Fasteners speeding ahead
Fasteners represent a vast range of SKUs – with nails, screws, rivets and anchors of all different sizes and material grades – but small in physical size, they can generally be collected in a single aisle. Further, they are high-margin products that typically move fast at all times of the year.
Demand can remain strong during lulls in the economic cycle also. While fasteners are obviously connected closely to the construction sector, they aren’t solely used in new building works. As housing approvals drop with the slowing economy, for example, renovation work and DIY projects naturally increase. And both tradies and amateur buyers use the same fasteners in their work.
“Despite softness in the residential construction sector since the Global Financial Crisis, sales volumes have remained steady,” Ian Johns, national marketing manager for ITW Proline says. “There has been a decline in usage of some products used for residential home construction however this has been compensated by growth of others used for home improvement, such as fasteners for deck construction
Rod Bran, national sales manager – retail, for Bremick Fasteners, agrees. “Fastener use is wide and varied, encompassing new building, renovation and repair.”
“Never cut back on fasteners when times are tough – people tend to repair rather than replace.”
It all adds up to fasteners being a hardware retailer’s natural bread and butter line. As other departments falter with the precarious national economy, many are relying more and more on their fasteners to provide an important initial base of revenue.
“Fasteners are generally one of the most profitable sales departments within a hardware store, with high sales revenue and attractive retail profit margins,” Johns says.
Fasteners are naturally an in-demand product, so it’s not unusual that a number of players seek to stamp their mark on the manufacture and distribution of them. Indeed, for all the high margins that retailers enjoy from their fastener lines, the next level in the chain is a cut-throat market with plenty of factors driving prices, and profits, down.
The suppliers that Australian Hardware Journal spoke with all indicated there was a constant pressure to hold onto every contract possible, while at the same time proving their wares to win new business from their rivals.
That pressure is worldwide, and it is forcing the market to become more dynamic and innovative. While price competition is only natural, manufacturers are now seeing the very real benefits of product differentiation, quality of materials, and creative design. Customer service is also helping to drive the market
The current market is being driven by a number of factors, not least of all the state of the housing construction market at the moment. But one of the biggest product changes is the growing trend toward higher quality materials that will last longer in the harsh Australian climate. “Over the past few years we have seen consumers trading up usage to fasteners with better corrosion protection,” Johns says. “This is the result of product improvement, allocation of shelf space to these products, and the recommendation of store staff.
Coatings such as ITW Proline’s Climacoat and Tufcote, for use on roofing and decking screws, and Techshield, for treated pine bolts, are gaining greater market share across manufacturers.
That long-term focus is the hallmark of the modern fastener business. Bran says retail customers in particular are looking for the security of a quality product that is long-lasting and strong, “Customers (retailers) don’t just buy on price,” he says. “Their customers demand product that works. Like most of modern day society, they are also time poor, so a quality fastener is imperative.”
He points out that design is critical, precisely because fasteners can be so specialised, for everything from general carpentry applications to highly sophisticated automotive manufacturing. “Some types of fasteners are very difficult to manufacture,” he says. “With minute manufacturing tolerances, design is critical. This area is something we are constantly working on in our own (Australian) National Association of Testing Authorities- accredited laboratory.”
All this development naturally leads to many new products being introduced to the market each year. For Jasco, this is one of the key avenues to maintaining share of a crowded marketplace. “Product design and research are vital to ensure quicker, more reliable and more inexpensive methods of fastening for the consumers.” Massimo Ioppolo, product manager for stapling, adhesives and business machines at Jasco says. “Introducing new and innovative products, and providing a wide range (is what) keeps customers coming back.” Among the new offerings in its stable are its improved professional grade glue guns, with outputs of up to 2200 grams of glue per hour, and a number of fastener applications that have been improved through Lithium-Ion battery technology. “This provides convenience and easy manoeuvrability for professional users,” Ioppolo says.
For Bran at Bremick Fasteners, the latest developments are focused on materials and coatings. “Finish technology has by far been the greatest advancement in the past twelve months,” he says. “Our new Revolution B8 coating has increased measurable fastener performance significantly, and is currently driving a trend of change in the market.”
Johns says ITW Proline is also continually updating its product range, including using a number of patents to protect that development. “ITW has a strong track record on bringing new products to market to stay at the leading edge of fastener product performance,” he says. The company holds a number of patents, including for its HiGrip, ShankGuard, and Climacoat products.
Not unsurprisingly, customer service is also becoming a bigger part of each fastener supplier’s standard operating procedures. Bran says each company has to go above and beyond for every customer – whether they are retailers or manufacturers themselves. “Our philosophy is to treat every one of our customers as if they are our largest,” he says. “This is the major factor on why stores buy from Bremick. We recognise that holding on to customers is even more important than winning new ones.”
At ITW Proline, this carries over into merchandising support and training courses for retail staff. “ITW provides training for retail staff through purpose-built facilities in Sydney, Melbourne, Brisbane and Adelaide, and conducts courses in regional areas as well.”
Interestingly, fasteners have not yet gone the way of many hardware lines and become a commodity for trade over the internet. Johns says this channel has been coming into play only very slowly, with “no profound effect on retail store sales of fasteners”. However, he says there has been an effect on design and ideas generating through online communication channels. “This has probably influenced the growth in deck construction and decking screw sales over the past few years.”