Surviving as a small chain
The American retail landscape is littered with memories of hardware and home centre chains of various sizes, big and small, that were unable to cope with the inexorable expansion and relentless competition of Home Depot and Lowe’s, who now dominate the US marketplace. Chase-Pitkin Home & Garden is different.
Chase-Pitkin Home & Garden is a $200 million 15-unit chain located in upstate New York, and it is actually thriving, even though both national chains have been entrenched in Chase-Pitkin territory for a number of years.
While Chase-Pitkin stores show kitchen and bath items, none of the in-store displays are as elaborate or inclusive as those found in the remodeling centre, located in a high-traffic shopping centre
What is enabling Chase-Pitkin to survive when so many other small chains went out of business? In Chase’s case, in part, it was a decision to excel in serving the commercial market in addition to the DIY consumer market. Management committed itself to this market segment.
While both Lowe’s and Depot also go after commercial business, Chase-Pitkin, under the leadership of its CEO, Bill Strassburg, is providing commercial customers outstanding service through a proprietary software program in which its dozen outside salespeople use hand-held wireless devices to spend more time face-to-face with commercial customers with instant access to Chase-Pitkin’s database. This provides instantaneous ordering information and stock availability.
A typical Chase-Pitkin store front. Units are much smaller than the big-box competitors, being about 50,000 sq. ft. in size.
When they begin each day, salespeople — with their PDAs and the software — know inventory levels, current pricing, order-status and other aspects of serving the needs of their customers. The system means they spend more time face-to-face with customers, serving them, and less time bogged down in office paperwork.
Quick access to that database enables its salespeople to make more fully informed sales presentations, with an instant grasp of every item in the warehouse. They can access order history, preferred type of delivery, and offer information on inventory availability, special pricing and other pertinent information.
Customers can be told immediately that the company can supply the merchandise they want and know that those products will be available for pickup or delivery with no “outs”.
Software for other stores
After developing its innovative software for use by its outside salespeople, Chase-Pitkin is willing to sell the code to other non-competitive retailers who might want to further develop and/or improve their outside sales efforts. (Any retailer interested in learning more about the software, the system and options in acquiring it should contact Chris Dorsey, IT Director at Chase-Pitkin Home & Garden, 3131 Winton Rd S, Rochester, NY 14623. Phone: 001-585-427-8100).
When someone is interested in any kind of remodeling, a sales associate works with a computer to help plan the design, compute materials needed and provide an accurate cost estimate
As another weapon in its ongoing battle against giants Home Depot and Lowe’s, Chase-Pitkin is focusing on installed services, catering to those consumers who want to remodel and improve their homes but don’t want to do it themselves.
To reach these people, the company operates a 10,000 sq. ft. remodelling showroom, located in a shopping plaza owned by its parent, Wegman’s. It was set up to house and highlight the firm’s installed services division, which makes up about 5% of its $200 million in sales — 10,000 sq. ft, out of a total 1 million sq. ft. of sales space contributes a relatively huge portion of overall sales.
Installed sales include much more than kitchen and bath remodellings, though those are important components of this sales division. It also includes adding decks to homes, replacing or installing doors and windows, etc. The installed services are included in all advertising circulars so consumers are constantly exposed to these options.
The showroom features impressive kitchen and bath displays. About 5,000 sq. ft. are devoted to the six model kitchens and several bathroom vignettes. The rest of the display highlights other work that can be done, plus necessary office/sales space. The displays are far more elaborate and upscale than displays found in Chase-Pitkin’s home centres, since the concept is to cater to a wealthier audience in the installed sales division.
Developing the displays originally cost about $400,000, but ongoing costs are much less, inasmuch as the firm upgrades and changes one kitchen per year, on average. Modest changes in the bath vignettes also keep costs down while providing “new looks” as needed.
Computers are also used for showing proposed remodellings to consumers, as well as to figure costs, materials needed, etc. What is most interesting is the fact that the 10,000 sq. ft. showroom is able to lead to sales and installation income of nearly $10 million a year.
Today, Chase-Pitkin is serving more than 1,000 commercial customers, ranging from home builders, real estate managers, and all kinds of other non-consumer accounts. Institutional and property management accounts need all the kinds of products that a home centre stocks, and enjoy having a single-source of supply that saves them administrative time in filling their needs.
Decks, window and door replacement and a host of other projects are available in the installed-sales division of Chase-Pitkin — anything that a customer doesn’t want to do himself or herself.
Chase-Pitkin is more than a century old, having been founded in 1857 as a nursery. Its first retail outlet was opened in 1956 after it was sold to another local company. In 1959, it opened one of the first full-line home centres in western New York. It has been owned by Wegman’s, a large, privately-owned supermarket chain since 1974.
Wegman’s is considered one of America’s outstanding supermarkets, famed for customer service, innovative stores and high quality products. The company’s 65 upscale supermarkets are predominantly in New York, but are also located in parts of New Jersey, Pennsylvania and Virginia. Maryland is soon to become home to Wegman’s too. Its ownership of Chase-Pitkin infuses that company with the same dedication to outstanding customer service and a commitment to retailing innovation.
Chase-Pitkin’s 15 stores are supplemented by a remodelling showroom where tradespeople and consumers can get ideas for major remodelling projects. In addition to its dozen outside salespeople and retail units, it also operates an installed services division.
Its commercial division, opened soon after Depot’s arrival in 1996, was developed as a counterpoint to offset the retail impact of Depot’s market entry. It has been recording double-digit growth over the last two years as its sales force makes better use of the new software.
Knowing Depot would hurt its retail sales to some degree, management decided to focus on an underserved market segment — the institutional and property management customers who either had to buy from multiple sources or were taken for granted by existing sources.
The wireless PDA system means salespeople spend up to 75% of their day in the field, compared with less than 50% before the software was installed. With its broad inventory, smart systems and aggressive sales force, Chase-Pitkin is now able to supply 80% or more of a typical apartment complex’s supplies — everything from lumber to light bulbs.
And keep the big bad wolves of Home Depot and Lowe’s somewhat at bay.