IHG delivers ‘Consumer First’ strategy at 2023 Expo

by | Mar 16, 2023

The Independent Hardware Group (IHG) was delighted to resume its national conference and Expo in face-to-face fashion on the Gold Coast from February 6 to 8. After three years of delays members, suppliers and the IHG team finally met personally with incredible enthusiasm and Expo 2023 proved to be nothing short of an outstanding reunion.

This year’s Expo, themed ‘Consumer First,’ focused on putting the needs of the consumer front and centre. 

IHG executives were joined by leaders of the Metcash team during the official proceedings including, Group Chief Executive Officer Doug Jones and Chairman Peter Birtles.

Over 1600 delegates filled the auditorium as IHG Chief Executive Officer Annette Welsh, took to the stage to welcome members and suppliers at the commencement of the business sessions. During her presentation Ms Welsh delivered a rousing presentation on the ‘year that was’, and detailed several exciting initiatives the group will focus on in the year ahead.

“We have a wonderful heritage championing successful independents and we have developed strong relationships with our suppliers for over 60 years. Together our businesses turn over $4.4 billion annually throughout 730 stores nationally.”

“Under our bannered businesses of IHG and Total Tools, we have the largest network of hardware stores across Australia and we have established a real strength in regional towns. We have over 1000 independent businesses that we support through the AHW model. Our store square metres and store numbers also continue to grow as we welcome new members to the group,” she said.

In recent years, IHG’s ‘Whole of House Strategy’ has proved to be successful, according to Ms Welsh, with the group now running 11 frame and truss models along with five Design 10 showrooms showcasing a selection of kitchen and bathroom accessories and appliances, as well as flooring and cladding. Alongside the success of the ‘Whole of House’ strategy, IHG also completed its new distribution centre (DC) in Ravenhall, Victoria just last year.

“Independents are winning and we should celebrate this. Our recent growth is linked to the circumstances of COVID but it is also a direct result of the delivery of strategies that have been in existence for years. This growth has enabled us to invest in our business and ensure that this will grow your top and bottom lines,” Ms Welsh said. 

Future challenges

While Ms Welsh made a point of celebrating IHG’s success she was careful not to ignore forecasts of an economic downturn, and pointed out that any decline within the building industry will be compensated with the large pipeline of new builds yet to be completed.

“In all of this, there is one thing I know, if anyone can manage declining cycles it is independents. While it has not been easy with growing inflation, supply challenges and natural disasters, what we have achieved is a 37.5 per cent growth over three years like-for-like. You delivered high store standards as you provide consumers with a shopper-led range at competitive prices, strengthened relationships with your builders and enabled every consumer to shop with you through a digital solution, on Click ‘n’ Collect and Click ‘n’ Deliver. We will continue to focus on gaining market share and increasing the basket size of everybody who works with us,” Ms Welsh said.

When detailing the forecast for housing starts and detached housing, Ms Welsh pointed out that 122,000 detached houses are built per year on average. However, as the Home Builder Stimulus came in, this number rose to 141,000. Consecutively, 132,000 starts was again a significant boost to the building industry until supply and labour shortages slowed things throughout the pandemic. 

“The pipeline could take up to 12 months or longer to complete. This presents opportunities with renovations and the government will see this industry as one that delivers economic growth,” Ms Welsh said.

In the DIY sector, consumers continue to spend off the back of a 40 per cent growth. Ms Welsh reminded members that this sector is a $25 billion market of which the group have claimed just five per cent. 

“This shows our strength is in trade and our competitive offer in DIY is now known to be our unique selling proposition. This impressive market potential combined with an ongoing mission of building more successful independents and remaining consumer-driven is what will continue to build solid businesses off the back of solid foundations and a solid heritage,” she said.

“There is no cookie-cutter approach here. Putting the consumer first will deliver a higher level of service and knowledge while understanding what is required in your business and community to help you stand out from the crowd.”

For now, investing back into the business is as much of a priority as IHG’s consumer-driven approach, with the group focusing on strategies that will not only deliver returns but also on where the group should head next, including prospects within new towns and utilising IHG’s data to source new opportunities.

In closing Ms Welsh said, “IHG’s investments made into digital solutions will ensure that the group is keeping up with our consumers demands, working smarter and providing members with an efficient process to run their business.”

