Paint merchandising has many shades

Retail paint sales are notoriously subtle – success may hinge on ‘inspirational customer care’ as much as ‘impressive product’. JOHN POWER speaks to senior industry professionals about their latest merchandising strategies.

No two retail paint operations are identical: they all do things slightly differently according to specific conditions, including location, client expertise, staff acumen, personal merchandising preferences, as well as marketing independence.

paintOne of the most successful Australian models is PaintRight, which operates as a 50-store collective of franchisees and owner-operators, including seven outlets owned by Haymes Paint. It’s a great place to start when analysing paint merchandising policies because of its healthy mix of head office-directed protocols and individual storeowners’ input.

One of the most striking aspects of the PaintRight model is its unilateral product range: Haymes Paint supplies the lion’s share of the group’s paint product.

“We’ve got a majority of Haymes Paint through all our network; we’re very strongly aligned with Haymes,” says Jason Buttigieg, PaintRight’s group operations manager. “We don’t want to clutter the sections but we still want to offer choice.”

It’s a striking contrast to most paint departments, where the sheer number of competing brands on display typically overwhelms consumers.

The predominance of a single brand at PaintRight works admirably because of the brand’s collateral reputation for: (a) premium quality; and (b) respect from trade clients. These twin reputational attributes instantly separate the group from other outlets and present an image of professionalism to customers.

One may ask, however, if there is a danger that a trade-friendly store will be offputting to DIYers and more casual retail customers? The group’s client base of approximately 65% trade and 35% consumer, would seem to vindicate this criticism. Buttigieg, however, is quick to point out that the benefits of a trade-respectful business outweigh any disadvantages, and indeed can help stimulate retail sales indirectly.

“Everyone would like more retail because that’s obviously where the margins are, but day to day when you’ve got tradespeople coming in, it actually complements the business pretty well,” he says. “We try to use it to our advantage twofold: we feel that if the tradies are buying from us then we’ve got the respect of people who know the products, hence giving the retail consumer a feeling that we must know what we’re doing; and second, customers will often speak to tradespeople in the store and ask questions.”

The value of ‘asking questions’ and encouraging personal interaction in the sales process is central to PaintRight’s and Haymes’ marketing methodology.

Matthew Haymes, from Haymes Paint, sums up the philosophy as follows.

“Haymes has always only been available through paint specialists or independent hardware stores,” he says. “There are a variety of factors as to why Haymes is only available via these channels (and not the big corporate barns):

• “We love dealing with other family businesses. Relationships with people are why we keep doing what we do (be it internally or externally). The people who own the businesses, make decisions, have tremendous passion and pride in everything they do. They are locals who know their customers, towns and regions and are as proud of their communities as we all are of Ballarat (site of Haymes’ headquarters in Victoria).

• “The knowledge a paint specialist has is second to none. They understand coatings and colour. Their knowledge is accumulated over many years of hands-on experience. They know good-quality products and, most importantly, invest the time in customers to ensure they receive exactly the right advice.

• “Trade customers generally are very loyal to paint specialist outlets. It is their ‘home away from home’.”

According to Haymes, in-store merchandising must be predicated on proven business ‘fundamentals’, the most obvious being product quality. He says, for instance, that it costs around 15 or 20 cents a litre of superior or additional raw materials to make the best paint. “So, as a family business which does not have a share price or a massive amount of shareholders to answer to, it’s a pretty simple decision – just make it better than the rest.”

But product quality, he concedes, is just one factor in capturing and maintaining clients, particularly in the face of huge advertising budgets from competitors (supermarkets and corporate hardware channels, he estimates, account for over 50% of paint sales to retail consumers).

Haymes says the big three paint manufacturers all sell via corporate hardware channels and, naturally, are not going to actively assist the growth of the independent specialist market. “Haymes understands that specialists need more than just trade business, and a strong growing retail component is vital to the viability of stores.”

In-store merchandising

In-store strategies to enhance retail spending are a fascinating blend of traditional and contemporary systems.

Dale Goodacre, managing director of PaintRight Colac, in regional Victoria, says his store – like many regional outlets – has a slightly larger proportion of retail customers than its metropolitan counterparts. “Here it might be 60% consumer and 40% trade, or perhaps even 50%–50%,” Dale explains, adding that he appreciates a degree of autonomy in his business promotions.

“I was on the PaintRight board for four years and one of the things you want each PaintRight store to have is some autonomy, but you also want them to be a little bit similar so if the customer’s in a different town it still looks like a PaintRight store.”

According to Goodacre, he uses both print and digital promotions to enhance retail sales, as well as in-store brochures, interior design displays, how-to videos, as well as a regular weekly radio slot on a local station.

“We use social media; we’ve had a Facebook page for two years and we’ve got our own website,” he says. “We interact this way because we think that’s the new way, but you need your face-to-face stuff. I’ve been doing a radio program for 17 years now – just a 3-minute interview with the local AM station here in Colac every Friday morning; it’s about promoting image.”

