Retail Focus: The Little Store That Said It Could

Janice Ryan reports on how a little hardware store in Clayton (Vic) surrounded by six Bunnings stores has survived to tell the story…

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Store: Leighton’s Thrifty-Link
Owners: Peter and Jan Leighton
Group: John Danks & Son

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Every now and again a small business success story comes to light that is highly inspirational. However, this is not the story of some amazing entrepreneurial idea that took off overnight and made the owners a fortune. And it’s not the story of a little business that grew to take over the world.

AHJRetail01Dec05Caption: The Leightons utilize all the space available to them

This is the story of a small hardware business that has managed to keep its doors open, and the customers flowing through, despite some overwhelming odds. It is the story of lateral thinking and good old-fashioned service, winning over big competitors and cut-throat prices, as well as all the seduction of big advertising campaigns.

This is the story of the little Thrifty-Link hardware store in the south-eastern Melbourne suburb of Clayton. The store sits in the middle of a territory surrounded by six huge Bunnings warehouses.

Peter Leighton, and his wife Jan, established their business in 1994 when there was just one Bunnings store nearby. Soon there was one in nearby South Oakleigh, one in Moorabbin, and another in Dandenong. By the time the sixth store had arrived, the Thrifty-Link store stood quaking in its little hardware boots.

Caption: Peter and Jan Leighton are beating the oddsAHJRetail02Dec05

Peter and Jan’s customers were being wooed with the big specials at Bunnings. Their letterboxes were bursting with Bunnings’ catalogues, their televisions sang the Bunnings’ jingle as they ate their dinners, and their local papers promised them hardware heaven. How could a little Thrifty-Link store possibly compete with that?

Certainly, business began to suffer. A lot of stores in a similar position would have just lay down and waited for the inevitable. However, Jan and Peter weren’t about to give up. It was time to get creative.

Getting Creative
First step was to cut costs. Peter and Jan decided that with a bit more hard work and longer hours, plus some part time help from their daughter, Mandy, they could manage without an employee. A difficult decision, but a survival one. And then they looked at what they could offer customers that wasn’t available at Bunnings. One thing was obvious. They could overwhelm their customers with fantastic service and product knowledge and always go that one step further to hunt out a required item.

AHJRetail03Dec05Caption: The store has a broad product mix

“That wasn’t hard. We genuinely like being helpful and the relationship we have with our customers is an important part of the overall satisfaction we get from our business. It’s one of the reasons we went into business in the first place,” said Peter. “Although we had always provided good service, this was the time to really ramp it up and put our focus on the things we knew we were better at than Bunnings.

“When you go to a big store like Bunnings, it can be hard to even find someone to ask to locate the product you’re after. The staff are usually very busy and don’t have the time to talk through various product options or explain things in detail. It’s very much a self service principle and there’s no use expecting anything else.”

An average Bunnings store takes as much in one day as the little Thrifty-Link store takes in a whole year, and there is no doubt that this style of big-scale retailing works. But by Peter and Jan’s reckoning, there are plenty of customers who don’t like this kind of shopping experience. “There’s no doubt that we lose business to the ‘10% cheaper offer’ but there will always be customers who want that extra special attention or help with a project,” said Jan.

AHJRetail04Dec05Caption: Peter devised his own computer software

“We take on the challenge of hunting down that little piece of a hinge they need or we spend time with them planning a project. We often see the whole job through with the customer, advising them along the way. It’s not unusual for someone to come in to say they have planned a certain project, and Peter will immediately see a problem likely to cause headaches down the track and suggest tackling it differently. This can be a big saving in the long run – more important than a few cents saved here and there on discounted products from the big stores. Apart from the interest we take, we also have years of experience and expertise to offer.”

The Thrifty-Link store buys its stock through Danks, who supply hardware and garden products to 750Home Timber and Hardware, Thrifty-Link Hardware, and Plants Plus Garden Centre retailers, plus a further 1,500 independent stores. According to Peter, this gives them excellent buying power and a good product offering, so that they can remain reasonably competitive.

“It’s a myth that the big stores always have the best prices. Our prices are usually on a par and sometimes even considerably cheaper. Unfortunately, the ‘bigger is cheaper’ perception is a hard one to fight, which is why we have tackled things from a different angle. Apart from the customer-service focus, I also decided that our survival depended on us running a very tight ship. So I sat down and learnt to program my own Point of Sale software.”

DIY Software for Hardware
After much research into what was available, and the disappointing performance of a commercial software package that cost them thousands of dollars, Peter decided to bite the bullet and taught himself to program, using Microsoft Access.

“I knew that micro-managing the business was a key to survival. I wanted to know what stock was sitting too long on the shelves, what items we should be promoting more, what I should be ordering today – not in two weeks when we had run out. Learning my way around software development was challenging, but the results have been well worth it.”

Peter has now sold the software, which he has called POSePlus, to several other merchants in the Thrifty-Link chain.

AHJRetail05Dec05Caption: Peter, Jan and daughter, Mandy, pride themselves on customer service

“POSePlus has really contributed to the success of our business,” said Peter. “Micro- management of stock inventory keeps the business finely tuned and allows me to make decisions on the fly. POSePlus tracks stock through cash register sales, handles accounts receivables, stock ordering and generally keeps my finger right on the pulse. We use it to steer the business daily and to make quick corrections if necessary, alerting me to stock problems that affect sales. For instance, the other day I noticed that wheelbarrow sales had unexpectedly fallen off. It was just that we had moved their position in the store, but a little thing like that can really affect your bottom line if the product is a good seller.”

So, if Peter and Jan had to give one reason for their success in keeping their business afloat, when nearly all their customers have to drive past a Bunnings store just to get to them, what would it be?

“Realising that there are some things you can’t change, but some things you can. You can’t change your competition, but you can change your abilities. Arm yourself with whatever you need to keep the business flourishing. If that means tackling something new, don’t be afraid to take the plunge. Looking at what’s possible rather than what isn’t – that kind of thing is really important to small business survival,” said Peter.

It’s obvious that providing the opportunity for a little human interaction – having the time for a bit of a chat and the sharing of a joke – doesn’t go astray either. Some would say that’s priceless.