Achieve business growth during lockdowns

It sounds incredible, but some fasteners specialists are enjoying business growth despite lockdowns, construction interruptions, and shortages of building materials. John Power reveals the secrets to success.

It is easy to find ‘doom and gloom’ stories arising from the world’s current pandemic – but this story is all about achieving success regardless of the most trying circumstances.

Bolts & Moore, a triple-outlet fasteners specialist servicing metropolitan Melbourne, has experienced significant growth over the past year by embracing a series of strategies designed to enhance business with existing customers, selectively expanding their ‘preferred’ customer base, and attracting new clients. These strategies have comprised a mixture of commonsense initiatives – like stocking non-traditional product lines in response to sudden market demand – as well as more cutting-edge reforms, notably the release of an easy-to-use app that allows customers to make online orders quickly and effortlessly.

By adopting such measures, Bolts & Moore has withstood some of the world’s most extensive lockdowns (over 200 days in total since the start of the pandemic) and set the scene for an even more buoyant future once the pandemic passes.

Let’s set the scene: over the past year local suburbs have been afflicted with sporadic lockdowns of building sites, for example, which have capped site workforces at 25 per cent capacity in some cases. Meantime, the wider community has also suffered restrictions based on five to 10-kilometre travel limits and even curfews. 

While hardware retailers have been largely untouched by physical commercial restraints, weakened international supply chains have reportedly damaged vital building materials supplies like timber.  

Diversity provides protection 

The primary protection against these kinds of construction and economic interruptions, according to Bolts & Moore’s Managing Director Justin Moore, is client diversity. Whenever customers from one industry category experience business decline, it helps to have plenty of customers from less-affected industries to maintain cashflow.

“As far as our general customer base is concerned, apart from building and construction we supply to all sorts of customers, whether they are involved in manufacturing or maintenance for the transport industry, the food industry – if our sales are affected negatively, it tends to be from category-specific customers rather than across the board,” Justin says.

Diversity and adaptability within individual client categories have also helped maintain steady demand for fasteners. For example, Justin says one client specialising in signage has increased work in sectors relating to essential services, thereby compensating for lowered workloads involving small-scale, everyday work. The result: healthy ongoing fasteners sales, but with modified kinds of product orders compared with pre-pandemic times. Similarly, larger infrastructure projects have tended to continue apace, to some extent making up for diminished volumes of residential work.

Of course, pandemic-related upheavals have had an unavoidable impact on raw sales figures – Justin says actual transaction numbers have fallen by 20 per cent over the period. Nevertheless, overall revenue has increased! Let’s dig a little deeper…

Keep nimble

Justin says a “nimble” approach to business is part of the fastener culture, and his team has been happy to adapt to modern ways of doing business. 

“The nut, bolt or fastener industry is one of those industries that is always the ‘forgotten product’, so products are always needed in a hurry,” he says. “Our guys and, by nature, the company are used to acting quickly.” 

Bolts & Moore showcased this flexibility and an ability to ‘think on the run’ at the onset of the pandemic with a willingness to stretch the definition of fasteners merchandising, quickly increasing its diversity of product ranges.

“These days we are supplying a much wider range of products – which we have always had access to – so we are quite proficient in a number of other areas, ranging from cutting tools or abrasives to PPE (Personal Protective Equipment).

“A good example is when we went into the first lockdown; I never thought we would sell as much sanitiser and masks! So, I think we are prepared to be nimble in our product offering, which again sets us apart if we can pick up a trend within the sector.”

New ordering app

Perhaps the most important innovation undertaken by Bolts & Moore in the past year has been the release of a dedicated app for online ordering.

The app, Justin explains, has created at least four identifiable benefits to the business:

1. Point of difference: while many fasteners outlets are often ‘generic’ in the eyes of customers, specially tailored ordering facilities represent an obvious point of difference, and provide a platform for building loyalty in the marketplace.
2. Expanded sales portfolios: the pandemic has motivated customers to rationalise the number of suppliers they deal with, not only to simplify their affairs, but also to reinforce regular and reliable business partnerships. Customers who have embraced the app for typical fasteners purchases have been happy to add other product lines to their orders, leading to an increase in average spends.
3. Enhanced ‘preferred’ client bade: given the app’s main facility, which is to provide an easy mechanism for repeat orders, it is no surprise that the main users have tended to be clients with consistent ordering needs. Consistent orders are easier to handle than erratic ones, so the app has had the happy side effect of lifting the ratio of preferred ‘repeat business’ clients.
4. Improved data analysis: metrics associated with the app have provided enhanced data about sales trends and market movements, allowing for a more refined appreciation of how individual client categories perform under different circumstances, including lockdowns. For instance, timber shortages have not translated into uniform reductions in fastener sales across all building sectors, confirming client reports that supplies are still being rolled out, but in selective fashion.

All the above benefits have helped deepen Bolts & Moore’s relationship with diverse client bases, and forged long-term bonds with a wide range of customers. “And, as far as the app is concerned, we are just scratching the surface,” Justin says.

Specialising helps

Another contributing factor to the success of the business during the pandemic, he notes, is the specialist nature of the three stores and their expert staff. The more specialised a business is, the more tightly held its market share. In the case of Bolts & Moore, a professional inventory and knowledgeable staff dissuade customers from wandering elsewhere, and definitely help retain customers over the duration of interrupted projects: order postponements outweigh cancellations, with slow market activity frequently being overcome through dramatic increases in orders whenever COVID-19 pressures ease. 

Other solutions

Not all fastener businesses have the resources or know-how to introduce new technologies during a pandemic, but there are plenty of low-cost actions that can be taken to encourage customer engagement during lockdowns. One straightforward measure is a clearly written ‘COVID-19 UPDATE’ on website Home Pages, addressing obvious Q&A-style topics. Announcements relating to policies about Business/Trade Customers, General Customer Care, Click & Collect arrangements, Discounts/Sales, Deliveries, etc., can alleviate market frustration and make life a little easier for customers.

A little personal attention goes a long way…

Paint & accessory industry thrives

Ongoing shipping and importing issues due to the pandemic has seen increased pressure within the Australian paint industry for a reliable and consistent supply of quality raw materials. Paint Place Group General Manager, Gary Liddicoat, believes increasing shipping costs have caused prices of raw materials to more than double in the last 18 months, while the time it takes to book shipping container space has been pushed out dramatically, triggering a major reduction in supply of raw material.

While the shutdown of key resin suppliers over the last 18 months has had a negative impact on the paint industry, with the supply of certain products reduced significantly, there are still many positives that have come out of the pandemic, according to Mr Liddicoat.

“This includes a huge swing back to DIY rather than DIFM (Do It for Me) as people have more time on their hands and cannot travel. This also means they have an increasing disposable income so they are taking on more projects to make their home their castle,” Mr Liddicoat said.

“When you also look at some of the record prices we are seeing in real estate throughout major cities, people are re-evaluating their homes and job location because of this. In many cases they are choosing to stay where they are and make their homes more comfortable rather than sell, relocate or build. I think staying put and renovating is an option that has been forced upon some people who may have been thinking of building a new home but have found costs have increased too much due to supply and demand. Then of course there is such a shortage of timber and building materials, so they make the decision to stay where they are.”

“Consumers are also tackling more DIY projects and are more confident to have a go thanks to the internet and YouTube. However, once in store we find there is often more apprehension from the customer about tackling their DIY project. This is where our people shine, by explaining and showing specific techniques and products that will help them get the desired results. We have recently started a series of ‘how to’ videos which we give our customers access to when required,” he said.

No-one ever could have guessed how unprecedented sales would be in the retail paint and hardware sector and we expect it to continue, Mr Liddicoat said.

“The DIY trend has been solid with lower wage growth, so the potential for those repeat customers to continue on with projects with the confidence of previous successful projects should not be discounted,” he said.

When looking at the paint industry as a whole, Mr Liddicoat said from the Plaint Place Group of Store’s perspective, it is now seeing a drive towards franchise models backed by manufacturers, “which in our opinion limits choice for our customers because these manufacturers are focused on their brands only”. 

“This puts the true independent paint specialist channel at risk. When demand on raw materials is very high and somewhat volatile, just like our customers we require flexibility and consistent supply channels as well as the ability to keep stock on shelves at all times which is where our model, with some flexibility, really works,” he said. 

The pandemic has also caused some variations in paint quality, according to Mr Liddicoat, who said any product inconsistencies are more in tune with the ability of manufacturers to obtain consistent supply of quality raw materials. 

“With paint, most finished goods are manufactured in Australia but manufacturers are very reliant on off shore suppliers for raw materials to do this. Apart from the likes of Rust-Oleum with Zinsser specialty products, we do not see much imported in the way of finished goods and in their case, they are supplying premium solutions-based specialty products, so not of a lower standard,” he said.

Which is why it seems the shift towards embracing Australian Made products has continued. Paint Place has embraced this with the launch of its new Private Label and also the relaunch of its corporate logo further solidifying our commitment to “painting Australia”, according to Mr Liddicoat.

“Launched in March, our Private Label has been a huge success. Australian made and owned, our private label also has low VOC and is APAS approved. Affectionately known as Paint Place’s Black Label it has resonated well with our customer base and the above-mentioned characteristics. Its premium quality at affordable pricing has seen sales to both the retail and trade market segments not only meet, but exceed initial expectations. Alongside this launch we have also introduced a new and improved rewards program and after pay service with humm. We have several promotions planned for this new range including double rewards on exclusive brands, a gift with purchase offers and much more,” he said.

“We have also seen a big trend towards things that can be done at home, such as art and resin pieces, and have tailor made workshops in-store to capture these opportunities,” Mr Liddicoat said.

The continued development of environmentally responsible products also remains on-trend and paint manufacturers continue to focus on these products to sustain not only their businesses, but also the environment heading into the future.

“One of our key suppliers, Nutech Paint have now begun to manufacture an environmentally friendly range of paints under the Graphenstone brand. This paint is unique because it actually draws in and captures CO2. This really is a true highlight and point of difference within the environmentally friendly paint space,” Mr Liddicoat said.

Another environmentally friendly feature which has continued to be implemented throughout the paint industry is of course the ‘Paintback’ paint disposal program, alongside local council chemical clean up days, which gives retailers and end users the socially responsible means of disposing household chemicals including paint. As part of this clean up, paint manufacturers and retailers are also encouraging flocculant wash systems for their trade clientele, he said.

When looking at innovative paint accessories that have continued to lift the game in the painting industry, Mr Liddicoat says Mirka’s dustless sanding products, as well as onsite spectrophotometers (NIX), have definitely been a huge hit within the industry of late. 

“To be fair there have always been great products in the industry but in the past we have not capitalised on the features and benefits of these or asked the customer ‘if they want fries with that’. However, through ongoing product training and a renewed focus on all categories, we are able to help lift the game in all sectors be it trade or retail, residential, commercial or industrial – I think more so than new products we have a new approach in-house which is making a real difference,” he said.

Looking to new innovations within the Australian paint market, Concept Paint has just released an Australian made hand sanitiser that meets WHO standards of 75 per cent Isopropyl alcohol, he said.

“With retail customers now expecting this level of cleanliness when entering a store, it is supplied in a larger size for the stores who have the mindset of a duty of care to their customers and staff. Colourtrend Paints have also introduced a hand sanitiser. In the case of both of these businesses, I think it has helped them in the sense that their customers saw them react quickly to a problematic situation and they want to support Australian manufacturers first and foremost.”

While Mr Liddicoat agrees the market remains fairly competitive, he says this competition does not come so much from new players – as in brands – but new players as in who owns the brands. For example Dulux, now owned by Nippon, and Wattyl now owned by Hempel. 

“Trade paint remains fiercely competitive, especially as we see Australia’s major paint manufacturer trying to gain more market share in this area. When you have a huge benefit in being Australian Made and owned, I think consumers will try to support you. Which is why we do not need to sell on price, especially when you have good products, but I guess you need to have a decent share of the market to start with. The market is only so big and there are many players after the same piece of the pie so price is very much an issue amongst the trade.”

“As more tradies understand service and consistency is also important to their business, price becomes less of an issue. I think independent paint specialists will always offer a better service to the trade. They want to keep their customers happy and they have ‘skin in the game’, rather than an employee in a corporate store who gets paid regardless of keeping a customer happy. Decent tradies are also happy to pay a little extra for good service. If they know they will get their paint when they are told and it will be the right product, right colour, right sheen level etc. it is one less thing they need to worry about – it saves them time which saves them money,” Mr Liddicoat said.

While Paint Place prides itself on achieving a point-of-difference in the market by maintaining a good reputation and delivering on customer service, it is the quality of the group’s members that has the group continually stand out from the crowd, according to Mr Liddicoat.

“We have a team of dedicated members who are passionate about their independence, combined with the reputation of Paint Place always revolving around the ability to service the customer’s needs by being multi-branded in our offer. We are continually working with our people to ensure they are up to date with new products and technology in every paint category be it interior, exterior, roof paint, paving paint, pool paint, marine, texture coatings, membranes, metal protection, woodcare, concrete and masonry, protective and industrial, automotive, epoxy and more.”

“Our point of difference also comes from our combined experience throughout the network, with many of our stores now into their third generation of ownership – with one or two about to go into fourth generation,” he said.

For now, the future is bright for Paint Place with the group currently rolling out its Retail Management System – a bespoke point of sale system that enables each store to build and maintain their own database in conjunction with a built in CRM. 

“The new system is also linked to our new VIP Rewards program and humm after pay service, all overseen by the group office as well. We will be running double rewards promotions, exclusive brands/offers, gift with purchase and holidays for ‘painting Australia’ over the next 12 months,” he said.