Newspaper exposure includes a front-page ad in the local newspaper’s monthly home and garden liftout, along with supporting editorial. Outdoor signage is also important, including a blackboard, which is (ideally) updated weekly.

We’re also doing a ‘Dare-to-Design’ competition with some other local businesses, a bit like The Block, where three couples (of the 10 who applied) will have to do up a room in a two-hour period at the local school’s home and garden exhibition, which should get 2,000 to 3,000 people through the gate.”

Additional strategies include a loyalty card program, which is embraced by many PaintRight stores. Goodacre says he has 1,400 store members who have each paid $25 to sign up as Gold Card holders. All purchases, whether for generic accessories or custom-tinted product, are recorded for future reference, and members receive price discounts.

Of course, local sporting and community groups receive special attention through either price discounts or sponsorships.

_K9T9290_HR_sRGBBut the most vital sales tool, Goodacre says, is personal care. Sales staff who take care to learn about a customer’s project and offer the right advice will inevitably achieve superior results. He says the ‘average spend’ of $70 or $80 per customer is largely attributable to seasoned and professional staff, “but if you had someone new, their average sale might sit down at $50.”

Promotional activities are constantly evolving. As Matthew Haymes advises, “Markets do change, and research is showing us some interesting data at present. We have some new packaging coming out in 2014 that may well challenge our traditional thinking in relation to this.”

Video Power

In-store videos are also making a strong impact in PaintRight stores.

“It’s evolved over the last few years,” says Buttigieg. “We started off with (in-house) advertisements going back three or four years, and more recently Haymes has compiled a lot of DIY videos. We started off with five DIYs last year and they’ve added another six or seven this year. So the suite will continue to be built on.”

Matthew Haymes confirms the importance of this promotional video category. “Our videos are online, on social media and available in store,” he explains. “More and more consumers are using this type of information. Our woodcare guides are amazing – we overhauled the range two years ago, and our Woodcare specialist Wendy Payne used her 30 years of industry knowledge to produce material for consumers and stores that has truly revolutionised and simplified the space. We have a fantastic template now for the future.”

Goodacre adds that in-store videos also provide entertainment for customers who may have to wait five or 10 minutes for their paint order to be prepared.

Video Complexity

Of course, not all retail outlets with paint departments have the space (or desire) to operate streams of how-to videos within the store environment. In such cases, suppliers must make use of other tools to reach video-hungry customers.

Trevor Lowder, head of marketing – trade at PPG Architectural Coatings Australia and New Zealand, says PPG supplies products to a broad range of large-format and independent retailers. PPG is well-known for such iconic brands as Taubmans and White Knight.

Instructional videos, Trevor says, are the way of the future, though he is not a fan of fixed, looped, in-store displays that are not controllable by customers.

“We’ve actually tended to lean away from in-store videos – in my experience people just don’t tend to stand there and watch them; they can also be irritating for the store staff who stand there and hear the same things on loop.”

Instead, he says he and his marketing team are always on the lookout for new ways of addressing customers – including paint stores – in functional and useful ways, mindful of the need to add value to the entire category.

“So, as a result, we have spent a lot of time working hand in hand with the customer, whether that be a Bunnings or an independent store, to actually understand what their category needs are, and then offer solutions that will not only promote our brands satisfactorily, but also do more of a ‘category’ service.”

But how can this be achieved without in-store video monitors?

The answer, Trevor says, involves one-on-one interactions with end users through digital media, mostly via smartphones. For instance, he says the placement of shelf strip QR codes in stores is proving highly successful (QR codes can be scanned in-store on a customer’s smartphone, instantly opening a video link).

“If you consider the mobile version of the White Knight website, for instance, almost 40% of the traffic is generated from a mobile device, and 40% of that traffic is generated on the weekend. So you can see people are not sitting at their desktop any more doing their research in advance – people are on the go, about to buy a product – possibly in-store – looking at these videos on their phone.”

Lowder says PPG produced four how to videos for White Knight in November last year. Since their release these videos have had a quarter of a million views. “And it’s some of the really niche products that people are exploring,” he says. “Our most popular video is ‘How to Repaint your Bathroom Tiles’, not the sort of task you talk about every day of the week.”

Another technology being used by PPG involves in-store information kiosks, which are now in operation in a number of small independent paint specialist stores. These kiosks allow customers to select and view specific instructional videos in-store.

People Power

Companies like PaintRight, Haymes Paint and PPG all invest heavily in training programs, both for their own personnel and for paint store staff. For example, PPG participates in Bunnings’ annual conferences to highlight new products and systems.

As advertising and promotional options become more diverse and complex, including the increased use of blogs, Instagram-shared photo albums, and a dizzying array of instant educational forums, the ‘last three feet’ of the retail process involving in-store staff will only become more crucial as a means of obtaining and keeping customers. It’s as much about people, as paint.

Haymes Paint www.haymespaint.com.au
PaintRight www.paintright.com.au
PaintRight Colac www.paintrightcolac.com.au
PPG Architectural Coatings ANZ www.ppg.com
White Knight Paints www.whiteknightpaints.com.au