The new kid in town
From the company’s locally-based head office in Collingwood, Victoria, O’Neill is joined by national sales manager, Peter DePaoli, and a team of dedicated area managers with backgrounds in FMCG, liquor and other hardware industries. Einhell Australia also has warehouses in every other state. “They provide us with a perfect balance of industry experience and fresh thinking,” O’Neill says.
While only in its second year in the market, O’Neill is predicting big things for the business. He’s confident that its products will be ranged in more than 300 stores within the coming months, and is expecting significant growth. “With a great deal of new product hitting the market, we will see strong sales growth nationally,” he says. As Masters continues to make inroads and Mitre 10 and Danks undergoing big changes, the hardware industry is facing challenges for all retailers and suppliers alike. While similar changes have affected the grocery and liquor industries over recent years, Einhell believes the hardware industry is different: “Consumers rely more on customer service, advice and trust.
“The key for all independents is to ensure that they can focus on their own competitive advantage and build these elements in their local community,” he says. Following this, he believes it is essential for retailers to continue working with suppliers to ensure they provide the best return on range and price.
At Einhell Australia, the goal is always the same – seeking to add value to the business of the retailers it is involved with. This means helping them to focus on better ways to increase foot traffic to stores, and of course, convert them into actual purchases.
Part of its strategy to help achieve this has been its sponsorship of the Gold Coast Suns, one of the newest team to join the AFL. As O’Neill explains: “Whilst it provides Einhell with national branding, the key to our program with the Suns is to create once in a lifetime experiences, which our retail partners can leverage in order to drive sales.” The sponsorship isn’t just about slapping a logo on a shirt either, but creating a vehicle through which retailers can add life and colour to stores, and most importantly generate purchases.
Innovation is another measure that Einhell prides itself on. All Einhell tools contain a “smarter” feature that enhances the user’s experience. Features such as an on-board blade, flange and wrench storage across the saw, grinder and planers ranges; dust collection attachments to its impact drill or anti-vibration; and flex control in its rotary hammers are all clever features. “They are all innovative features that don’t reinvent the tool, they just make it a little smarter!” O’Neill laughs.
Keeping it fresh
Another important innovation is its social media strategy. A quick scan on the company website reveals links to its Facebook, Twitter, YouTube and LinkedIn pages, and option to sign up for Einhell’s enewsletter. “The internet is used as the primary source of information for the majority of Australians. However we found that most power tool sites focused more on product reviews and special deals, rather than informing the consumer about power tools in terms of what to look for when buying them, and how to use them,” O’Neill says.
Einhell’s approach is more engaging and informative. Rather than launching an Einhell Facebook page, it launched the Powertools 101 Facebook page, with ways to help users understand more about power tools. Its resident expert, The Toolmeister, writes blogs on subjects such as cordless battery technology and lawnmowers, while a fun series of YouTube episodes called “Can we cut it?” showcases various products in use.
While some European markets are being affected by the deepening financial crisis, Einhell is bucking the trend. There’s no doubt that the region is its key area of strength, but O’Neill notes that Germany – where the company was founded – remains the best performing in the world. “And Einhell is benefiting from this in its homeland,” he says. The group is an extremely financially secure business, and irrespective of the current climate will be adding at least three new subsidiaries each year. This year, it will launch more companies in Mexico, India and Russia.
In Australia, the market conditions are favouring mid-tier brands such as Einhell. “Trade business have become more cautious, and so will purchase tools for only one or two jobs, whereas retail customers are more predisposed to renovating and improving their homes, rather than selling them,” O’Neill says.
Both need a strong, high quality tool they can rely on, and both are facing economic pressures. Einhell’s full, two-year trade and DIY warranty help provide the right solution. All tools include the warranty, which is managed both centrally through the head office, as well as in partnership with a network of warranty agents across Australia.
Einhell believes there will be a major shift towards the renovator market, both in DIY and trade. And while its core range of handheld and stationary tools, and power garden and pumps are performing well, the company will greatly increase its footprint across the power tool category. It currently offers a five-piece cordless kit with a lithium ion master battery, but in the second half of the year will launch eight new, larger stationary tools, that will allow retail partners to add incremental sales in stationary tools. “Einhell has for many years had an especially strong advantage in this category,” O’Neill says. “And in the second half of this year, we will be looking to take full advantage of this strength in Australia.”
Einhell is also committed to environmentally friendly processes and features in its tools and packaging. In particular, its “Eco Power” designed motors were launched first on its Wet & Dry Vacuum in Australia. The company plans to employ the specially designed motors across its garden range in the coming years.
“Eco Power motors are designed to provide performance equal to that of our competitors but which use approximately half the wattage. This more efficient use of technology allows the user to greatly cut down emissions but also has the added benefit of saving on your power bill,” O’Neill says. It is only by continuing to innovate, and close collaboration between suppliers and retailers that success can be achieved. Einhell believes it is critical this occurs to ensure that the price and product is competitive. Promotional and marketing activity should also be focused on driving customers to the store and encouraging them to buy while they are in the store.
“Suppliers and retailers that work best together to achieve this will be the biggest winners,” O’Neill says.