Listening to the future

A word that keeps cropping up when you speak with the general manager – Home Timber & Hardware Group for Danks, Mark Burrowes, is “richness”. Richness, for Burrowes, is all about the experience of the customer in a Danks store. Burrowes is, in fact, one of the single most customer-focused executive Hardware Journal has spoken with in some years — and that evidently comes at something of a cost.

“We have a program that was introduced last year called ‘Let’s go shopping’,” Burrowes tells us. “I do it, my direct reports do it, their direct reports do it, and our store managers shop at other stores. What I do is visit a store and find a customer. I say: ‘I’m from the Home Timber and Hardware group, and can I walk around with you while you shop?’

“We walk around the shop and I ask them what they are shopping for. Of the four that I’ve done so far, three out of the four needed a fair bit of advice on what they wanted to do. Sometimes it wasn’t about how to build a deck, but it was about ‘I need to prepare such and such, what’s the best way to do this?'”

It’s a program that originated with Danks’ new owner, Woolworths Limited, but one senses that Burrowes has developed a unique and individual insight from this process. The value of “Let’s go shopping”, rests in the way it facilitates “getting more connected to our retailers and store network. But mostly, it’s about seeing the shopping experiences through the eyes of the most important people of all, our customers.”

This statement contains the two biggest insights you need to have into the way Burrowes has chosen to manage Danks: firstly, that he values the company-owned stores and independent retailers operating under the Danks banner equally; and secondly that, to him, both these groups are, in a sense, customers.

In other words, he feels his task is not to control what the retail outlets do, but to facilitate their operations as best he can. This drive is illustrates both an unusual lack of arrogance, and a focus not on the internal dynamics of his own company, but on the demands of the marketplace itself. Burrowes encapsulates this approach in the phrase “looking outside-in”.

Danks sees its customers as being as responsive to service and “interface” as much as prices. In tennis terms, we might say that Danks’ competitors are relying on various forms of big-serve, baseline drive strategies. Danks is serve and volley, and it is this athletic, brisk responsiveness that Burrowes identifies as the desired “richness” in the company’s operations.

Hard-core fame

Burrowes has a simple and concise way of stating what he hopes Danks can achieve. “When you look at research over the last several years, both our own research and independently commissioned research, what comes through is we lead the sector in three measurements: friendly and helpful, customer service, and staff knowledge. We want to build on that platform and become ‘famous’ for hardcore hardware. What we want is to be famous for hard-core hardware.” What Burrowes means by being famous for hard-core hardware is, primarily, strengthening the Home brand to appeal directly to its two core customers groups: tradies and serious DIYers.

This is one of the key initiatives in the Danks Business Plan. According to Burrowes, this program “involves the re-positioning of our Home Timber & Hardware brand to leverage our current strengths alongside our vision for a stronger trade focus. We’ve been working on it since early in 2012 and will re-launch the new brand positioning in Spring. We’re very excited. It is going to absolutely underpin our passion for being number one with tradies and serious DIYers. We have a new agency to help us, we have a new media buying company on board, we have the staff on board and our independent retailers and company stores lined up behind us.” One of the stores that Burrowes sees as something of a model for its future growth vision is Tait Home Timber and Hardware located in Glen Iris and Somerville, Victoria which was acquired by Danks in October 2011. With a one million dollar a week turnover, this is in the top 10 per cent of the company-owned businesses. “If you see the relationships they have there, it’s unbelievable,” he says. “The trucks are lined up there every day. If a tradie is in trouble and he forgot to order something, he can order it on a Sunday, and it will likely show up on the building site on the Monday. It’s this kind of opportunity for difference, reaching through to the customer, that we will use to our advantage and leverage across our network.”

One of the ways in which Burrowes plans to change its marketing to better reflect the new trade strategy is by making adjustments to its “Dogalogue” program. While supportive of the general approach, Burrowes sees an opportunity with the two dogs to communicate a more specific message to prospective Danks’ customers. “Probably what we will do there will be a repositioning of the trade and the DIY dog so that the right messages that we are trying to get through to DIYers and tradespeople gets through. “We will continue to use the dogs in appropriate ways, such as local area marketing, in store and online. We just need to join the dots so that we our brand messages get greater cut through to those customers we want to target. We’ll let the others fight it out in the home improvement category. We’re interested in targeting our marketing around tradies and serious DIYers.”