Inspirations Paint upgrades in-store and online

While the 2020-21 business year has seen the unpredictable and challenging times of 2020 continue, overall, Inspirations Paint’s store-on-store, year-on-year sales across both trade and retail increased by between seven and eight per cent. The individual state government’s varying responses to COVID and the extent of lockdowns and restrictions over the last 12 months have resulted in differences in store sales, according to Inspirations Paint Chief Executive Officer, Robert Guy.

So, what does 2021-22 look like? According to Mr Guy, with the on-going COVID situation, the only certainty is that the next 12 months will have continuing challenges and uncertainties, making any forecasts difficult. 

“Trends that have evolved in the first six months of this calendar year indicate that we should expect our collective store-on-store retail sales for 2021-22 to fall from 2020-21 levels but will still be ahead of 2019-20 levels. We expect our collective store-on-store trade sales to see moderate increases from our 2020-21 levels, resulting in a small overall total sales increase on 2021-22,” he said.

“As was the case in 2020, Inspirations Paint members should be very appreciative and proud of how our employees have responded to the continuing challenges of the pandemic. Our stores and store staff have continued to deliver the leading levels of customer service and ‘personal attention to your painting project’,” Mr Guy said.

Inspirations Paint has several key priorities for its business moving forward, that not only includes the health and safety of employees and customers, but also maintaining financial strength and support to the store network; continuing to improve its ‘click and collect’ and ‘click and deliver’ capabilities, as well as rolling out its store upgrade program.

With sign-ups to Inspirations Paint’s loyalty programs in 2020-21 increasing 16 per cent on the prior 12 months of strong retail sales, Mr Guy said the importance of the size of a store’s Paint Club (DIY) and Paint Edge (Business Customers) membership lies in customer loyalty and its ability to advertise targeted promotions to these customers. 

“The Paint Edge loyalty program was launched in late 2020, and is aimed specifically at ABN holders who purchase paint for commercial reasons (not DIY). Together the Paint Club and Paint Edge customer loyalty programs are an Inspirations Paint store’s most effective tool to build and maintain retail business, and hence profitability,” Mr Guy said.

Alongside the newly launched loyalty programs, Inspirations Paint’s ‘Recall’ advertising campaign is also aimed at tapping into the emotions of how a customer feels just before they tackle a new painting project.

“The new campaign looks into that moment before you start your painting project – you close your eyes to recall the expert advice you received from the team member at your local Inspirations Paint store… now you have the confidence to get stuck in. The commercial features the 1975 hit song, ‘Dreamweaver’ by Gary Wright. A tune deeply familiar to the target audience of 35- to 65-year-old home owners,” Mr Guy said.

“There are now eight different commercials in the campaign, each featuring a different painting project: a ceiling, a kitchen feature wall, a metal fence, a concrete driveway, a boat restoration, a car touch-up, a weatherboard home exterior, and a back deck.”

“Since its launch in January 2020 across TV, digital, billboard, print and radio the ‘Recall’ campaign has struck a chord with customers. Advertising research shows 91 per cent of the target audience ‘like’ or ‘very much like’ the campaign and 75 per cent of them say the campaign makes them more likely to visit an Inspirations Paint store. These scores are significantly higher than previous campaigns and have contributed to a retail sales uplift above the market rate throughout the pandemic,” he said.

The campaign will continue to run throughout 2021 and into 2022.

Looking to the on-line space, there certainly was no slowing of activity throughout the pandemic, according to Mr Guy who said, “it is amazing to think that in late 2019 you could not buy a can of Dulux Wash & Wear online and pick it up from your local hardware store or paint shop because eCommerce was not live for any national retailer.”

“It was a curious but unsurprising reality, yet again that the home improvement market, a $24 billion behemoth, had not kept pace with other retail sectors like electrical, grocery and fashion. Inspirations Paint had been envisaging a paint eCommerce website for many years that would help the customer through a tricky purchase. On 12 December 2019, Australia’s first full eCommerce store for paint went live at www.inspirationspaint.com.au which was the first eCommerce site to have selectable paint colours, with logic to automatically calculate the required base. The site now features over 60,000 colours available online.”

“This innovation was paired with a strong pick-up promise: tinted and ready in two hours nationwide. When the pandemic hit in March 2020 Click & Collect sales surged, however, it became evident that a Click & Deliver functionality was also required to service people who did not want to leave their home. By May 7, 2020, Inspirations Paint had developed, tested, and launched a next-day click and deliver service. Click & Deliver orders now make up 30 per cent of online sales,” Mr Guy said.

It was also on November 23, 2020 that Inspirations Paint’s customer loyalty program – Paint Edge – went live online, allowing business customers to purchase paint and accessories at cheaper prices while also offering a ‘same day’ delivery promise. 

“Since the launch, thousands of Paint Edge customers have joined and now shop regularly both online and in-store taking advantage of the program’s benefits including monthly promotions and offers,” he said.

“As the fulfillment of online orders happens from the Inspirations Paint store network, it was critical to integrate the functionality of web sales seamlessly into the stores POS system. This integration was tailored to allow stores the flexibility to swap out products, delete or add lines, swap collection to delivery and vice versa. Stores have done an excellent job fulfilling 97 per cent of collection and delivery orders in full and on time.”

“National market research shows that 29 per cent of Australian’s who bought paint online in 2020 shopped on inspirationspaint.com.au, up from three per cent in 2019. To date no other paint specialist chain in Australia has eCommerce,” Mr Guy said.

In 2019 Inspirations Paint also embarked on a customer experience program, which has now resulted in the CFX Store Upgrade Program. CFX stands for Customer First eXperience and it is the culmination of two years’ worth of customer interviews, store designs, stakeholder engagement, store prototypes and funding models, which is now rolling out to all stores over the next three years, Mr Guy said. 

“The goal was to develop a store design that was attractive to both trade and retail customers, integrated with Inspirations Paint’s online offering, improved operational efficiencies, and maximise store profitability. After 60 hours of in-depth customer interviews and a competitive store design pitching process, we had our new store design,” he said.

“The new store design sought to eradicate the myriad of pain points customers had identified. They said our stores were: hard to shop, cluttered, messy, illogical, worn, dirty, cluttered, confusing and intimidating. We had nine different types of ceiling paint in six different locations! The motto for the new store design is, ‘we do the hard yards to make shopping easier for the customer’. This means easy wayfinding and line of sight, displaying products by category not brand, ensuring pricing is always present, planograms ensure every SKU has a place, service and tinting is separated, information panels demystify complex product categories, and the brand is present throughout the store.”

“Inspirations Paint went on to build four prototype stores that were tested over a two-year period, with tests results showing 90 per cent of the previously identified pain points had been eradicated. Inspirations Paint is now into the rollout phase with 12 stores to be upgraded before Christmas starting with a new greenfield store in Tamworth New South Wales, completed on July 29,” Mr Guy said.

For now, Mr Guy believes in order for Inspirations Paint to provide a sustainable, viable future business model for its members, the group needs to maintain and improve its independent business model, store support structure, culture of member support and continue to develop and enhance the current store and operator network. 

“As a group, we will further develop the necessary programs to allow the planned succession or retirement of long-term members, the development and growth of higher potential members and the entry and development of new quality members. This continues to be the major focus for the Inspirations Paint Board of Directors moving into the future,” he said.

HBT supports Australian Made

The Australian paint market has consistently adjusted in the last few years, particularly with international ownership of three of the four leading manufacturers bringing change to the way they operate within Australia. According to HBT Business Manager for Hardware/Construction, Rita Niforas, this is also why it is so important for the HBT team to work with businesses that understand the Australian market, Australian consumers and also Australian family businesses.

“Our partnership with Haymes Paint, Australia’s largest made and owned paint manufacturer, ensures that we have this. This ongoing partnership has made a massive difference to our group who continue to support us a core supplier. Their position within the market really resonates with our customers. Consumers have rallied around Australian owned businesses during the pandemic and this was particularly evident with customers looking for and purchasing Haymes Paint through our members,” Ms Niforas said.

“During the pandemic, Haymes Paint demonstrated its ability to pivot during unusual times by producing a hand sanitiser and making it available for our stockists to purchase. The ability for Haymes Paint to be able to pivot and supply sanitiser so quickly was extremely beneficial to our group because we already had a long-standing relationship with them and we did not need to look for another supplier when sourcing sanitiser throughout the pandemic,” she said.

Environmental concerns around paint disposal remains a prominent issue within the industry, according to Ms Niforas, who said this is also why it has been so encouraging to see primary manufacturers become proactive with their involvement with the popular ‘Paintback’ paint disposal program.

“As an industry led body, ‘Paintback’ looks to centralise and minimise inappropriate paint waste disposal across Australia and also manage ways to recycle packaging. Raw material shortages are also a primary concern across the industry. We have found through regular communication with our strong core suppliers and a shared understanding of our current environment, that there are many solutions to appropriate waste disposal. This knowledge benefits our customers as well,” she said.

Recent high demand for paint throughout the pandemic has seen DIY customers push unprecedented growth, which is why HBT members have had to remain diverse in their businesses during this time, she said.

“Giving our customers the ability to ‘click ‘n collect’ has been of immense benefit, particularly with paint accessory companies such as Oldfields. Some paint suppliers have also now developed technology whereby paint can be colour matched via an app, enabling the customer to have their ‘own’ individual paint colour made up, and customising precise paint colours. A customer can scan the colour from fabric, flowers, walls, household goods etc., and the exact colour match will be tinted. This allows for bespoke paint colour that the customer can name and it can be shared with their painter, friends and family.”

“We have seen exceptional growth throughout the pandemic as people have become inspired to spruce up their home offices making it a pleasant place to work from. Additional to homes required painting, customers were also encouraged to prep and oil new outdoor decking space.  As a result, paint accessories, brushes, rollers, trays and spray gun demand increased. Spring/summer projects that include decking and decking oil will also increase at this time,” Ms Niforas said.

During this busy time, HBT has continued to compete strongly with competitors, particularly because members have the ability to serve every customer that walks through the doors and help them find a solution. 

“Alongside personalised customer service we also utilise educational tools and training from our suppliers, including online ‘How tos’, while also utilising our team’s experience to ensure we provide a point of difference from other hardware retailers. HBT is proud of the members that have continued to think outside the square during this time, and utilise programs that allow them to serve their customers better,” she said.

While new products do continue to innovate the category, so too does the quality and innovation of products with increased exterior durability, improved mould resistance and larger colour choice just a few consumer benefits that have been enhanced in recent years, according to Ms Niforas.

“The ongoing innovations sees the customer as the winner because they can easily access the solution that best fits their needs. Some recent innovations include improved indoor air quality and elimination of odors, advanced coatings can improve air quality by neutralizing odors, from carpets, fabrics and insulation,” she said.

“Advanced coatings are also now assisting in the reduction of mould and mildew on the paint surface, while coating with antimicrobial agents prevent the growth of mildew and mould on the paint film, as well as inhibit bacterial odour.”

“Enhanced durability also remains on trend within the market because painters, interior designers, DIY customers can create interiors that are hardworking and aesthetically beautiful by selecting paints that are durable. These paints provide unique benefits due to advanced coating technologies, which can add incredible and lasting value to key building projects, leading to increased client satisfaction,” Ms Niforas said. 

As the largest independent buying group supporting independent hardware, building and trade businesses, Ms Niforas believes HBT will continue to work with its trusted suppliers on delivering innovation, as well as products that provide a good entry point to the market, including ‘The New Look’ range by Haymes.

“Our partnership with all of our paint suppliers helps ensure that our customers are able to have confidence that they are purchasing a quality paint. For instance, Haymes Paint have quality standards that are well earned and recognised.”

“Reputable suppliers such as Taubmans, Haymes, Dulux and Wattyl also offer colour consultancy services with retailers and customers. Campaigns such as GIVIT and the ‘In it together’ programs help raise funds for communities affected by droughts, bushfires, floods and COVID,” she said.  

While the paint market remains fiercely competitive, there are several major, stand out players that continue to do well because they have a long history in the Australian market and carry strong brand equity.  

“We have seen a shift to Australian owned and manufactured products across all categories, which has been driven by buying and supporting local businesses. This is indicative of the great Australian spirit and COVID continues to exemplify this,” she said.

ABC pushes paint accessory sustainability 

While there are plenty of strong solutions around paint disposal there are still very little resolutions around the sustainable disposal of painting equipment, which is why sustainability continues to remain a pressing topic within the paint industry currently, according to Australian Brushware Corporation (ABC) Marketing Manager, Michelle Wee.

“Professional painters are used to washing out brushes and rollers and re-using quality tools, however this remains a challenge with DIY customers because brushes, rollers and trays used with paint often end up in land fill. As a business and a brand, Monarch continues to look at ways in which we can reduce our carbon footprint and most importantly, how we can continue to educate consumers on re-using painting accessories versus throwing them out,” she said.

“When it comes to sustainability, consumers have become savvier in their purchasing behaviour and are seeking products that ultimately help the environment. Due to the pandemic this is important now more than ever because people are not only painting their homes but also finding a love for furniture restoration and crafty projects,” Ms Wee said.

As strong sales continue within the paint and paint accessory industry, Ms Wee said if consumers are not painting their homes themselves, they are hiring professional painters and labourers to do the job.

“It is for this reason that we will continue to see strong sales in paint this winter, even with COVID lockdowns across each state and over the entire country. With such trends in sales, we are still hoping spring and summer will peak as well.”

