IHG unites ‘through tough times’

IHG’s 2020 Expo, held at the Gold Coast Exhibition and Convention Centre from February 10-12, did not disappoint, with informative business sessions and workshops delivering many initiatives for future business growth, particularly in the trade, digital and smart home space. A two-day trade show followed the sessions with over 200 exhibitors boasting exceptional sales. IHG’s ‘Awards of Excellence’ concluded the event, with popstar Anthony Callea ensuring members, suppliers and the IHG team finished their Expo experience on a high.

IHG’s 2020 Expo theme of ‘Working together through tough times’ was dominant throughout the event, particularly during the business sessions held on the opening day of the conference, with over 1550 attendees and 384 stores in attendance.

Master of Ceremonies and Merchandise Project Manager for Sapphire, Tony Matteo welcomed members to the fourth Expo under the IHG banner. He asked members to keep those communities suffering from the effects of flood, fire and drought in their thoughts, “as we focus on building successful independents.”

International speakers

The important theme of ‘working together’ was also reiterated as terrorist attack survivor, Gill Hicks, was the first speaker to take to the stage during the business sessions.  

Gill Hicks spoke in an incredibly positive tone of her experience of the 2005 London terrorist bombings. As she faces life as a double amputee, she also spoke on the importance of humanity and human connection, which helped her through her darkest moments.

Second guest speaker and global hardware industry expert, Steve Collinge, also returned to the stage after presenting to members during the 2019 Expo. Founding Insight Industry Group in 2010, Mr Collinge provides the latest industry news and market intelligence for suppliers, retailers and distributors operating in the home improvement market.

See full details of Mr Collinge’s presentation in an upcoming edition of AHJ.

Throughout his presentation, Mr Collinge reminded the audience of the current disruption in the global home improvement industry, which is expected to change where customers buy, how they buy and every aspect of how retailers deal with their customers. He also spoke about winning in trade, looking at the changing DIY consumer, future proofing categories such as garden, housewares and smart home, as well as transformation of businesses.

Executive presentation

Prior to the executive presentation, a warm welcome was given to special guests from Metcash, and Mitre 10 New Zealand, including Metcash Chief Executive Officer, Jeff Adams; newly appointed Non-Executive Director, Peter Birtles; Metcash Chief Financial Officer, Brad Soller; Mitre 10 New Zealand Chairman, Martin Dipp; and newly appointed New Zealand Mitre 10 Chief Executive Officer, Chris Wilesmith.

The executive presentation from IHG Chief Executive Officer, Mark Laidlaw, General Manager of Merchandising and incoming IHG Chief Executive Officer Annette Welsh, as well as IHG Trade Manager, Toby Loft kicked off official proceedings.

While it seems attendees expected Mr Laidlaw’s opening address to include his usual summary on the ‘year that was’ and initiatives to drive the business forward, Mr Laidlaw began his opening address by directing members’ attention to the devastating South Australian, New South Wales and Victorian bushfires, and how this has affected 48 stores in the fire zones and 17 stores in emergency zones, with store owners and staff losing seven of their homes.

It was then that Mr Laidlaw asked members for their assistance in “working together through tough times”.

“The last three months have been unbelievable with the Australian fires 12 times the size of the 2019 Amazon fires at one point. Many of our stores have been at the forefront of these fires. A lot of them being the Thrifty-Links and True Value stores who serve their local communities very well.”

“These towns are now left to rebuild their homes and entire communities. Some towns have lost everything, there really is nothing left. It is for this reason our National Advisory Council began setting up a National Relief Fund back in November. At the time the fund was set up to help with those directly affected by the terrible drought and also assist stores’ mounting credible legal campaigns against big box operators for their mis-use of power,” Mr Laidlaw said.

The National Relief Fund, which was launched to members in January, will result in a pool of funds that is matched dollar for dollar by IHG.  The National Advisory Council will be the authorising body of how the funds are spent, with many worthy causes such as BlazeAid up for discussion at the next meeting.  

Branding

Mr Laidlaw then went on to summarise the importance of ensuring IHG’s ‘Superior Service Strategies’ are continually implemented in-store. 

“If we want to differentiate ourselves, our superior service strategy needs to be based on knowledge, advice, convenience and inspiration. This is why we developed our ‘Superior Service Strategies’ pyramid. At the bottom, the pyramid highlights that our stores had to be famous for something. We then had to match our customers’ expectations through price, range and getting our standards right through the ‘Sapphire’ transformation program,” Mr Laidlaw said.