At the core of making Danks “famous for hard-core hardware” is the need to transform some of the company’s key strategic initiatives into action. “That is what we are all about, we’ve done the thinking around the brand and the repositioning. We have the plan. Now we are entering the execution work, and the logic is all there, and the objective is to drive the customer accounts coming in the front doors for company and independent stores. Sounds simple, but it really isn’t.”

Hybrid strategy
The execution phase is heavily dependent on Burrowes’ view of its store portfolio as being a hybrid model, provides customer solutions through the dual channels of company stores and independent stores. “As we stand here today, we’ve acquired 25 stores across three states,” Burrowes explains. “We have grown our network to 255 Home Timber and Hardware stores, up 25 per cent on last year, and this growth is very important for us, and we will grow further. What you will see in the numbers is that currently it is about 70/30 independent versus company-owned, in terms of turnover. The focus right now for us is further network growth through both trade-focused acquisitions and through independent brand conversions. Importantly, by expanding our company stores footprint we can continue to deliver greater benefits to our independent network.”

A key message throughout the recent Danks National Trade Show & Conference was the following: “There’s never been a better time to be with Danks.” Danks is very careful in making acquisitions to retain the key value in any business — its people. “For many family-owned businesses, it is customer service skills that are passed down. When we purchase a store and bring it into our network we strive very hard to keep the principles and the staff on-board. We want those people so we can keep the richness of the service and advice, and maintain the passion and spirit of the independent retailers in all of our company-owned stores.”

Burrowes is also quick to praise independent operators such as Hedland Home Timber and Hardware in South Hedland WA, owned by Gloria Jacobs. This is a store undergoing quick growth and expansion, something that Burrowes finds extremely encouraging.

The tangible progress Burrowes wants to see developing in the future with all the stores comes down to two things: using marketing, branding and advertising to drive customers in through the front doors of Home Hardware stores, and making sure those stores are hooked up to the best possible supply chain.

“Between Masters and our company stores and independent stores, our job is to drive traffic into our stores, and also to get that supply chain hooked up to their back door. I don’t buy differently, range differently or have services that are different between independent stores and company stores. It’s the same. It’s going to stay the same.

Listening

Underpinning all these developments is the need to listen and exchange views. Burrowes has gone to considerable lengths to make sure he hears what retailers have to say, and to engage them in his plans. As he puts it, “Having a two-way conversation is the most important thing. You have to listen. If you are listening to the customer, even a bad report is an opportunity.”

Aside from the “Let’s go shopping” program mentioned previously, which is a Woolworths-wide initiative, Burrowes has undertaken two other processes to make sure he hears retailers and they get a chance to hear from him. The first is with Danks Chairman’s Club meetings, where Burrowes ”opens up the floor” to discuss key issues with the group’s top-tier retailers.

“I’ve recently gone around talking to some of our Chairman’s Club members. I start by asking them what they want to talk about, put that up on a whiteboard, and have a conversation. I don’t talk at them. When I talk with them about our plans, they are very excited. They value the full and frank conversations.”

It’s not just hardware retailers that Burrowes strives to bring on-board. “At the supplier night when we unveiled our growth strategy, I had a supplier come up to me to say that it is refreshing to hear a company in the home improvement sector talk about growth and investing, after so much doom and gloom. And he said the magic words: How can we help you?” The second part of Burrowes’ listening strategy is to set up forums through which Danks can interact with its store representatives. Danks has recently set up a Trade Advisory Council (TAC), and makes constant use of its National Advisory Council (NAC) in much of its decision making. One area where this regular contact with retailers can help is in staff training. “Our colleagues at Masters give all of their staff a hundred hours of training before they start the job. If they have the investment in the infrastructure and content, then the job we have with the NAC and the TAC is to determine how we can shape that and provide additional or expanded services to our independent and company stores to develop that part of product knowledge and service experience in our business. We have those programs now, but I think we can enhance it through our colleagues at Masters, as well as tapping into the expertise of suppliers.”

The specifics of the strategy — concentrating on a single segment of a diversifying market so as to deliver clear, consistent services backed-up by a clear marketing/advertising message — may be unique to Danks. Burrowes’ overall approach, however, of attentive engagement, boosting real in-store services and honestly responding to market needs, is very likely to be a key part of the future of hardware retailing everywhere in Australia.