“Brushes and rollers continue to maintain great sales. While smaller projects remain on trend, like furniture restoration and thrift flipping projects, products like mini rollers, specialty brushes and applicators are also increasing in sales,” she said.

More recently, the Monarch team has been busy working on a new paint accessory range designed specifically for the professional trade painter, set to be launched around the spring/summer period this year. Alongside this range, Monarch will also release a new range of sustainable products by early 2022.

“The paint accessories category is very mature, with brushes and rollers around for as long as we can remember. At Monarch we have found that innovation is an important element in such a mature market. Anyone can source and sell a paint brush and roller. What sets Monarch apart is our ability to develop new products that help improve the painting process – whether it is increasing paint coverage or simply making it easier to cut in a wall,” according to Ms Wee.

Alongside the exciting launches, the Monarch brand will celebrate its Jubilee year in 2022.

“Our unique selling point is that we are a brand that has so much heritage and a strong reputation for producing premium quality paint accessories. Innovation and technology set us apart from our competitors as we are not only able to develop innovative products but our products provide true solutions to the end consumer. Once a customer has tried a Monarch product, they become a true advocate,” Ms Wee said.

“At Monarch, we not only provide the right tools for any painting project, we also endeavour to provide the right tips and tricks on how our customers can achieve that professional finish every time. Many consumers are often afraid of painting and perceive it as a difficult task. Monarch, through all its communicational efforts, aims to educate every time. We work closely with our retail partners to ensure consumers have an avenue for all the right information with Monarch,” she said.

Despite all the uncertainty of COVID, Ms Wee said Monarch will continue to innovate and evolve with some exciting new campaigns already planned for the year ahead.

“After the success of our House of Monarch online series, which sees the Monarch team renovate 12 spaces into an incredible home makeover, season two is set to be released at the end of October and is filled with many more innovative renovations for our audience,” Ms Wee said.

‘Paintback’ passes 21-million-kilograms

Incredibly the ‘Paintback’ recycled paint scheme is now five years old but is still proving to be very successful as it continues to grow and make new records, according to Australian Paint Manufacturer’s Federation Executive Officer, Bernard Lee.

“In 2020, ‘Paintback’ passed the 21-million-kilogram mark with more than eight million kilograms of unwanted waste paint and packaging collected during the year. The industry has maintained a strong focus on sustainability as paint manufacturers continue to develop innovative and sustainable products, “Mr Lee said.

It seems there has been more great news for the paint industry over the last 18 months with the pandemic significantly pushing up sales as consumers stayed home and revamped. In saying this shipping delays has also impacted sourcing raw materials as well as pushing up pricing throughout the industry, according to Mr Lee.

“The pandemic has caused quite a mixed experience for retailers, suppliers and painters within the paint industry. Paint manufacturers that supply niche markets, including the events and conferences sector, have been hit hard by COVID. While the automotive refinishing sector has also experienced some slowing down in demand. In saying this construction and DIY have remained particularly strong during this time as homeowners have focused on renovations and maintenance during lockdowns,” he said.

Paint manufacturers also showed significant diversity during this time with many making hand sanitisers. Some used the sanitiser for their own use while others chose to supply this product as a way of supporting their customers and local communities, according to Mr Lee.

“As demand for hand sanitisers increased, the APMF wrote to the Commonwealth State Governments on behalf of its members offering to make hand sanitisers. Australian paint manufacturers were uniquely positioned to respond quickly to the increasing demand. Their plants were set up to mix large batches of raw materials, they have the necessary regulatory licences, and their work forces are trained and experienced with the handling of the raw materials in a manufacturing environment,” he said.

“The offer to assist with hand sanitiser production was made to support the community at the start of the COVID crisis.  We are not aware of any manufacturers with long-term plans to make sanitisers going forward,” Mr Lee said.

Timber traders tackle the perfect storm

While global governments are using building and construction as a stimulus to fight their way out of the economic repercussions of COVID, this – combined with several unusual economic factors — has gone on to create the “perfect storm” for timber supply in both the national and global markets.

Australian Timber Importers Federation (ATIF) General Manager, John Halkett believes there is so much domestic and commercial construction nationally because consumers cannot spend their money on travel and also have access to cheap money. This has only exacerbated problems because it is not only timber that has an increased demand and a decreased supply – but building supplies as well.

“While international demand for timber has placed pressure on supply, local issues are also proving to be challenging, especially after Australia lost 40 per cent of its softwood plantation resources during the 2019/20 bushfires. The capacity domestically to make those products, which is predominantly structural softwood, has flat lined and is likely to decline in the medium term. This will also increase the demand for imported timber in a global marketplace with lots of competition from Northern Hemisphere countries for this product,” he said.

“Australia is a challenging market not only because of its geography but also because its timber sizes (90×35) are different to Europe. Australia’s code and standards requirements in logging are also relatively demanding in an international context. So, if we are going to get MGP10, which is the grade that is required to make frames and trusses in Australia, it has to come from the Northern Hemisphere. This is the only other source other than the domestic source,” Mr Halkett said.

For now, it is up to importers and associations, such as the ATIF, to try and source product from across Europe and North America and continue to communicate with perspective suppliers to see how they can support the market, he said.

Prices skyrocket

While it is no secret that timber prices have skyrocketed recently, with the price of logs doubling to US$160 per log, this price hike combined with heightened demand means there is now a two- or three-month delay in terms of orders, Mr Halkett said. 

“This delay has again exacerbated because Northern Hemisphere suppliers are also prioritising Northern Hemisphere customers. This is because their local customers are not as demanding when it comes to compliance as the Australian market.”

“This is already the perfect storm – in terms of supply – before you even get into the really big issue which is the logistics of shipping,” he said.

Since the pandemic escalating shipping prices have gone from US$1500 to US$5000 per container, with shipping delays also heightened due to the shortage in shipping containers alongside the increased demand for timber and building supplies.

“Shipping containers are not being repositioned globally because ships are already too busy carting full containers. The sweeper ships that usually pick up the empty containers are no longer operating. The shipping lines are also charging congestion fees and peak season fees while industrial action is also holding up the wharfs. Industrial action, congestions, delays in shipping, extra costs, plus the challenges around supply has seen shipping costs go through the roof. It is for this reason that local builders are not only finding it difficult to source product, but they also now have to pay a lot more for timber and building products,” he said.

Mr Halkett did point out that those builders who have been loyal to their wholesalers are still sourcing supply because big timber wholesalers continually push to meet the orders from their well-established customers. 

“If you have a decent relationship with a wholesaler, they will endeavor to meet your order, but you will still wait up to three months for your order. And if you are a smaller builder who has always shopped around for your frames and trusses, you will find it an extra challenge to source the timber that you need for the jobs – as well as tiles and taps and other bits and pieces.”

“All together our assessment is that this supply and shipping situation is not expected to get better for another 18 months. The advice I have also sought from Europe suggest this is likely to be the scenario. Bear in mind that a lot of the European mills also shut down in September so they can refurbish, update and repair the mills. This will again see supply problems escalate in Europe and in the Australian market that sources this product because it is compliant with local codes,” he said. 

Shortage solutions

Mr Halkett said he and his colleagues have continued discussions with Ministers in Canberra around the timber shortages because a substantial amount of the timber demand was fueled by the Federal Government due to its HomeBuilder grants and incentives to employ apprentices. The meetings included a round table for officials to try and identify factors that would make it easier for prospective suppliers from the Northern Hemisphere to provide additional quantities of resources to the Australian market.

“A lot of the issues currently sit around standards and codes. This is because you have got the possibility of harmonisation of some international Canadian codes with Australian building codes, as well as issues around border control in regards to quarantine, and also some no tariff barriers that may be able to ease. One of the issues we have is having the ability to talk to people on the ground,” he said.

In the meantime, one solution could see supply sourced from Russia as it produces a significant amount timber in the global market.

“We currently see some real opportunities to increase the supply of sawn timber out of Russia. In saying this, there is not a lot of Russian product that comes to Australia directly because Russian logs are processed through the Czech Republic. The Russians have also announced a ban of log exports from 2022. However, with a fifth of the world’s round log exports coming out of Russia we ought to see some of that product come into Australia. The problems that the Russians have had is understanding the Australian market, conditions and compliance,” he said.

Another challenge in sourcing supply from the Russian market comes from Australian importers not having any current links with trade authorities or Russian trade associations.

“The Federal Government could assist with a dialogue with prospective suppliers or increase the supply from Canada. We are currently working on a paper and we have had significant and valuable input into that paper from the freight groups already. Currently there are two parts to the equation – one is the timber supply and the capacity of the saw mills, while the other is that logistics and shipping which is just as big as the conundrum as the supply side. In putting the paper together, we have liaised closely with freight and customs brokers groups and we have a joint paper that will go to the Federal Government soon.”

“For now, we are trying to see what we can do as a Timber Importer’s Federation to improve the flow of structural softwood products and engineered wood products into the Australian market because of the demand here,” he said.

Local market woes 

Looking to the Australian market, domestic mills are still running at more than 100 per cent capacity, while there is also continued salvaging of the fire kilned plantations particularly around southern New South Wales.

In saying this, local mills only have a small window to salvage the fire kilned plantations, according to Mr Halkett.

“When pine trees are burnt, unlike eucalypt trees they die, so you have only got about six months to harvest those trees and process before the logs can no longer be sawn. That salvage is now finished and that wood is now flowing in to the market,” he said.

“We could export pine logs to China but why the hell are we exporting pine logs to China when we have a demand for the sawn product in Australia? China do not want them anyway. There seems to be an opportunity, perhaps courtesy of the Chinese to investigate how we might saw and use the sawn wood domestically from logs that might have, in the past, been exported.”

“The second area is to try and improve the utilisation of the logs they process. This might be to cut different types of product or shorter lengths but optimise the recovery of the logs they are allocated. The sawn allocations are going to decline because 40 per cent were burned in the bushfires. In the medium term you are going to see a decline in mills in southern New South Wales and a decline in the volume of logs they have access to as well.”

“This will flow through to loss of jobs. There has to be ways to deal with this including improving the utilisation of logs they already get and saw logs that might have been exported in the past,” he said.

While plans are already in place for the Federal Government to work closely with Australian timber associations moving forward, there is still no sign of timber supply woes letting up,” Mr Halkett said.

“While consumers are still locked down from COVID intermittedly and loans cost next to nothing, renovations will continue. This will not only continue to place a high demand on timber but also a demand for flash bathrooms and new kitchens, which again contributes to the perfect storm.”

“As a trade association it is our job to work with the custom brokers at the ports and with suppliers to try improve supply. For now, I also see some merit in visiting suppliers, including the Russians who are keen on looking in the Australian market, and also importers who will need assistance and support,” he said.

IHG’s timber industry overview

Independent Hardware Group’s (IHG) Category Manager for Structural Timber and Building Supplies, Richard Walker agrees the unprecedented demand for timber was initiated by the 2019/20 bushfires, but the boom then accelerated as a result of government stimulus to support the building industry and shore up the economy during the pandemic.

However, another lesser-known factor that contributed to the timber shortage is when COVID hit, a lot of retailers and wholesalers that were importing into Australia completely stopped placing orders for timber because all forecasts pointed towards the economy completely shutting down, he said.

“As the lockdowns took hold in May last year, nearly every economist predicted that construction would fall off a cliff, which is when importers naturally held back volume orders for pine and LVL. But as we all now know, the industry was soon booming while everyone stayed home and undertook renovations. By the time it became clear that the growth was here to stay, Australian importers were caught short as other global markets offered extraordinary rates for these products,” he said.

“Imported structural timber usually sits at around 20 per cent of Australian timber purchases. This has dropped to below 10 per cent in recent months adding further strain to an already over-stretched local softwood industry. Australia is essentially competing with other countries for imported timber and, in many cases, being thwarted by regions prepared to pay significant premiums. Imports are also being further impacted by shipping delays and port congestions. It is putting a lot of pressure on all parts of the timber supply chain, our members, builders, the local mills and importers.”

“The IHG team have worked hard to secure extra import volume for our members but so has everyone else in the world. Negotiating with timber producers overseas has basically become an auction. Prices in the US tripled and this flowed onto us which meant the market has had three to four price increases from importers over the last 12 months,” Mr Walker said.

IHG’s National Trade Operations Manager, Brett Martin agrees that the on-going price hikes with imports, combined with shipping delays has seen the Australian timber supply wane considerably, while the local mills are running at capacity levels but still struggling to meet demand, particularly after the shutdown of South Australian mills in November last year.

“A forced week-long shut down of the Mt Gambier mills turned into two weeks of lost time, by the time the kilns got going again. This took about 10,000 cubes out of the market. You will never get that volume back. The mills are all running at 100 per cent and their entire output is being swallowed by the local market,” Mr Martin said.

The IHG team have continued to work daily with all of its primary timber suppliers – local and imports – to source product at a fair price on behalf of the members. While at times they have had to be prepared to pay the global rate, Mr Walker says that today’s supply is relatively healthy versus last year and this goes back to maintaining loyalty with suppliers.

“Loyalty and forecasting volume is crucial in these times. Any stores that just chase the cheaper rate will struggle to secure stock. Whereas those stores who stay loyal to key suppliers are certainly looked after. This loyalty also extends to how our members must deal with their customers, placing emphasis on their most loyal builders – big and small – rather than the random builder that is shopping around,” he said.

Global woes

Australia is not alone in the challenges, with other housing markets around the world also experiencing similar timber shortages according to Mr Martin. 