“Differentiation comes from areas that outperform the market, including ‘superior service’ and ‘building trade’. It helps to have convenient locations with a strong online presence, providing knowledge and advice, while also building a trade technology model. If we get this right, only then could we differentiate ourselves by being locally owned. Too many small stores think that everyone will support them just because they are the only local store in their community. It will not happen unless you get these things right,” he said.

Mr Laidlaw also touched on branding, recognising that it remains an emotional topic for members, particularly with the IHG group now made up of four strong brands.

“In saying this, the National Advisory Committee (NAC) has decided that to effectively compete with Bunnings, we need to have a strong, priority brand. Today 70 per cent of our volume does go through the Mitre 10 brand, with 27 per cent volume through Home Timber & Hardware. Our 162 smaller stores are at three per cent but importantly servicing small communities, and important to our business.”

IHG’s trade tagline also remains a contentious issue, according to Mr Laidlaw, with the most recent trade tagline being ‘Get in, get out and get on with it’. 

“We did some research in Tasmania and 70 per cent of respondents suggested we go with Home Timber & Hardware’s original ‘Go where the tradies go’. This is not to replace ‘Mighty Helpful, Mitre 10’, but it is the tagline we would recommend for trade advertising moving forward,” he said.

Incoming CEO addresses members

Incoming IHG Chief Executive Officer and current General Manager of Merchandising, Annette Welsh, went on to discuss IHG’s outlook for the next few years. Ms Welsh also touched on the Expo’s theme of ‘working together through tough times’ by first addressing how the downturn in the Australian economy had affected the hardware industry in recent years.

With the Australian economy enduring a relatively tough 12 months, Ms Welsh said the correction has also hit the building industry in the last 12 months.

“The word from economists is that there is a better balance coming, and the balance of supply and demand in the housing market has reset itself. There is expected growth returning to the building sector in the next 18 months and consumer confidence will be around 2.5 per cent growth in 2020. But it is still on really shaky ground and I think we are still in for some uncertain times in retail,” she said.

“In saying this, it is in the tough times when we become stronger. One of the things that has happened in the last 12 months is that everyone in this room has looked at every cost line in their business and reset a lower cost base. This also makes us really well placed for when the economy recovers. With over 200 stores now providing scan data, I have confidence in our members because even through the last 12 months, the majority of you have held market share and actually grown share within in your local market,” Ms Welsh said.

Whole of house strategy

Introduced around 18 months ago, IHG’s ‘Whole of house’ strategy was designed as a preferred model for the trade. When presenting opportunities through the five stages of building, Ms Welsh said members were really good at some of the stages of the model, however, a bigger basket size was still achievable via trade.

“We have the ability to take our ‘Whole of house’ sales from 30 per cent of the house to 70 per cent of the house. This is not just about trade either because the last two stages of a home build are ‘Fix’ and ‘Fit Out,’” she said.

Trade technology a priority

IHG National Trade Manager, Toby Loft, then took to the stage and explained to members how IHG has worked with suppliers to unlock the value of its segmented customer base and give its stores the ability to go to their builders and provide solutions not previously available. This includes IHG and the Trade Action Group (TAG) recently investing over $1 million into trade technology, he said.

“While others are playing with technology to get their builders in and out of stores, we are looking at technology to help our stores, and your builders, to grow sales and reduce costs. We have managed to stretch that million dollars to deliver a suite of products that help us continue to outperform in trade. We want to engage with the builder with ‘Trade Online’ – this is their entry point into their account so they can see statements, invoices and proof of delivery from job sites.”

“We also want to connect with our builders through Trade Sync (a transactional cost saving opportunity) and deliver via Truck Tracker, where tradies get a text when a delivery is on the way and proof of delivery, including photos and signature, delivered by an independent who knows trade. The most important thing for builders is having their product on-site when they need it. We also intend to create loyalty with our Trade Plus Pass and deliver insight to the stores on how to manage their trade sales team,” Mr Loft said.

However, the biggest investment store owners can make is in their people, which is why IHG is also investing in trade sales training, Mr Loft said.

“We did a lot of work in understanding what was required in trade sales trading and developed an eight-module trade sales training program to allow stores to go from order takers and problem solvers through to business partners and industry experts,” he said.

