COVID-19 survival kit for hardware retailers
Independent hardware retailers are now, more than ever, looking for ways to ensure their businesses stay afloat and healthy over the coming months as they tackle the economic repercussions of the COVID-19 pandemic. In this special report, AHJ Editor, Christine Bannister, details strategies hardware retailers can implement in-store now to survive this unprecedented pandemic and how several independents are currently tackling this evolving situation.
There is no doubt Australian independent hardware retailers are some of the most resilient, and at the same time, agile retailers in the country. Not only have they already competed, in what we thought, was one of the biggest retail battles in the history of hardware, against the big green box, but they have also only just recovered from the economic repercussions of the 2020 bushfires, followed by severe floods in February.
Little did they know the biggest challenge was yet to come with the arrival of the COVID-19 pandemic. No one could have ever predicted the repercussions COVID-19 would have on the global economy. However, it is not only the economic affects that could leave a lasting scar in the back pocket of every Australian, but the detrimental effects the virus could place on our nation’s health system if it takes hold.
It is for this reason, Australian Prime Minister, Scott Morrison had no choice but to restrict the trade of any business that sees the gathering of small to large groups of people and enforce strict social distancing laws in stores that remained open, including hardware stores.
Initially hardware retailers were skeptical how COVID-19 would affect business, with many fearing, and still fearing, their businesses would reduce significantly. However, as the weeks went on and Australian DIYers were faced with a new reality of being locked down at home, many hardware retailers experienced panic buying in recent weeks, particularly in the way of garden products, cleaning products, paint and any product that would support a DIY project from home.
The demand for certain hardware products had become so high, Bunnings restricted customers to just four items each if they purchase cleaning products, batteries, garden sprayers and storage containers. Customers are also limited to one item if they buy methylated spirits, turpentine, gas bottles, generators and fuel cans.
The COVID-19 impact varies dramatically between hardware independents, with demand and customer response depending on the location and type of hardware store. The following are several case studies detailing how several hardware retailers are coping with the crisis so far.
Convenience hardware store group, Sunlite Mitre 10, which has six boutique hardware stores throughout Sydney’s CBD and the inner suburbs of Paddington, Mosman, Newtown and Bondi, have remained quite busy during the COVID-19 pandemic. This is particularly the case throughout its suburban stores, according to Group Managing Director, Steven Czeiger.
“While the stores in the inner city are not as busy, these are also the stores that are starting to assist those hotels now being used as quarantine facilities for overseas travellers. We are currently supplying these hotels with cleaning and personal protection equipment. Although it has been a challenge sourcing some of these products, it has forced me to be very creative with my supply chain,” he said.
Just some of the services Sunlite Mitre 10 continues to market throughout all of its stores during the crisis include delivery services, as well as ‘call ahead and pick up’ services.
“We are also promoting ‘Click ‘n Collect’, and we are just trying to observe what the Federal Government and the World Health Organisation is saying and place those practices in-store.”
“Being small boutique hardware stores, it is important for the group to continually observe all the social isolation measures as much as possible. This is also why we have put up posters at the front of each store informing customers on what they need to do once inside, while all our staff are wearing masks and gloves to protect themselves,” Steven said.
When talking about keeping up morale instore, Steven said he converses with his team regularly via email and FaceTime as the business now operates via a digital platform.
“At the moment we just plan one week at a time. Although I am sure hardware stores will continue to be deemed essential, I also believe retail has a direct correlation to the spread of the virus. The government is watching infection rates over the next few weeks. If the rate is contained to the government’s upper limit then our retailers should be fine,” he said.
Traralgon H Hardware Store Manager, Andrew Graham, said customers are definitely supporting local retailers a lot more and appreciating their local hardware store during this situation.
“While we welcome new customers to the store, I will also be making sure I do not increase my prices because I do not want to burn people for the future. One thing I will be doing is buying vouchers from all the local businesses, and restaurants, and run a competition with customers so they know if they use our free delivery, they also go in the running to win a voucher to a local business,” Andrew said.