“The reality is, no market was sufficiently prepared for a building boom as dramatic or sudden as we have seen. Manufacturers are simply doing what is best for their business – chasing the highest sell price. The product triples in price and they divert the containers to the market that’s willing to pay that premium. Thankfully the escalating imported prices have come off recently but we are still dealing with the doubling of shipping costs. A container that usually costs US$2500 is now US$9000 so there is just no relief for our market.”

“Looking to Europe, all the mills have already presold everything right up until October. At the current inflated rates I do not think we will see a lot of relief until the US lumber number gets closer to AUD$600. It needs to be there for some time and we need a see more normalised housing demand. All economic forecasts point towards the fact that there will not be a likely smoothing of housing starts in Australia until around 2023,” Mr Martin said.

Concerns with timber supply are being combatted by IHG head office who, throughout the last twelve months, have continually focused on working with each of its trade members. These members are, in turn, maintaining close relationships with their loyal customers, according to Mr Martin.

“There is a lot of stress in the market because the product is just not coming through and this stress is coming from the bottom up. It is tough knocking back orders in a sales environment where you are always challenged to bring in new business. As a group we are more proactive than ever in managing our relationships in the marketplace – between suppliers, members and builders. We have put programs in place that improve member’s processes around forecasting supply and managing price rises, while working closely with our supplier network to make sure we get our fair share. This means challenging the norm as timber supply is core to our business,” Mr Martin said.

“IHG deals with many large trade suppliers and I think we are holding our own in regards to supply. It has not been all smooth sailing but our close relationships with the supply network certainly assists in securing product for our members. Even things such as paying suppliers on time rather than demanding extended terms goes a long way toward them maintaining equity in their business to source product for us. We have members that cross over stock between stores. So if one has a surplus of one size, they will do a swap. Large stores are also helping the smaller stores, a great example of our hub and spoke model within the network,” Mr Martin said.

When looking to engineered wood products to combat supply, it seems these products are currently in a more critical state than structured pine frame, according to Mr Walker. This is because 80 per cent of pine framing is produced locally while 20 per cent is imported. However, this situation is the opposite with LVL which is about 85 per cent imported, he said.

“LVLs are produced in Europe and the US with a small component from Asia. New Zealand product sat around 50 per cent higher than Australia during the pandemic so New Zealand manufacturers suggested they just keep it there and sell it for a lot more than if they send it to Australia.”

“Australia is usually the first one to drop off because of our low pricing. However, because local prices have lifted, we now look more attractive. In saying this we do need to future proof ourselves so we are not reliant on a couple of suppliers and spread it out a bit more,” Mr Walker said.

When looking at other timber alternatives, such as steel, it is not just a matter of changing a building site to steel framing – the builder also needs to think about the plumbers, electricians and plasterers who all need to adapt when using a different product, Mr Walker said.

“When Australia had a timber shortage in 2017 – not to this scale – the market started to look to steel. There were some carpenters on board because they needed the alternative but as soon as supply was rectified, they defaulted very quickly back to timber, because carpenters want to go back to using the tools they are skilled in and work with timber,” he said.

“Even though steel companies are in the position to take advantage of the situation, like any new ventures this takes time to start up. Steel represents between five and 15 per cent of the house frame market but even if it doubled overnight, we still have a void of about 30 to 40 per cent. If we find another five to 10 per cent in steel it is not going to fix the problem,” Mr Walker said.

Throughout the challenges, IHG has focused on solutions for its members and remained transparent in its communication to ensure everyone is educated on the situation.  This includes a regular newsletter called ‘Timber Market Wrap’ which they distribute to their store network.

The communication details strategies IHG has in place to source supply on behalf of members as well as tips on helping the store team adapt and manage customer relationships, Mr Martin said.

“There is a lot of angst in the industry given the impacts on livelihood caused by delays in the building cycle, and the store teams and trade account managers in the field are copping a lot of this frustration from customers. In one of our communications we drafted an open letter to builders which our members were encouraged to place on their letterhead and distribute to customers, and in turn, builders to pass onto their clients to help educate the end user on the truth around supply.” 

“The message focused on four things – customers being open to using different lengths and products; working with us on longer lead times; being cognisant of price rises to factor into future quotes; and being respectful of our store contacts. The message was made really clear that timber shortages and subsequent price hikes were a global issue and that took much of the pressure off the store and the builder. It was really well received,” he said. 

The communication is also about separating fact from fiction, says Mr Walker. 

“There are a lot of myths being put out there. The truth is local mills are running at 100 per cent and they cannot produce any more product. The good news about prices lifting is these mills can make a buck and reinvest and use some of their poor-quality logs, that do not meet structural grades, to produce engineered products that we can use in Australia in the future. This would ultimately mean that we could produce more product in the long term.

Decking and flooring

IHG’s decking and flooring category has achieved a 15 per cent growth on last year in terms of volume in stores, according to Mr Walker, who pointed out that the increased volume is a direct result of lockdown-driven DIY projects as Australians upgrade their indoor and outdoor living spaces in record numbers.

“A lot of our decking product comes out of Malaysia and Indonesia, with Merbau now representing over half of the volume of decking sold in Australia. When sourcing product our members act as a group, sharing container loads between stores and doing everything they can to make themselves attractive to the supplier to get a better rate,” Mr Walker said.

“What tends to happen throughout the year is that when the market starts to deflate, the Australian species becomes a bit more attractive, like spotted gum, iron bark and silver top. They become more popular because it is price driven and the end user can save a few bucks. There is also a lot of trends towards composite decking now – including innovative products that are fire resistant and do not need coatings. This is what will drive the future,” he said.

After starting his career in timber flooring 25 years ago, Mr Walker reminisced how initially he only sold Australian timber flooring during that time – there were no manufactured, or engineered or composite products on the market at the time. 

“It is so different now with half of the volume of flooring in engineered products particularly around European or American Oak. You can get very wide board which is the trend and you can choose any colour that you want. The engineered products are more stable while the solid timber moves around a lot because it tends to absorb water,” he said.

Mr Martin also pointed out that the magic of the deal in decking and flooring is that IHG can bring together members as a collective.

“Our strategy is to buy as a group and sell as an independent. That is our philosophy. You have to bring the benefit of the volumes to the supplier, because they pick up efficiencies as well and share the savings. It is a win win.”

“You have to consider the effects of installing solid timber or manufactured products and if you can take time away from the cost of the installation you can also take away the cost of the floor. Even though the flooring is dearer initially, it works out cheaper because of the reduced time installing it.”

For now, IHG will continue to not only source timber supplies but also sell high end and innovative product solutions to meet the demands of a booming market.

One example of this innovation is coming from Johnson Brothers Mitre 10 in Mona Vale, outside of Sydney, where the member recently started their own business around pre-oiling timber. They are working alongside Cabot’s on the initiative which uses a simplistic machine that ensures when a deck goes down it is oiled on all four sides. This product is now being distributed across the network. 

In the meantime, it is about remaining diverse, maintaining loyalty in its supplier relationships and continuing to work closely with every IHG member on opportunities that keeps them price competitive and adds value to their local builders.

Global supply pressure to continue

While it is apparent that the pandemic, shipping delays and the 2019/20 bushfires are all attributing to the current timber crisis, a boom in the American home market also means that supplies normally imported into Australia from Europe are instead being diverted to the US, creating even more issues to the current shortage. MGA TMA National Membership Manager Marie-Claire McKiernan says unprecedented demand in the global market will still affect Australia for some time. 

“There is a backlog of orders to be filled and the sheer volume of construction projects that are in the pipeline will keep the demand high for a long period. Generally there is a balance in Australia of projects on the go. Some states are not as busy as others meaning that supplies can be re-directed but at present, MGA TMA members say all states are booming,” Ms McKiernan said.

“Local producers are currently processing as much pine as they can. We believe there will be a new pine mill opening in South Australia but that is some time away. In Victoria, the State Government could look at releasing further forest coups. This way our mills could add additional capacity which would assist the F17 hardwood market.”

“While the demand is high and there is less timber available, price will also remain high. We at MGA TMA anticipate that prices will come down when demand decreases. However, while production is at 100 per cent, pricing will remain at current levels. We have no choice but to pay what producers are charging. Our local producers cannot do any more than they already are. We simply have to wait for demand to slow and projects to get back on schedule, including build times getting back to normal timing rather than being pushed out by two months or more – which is what is currently happening,” she said.

Without being able to guarantee when timber frame deliveries will be available, some MGA TMA members have recommended customers look to steel framing as an alternative. However, with the price of iron ore also increasing, the price of steel is now going up which will again have a financial impact on the builder and the end consumer, according to
Ms McKiernan.

“As the price of iron ore increases so too does the price of steel, so this will also have a financial impact on the builder or the end consumer. I believe there is also a real risk that once a builder moves to steel framing, they may not return to timber,” she said.

Looking to the timber flooring and decking space, light timbers continue to trend well, according to Ms McKiernan, who said Blackbutt and American Oak currently remain very popular. 

“Consumers are choosing timber flooring over other floor alternatives because they want the natural feel. Timber is authentic and durable. The spending on home renovation continues to stay strong and the MGA TMA members expect this to remain the case in our local market until Australians can travel internationally again,” Ms McKiernan said.

Timber suppliers look to Federal Government for crisis solutions

Rising house prices, people returning from overseas during COVID, along with the HomeBuilder stimulus have encouraged consumers to bring their building or renovation plans forward, according to Timber Trade Industrial Association (TTIA) Chief Executive Officer, Brian Beecroft. But resources remain low, particularly with the 2019/20 bushfires devastating up to 50 per cent of the resource in large swathes of the Tumut/Tumbarumba region as well as the South Coast of New South Wales and East Gippsland, he said.

“This resource will take 25 to 30 years to mature for harvesting again. There were already growing supply issues before the fires but the events of 2019/20 made the situation worse. In terms of the demand, it is always present and it is global,” he said.

“The construction boom is happening globally because many other countries have used construction as a stimulus throughout the pandemic. It is for this reason that some countries are willing to pay a premium for imported timber. European supplies are being directed to countries like the US where timber prices have doubled. This has particularly affected supply locally because imports are estimated to make up approximately 25 per cent of the demand for timber in Australia.”

“The crisis has seen prices already rising by 15 per cent in some cases, but this has not decreased demand. The price increases will slow but not dramatically because the pent-up demand in the renovation and construction sector is likely to continue for at least 12 months,” he said.

Solutions to the timber shortage could potentially begin in Canberra, according to Mr Beecroft, who said State and Federal Governments need to be placed under more pressure to support the timber industry and provide better access to resources.

“Discussions have already taken place with the Federal Government regarding the need to streamline the port’s processes, increase efficiency and reduce costs both at the point of entry as well as freight charges. I expect that this will assist the supply issue slowly as shipping returns to some form of post COVID normality,” he said.

“This crisis has also highlighted a need for Australia to be self-sufficient in its timber supply. This could mean more plantations in the long term but also more access to sustainable native forests in the short term,” Mr Beecroft said.

Better scheduling of the Federal Government’s HomeBuilder program will also combat demand, according to Mr Beecroft, who said extensions will reduce financial and commercial pressure on home builders and the construction/timber supply chain. 

“It also assists in better scheduling the work over a more reasonable period and hopefully avoid a boom bust cycle and housing industry collapse. It will ease the pressure on the shortage of building materials and the availability of trades and skilled labour,” he said.

Looking to the timber flooring and decking market, timber flooring now represents 25 per cent of the flooring market with this figure continually increasing, he said.

“This strong market demand reiterates that hardwood flooring is the preferred flooring. It is more energy efficient than other surfaces, is a sustainable resource and finally it is extremely long lasting. Consumers will increasingly opt for timber flooring over vinyl and carpet as a premium product and feature of their home or business,” Mr Beecroft said.

“More recently there has also been a trend this year towards lighter, blonde to light brown looking timber to maximise the feeling of light and space in homes. The lighter colours are more versatile to numerous decorating themes including the beach rustic or modern style. Parquet flooring is proving popular as a unique feature look, particularly the herringbone style which connects planks at an angle and give the room a more spacious appearance.”

“Local and recycled timber is also popular with people looking for an environmentally friendly option. People are building larger decks than before for enhanced outdoor space and living. A variety of colours on a deck and rounded corners and circular areas are more commonplace. Decks are no longer just square,” he said.

With so much demand for timber and timber flooring, Mr Beecroft says there are no signs of demand slowing down for at least 12 months, with the only constraint being supply.

Supply reduces in timber coatings

Despite all of the timber woes, it is not just timber that is being affected by supply issues with coatings and adhesives also significantly effected due to the crisis, according to Randy Flierman of the Australian Timber Flooring Association (ATFA). 

“This is particularly the case with resin binders, pigments and fillers, additives and solvents used to produce coatings. Elastomers for adhesive production are also in short supply. These products are all mainly produced in Western Europe where factory fires and extreme weather conditions have heavily affected production,” he said.

“Manufacturers are reticent to go outside reliable chemical producers, hence slowing production and increasing demand – thus heightened pricing. Likewise, due to COVID still being very active in Europe, manufacturing at full capacity is still some way off,” Mr Flierman said.

There may still be a little price pain to come in this segment also because equipment production is not exempt either, with a reported 50 per cent increase in steel prices also seeing equipment costs go up. Availability of copper for engine parts is also slowing production of sanding machines, he said.

“In the mean-time contractors can continue to secure deals with their supplier and they will reward loyalty. If you have builders as regular customers, keep them informed as they can be less forgiving if you are flagging increases. While we understand that undercutting is always an issue, everyone needs to pass on the costs to the end consumer – that means you need to increase prices as well. It is hard to do, however, your livelihood needs to come first,” Mr Flierman said.