“Our consumers see us as a national brand in Mitre 10 and Home Hardware. We should be confident in our ability to grow through family-run, locally owned and operated businesses combined with an e-commerce site across the country. If we keep this combination firing, I have no doubt that every town will be an unbeatable force,” Ms Welsh said.

A message from Metcash

Also speaking during the business sessions was Metcash Group Chief Executive Officer Doug Jones who said it was a privilege to be a part of a business model that allowed him to work with independents as well as brilliant business people.

“When taking on this role I wanted to contribute in some small way through the independent network and be given the opportunity to deliver something to our consumers that is differentiated, unique and highly tailored to them while making a difference to those communities that you serve both through employment, economic and commercial benefits.”

“At Metcash we say we are a purpose-led organisation and we strive to act like a purpose-led organisation. The purpose of championing successful independents is at the centre of everything that we do,” Mr Jones said.

While Mr Jones did point out that there are, “some wonderful competitors across all sectors in Australia – they are pretty much the same everywhere and they are not tailored to the market in the way that IHG members can tailor your store, to your town, or your suburb.”

“We want to make raving fans out of our shoppers and set that emotional connection. Having a relevant relationship with our shoppers is the ticket to the game. Fans trust that when they enter your store they will be treated with respect and they will be given a warm smile and probably welcomed by name. They also forgive our mistakes because they are fans of ours. This is more about bringing out the very best of ourselves in everything that we do,” Mr Jones said.

 

Mitre 10’s cheeky marketing campaign returns

IHG’s General Manager of Marketing Karen Fahey also took to the stage during the business sessions, pointing out that IHG now has three primary consumer groups – the renovator, the small to medium builder and the DIYer. 

The online shopper, however, is also  rapidly redefining how to go to market with Ms Fahey saying that the highest users of social media are primarily aged between 19 to 30 years old. 

“Loyalty and having stock visibility online are key drivers of boosting traffic online and in-store. We have also invested in a smart marketing platform that will allow us to deliver an omnichannel experience for the consumer. IHG is utilising its learnings from Total Tools to implement a revamp and a refresh within its loyalty program in an effort to deliver an even more rewarding experience to its consumers.”

“We want to excite consumers with offers that will attract them back into the store. To do this, we are investing in new technology and have doubled the size of the team so we can support your consumers,” Ms Fahey said.

Just last year, IHG used shock tactics to launch ‘The Other Hardware Store’ campaign which saw sales reach an impressive $15 million above IHG’s forecast throughout the June/July period.

“The campaign worked. We did get noticed. We had three million visits online of which 66 per cent were first-time visitors to our sites. Our DIY transactions are up 17 per cent when compared with pre-COVID numbers. Loyalty members are now spending more, while online shoppers have found our website is a good place to source information and purchase products,” Ms Fahey said.

Ms Fahey reminded members of the importance of executing the campaign at every level. 

“We need to be memorable and you can expect a cheekier tone from us going forward because we need to call out why we are a better choice. This will include more investment into DIY online content as well as a continued shift to digital channels particularly those where the younger generation is hanging out,” Ms Fahey said.

In closing Ms Fahey said as the Home Hardware brand celebrates its 30th birthday this year, the marketing team intends to celebrate the event by driving loyalty in-store and online while also driving store numbers, e-commerce and loyalty within the home hardware channel.

Sapphire transformation success

When it comes to IHG’s ‘Best Store in Town’ initiative, IHG General Manager of Operations Retail and Trade, Chris Tsotra said IHG’s objective is to design, modernise and deliver the best class in stores across DIY and trade. A target of 300 Sapphire stores by 2025 has also been set with 176 Sapphire stores delivered so far.

“When looking at performance, our Sapphire stores are growing circa 25 per cent versus non-Sapphire stores at 8.7 per cent. We also have 41 trade-only stores and with a strong pipeline of stores coming to Sapphire, we can see that the model is absolutely working,” Mr Tsotra said.

“We believe independents need to reinvest in their businesses every five to seven years and IHG has been contributing to this investment circa 50 per cent. When you have the best store standards this is when you have the opportunity to focus on growing your sales and profitability, and that is when our enhanced digital store dashboard can come into play.”