For now, the biggest challenge is just trying to gauge how the Federal Government’s restrictions will affect Traralgon H Hardware business throughout the many stages, according to Andrew.
“I just do not know what to order because we do not know what Stage Four restrictions could mean for the building industry and for our business. Tradies are currently the only customers allowed into stores on Stage Four restrictions in New Zealand.”
“I think it is for this reason that Bunnings is now signing everyone up to a PowerPass card, and in some areas, they are not letting customers in if they do not present this card. I told my team we should do something similar because obviously Bunnings is building a database. We could do this to keep our customers informed and build a better database as well,” Andrew said.
When it comes to social distancing, Andrew said while tradesmen had been very respectful with the new guidelines, retail customers had struggled with the restrictions with several people still coming in when they are obviously unwell.
“A few customers were asked to leave the store,” Andrew said.
Unfortunately, Traralgon H Hardware has experienced the worst four months in the business’ history this year after it was initially caught up in the severe bushfire crisis that ravaged Victoria during the Christmas holiday period.
“January, we had the fires, then we had the floods in February and now this. Despite all of this, last week we had about 70 per cent new customers come into our store because our local Bunnings was being too heavy handed with its social distancing laws. So, this week has been better and our free deliveries have assisted us as well, but it has been so hard to recover,” he said.
When it comes to implementing new stock in-store, Andrew said he has spent days panic buying, trying to think of things that people would buy in the current climate.
“We are putting things in store like disposable face masks, hand sanitizer and methylated spirits. The metho will triple my costs though because suppliers now sell this product above my retail, but I just have to get what I can to keep people happy. I will also continue to focus heavily on cleaning products and hand wash because some of these lines are now unavailable at the supermarket. Paint, seedlings and silicones are also up in sales because people want to do maintenance on their homes during lockdown,” he said.
“The hardest part has been with our tradesmen too because a few weeks ago people thought that everything was going to shut down after Daniel Andrews’ announcement in regards to Stage 2 restrictions. So, I sent a message to our trade customers that we are stopping all orders on our board and to call us with their orders.”
“We just did not want all our stock on site if we were to close because it would get stolen. So, the Monday after this was one of the biggest trade days we have had in ages with panic buying. Now it has died off and it is business as usual,” Andrew said.
It is also business as usual for Kev’s – Fasteners, Construction, Insulation, located in central Queensland, with owner Shannon Lamb continuing to monitor the building industry during the COVID-19 crisis because his store is so heavy in trade.
When the notice came out from Masters Builders that hardware and trade stores were classed as essential services, Shannon immediately spoke to his customers to see how their businesses were going so he could plan ahead.
“In saying this, we do realise that it is all well and good for builders to say they are still working, but we are worried about the person that is building the house who may have lost their job. Touch wood at this point it is all still going as per programed with slabs still being put down etc.,” Shannon said.
“We have also seen an increase in some builders stock piling with some ringing up and asking for all of their orders to be delivered to site, so they can then put this stock in their garage and have it ready to go. Builders were concerned that they may not be able to access the stock they need, even though our suppliers have informed us that stock levels are not an issue. They are just taking a little bit longer to get here at the moment,” he said.
Even though Kev’s – Fasteners, Construction, Insulation has a 90 per cent trade base, Shannon said he has made the decision to keep the DIY part of the shop open because he rarely sees more than three people in the shop at the same time.
“We are not like a proper hardware retail where we have the local punter walking through for a bit of a look. Our customers come to us for a specialist reason.”
Shannon said he has gone ahead and completed his order for April which he gauged based on future orders.
“I have just pulled back a bit on this side of things but everything else is pretty much day-to-day. It is a real shame things are slowing down because the last quarter was one of the best we have ever seen. Everyone had work and everything was kicking along so well, and then the virus and restrictions have made people feel a bit uneasy.”
“We did have some big renovations coming up that have now been put on hold but these will be great to go back to once this all blows over. We also just won a contract for insulation for around 400 homes for the year, but hopefully these will also be pushed through because we are deemed essential. If work is held off, we are just looking at it as something to come back to – which will be great,” Shannon said.
What will Stage Four restrictions mean for hardware independents?