At the moment, the COVID-inspired renovation boom continues as overseas travel stays at a stand-still.

“Pre-COVID $65 billion was being spent by Australians on international travel annually (Financial Review) and $6.2 billion by New Zealanders annually (Infometrics). While this money is being redirected to spending in a number of ways – new cars, big screen TVs, electronics, etc. – building and renovation is capturing more than its share. The point here, consumers can afford a small increase,” Mr Flierman said.

Australian Forest Products Association (AFPA)

A recent statement by the Australian Forest Products Association (AFPA) reiterated that Australian builders are experiencing significant delays in sourcing structural timber and building products. With 25 per cent of Australia’s housing timber normally coming from overseas, this has disguised the fact that Australia simply does not produce enough timber in this country to supply its growing needs, according to an AFPA spokesperson.

“More recently imports have collapsed as global timber prices have skyrocketed in other countries (timber prices have soared by more than 400 per cent in the US) and shipping has been heavily constrained.”

“Australia’s softwood ‘pine’ plantation estate, which supplies most of Australia’s housing timber, has not increased in almost a decade and has failed to keep pace with Australia’s timber needs. Compounding the shortage and need for urgent action, about 10 per cent of Australia’s one-million-hectare softwood estate was lost during the 2019-20 summer bushfires,” he said.

The current timber shortage demonstrates to Australian policy makers that Australia needs to develop a sovereign capability and that cyclical timber shortages will become more frequent and acute if State and Federal Governments do not use policy levers to drive more softwood (pine) plantings to meet future demand, the AFPA spokesperson said.

Belmont Timber thrives under Fagg’s family business

There is an element of risk when merging a 60-year-old business with another that has serviced the same region for 160 years. But for the staff and customers of Belmont Timber, the union of this large-scale timber operation with the Fagg’s Mitre 10 Group in 2017, has helped position it as a leading builder and renovator destination. 

Business: Belmont Timber Mitre 10 Trade Centre
Owner/s: Fagg family
Location: Geelong, Victoria
Buying Group: IHG (Independent Hardware Group)

Measuring over half the size of a suburban block, Belmont Timber is one of the largest timber merchants in the country by footprint and sales volume. It not only acts as a major supply hub for trade customers but also supports other independents in the region who tap into the buying and distribution channels of Belmont Timber, particularly timber buys. 

General Manager, Andrew Pitman, who was appointed into the leadership position in 2018, says the integration of Belmont Timber into the group was relatively swift but it has struck the right balance of respect for heritage and the need to stay ahead of the competition.

“The Fagg’s business has origins dating back to the 1850s which makes it the eighth oldest family business in Australia. When Belmont joined the group, we were very cognisant of the heritage of Belmont Timber as a standalone brand, and continue to take our role of custodians of that brand very seriously. We see it as a privilege to have Belmont as part of the broader Fagg’s family,” Andrews said.

Since Fagg’s Mitre 10 acquired Belmont Timber, Andrew says there has been quite a lot of change but “we are still very much a family-fronted group led by Barry and Keith Fagg who are synonymous with the Geelong area.”

One of the more visible changes in the last 18 months has been the upgrade to the Mitre 10 Trade Centre, bringing the branding in line with the Fagg’s other three stores in South Geelong, Wallington and Torquay. The introduction of a Design 10 showroom and consultation service into the Belmont location has further extended the trade offer.

“Painting the Belmont site was a major investment simply due to the sheer size and scale of the property but the exposure of the Mitre 10 trade brand to passing traffic is enormous. Now with the introduction of Design 10 we are expanding our customer reach even further,” Andrew said.

After the re-branding of the Belmont site was complete, there was also a re-structuring of the management team with Andrew describing it as “an evolution in streamlining the business into pillars”.

“Jules McDowall, who has been with the Fagg’s business for over a decade and comes with an extensive interior design and renovating background, was appointed to oversee the delivery of Design 10. Then we have Paul Bordonaro who looks after the overall operations of the total Belmont business, both retail and trade, where previously we had one trade person and one retail person. We have also introduced a Group Trade Sales Manager, John Sinclair, and a team of people to help facilitate the sales and face-to-face meetings with our builder customers. This is also why we have recently implemented a call centre, with a trade hub at Belmont Timber which we have built up over the last three years,” Andrew said.

“This looks like any normal call centre with staff with head-sets on in front of computers taking orders and it is quite a departure from what was done previously. There is a portfolio of guys who look after trade accounts and we also have five trade account managers out on the road with the call centre supporting them. This allows our customer’s builders to ring in and talk to a person in the call centre that is affiliated with one of the trade account managers,” he said.

The combination of the trade offer alongside the rebranding and the investment in its people, has seen the business achieve 30 per cent growth in volume, particularly with the store undertaking a complete change in its trade offer.

Local competition

Rivalling some of the heaviest concentration of competition anywhere in Australia, the Belmont store currently goes head-to-head with numerous high-profile trade businesses.

“We co-exist with many worthy competitors including Bowens, Calco, Barwon Timber, MB Pre-Fab, all large-scale operations within just a few blocks of each other. Bunnings of course are here, over-represented as usual with four stores in the area. We have not only held our own in this environment but grown the business substantially. The housing growth in the Geelong region has been considerable, particularly in the last 18 months with people relocating out of Melbourne and seeking that lifestyle change in regional Victoria,” Andrew said.

“Like most hardware stores, the retail side of our business grew astronomically during COVID, achieving a 40 per cent uplift across the business. We are seeing that retail come off a bit now as you can only paint your house once, but trade for us continues to grow and it is now about accessing timber to meet that demand. Things have picked up in the second half of the year in terms of sourcing product but it is still nowhere near where it needs to be.”

While Australia’s housing and renovation boom has been a sales blessing for trade businesses that have done it tough for a number of years, Andrew says timber supply is proving to be one of the most stressful consequences of the demand. 

“In our business we have prioritised customers who have remained loyal to us, but this is difficult because like most timber merchants we have always been a company that has said ‘yes’ to everyone, but we have had to say ‘no’ just to preserve and share the product around,” he said.

It is one of many ongoing learning curves for Andrew and even as he draws on his extensive background in management roles in the oil industry, he says he is still learning new things despite having been in the industry for over three years.

Sapphire Trade Centre

While the store’s Group Operations Manager, Paul Bordonaro has only been with the business since January, he brings an impressive portfolio in his former roles at IHG where he drove the execution of the Sapphire transformation program nationally.

“I used to see about 20 to 30 stores every year and they are all different and you learn something new from every site. Fagg’s and Belmont Timber continue to stand out from their competitors because of how well the team knows the business and the products, and the excellent relationships they each have with our builders,” Paul said.

Paul said the recent transformation of the Belmont site to a Mitre 10 Trade Centre ensured the store’s offer reflected Mitre 10’s ‘whole of house’ credentials.

“It is not just about upgrading the signage, the paint and the counters, it is more of a holistic approach to the total customer offer and experience. We focused on really customising the range for reach and to suit the local Geelong market. That is what the Sapphire Program really is. The trade business here in Geelong might be different to a trade site on the other side of Australia which is why it is so important to get this reach right,” he said.

At this stage the trade business is operating with a ‘steady as it goes’ pace, according to Andrew who said it was important not to push the trade area too much because the store wants to service the existing customer base, rather than bring in new business, while focusing its marketing endeavors on Design 10. 

While the store’s Design 10 showroom was only officially launched on the Belmont site in April this year, it forms part of IHG’s wider ‘whole of house’ strategy. Design 10 will eventually become an omni-channel solution for IHG with a complete online offer and ten showrooms around Australia by 2024. 

Belmont is the second site to introduce the concept and it includes a tailored range of kitchens, bathrooms, flooring, doors, tapware and windows, a design and consultation service as well as supply and install arrangements to help meet the needs of local home owners. 

Showroom Manager, Jules McDowall, said IHG worked closely with the Belmont team in terms of the branding and the new colour palette because “it is quite a departure from the traditional Mitre 10 brand”. 

“The new showroom is quite a point-of-difference because it is such a bespoke, high-end offer. While Design 10 has really paid homage to the Mitre 10 brand and its heritage, we also need to present ourselves as something quite different in the market. We found through recent research with locals that, prior to their visit to the showroom, over 90 per cent of the respondents would not have considered Mitre 10 for the items they found at Design 10, which is incredible,” she said.

Within the Belmont store the showroom was born from an area that was originally a Tait Flooring display area and Hardings appliances showroom. 

“Under the Design 10 brand, you now see a collaboration between Hardings supply of kitchen, bathroom and laundry front-of-wall products and a stunning Tait Flooring display area. We have also integrated some of the things Fagg’s Mitre 10 is already famous for, such as doors and door furniture, as well as Principal Kitchens creating a comprehensive whole of house offer,” she said

While Jules has worked with Fagg’s Mitre 10 for just on 10 years, heading up the selection centre at the Fagg’s main site at South Geelong for about five to six years ago, she said it has been a pleasure seeing Design 10 come to life.

“We have elevated the area to a beautiful, open, vast showroom where people can come in and pick everything that they need to get their new-build or renovation underway,” Jules said

“It is not only the builder and their clients visiting, but there is also what we call a retail client – an unexpected surprise to have come out of all of this. Since we have been advertising, we have welcomed many browsers who do not have an association with a builder. We then help these customers to specify their look and also get in touch with a tradesperson. It is now having a reverse affect – which is amazing considering we only officially launched in April and our socials only began in May.”

“For the amount of time that has passed we have actually gained a lot of ground and what we need to do is now capitalise on this and look at all the opportunities that are presenting themselves,” she said.

Design 10 also uses the the Mitre 10 Principal Kitchens range as the basis of a custom kitchen and laundry offer.  

“We have already gained a significant reputation for thinking outside the flat pack box. We do this by customising our client designs with fresh thinking in terms of finishes, add-ons and unusual re-works on the cabinetry. We are currently doing a kitchen in Forrest in the Otways where we are swapping out some of the flat pack elements by using pressed tin as a splashback and timber cladding as an island back. The nett result will be a stunning kitchen, unique to that customer, at a fraction of the custom jobs,” Jules said.

‘Whole of house’ strategy 

IHG’s ‘whole of house’ strategy remains a focus across its trade centres. According to Andrew, the strategy has seen better collaboration by IHG, stores and key suppliers to grow categories, helping to generate a greater share of wallet across the house build stages. 

“Design 10 lends itself really well to pushing the whole of house strategy, particularly the opportunity for other IHG members who often do not have the space for a kitchen or bathroom display. They can now leverage our showroom space to walk their builders through and convert a sale,” says Andrew.

“Jules is now working closely with our trade account managers to do joint call outs to builders. The target audience for Design 10 is now quite widespread in that you have the renovators, builders, rebuilds, builder customers as well as designers and architects,” Andrew said.

“Design 10 is both a retail and trade offer but the retail customers who come in are looking for a whole solution. They want the installation, expertise, advice and supply of everything as well. This is also why we have a whole suite of installers and trades working with us so they can work with potential customers,” he said.

The trade customer base of the Belmont store is diverse, servicing volume builders all the way down to small-scale trades, according to Andrew. 

“No matter the size of each builders’ business, we are encouraging everyone to use Design 10 and choose products for their customers because this is the biggest frustration for smaller builders, particularly when it comes to identifying the products that go inside the build. We are trying to take this pain away from them by our expert team,” he said.

“This way we can tailor packages for the builders and they can get back on the site and back to running their business. While Design 10 already has a huge flooring, cladding, doors, kitchens and bathrooms display, we also have the ability to refresh the display area and keep it current.”

“If we do not have a product that a customer wants on display, Jules takes the customer over to the interactive touch screen at the consultation desk and takes them through the products in real size on the screen, as it would appear in their home. 

Looking ahead…

Moving forward there is plenty more upside and growth to come for the Fagg’s Mitre 10 and Belmont Timber businesses, Andrew said.

“We will be upgrading our Wallington and Torquay stores as both are in real growth areas for us, we will be installing a café at South Geelong and we will continue to refresh the Belmont site as part of the ongoing evolution of the Mitre 10 Sapphire elements.”

Andrew is quick to point out, however, its growth will not be at the expense of other IHG members in our region. 

“Barry and Keith, being long time members of the Mitre 10 brand, understand what it is to support the wider group, and ensure the sale stays within the collective IHG network. We are proud that Belmont Timber and Design 10, and indeed the whole Fagg’s business, can support other independents in the region as a hub and spoke service for timber and building materials as well as kitchen or bathware packages,”
said Andrew.  

“With the support of Barry and Keith, and backing of the IHG team, we see no limits to how we can continue to adapt and grow. With risk comes reward,” he said.

Hire & rental space proves profitable for hardware

The ‘Hire & Rental’ segment has shown a significant increase in popularity. It is for this reason that hardware retailers are shaking up their businesses and offering customer’s equipment for hire, particularly as the building sector continues to grow post-pandemic.

It seems that hiring and sharing products and services is now the way of the world, with consumers borrowing everything from cars, to properties, to push-bikes and caravans. Allowing your customers to have access to quality products on a ‘need-to-use’ basis is the perfect way to not only entice customers to the store, but also cater to their needs so they never have a need to go anywhere else.

The reasons behind the current upward trend for consumers to hire products are extensive. Some ‘Hire & Rental’ customers include tradies who occasionally use heavy-duty industrial gear but see no need in purchasing an expensive product and then have to store it in the work car for months on end before it is ever used on the job. The current shortage of tools, due to shipping issues, is also boosting demand for tradies who currently cannot purchase some of the tools they require for their jobs.