New concepts

Ms Welsh then returned to the stage to run through several new concepts IHG has implemented over the past few years, including its Click & Collect Program. The program was first to market when it was launched in 2011, and now boasts 12,000 SKU’s. 

“We now only need 24 hours to advertise a product and put it online. This model has the potential to be at $30 million in sales from new customers and we are also trialling Click & Deliver this year,” Ms Welsh said.

Another new concept is the connected home space which Ms Welsh said is a slow burn, future trend. 

“They key thing we have learned in connected home is the average basket size is at $600-$700, and customers are willing to pay this, but it is not a set and forget item, with investment required in your staff’s training. Supply and Install is also being trialled with heating and cooling currently,” she said.

Summary

In closing, Ms Welsh said she believed IHG has never been as united as it is currently and there is very good reason to feel confident in the business. 

“We have got the largest network of 650 conveniently located stores in Australia. We have strong brands, solid foundations and a best practice, world class supply chain model, with the only distribution centres for independents in Australia. We outperform in our consumer driven approach, in superior service that provides solutions, trade, technology, Omni channel, digital, loyalty and we work together to ensure we have the best business.”

“I have great confidence that we can go from good to great and I reassure you that independence will stay the blood of this company and will be fought for every single day,”
she said.

Incoming CEO

When closing the business session it  seemed pertinent for Mr Laidlaw to address members on Ms Welsh’s new role, as he retires as IHG Chief Executive Officer, effective May 1.

“It is so important to understand that Ms Welsh was not gifted this job. She went through a rigorous process that involved very good internal candidates and CEOs from overseas and I am delighted Jeff Adams and the Metcash board have made this decision. She will keep what is good but make it her own and fight for independents and that’s very important,” he said.

Awards of Excellence

SUPPLIER AWARDS

2019 SUPPLIER OF THE YEAR – LOGISTICS – Victorian Freight Specialists 

Victorian Freight Specialists Director, John Rowe, said he was thrilled to go home and show the award to all the hard-working people that service and support the group. 

“Suppliers in the room understand that a lot of the towns they service sadly have been in the news for not the best reason. VFS would not be here without the support of all the suppliers in the towns we service.”

2019 SUPPLIER OF THE YEAR – DIY – Dulux – Dorothy Grouios

During the presentation Dulux was said to have strengthened its commitment to the group by ensuring IHG benefits fully from the Dulux Paint Insights, research and development, and brand knowledge. Dulux also recently assisted 120 stores to roll out a core range in just 18 months. 

2019 SUPPLIER OF THE YEAR – TRADE – CSR Bradford

“On behalf of CSR Bradford, it is a wonderful honour to receive this tonight. A big thank you to IHG members and staff who are always so professional and always looking for a win in sales,” Darren Burgess said upon receiving the award.

INDIVIDUAL AWARDS

2019 ‘MIGHTY HELFUL’ PAUL MURPHY SERVICE AWARD – Bob Arnold Crameri’s Mitre 10 Maryborough.

Accepting the award on behalf of Bob Arnold, Crameri’s Mitre 10 owner, Bernie Crameri said,” Bob is dedicated to his customers, staff and Mitre 10. He knows his customers’ names and every project they are working on.”

2019 BLUE BLOOD AWARD – Vince Tebb, Business Development Manager

Award recipient Vince Tebb said, “It has been a pretty solid few years and I want to take the opportunity to congratulate Mark Laidlaw and the team for bringing IHG and the two major parties together successfully.”

2019 CEO RECOGNITION AWARD – Paul Brown, Margaret River WA

Mr Laidlaw said the winner had earned the respect of the NAC, “which is not easy, and had the courage to speak up. He is passionate and a true team player.”

On receiving the award, Mr Brown said, “I love the brand and where it is headed. I would like to acknowledge the team that allow me to do what I do. The people on the NAC are just fantastic as well. Thank you also to my wife Sharon,” he said.

STORE AWARDS

2019 VILLAGE OF THE YEAR – Western Warriors

IHG State Sales Manager for WA, Hailey Radalj said, “The Western Warriors cover the entire state of WA, which is over 4000 kilometres. Somehow, we pull together and we have an incredible group of people, who support each other, work hard and are passionate about their businesses.” 