The AHJ team has closely monitored this evolving situation, particularly with the growing concern that hardware retailers may not be deemed an ‘essential’ service as tougher COVID-19 Level Four restrictions are enforced throughout the country.
However, as many parts of Australia enter Stage 3 lockdown (at the time of writing this article) and some non-essential retailers close, Australian’s still have permission to shop at hardware stores, along with agricultural supply shops, petrol stations, supermarkets, banks, pharmacies and vet surgeries.
Although New Zealand has enforced a Stage four lockdown, Bunnings is allowed to stay open to the trade, but not the general public, between 7am and 3pm, with Bunnings, Mitre 10 and Placemakers open for essential building and construction.
In an effort to ensure hardware retailers are cemented as an ‘essential’ service during this unprecedented time, Hardware Australia and TABMA pledged to State Ministers of the need for all hardware stores and timber businesses to be classified as ‘essential’ businesses during the trading restrictions, in mid-March.
In the official letter, Timber & Building Materials Association (Aust) Chief Executive Officer, David Little and Hardware Australia Executive Officer, Alicia Oelkers asked State and Federal Governments to consider several factors when determining hardware retailers as essential service including:
- Hardware stores located in regional areas supply local communities with essential items including face masks, respirators, isopropyl alcohol, methylated spirts, toilet paper, and LPG, as well as general cleaning and disinfecting products.
- Stores with garden centres provide a means for residents to grow their own food through the sale of seeds and seedlings, along with associated plant care products such as composts, fertilisers and pots.
- Local hardware stores provide communities with essential needs for livestock and pets including feed, health products, bedding and safety items.
- Hardware stores provide essential products to local tradies, homeowners and handymen to keep the town’s lights, taps and toilets operating.
- Hardware stores also deliver trade supplies to building sites. Should hardware stores suspend trading this would in turn effectively shut down building and repair work in the community. The flow on for jobs in that community will be devastating, and the recent Government stimulus packages supporting apprentices will be for nothing.
- Those stores located close to communities devastated by the January bush fires currently supply items to bushfire ravaged areas across Australia. Closing hardware stores would significantly slow down the bushfire recovery in many regions across Australia, and damage those communities attempting to rebuild in those areas completely devastated by fire.
- Lastly, there is a worldwide precedent in naming hardware as an essential service, with America and the UK most recently making that determination.
Innovation ensures COVID-19 survival
Although this has been one of the most difficult times independent hardware retailers have ever faced, now is the time for independents to unite and get behind their communities during the COVID-19 pandemic.
Local communities, now more than ever, need the personal interaction (while respecting social distancing laws) hardware independents can offer during this stressful time.
Although retailers may find themselves offering advice for a new DIY project at home, they should never underestimate the power of human interaction, and if retailers can make their customer’s day just a little brighter by speaking with them in a positive and upbeat manner, it could be the difference between them choosing an independent store over the Big Box when the crisis has ended.
Compared to Bunnings, independents are also in a prominent position to quickly reassess new stock and provide to their communities’ specific needs. They can rearrange their stores as they wish, stock products where they see fit and also assist their customers with advice to ensure their homes remain safe and clean. The advantage of an independent business during this time is that they adapt to situations swiftly and can make decisions quickly to
This may include hiring more equipment such as steam cleaners or high-grade pressure washers, creating a ‘store within a store’ concept.
Hot steam cleaners are just one of many products in high demand currently, particularly Karcher’s domestic steam cleaners, which has the ability to kill 99.9 per cent of bacteria without the chemicals, and clean hard surfaces as well as carpet.
Heat treatment, such as steam cleaning, is effectively shown to kill viruses on soft furnishings in the past, with cruise ships advised to steam clean carpets and upholstery at 70 degrees Celsius to prevent infection.
In these trying times do not forget there are so many items to consider during the pandemic. Just some of the many products retailers can upsell include: bleach, washing powder and liquid, antibacterial soap, hand sanitizer, dust masks, bottle water, pump sprayers, gloves, first aid kits, pet supplies, security cameras, seedlings, batteries, drain cleaners and back yard sheds.