Then there are those tenants residing in rental properties who occasionally like to tidy up a small patch of grass or hedging but would rather hire garden products than have to purchase products that require storage at the home.

Ongoing emergency situations are also boosting the ‘Hire & Rental’ category after severe storms in the Melbourne metropolitan area saw 90,000 homes without power, some for weeks on end desperate for generators, while the catastrophic bushfires in 2020 also saw a severe shortage of pumps and generators also needed by those worst affected.

Now with so many Australian consumers renovating and upgrading their homes in leu of overseas holidays, it is no surprise that the need for hire equipment has exploded in Australia, particularly when considering how much a DIYer can save if they attempt to complete some of their DIY projects themselves. 

Providing the right products

Providing products for rent not only ensures that hardware businesses remain agile in an ever-changing market, but also sees a segment of the business grow to become 100 per cent profitable once the product for hire pays for itself. Those retailers willing enough to dabble within this space are now finding success and are expanding their ranges as their hire business grows. 

Traditionally, ‘Hire and Rental’ products consisted of heavy-duty equipment, such as carpet cleaners, floor sanders and any expensive garden equipment that can be too expensive to purchase if only used half a dozen times.

The stock of hire equipment also changes from store-to-store as the variety can depend on the geographics of the local area, with the needs of regular customers crucial in determining which rental products to select in-store.

When it comes to cashing in on the ‘Hire & Rental’ market, it really is just a matter of retailers having the ability to build up a reputation of hiring only reputable products and meeting the specific needs of their customers.

Rental challenges

As with every business venture, there are always business challenges to navigate before a rental service proves profitable.

Initial challenges include the up-front cost of purchasing all equipment and also ensuring that department staff are properly educated, so they can adequately brief customers on how to safely use the product they are hiring.

‘Hire & Rental’ specialists recommend staff personally try out all the store’s products, outside of store hours, so they have hands on experience at using all products and can use this experience to easily explain the step-by-step process of using a product.

Hardware retailers also need to be particularly wary of hiring products that can be easily bought in-store. It is important to only hire out products that are high-end and are potentially required by commercial and industrial customers. Retailers also need to consistently review the performance of the products on hand, while also removing any products that are underperforming.

According to ‘Hire & Rental’ specialists, it is important to also promote products that comply with the seasons, including garden care products. Outside of popular rental months, specialists suggest the occasional half price promotion on seasonal specific products will maintain sales during the slower months.

There also needs to be a strong security plan in place to ensure products are only hired out to those with a licence and valid credit card, with retailers warning to be on the lookout for addresses located too far from the store or potential customers who show little understanding on how to use the product they are hiring.

To help easily keep track of products it might be as simple as asking your POS software provider if it is possible to manage rental assets by purchasing a rental plug-in – if available.

Marketing products for hire

One of the most important aspects of a ‘Hire & Rental’ business is to ensure products have pride of place within a store, along with decent signage so every customer that enters the hardware store knows – without question – that equipment is available for hire in-store. Larger pieces of hire equipment may also be strategically placed outside, along with a prominent ‘Rent Me’ sign to draw the customer’s eye. 

Presentation should be neat and clean and easy to navigate – as well as guaranteeing products that are available for hire are in perfect working order. Some hardware retailers have established close relationships with local workshops to ensure that all hire equipment is well maintained, or they have even employed a mechanic in-store to not only maintain the working order of hire products, but also offer the mechanic’s service to customers who may need a product serviced or repaired.

There is also the opportunity to add-on sales when hiring out equipment, including all consumables. Fertilizers and cheaper garden equipment, such as pruners, could easily be a suggested add-on sale to lawn care equipment hired from the store, while floor polish, sandpaper and masks could also be suggested add-on sales when a customer hires out a floor sander or polisher.

Retailers need to also bear in mind that starting up a ‘Hire & Rental’ segment is like starting up a mini-business in-store, with retailers suggesting that a decent business plan will potentially iron out any financial surprises once the hire shop is established.

Successful stores

One only has to look at a Bunnings’ Hire Shop, with all products available for easy viewing on-line to see how much the ‘Hire & Rental’ segment has grown in recent years.

With an online offer that includes everything from heavy duty products, general equipment as well as a Coates Hire shop available, all aspects of the hire industry has been covered with Coates well known for its wide variety of electric scissor lifts, cement mixers and impressive earth moving equipment.

Bunnings, along with larger hardware independents, now provide customers with everything from floor sanders, carpet cleaners, trailer and vehicle hire, as well as general hire equipment that includes air compressors, circular saws, lawn rollers and nail guns.

This is a clear example of how independent hardware retailers and trade centres could also partner up with the independent ‘Hire & Rental’ business in their local area. This could be easily arranged when considering there are currently over 3000 independent hire and rental businesses nationally. 

Another option could see hardware independents to cross-hire equipment from local hire companies, and then sub-hire this equipment to hardware customers for a period of time. Independent hardware and rental businesses have a lot in common and together they have the ability to share many resources to service their respective trade and DIY customers.

Just some of the independents now dabbling in the hire space including Millers Mitre 10 Trade Centre in Narangba Queensland, just north of Brisbane. Boasting a one-stop-shop for its customers, Millers implemented the hire shop so customers were able to source all of the products they needed to purchase, as well as hire equipment from one place.

The store claims that “no matter how heavy the workload, Millers has the right tool for the right job.”

The store’s hire range is extensive and includes heavy landscaping equipment for local contractors including excavators, mini loaders, post hole augers and stump grinders. Cement mixers and quick cut saws are available for concreting, while mulchers, rotary hoes and pruners are also available for gardening. General equipment includes pressure cleaners, generators and compressors. 

Looking to the US, Home Depot has also introduced an online rental service at many of its retail locations throughout North America, with the service using Home Depot’s new ‘Rent online, pick-up in-store’ technology. Offering a range of products aimed at pro and heavy DIYers, the rental service includes demolition tools, landscaping tools and moving vehicles.

Those already hiring product believe it is also crucial for retailers not to be afraid of hiring products outside of the traditional hardware store and consider products such as party supplies which are most likely used for special events by customers and also sporting clubs and schools in line with major community events.

If a store is in an area with a lot of rental properties, stores could then consider hiring products like window cleaners, mowers, and blowers which they would only use every few months by the tenants.

The opportunities are only as limited as a retailer’s imagination and innovative flair. The right products, alongside high quality, hands on training and great presentation can ensure a hire shop will always prove to be a positive asset to any hardware independent.

Bunnings partners with Coates to expand hire offer

Bunnings Services Development Manager, Karen Marshall, recently spoke with AHJ on the increasing popularity of Bunnings’ Hire Shop, saying much of the demand is coming from DIY customers wanting to complete projects at home post-pandemic. 

“With many customers spending more time at home due to the ongoing pandemic, we have seen an increase in people investing in home improvement. It is for this reason that products from our Hire Shop that have had grown in popularity over the past year include landscaping equipment, carpet cleaners, floor sanders and skip bins. Customers have also enjoyed the convenience of our vehicle and trailer hire service,” Ms Marshall said.

Bunnings has plenty of exciting innovations planned for its hire space in the coming months, including the expansion of its partnership with Coates.

“Coates is an offer currently available in selected stores across Victoria and New South Wales. This partnership will eventually be rolled out nationally and allow us to offer an even wider range of equipment for hire that caters to our trade and commercial customers as well as those looking to tackle more advanced DIY projects,” she said.

“The Coates offer complements the in-store range of fleet and equipment, providing customers with an even wider range of hire equipment to make it even easier for them to access the products and equipment they need at the best price,” Ms Marshall said.

When choosing the most appropriate products to hire out, Ms Marshall said Bunnings’ core fleet of hire equipment supports customers in completing DIY projects, while also assisting trades in getting the job done.

“The Hire Shop offer complements our wide in-store range, while also giving customers access to fleet or equipment that they may only need for a once off use. We also have an extended range of fleet and equipment that can be brought in to meet more specific customer or regional needs,” she said.

Throughout 2021, Bunnings will continue to educate its Hire Shop team via a wide variety of training courses and resources to help ensure the team is knowledgeable and provides the best service to its customers. 

“We have dedicated Hire Shop team members within each store that have a more in-depth knowledge of our fleet and equipment offering and can provide expert advice to customers looking for help,” she said.

Looking to the next 12 months, Ms Marshall said Bunnings will continue to look at opportunities to expand its core and extended range that not only complement its wide in-store range but also help meet its customer’s needs. 

Aussies’ garden love continues post-COVID

While the garden and outdoor living space was yet another hardware segment that experienced a surge in sales during the pandemic, it seems there is no sign of the boom slowing down with Australians’ love for their gardens expected to continue well into the upcoming spring season.

IHG’s (Independent Hardware Group’s) Finish and Exterior Business Manager, Kate Baker, alongside Outdoor Living and Indoor Furnishings Category Manager, Emma Lewis, recently enlightened AHJ on current trends within the garden and outdoor living sector, as well as IHG’s strategy when tackling supply challenges.

“Just some of the key growth areas within this space include vegetable seeds, with sales in composting also increasing in-line with this trend. Children’s play equipment and cubby houses have also become exceptionally popular. Although sales are not at the height that they were during COVID lockdowns, garden sales are still significantly higher than 2019 levels. It is evident that people have maintained their interest in gardening since the first wave of the pandemic,” Kate said.

Strong sales are also evident within the outdoor furniture space, according to Emma, as customers attempt to recreate the tropical oasis they once enjoyed during overseas holidays.

“Because Australians are not yet able to go on their annual sunshine holiday overseas, they are recreating a tropical oasis at home. Last season there was so much demand for quality outdoor furniture that we saw widespread stock shortages across most retailers. The boom is expected to continue this season with home owners opting for a seamless indoor/outdoor look,” she said.

“Going back 20 years ago, outdoor furniture usually consisted of a forest green cast-iron garden setting that your grandparents used to have, but now the settings are so stylish you are not often sure if they are for the indoor or outdoor area. This trend has been going on for a while but it is just growing more now people are unable to travel.”

“Mixed materials such as timber and wicker or aluminum are the key trends again for this season,” Emma said.

When it comes to customer preferences, IHG’s outdoor furniture program caters to all budgets however a growing proportion of customers are opting for the higher-end designs. According to Emma, in recent years customers have shown less restraint on budgets and are prepared to spend a couple of thousand dollars on a setting plus accessories such as cushions, outdoor rugs and a fire pit.

“Each season we update our designs in line with the current style trends, such as the Boho look, and ensure there is an assortment of products that meets the brief of what our customers are seeking. The range not only captures these design trends but helps people invest in their home surrounds,” Emma said.

“Fire pits were one of the most Googled searched terms in winter 2020 and sales remain high into this season. Part of what is driving this growth is people are generally tired of spending time indoors, particularly if they do not have a large home,” she said.

Barbequing has also experienced phenomenal growth recently, especially in Melbourne where consumers could not go to restaurants during the extensive COVID lockdowns. Eating out is part of Melbourne’s culture, so consumers chose to make gourmet meals at home instead, according to Emma.

“Barbecue sales have doubled over the last 12 months, with the low and slow cookers and creative barbecuing becoming particularly popular. So much so, there has been a world-wide shortage of barbeque pellets.”

“When it comes to accessories, new trends within the home’s interior are transferring outdoors as well, with the Bohemian, chunky look becoming incredibly popular, alongside earthy tones,” Emma said.

Privacy has also become a priority when creating these outdoor spaces, with the use of outdoor screens and semi-permanent gazebos becoming particularly popular.

“The aluminum semi-permanent gazebos can be erected in a court-yard providing all year-round protection and has become quite popular because they allow privacy and protection as well. Their roofs are louvered as well, so users can choose if they want sun or shade,” Emma said.

There is plenty of innovation in the outdoor decking space currently, with innovative products such as Intergrain’s new Universal Oil, set to excite this segment throughout spring, according to Kate.

“The Universal Oil is referred to as an ‘unlocked system’. This is because normally if you paint a deck with oil-based products, users are then committed to always use an oil-based product. Intergrain’s new Universal Oil can now be applied to a deck that had previously been an oil-based deck – even though it is a water-based product – and is set it much easier for users to re-coat their decks,” Kate said.

While there has been no shortage of excitement within the garden and outdoor living space over the past 18 months, it seems continued supply issues have presented a fair share of challenges. Kate said these issues have now become less about being unable to source stock, and more about having to work with extended lead times.

“Taking the learnings from last year, we have worked really hard with all of our suppliers – locally and overseas – and months ahead of schedule to ensure we have stock ready to go for the season ahead. We source more Australian product now, which in some cases has helped in our capacity to meet supply as well as boosting the appeal of our furniture program to consumers,” Kate said.

The availability of the range through Click ‘N Collect channels, sold online and available to collect from over 600 Mitre 10, Home Hardware, True Value or Thrifty-Link stores nationally, is another value-add that IHG offers for consumers, added Emma. 

“Through our free-into-store freight arrangements we have with all of our stores, consumers are able to shop the range online without the worry of expensive freight fees that some other retailers charge. In addition our smaller stores, who do not necessarily have the footprint to showcase the full range in-store, leverage the online channel to give extra choice for their local customers and have the product delivered to store for collection.”

“As we do each season, we will continue to analyze areas where there has been a surge in certain products and make sure we are well stocked and able to adapt to consumer behavior,” Emma said.

IHG is expecting another bumper sales season for all outdoor and garden categories, well ahead of pre-COVID levels, according to Kate.

“Whether it is outdoor furniture, garden décor, plants or barbeques – there is an insatiable demand for home projects and products that help ‘spruce up’ your outdoor living spaces. Our members are passionate, they invest in these categories, and they are well educated so they can assist their customers when they come looking for advice and solutions.”

