments, and digital advertising. The deal also allowed us to massively accelerate our strategic investments to more effectively and efficiently serve our retailers— all without any financial burden on them.
- Built a $150 million state-of-the-art distribution center, the largest investment in company history;
- Rolled out a new Hub and Spoke distribution model in the Midwest and Northeast. We’re already seeing fill rates of 99% in the Midwest;
- Doubled our sales force to better serve current accounts while growing our customer base;
- Introduced the industry’s most innovative and effective, hyper-local marketing programs.
Since the transaction, more than 600 retailers have joined the True Value family.
How is True Value evolving to create an omnichannel experience that appeals to Millennials purchasing homes and entering the DIY market?
John Kacedan: True Value’s hyper-local marketing programs are designed to reach customers wherever they are in their shopping journey— whether that is via digital ads, a local e-commerce presence, emails, circulars and direct mail, social media and in-store experience.
For example: Our advertising drives customers to local store websites, where they can look at a store’s pricing and inventory availability on products they seek for their DIY projects. We’ve also seen great success in reaching Millennials through our digital program, social media strategy and the development of home improvement videos to help them get their DIY projects done right.
It’s important to remember that the independent retailer is offering consumers something very different from a web-based trader, especially in a sector like hardware. Customers go to our retailers for their unique expertise and highly personalized service, something that an online platform can never truly replicate.
What are the most important factors in a consumer’s decision to shop a local hardware store, and how is True Value addressing those needs?
John Kacedan: Convenience. Buy items at stores and bring them home immediately. That’s why the shopping process today begins online. Consumers want to make sure stores have the items they seek at a fair price before they make the trip.
Expertise. Whether it’s to fix, repair or replace, customers want expert advice, especially new homeowners buying fixer-uppers. True Value store employees are well-known for empowering customers with the know-how— offering advice, tips, and ideas on how to complete their home improvement projects successfully. We extend that advice and project support online via TrueValue.com, through our social media consumer purchase cycle and via our printed circulars.
Local service. Whether in rural America or a busy metropolis, local hardware stores are the cornerstones of their communities. The local heritage, deep expertise and personalized service that independent retailers offer their customers every day cannot be matched by online competitors or large format stores.
How has True Value advanced its advertising and marketing support for its store owners?
John Kacedan: Our digital and hyper-local marketing programs are built around the unique needs of our hardware store owners. We offer owners a cafeteria plan of marketing programs, allowing them to pick and choose the options that are right for their budget and trade area.
For True Value, it’s all about targeting the right consumer, with the right product, at the right price and at the right time. We do this through highly targeted digital advertising designed to drive consumers to either buy online or visit their local store and most recently, through our new local e-commerce program, which gives our retailers the ability to show their available inventory and prices online via their website. For retailers participating in True Value Brand Program, we manage their local websites to increase pick-ups by Google My Business, Google Maps, Yelp Apple Maps and over 70 location-based websites.
How important is housewares and related household product to the True Value strategy, and how does the company support retailers looking to grow in such categories?
John Kacedan: Housewares and household products are a growing category for True Value. Many True Value stores are in rural areas or small towns where there aren’t a lot of choices and people have to drive a fair distance to get to a larger store. By providing a rich assortment of high quality, differentiated and locally relevant products in the hardware, housewares, household and consumable categories, we’re helping our retailers create a convenient, one stop shopping experience for their customers while increasing their transaction sizes.
Why is the National Hardware Show a valuable B2B marketplace for True Value corporate merchants and store owners?
John Kacedan: For many years, True Value has been an active participant at the National Hardware Show. It’s been a valuable B2B marketplace for us to explore key trends and developments in the hardware retail space. A gathering place to make connections with buyers and suppliers. A place to discover new products, technology advancements and explore ideas to integrate into our business.
The National Hardware Show, celebrating its 75th anniversary of connecting the industry and kicking off its first year of being a SMART event May 5-7, 2020 at the Las Vegas Convention Center, is a vibrant, vital resource for progressive home improvement retailers of all sizes and scope seeking an expansive selection of innovative housewares and home products in such popular Show exhibits as Homewares, Outdoor Living and Tailgate, Backyard & BBQ.