2019 STORE OF THE YEAR – CONVENIENCE FORMAT – Lennox Head Thrifty-Link, QLD

Business Development Manager, David Voulgaris accepted the award on the store’s behalf and said, “for those who do not know, the Lennox Head business it is about 130 square metres in size and is almost a 7 Eleven of hardware. This is reflected in the range and marketing. It gets behind all initiatives and instils what the Thrifty Link brand really is.”

2019 MITRE 10 STORE OF THE YEAR – SMALL FORMAT – Strathalbyn Mitre 10, SA

On receiving his first national win Brad Fuss said, “this award is a great check point for our business. My team have created a great product and it gives me a tremendous level of fulfilment watching them strive to make things better on a daily basis. I congratulate them on their effort and for IHG for supporting my dreams from the start.”

2019 HTH STORE OF THE YEAR – UNDER 1000 SQUARE METRES – Waroona Home Timber & Hardware, WA

Mark and Barbara Hiller’s business partner, Mike Walmsley, accepted the award saying, “the thing about Mark and Barb is they work particularly hard as most small businesses do in this challenging time. Thank you to the IHG group, it is a great recognition for the hard work they do.”

2019 MITRE 10 STORE OF THE YEAR- MEDIUM FORMAT –Wills & Co. Mitre 10, Waikerie SA

On receiving the award Mike Wills said, “With the amount of development we have done over the last few years we could not have done this without IHG and all our suppliers. They were just brilliant, working to a time line and got the end result that we were looking for.”

2019 GARDEN CENTRE OF THE YEAR – Diamond Valley Mitre 10, VIC

Diamond Valley representative Paige Hastings said the store’s garden centre is, “unique to our business and we think we thrive in it. However, our business is nothing without the amazing staff we have. Every day they come and put 110 per cent in it and treat the business as if it is their own.”

2019 TRADE CENTRE OF THE YEAR – Johnson Brothers Mitre 10, Mona Vale NSW

Johnson Brothers representative, Michael Johnson, thanked IHG for taking the business to the next level. I would love to thank our staff who work well with us. It is brilliant how they get behind us. We are spotless and customer focused and pride ourselves on our service.”

2019 HTH STORE OF THE YEAR – OVER 1000 SQUARE METRES – Permewans HTH – Hamilton VIC

Owners Paul and Denise Bast said they were very proud of the business and what they have achieved.

“Our store opened in one of the best places in Australia. Denise had faith in the store at the time we bought the business and we just did not stop, developing the store to what it is now. We have transformed the store over three months and received considerable growth during the opening of a local Bunnings store,” Paul Bast said.

2019 MITRE 10 STORE OF THE YEAR – LARGE FORMAT – Benalla Mitre 10, VIC

Gary and Jan Woodruff said it was incredible what they have achieved in the last five years.

“I believe the independent sector is alive and well. Thank you to Jan my wife, who has been with me through thick and thin. We have experienced all aspects of win, lose and draw in hardware. We all stand on someone’s shoulders and I would like to thank my father John for his support,” Gary Woodruff said.

2020 HALL OF FAME – Norm Hastings and Frank Benton – Diamond Valley Mitre 10 

Diamond Valley Mitre 10 founder, Norm Hastings’ children spoke on behalf of the family when receiving the award.

Daughter, Paige Hastings said the business started 41 years ago when a working-class couple with a two-year-old son, took a gamble and started their own business.” 

“The business started in a shed selling only timber, with every dollar they earned going back into the business and growing it to where it is today. They spent their entire life working in the business and running us kids around.”

Norm’s son Brock Hastings also thanked his father Norm, and Frank, who joined the business 27 years ago and is the store’s expert in merchandising, organisation and planning. 

“At a time when most were slowing down, Dad and Frank set about building a store 10 times the size of the original store,” he said.

Norm Hastings also said growing the business was all about the people you work with and the people you deal with in the community. 

“I love both of them so it was easy and I enjoyed it. IHG created a viable future for Mitre 10, thanks to many people, including Mark Laidlaw, who have helped me learn how to run a good business,” he said.

Exhibitor Awards

Several Exhibitor of the Year Awards were also presented to suppliers during the Expo Trade Show, including the following winners:

EXHIBITOR OF THE YEAR – LARGE – Ames

EXHIBITOR OF THE YEAR – MEDIUM – Stanley Black & Decker

EXHIBITOR OF THE YEAR – SMALL – Macsim