“We have over 400 different suppliers for the garden category alone, who enable all of the stores to have specific products that are suitable for their geographical area. This is one of the beauties of the independent model – enabling every store to do a very good job of catering for their immediate and local market,” Kate said.

Ambient garden centre entices McLaren Vale Mitre 10’s customers.

With a green life department that has grown 60 per cent in just three years, McLaren Vale Mitre 10 still has big plans to grow its popular garden department even further.

Part owner of the South Australian store, Fiona Loveday said the department has become so popular it is now a ‘must-see’ destination, for those visiting the McLaren Vale wineries and surrounds.

If the live canary and budgie sounds throughout the garden is not enough to fill the senses while checking out the centre, then the 12 running fountains and stunning merbau decking that has been used to create outstanding shelving for all of the healthy plants certainly will. The store’s new popular giftware and homewares department now leads into the garden centre, so there is plenty for locals and tourists to discover when visiting the store.

Fiona said she believes the store’s success lies in having the foresight to continually grow and evolve the business, as well as trying out new products.

“The garden centre continually draws new customers primarily through word-of-mouth, as the store does not use a lot of social media, but word is travelling far and wide that the centre is a ‘must-see’ in the area,” Fiona said.

“We have made sure the garden centre is not just a tack on centre to the hardware store. It is a destination as a garden centre and there is a big variety of plants to choose from. Even though we do not really cater to landscapers or those looking for bulk products, we can always source these products if required,” she said.

While presentation is a high priority in the garden centre, high quality products go hand-in-hand in maintaining high standards throughout the garden space.

“If we would not pay full price for a product, then we reduce that product. In saying this, we do maintain the high quality of our plants and we do not need to throw much out. It is about having the right staff who know how to look after the plants and choose the right plants for our area,” she said.

“While we do occasionally have a gamble with larger quantities of a new product that might be at a good price, the majority of the time I believe having a large variety of plants is important, but also having plants that thrive in the local area because we do not believe in selling plants that will fail.”

“Even though we do have customers come from areas where the climate is a little bit different, we are not going to sell plants that will not do well once the customer takes it home. In our garden section, if a plant is indoor and under-cover it means that it needs to be indoor and under-cover and we constantly remind our customers of this,” Fiona said.

It seems that indoor plants and pots have made a big comeback in recent months with the store recently dedicating a new aisle solely to indoor pots and hanging baskets to cater to this trend.

“We sell lots of outdoor pots but we have now included a new aisle in-store, near the irrigation area, that is dedicated to indoor pots, hanging baskets, cover pots and tri-pod pots. The indoor trends have evolved because customers are trying to to create a happier and healthier indoor space by placing indoor plants throughout the home, particularly during COVID lockdowns. Some of our customers are completely obsessed with their indoor plant collection.”

“Indoors is not just about having an indoor plant inside because some need low light, lots of light, less water or more water. It is easy to kill an indoor plant if you do not have it in the right room but our customers are always willing to engage with our staff and discuss what they need to do to see their plants thrive,” she said.

The store’s natives, flowering perennials and hedging area also performed well during lockdowns, according to Fiona, with customers wanting to put in new garden areas or just maintain what they have. These trends have continued as customers seek to maintain their need for gardening, she says.

“Vegetable seedlings are also currently very popular with people wanting to grow their own fresh produce, and flowers go along with this. This time of the year sees people also planting seed potatoes and garlic. Everyone is going with the season to get fresh produce in.”

“We have many customers who are very organically minded and will only buy the organic fertilizer et cetera because they want to know what their produce is grown in. We also have some of the wineries come to us to grow their own herbs and veggie patches along with schools, with a lot of them doing kitchen/garden projects, as well as the local childcare who obviously have to educate the younger children on what they can and cannot eat,” Fiona said.

While Fiona said it is important for staff to remain well-educated on products, so they can in-turn educate customers, she has also made sure the garden centre is well set up so experienced customers can serve themselves.

“For those customers who have a good idea about gardening, we have set up the area so people can easily get what they need without having to ask staff. We have done this by implementing easy access to trolleys and good signage. These are the customers who easily buy what they need because they trust that the plants are healthy and they can access help from our staff if required.”

Whilst the store does not carry a guarantee on its plants, all plants are very healthy upon the sale. The store also sources plants locally so plants can be grown successfully at home by local customers.

“If we cannot source a plant locally, we go to Victoria which has a similar climate. If we cannot source a citrus plant from Victoria, we do not go and source the same plant from Northern New South Wales. If it has not grown in a climate that is anything like ours, they do not look as good, they are much more expensive and people would rather wait. When you tell customers that a product is worth the wait because of what it is grafted onto, they are happy to wait up to six months for the right product.”

“Our garden staff will also ask where customers are putting their plants making sure they are under cover if they need to be or have plenty of sun. They will also ask where the plant is going and what the soil is like. It is troubleshooting before you even sell,” she said.

While Fiona agrees there have been some supply issues this year, supply is currently not as challenging because nurseries have had a chance to build stock up over the last six months.

“People still cannot travel so I guess those who are normally travelling are maybe improving their house and their garden even today. While supply is picking up there are still certain plants we just cannot source but this has always been the case,” she said.

“Our garden team know how to make an area look exciting and we also know how to look after the plants properly. Mandy, Liz, Anthony and Fiona complete the garden team. Their many years of experience and study make McLaren Vale Mitre 10 Garden Centre what it is today and a space they are all very proud of. We combine this expertise with Mark’s special love for giftware and we also have quirky products, like hanging monkeys, everywhere.”

The green life department now flows through to a popular giftware section which is also doing extremely well in-store. Looking to the next six months, plans are already in place for the garden centre to be expanded even further into an area beside the store’s trade centre.

“We have excavated and paved this new area so we could implement a new advanced tree area. We also installed several large fountains in this area as well as all of our pots as another add on to the store. There are no businesses in the area that currently stock advanced tress so we are looking forward to giving this a go in the months ahead,” Fiona said.

Nursery masterminds see Diamond Valley blossom

Another outstanding garden centre is located at the very popular Diamond Valley Mitre 10, located about 30 kilometres north of Melbourne, in the suburb of Diamond Creek.

Kathy Marshall has worked at the garden centre for over 20 years, alongside colleague Robert Urban, who are the masterminds of the nursery and garden centre and work closely together to create stunning innovations that keep the customers coming back.

There is no limit to what you can do once you use your imagination, according to Kathy.

“I just make sure we are constantly switching things around so the garden centre does not become boring or dated. Some of our more recent changes include picking up a couple of new local suppliers who have been instrumental in helping me source more Australian Made products for the garden centre. This is perfect timing when considering how hard it has been to source some imported products post-COVID.”

“A lot of our customers prefer locally made products now which is why we have introduced new garden sculptures that are sourced from New South Wales and Daylesford. Products we used to source from China are no longer available because a lot of the factories closed down during COVID. Even supply from Japan has been disrupted because shipping containers have been stalled in the queue to come in. We were running out of a lot of products. We simply cannot rely on other countries for supply anymore,” she said.

Though Kathy admits locally made products are priced slightly higher, consumers are happy to pay a touch more for products certified under the Australian Made logo because the certification easily communicates to customers that the product is made locally.

“This is also the case when it comes to products that we use such as Goodman seeds, who are based in Bairnsdale. Customers love this product because they know it is a high-quality seed grown in Gippsland, Victoria.”

“Seeds became very popular during lockdowns because a lot of our customers reassessed their back yard and reignited the growing of home-grown food. It was crazy how quickly seeds were selling in-store during this time. When there was a shortage of seeds, a lot of the bigger suppliers said they were only going to deal with the customers they had dealt with for years. We had a continual supply of seeds because the suppliers showed their loyalty to us during this time,” she said.

Supply is improving, although there are still several products that will take several months to come through, according to Kathy.

“While we have a good supply of bagged goods because they are all Australian, it is things like the tomato cages that are only just starting to come back in that have been hard to source. It was worse a couple of months ago but it is getting better,” she said.

“We are also very lucky that the staff who work in garden are either extremely qualified or have a huge passion for their gardens. This passion is passed onto our customers and is also why so many customers come from such a long way away to visit our store.”

“We just need to keep this up and also genuinely ensure that our customers know how important they are to us. To continue to inspire them through the love and passion that we have for our gardens. People have to go past a lot of nurseries to come here but they keep coming back to us. One passionate customer drives over an hour to source product from the Diamond Valley Mitre 10 Garden Centre because he trusts the plants and the advice that the staff deliver,” Kathy said.

When it comes to implementing high quality presentation in-store, Kathy said management have allowed her to re-create and develop her own displays, “as long as I do not put anything stupid in-store like an aeroplane.”

“The garden centre must have a welcome feel about it or customers simply will not come here. It has to be inviting so they are comfortable enough to have a walk around and see what they can find. I think by implementing the artwork and ornaments into our displays, ensures the garden centre is as welcoming as possible,” she said.

Just some of the products on-trend at the moment include indoor plants, and Kathy believes she does not expect this trend to slow down anytime soon.

“People like to bring the outside in and everyone knows how healthy it is to bring your greenery inside. Then of course you have all the plant stands that go alongside the indoor plants and the beautiful pots that go with it,” she said.

“There are also a lot of innovative products coming on-trend that look like a living pergola or a green wall so there is not a lot of distinction between inside and outside. People love to build their gardens right up to their back door. We are also seeing suppliers make a tall tree look like a pergola in itself, alongside garden furniture that looks like something you would have inside rather than the traditional old chair and table out the back.”

“People are also implementing pizza ovens, meat smokers and fire pits in their outdoor areas because they really want to spend as much time outside as possible. Everyone wants to make their outdoor areas a snug place in the backyard to spend time in and relax,” Kathy said.

Cottage gardens created using native plants are also starting to make a comeback, according to Kathy, who said they tend to grow really well locally, and the store makes sure it stocks a comprehensive range.

“People also want to go and pick a bunch of flowers from their garden and bring it inside. While the cottage plants, like lavender and salvias are beautiful, you can easily mix these in with the natives to make a stunning garden.”

“We often have to spend some time offering our ideas to our customers because most of the time they will have a design in mind, but they just do not know what to plant. We tell them to bring photos to us of what they have in mind and then we show them a few different things from there. Most of the time they do not have an idea of the design they want, so we help with this as well,” she said.

Diamond Valley Mitre 10’s garden staff would often visit customer’s homes – pre-COVID – to offer ideas on the type of garden they wish to create.

“We also assist local schools in re-creating their garden beds to brighten up their gardens– it really is a great community feel out here now. There are also a lot of school programs out at the moment which is seeing schools set up vegetable gardens and compete against other schools on this. Once the kids start doing this, the parents get involved too which is great.”

When discussing sales post-COVID, while Kathy believes that sales are slightly quieter now that the height of the pandemic has passed. People have become use to what they need to do during lockdowns and those who have are on JobKeeper have had to be careful with their dollars as well.

“When I look at my sales compared with last financial year to this financial year, currently we are hitting the same targets. However, I believe this spring will be different to last spring. Everyone is realizing that you do not have to rush out and do everything you want to do to your home and garden. Due to our customers doing a lot of gardening in last year’s lockdown, which was very good for the nursery industry, they now have all their garden beds and pots potted and they really want to maintain these for now,” she said.

“Seedlings and plants continue to sell very well because customers have discovered the joy of growing their own food but they now need the seeds and soil that go along with maintaining their new projects. They have invested all this money into it so they will keep it going, especially if it is a family project that has been enjoyed by all as well,” she said.

Looking ahead to the upcoming season, Kathy says she will continue to source more locally made products, including garden sculptures to implement in-store. The store will also continue to supply plants for the TV series ‘The Block’, with Kathy personally sourcing plants for the front and rear gardens, as well as assisting with designs should the contestants run out of money.

“We are always trying to look at new things to implement in store. We will be doing our spring planning soon, and doing our research with suppliers and work out some exciting new things that we can bring in to keep the excitement going in the upcoming gardening season,” she said.

Barossa Mitre 10 builds new Design Studio

Barossa Mitre 10 has evolved substantially over the years particularly after it became a part of the Barossa Co-op in 1992. The Barossa Co-op was incredibly established in 1944 and was initially run by the local community as a general store selling an array of goods and services in the main street of Nuriootpa.

Business: Barossa Mitre 10 – The Barossa Co-op
Business Manager: Craig Dodman
Location: Nuriootpa, South Australia
Buying Group: IHG (Independent Hardware Group)

Today the Barossa Co-op is Australia’s largest and longest standing retail co-operative and has evolved into nine retail businesses located in and around a regional shopping centre.

Not only has the retail offering expanded, but so has its membership, growing from 771 members in 1945 to over 23,000 members today.

Originally run by the Mader family, Barossa Mitre 10 has continued to grow under the guidance of the Co-op with the total demolishment of the original store and replacing it with an impressive new 4100 square metre hardware store. The Co-op’s dream became a reality when the new store was re-built on 12,000 square metres of land in the centre of town in 2017.

Mitre 10 Barossa Business Manager Craig Dodman said the new store was re-built under the guidance of IHG’s Sapphire upgrade program and is virtually across the road from the former site.

“The new mall and Mitre 10 were about a $35 million spend in total. At the time, Mitre 10 had just released its Sapphire Program and we were the first in South Australia to roll out a store under this extensive renovation program. We are now a 4100 square metre store, which encompasses a trade drive through area, 1500 square metres of trade product and storage and a dedicated trade team to service our customers. We are also very proud of our garden centre which is over 500 square metres,” Craig said.

