News: Retail Heads Gather At Practical World

After an absence of two years, the famous Cologne (Germany) Fair returned in March, now called International Hardware Fair/Practical World, and occupying some new and some re-numbered halls.

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International attendance from retailers and wholesalers was strong. Here one can see and compare products from dozens of countries, in every price range. For businesses interested especially in the professional and industrial sides of the business (heavy tools, hardware, etc), nothing quite matches this fair. This year, fair management added educational seminars and store tours so visitors could learn about consumer trends based on Mintel research, or see the latest in merchandising techniques.

One of the seminars brought together the head of Kingfisher, Europe’s largest home center organization; the head of Lowes’ importing division; the founder and chairman of Easy Home Centers, which operates in both Chile and Argentina, and the President of Ace Hardware’s International division.

Speakers from Lowes and Kingfisher confirmed the consumer research described by Mintel, in which women are playing an increasingly important role in DIY and decision-making about home improvements. As a result, they and the founder of Easy commented that they are broadening their assortments to include more items of interest to women –such as bedding, curtains, etc.

Lowes in particular has been competing successfully against Home Depot by creating a “softer” look in its stores. While it is still a big-box warehouse in many respects, it is using stylish displays, cleaner floors and more open aisles to not be as intimidating as a regular warehouse look. There also appears to be a growing interest in “Do It For Me” (DIFM) as two-income families proliferate and time-pressed consumers decide to spend their time doing other things, not tackling all the home repair projects themselves.

While large stores operated by chains continue to grow, Ace Hardware’s Murray Armstrong said smaller stores and independent retailers such as the ones served by his company, are finding it easier to compete with the chains. In the US, both Home Depot and Lowes are now averaging more than 33% gross margin, making it easier to be price-competitive. And not everyone wants to trudge through a large store, Armstrong noted, emphasizing that smaller stores are a convenient alternative.