New Design Studio  

The Barossa Co-op already boasts nine businesses including a supermarket, SportsPower, Better Electrical, fashion stores Orchard Lane and Rod & Spur, Toyworld, Barossa Workwear and new business The Design Studio that opened a few months ago as a complementary offer to Barossa Mitre 10.

Craig said while the new The Design Studio is a stand-alone store, it is still run under the Barossa Mitre 10 banner and offers an extensive builder’s selection centre to trade and retail customers. This offer is also complemented by Barossa Betta Home Living which completes the home division of the Co-op.

Operations Leader of Betta Home Living and The Design Studio, Janelle Hueppauff said The Design Studio was established after customers from the Barossa Mitre 10 store continually enquired where they could source tiles for renovations and new builds. 

“The team started to think of other products that were not readily available locally for the renovator, builder and architects and The Design Studio grew from there. So now we have all of these offers under one roof in a 450 square metre space. We knew tiles were part of our buying group, so by sourcing these from our supplier, EVERSTONE Australia, we could properly service our customers. This is now one of the key brands of The Design Studio as well as Mitre 10’s newly marketed Principal Kitchens which is also unique to IHG,” Janelle said.

“Post COVID, our customers are putting a lot of money into their homes so this is the silver lining in this situation. We have multiple displays in-store including three model kitchens, as well as display bathrooms including vanities, tapware and showers. Since the opening of the store the response has been through the roof. Last week we delivered five new kitchen designs and we continue to work on multiple kitchens daily with over 20 kitchens in the pipeline plus several bathrooms and laundries. We love nothing better than seeing people’s visions come to life and being part of that process,” she said.

“When people come in, whether they are locals or tourists, they are just blown away by the new offer. Everything crosses over. If someone mentions that they need a fridge as well as their new kitchen, I can source a fridge from the home division as well. We are also working closely with builders and they have been so supportive of The Design Studio. Our home renovators and interior designers also know we can help them with a project from the beginning right through to install.”

“Between Barossa Mitre 10, Barossa Betta Home Living and The Design Studio we have all bases covered for our customers who want to either complete home renovations or furnish their home. We can put TVs in there, a Weber out the back, tile your bathroom, put in your architraves, we can now do it all,” Janelle said.

Local demographics

The South Australian Barossa Valley is currently experiencing exceptional growth in new home builds and renovations as well as a lot of development in the aged care and independent living space, according to Craig.

“Local builders are currently working on alterations, new builds, extensions – a bit of everything at the moment. We do not always get involved with the big builders but more of the small to medium sized builders who are serviced by us,” he said.

“The store currently services between 35,000 and 40,000 customers. This is the rough catchment area of the Barossa Valley that consists of three main towns, Nuriootpa, Tanunda and Angaston but there are many more towns north of us that use our regional shopping centre as a regular base.”

“Our local competition consists of a Bunnings about 35 kilometers from us, with a Tradelink and Beaumont Tiles store in the same town, as well as another Tradelink in the town of Tanunda,” Craig said.

New Sapphire store

Built as part of Mitre 10’s Sapphire upgrade program, Barossa Mitre 10 is not only impressive in size but also has innovative systems in place to guarantee its in-store processes and efficiencies free up staff so they can ensure exceptional customer service is consistent.

“I think we are one of the only Mitre 10 stores that has implemented a night fill concept in-store and this works really well for us. Our night fill team of five come in at about 6pm and work until 11pm pretty much every night so our staff can keep serving during the day. This is also an efficiency thing as they not only fill the shelves but also organize the next day’s orders.

“We also recently purchased a crane truck to assist with our deliveries and we even have someone picking at night for this service so our trucks are ready to go in the morning. When it comes to educating staff we strongly support the e-learning program through Mitre 10. This helps us better service our customers with up to date product knowledge,” Janelle said.

“Being a part of the Barossa Co-op makes us unique because we sell to 90 per cent of our members. They have loyalty to the business already because they have invested in it. They also receive a rebate.” 

“We run a lot of specials for our members, while the Barossa Co-op also puts a lot of money back into the local community by holding BBQs every weekend where we donate 30 kilograms of sausages to any fundraiser that comes and holds a sausage sizzle. We are fully booked Saturdays and Sundays now and our support with the sausage sizzles equates to over $100k in donations per year because we donate the gas, the sausages, BBQ, and location. Local sporting clubs and charities make a complete profit on this,” she said.

In-store marketing

Part of Janelle’s role is to execute the store’s marketing alongside a team of four. The team implement the majority of its marketing through the local paper as well as executing store displays in the Barossa Central Mall, that in-turn draw customers to the store.

“I also look after a lot of the social media for Instagram and Facebook for the three divisions, while Craig has recently implemented an exciting new trade newsletter for our trade customers titled ‘TRADElife’. We post hard copy newsletters to 200 tradies every month and it keeps them updated on what is going on including introducing staff members and advertising our ‘Meat Tray Friday’ winners for the month. It is just a different channel of communication to our customers,” she said.

“I think if we took the newsletter away, we would definitely notice it as we think it is important to market the store throughout many different channels,” Janelle said.

Trade store features

Mitre 10 Barossa’s sales percentage sits at 60 per cent trade to 40 per cent DIY but despite the trade presence in-store, the garden centre continues to be extremely well supported, as well as paint, timber and building supplies which were particularly strong throughout COVID, according to Craig.

Barossa Mitre 10’s Garden Centre is a stand out feature of the store, with its displays, product knowledge, green life offering and the garden club ensuring this division continues to grow despite competition from other popular garden centres in the area.

“Many years ago, Mitre 10 used to run a garden club called ‘My Patch’. After it was abolished, we developed our own garden club called ‘Garden Grow’ which gives members an immediate 10 per cent off all green life. Our club members also receive a $10 credit for every tenth purchase over the value of $15, which is very popular within our garden club. We also try to advertise green life products that are different and to continually maintain that point of difference,” Janelle said.

“We are probably up against one of the best garden centres in the state just down the road. Barossa Nursery is a massive garden centre and with this huge competition being so close to us I am so proud of what the team have achieved in this department. We are punching above our weight that’s for sure,” she said.

Looking to the remainder of the year, Craig said even though the Co-op has only just opened The Design Studio, the team is always thinking of the next innovation because the group believes in remaining proactive for future projects.

“For now, the team will continue working with suppliers to strengthen our current offer and remain customer focused. Our home renovation’s base is strong and we look forward to where this may continue to lead us with opportunities,” Craig said.

Hand, Power & Trade Tools – Trades welcome innovation

The highly competitive Hand, Power & Trade Tools sector remains one of the most innovative spaces within the hardware industry. In this report, industry leaders explain why trades and DIYers are so attracted to new and upgraded products.

CSS (Construction Supply Specialists) Managing Director, Jeff Wellard recently outlined some of the latest trends, saying that while he did not believe there were any new products launched onto the market recently, plenty of upgraded products had been introduced.

“This is always an interesting topic for discussion as it is often difficult to really ascertain what a new product is. New products can also be recognised as revolutionary ‘new products’ as opposed to ‘upgrades/improvements’ of old products. While I cannot recall any revolutionary new products launched onto the market recently, there were certainly plenty of upgrades and improvements particularly in the ‘outdoor power equipment’ section of the market with Makita and Ryobi leading the way with relevant power tools and accessories,” Mr Wellard said.

When reflecting on the last 18 months and the impact that COVID has had on CSS members, Mr Wellard said a vast majority of members claim that even though stores are primarily industrial and trade focused, just about all of them have seen an increase in non trade related foot traffic over the past year.  

“It was, and still is, very apparent that DIYers were looking to do ‘bigger projects’ in the past year or so and are also very keen to seek professional advice from companies with close ties to industrial and commercial users of products and services. This is a trend that appears to be continuing,” he said.

“Generally speaking, we have all been quite fortunate given all that has happened in our industry over the last year. Thankfully we have not been held back by shortages on everyday products where there are alternatives to cover gaps. Obviously, power tools, where users have stable battery platforms in place, create challenges but the key players appear to have managed their inventories quite well. Our understanding is there is also a growing shortage of timber for the building industry and this will have a substantial impact if a solution cannot be found,” Mr Wellard said.

When discussing significant issues surrounding the launch of inferior products, Mr Wellard said CSS members are more likely to stock quality hand, power and trade tools because customers are primarily professionals who prefer to use efficient products.

“Most CSS members are commercial and/or industrial focused and as such stay with quality tools from well-known suppliers across the power and hand tool range. This is also the case in the industrial products market where abrasives and cutting equipment fall,” he said.

“What we have found of late is that there is an emerging ‘new sense of worth/value’ in the minds of industrial users, with all users looking at quality and fit for purpose attributes before price. The construction industry, and its allied industries, are full on cordless when it comes to power tools and they need and want more power, longer run times and corded tool reliability from their tools and equipment. Down time means a loss of money so it is more important than ever to have reliable products. This is the same for hand tools and power tool accessories like cutting tools, abrasives and grinding equipment. There is a genuine push for quality that is for sure.”

“Brand loyalty still exists but the brand needs to stand up from a quality and value for money viewpoint. All product manufacturers must ensure they stay current and relevant through innovation, adaption and understanding where the industry is heading,” he said.

Looking ahead, Mr Wellard said it is becoming more apparent that Australian Made products are a growing factor in the decision-making processes of many buyers from all manner of industries. However, this will always be tempered with the need for quality, reliability, durability, ‘platform compatibility’ and value for money going forward, he said.

TradeTools sees innovation drive sales

Trade Tools Chief Executive Officer, Jeremy Stewart agrees that new product launches have continued for many suppliers over the last 12 months, with consumer demand primarily coming from tradespeople who are constantly on the look-out for innovative products.

“New product launches have been introduced by many suppliers over the past year – some more than others. Australians are known as early adopters and tradespeople generally look out for new products and gear that makes a job easier, safer or faster to complete. Some new product releases can generate a tremendous amount of interest as well as a lot of pre-orders throughout all TradeTools stores,” he said. 

“There are suppliers and brands who are very actively driving new product development by introducing innovative ideas and enhancements to products that have essentially remained un-changed for decades. It is great to see and I think it should, and will, continue as a trend. If an innovation increases safety, or productivity, then this helps tradespeople and end users do their jobs better, earn more and improve their business all round. That is a great thing,” Mr Stewart said.

When reflecting on the past 12 months, Mr Stewart said he believes there was definitely disruption throughout the industry as a result of the pandemic.

“Just some of the disruptions we have experienced included a reduction in supply due to factory shutdowns in Asia. Then we quickly saw demand rapidly increase as renovations and construction began to boom. The increase in sales has sustained across all TradeTools stores to date.”

“Supply has generally improved and we are well stocked, however there are still challenges, particularly when it comes to shipping. Rising commodity prices are placing pressures on pricing and this sustained pressure may begin to flow through in the coming months,” Mr Stewart said.

When discussing the launch of inferior products on the market and how TradeTools combats this low-cost competition, Mr Stewart said the group simply does not range any products that will not meet the expectations and demands of its customers.

“There have always been poor-quality, cheap products out there. We will not range products that do not have the ability to withstand the demands of trade and industrial users. An item has to be fit for purpose and you need to have a deep understanding of what that purpose is in order to determine if you offer it to your customers or not,” he said.

Looking at the growth and expansion of the TradeTools business moving forward, Mr Stewart said he believes that a slow and steady expansion in ethos is the only proven and sustainable method of growing and evolving the business. 

“If any company expands too quickly, especially in a specialised market like the tool industry, it runs the very high risk of baking in ongoing commercial and weaknesses. For instance, we only now open a new store where the freehold site fully belongs to TradeTools, and that always takes longer to find and set up,” he said.

“We then spend a lot of time, money and energy recruiting and training staff who are usually there from the outset. That is the reason that TradeTools, on average, only opens one new store annually. It is simply the old and tested principle of building a house of bricks and mortar. Instead of choosing the much easier option of quickly constructing a temporary shelter from straw. Of course that is when the economy is strong and expansionary both systems can work, but when economic storms hit hard, as they always eventually must do, ancient wisdom tells us that anything built of straw is quickly swept away.”

“It took us ages, for instance, to find, purchase and prepare our new Browns Plains store, but it hit its sales targets after only the second week of trading and should continue to do so for many years into the future, regardless of storms or otherwise,” Mr Stewart said.

Premium Tools tackles supply issues as demand increases

Premium Tools Director – Australia and New Zealand, Andrew Cordes spoke to AHJ, not only on the newest products to be launched by the company, but also the post-COVID shipping challenges. 

He said some of the biggest challenges faced by manufactures currently include ongoing limitations in raw materials that have an on flow of supply challenges for suppliers. 

“In regards to the shipping crisis, the supply of product is boom or bust at the moment. I am sure it is the same for all suppliers. Many manufacturers globally are having raw material shortages due to COVID. This means longer lead times, stock shortages, a big on-flow effect for everybody; suppliers, retailers and end users,” Mr Cordes said.

“To combat the challenges around global shortages, we have no choice but to carry additional stock levels. Suppliers really need to have a balanced approach when it comes to stock levels. We are not seeing a decrease in sales so there is no real choice but continue to carry a heavy amount of stock,” he said.

Premium Tools, established in 2013 by a New Zealander and an Australian, is dedicated to distributing quality tools to the trade and DIY channel across Australasia. Premium Tools has continued to distribute a number of high-quality brands, including global leaders such as Wiha Tools, Unilite Portable Lighting and Veto Pro Pac Tool Bags (NZ Only), as well as LYRA marking systems.