“In build trade, we now understand our consumer profile better than ever before. We know we can compete and grow in trade which is clearly a large portion of our business at 65 per cent. To drive this growth we need to start driving bigger build stages and categories, including ‘fix and fit out’ by utilising our Design 10 and Hardings Hardware stores. Supporting this is our frame and truss strategy with 11 to date and our network plan will allow for many more,” he said.

“We have the program and the tools and if these are implemented and executed effectively, we will no doubt future-proof our business,” Mr Tsotra said.

Key growth categories

During the business sessions, IHG General Manager of Merchandise Geoff Harris said that in the past three years alone the national DIY market grew at 29 per cent with IHG’s DIY growth sitting at 40 per cent. However, he believes that winning long-term in DIY does come with some non-negotiables as consumer behaviour continues to change.

“In our strategy, we believe members should target around 20 per cent of their range to be a local offer. This range must be designed specifically for your local consumer in your local area,” Mr Harris said.

When looking at key growth categories, sales of IHG’s Principal Kitchen range are up 25 per cent, while appliance sales have experienced a 10 per cent growth. Camping sales have also grown substantially and are largely being driven by the expansion of the Kings range.

“Power garden and BBQ sales are two of our most successful categories. Our stores have become a destination for these categories and we should be proud of that. Growth opportunities also include the exterior flooring category or the decking category, with 86 per cent of all renovations including an outdoor flooring solution, which is now a $250 million category in Australia,” Mr Harris said.

With the bathroom category expected to be another big opportunity for the group, Mr Harris announced that IHG will launch a bathroom design tool this year to give members the opportunity to play more of a role with their customers when designing and fitting out new bathrooms.

IHG Awards of Excellence 2022

TV personality Catronia Rowntree co-hosted the Awards of Excellence.

TV personality  Catriona Rowntree along with well-known Australian actor and singer, Tim Campbell wooed dinner guests with jokes and chatter throughout the 2022 IHG Awards of Excellence 2022, while Tim sung well-known hits throughout the duration of the night. IHG Chief Executive Officer, Annette Welsh also presented several awards throughout the night, including a new award, the 2022 CEO Outstanding Contribution Award.

During the presentations Ms Welsh said that the Expo was all about nurturing the most amazing relationships, while supporting each other in the best of ways, connecting with people, learning from each other, and sharing the opportunities that are ahead. 

SUPPLIER AWARDS

2022 SUPPLIER OF THE YEAR
FINISH AND EXTERIOR
– Dulux Australia

Dulux General Manager, Dorothy Grouios said the Dulux team had worked hard over the last few years to supply and service stores through a very challenging time.

“Thank you to all members for your partnership over the past three years. There is no greater recognition or award for us than one that is voted by our customers so we are very humbled by this award,” Ms Grouios said.

2022 BUILD SUPPLIER OF THE YEAR – Cement Australia

IHG 2022 BUILD SUPPLIER OF THE YEAR – Cement Australia

Cement Australia’s General manager of Sales, Marketing and Risk Phil Halpin said, “One thing we have in common with everybody here is that we are an Australian manufacturing business and we are made right here which we are very, very proud of. Thank you to IHG for the award.” 

2022 FITOUT & FIX SUPPLIER OF THE YEAR – Makita

IHG 2022 FITOUT & FIX SUPPLIER OF THE YEAR – Makita

Makita Australia’s National Key Account Manager Stuart Wiley said, “I want to thank our team. Things like this do not happen without a really solid team behind you. Thank you to the most important people in the room, all the store owners, their families and all their team. Your support of our product is just wonderful.”

INDIVIDUAL AWARDS

2022 ‘MIGHTY HELPFUL’ PAUL MURPHY SERVICE AWARD – Peter Davie – Wilson’s Mitre 10 – Bacchus Marsh

IHG 2022 ‘MIGHTY HELPFUL’ PAUL MURPHY SERVICE AWARD – Peter Davie – Wilson’s Mitre 10 – Bacchus Marsh

Julie Murphy and Laura Murphy took to the stage to present the award to recipient, Peter Davie. Upon receiving the award Mr Davie said after 22 years in the business, “This is a real surprise and a real honour.” Ms Welsh pointed out that Mr Davie was instrumental in the delivery of the very first Sapphire store, and those learnings are used to this day. 

2022 BLUE BOOD AWARD – Noel Green, Head of Sapphire Trade Transformation 

IHG 2022 BLUE BOOD AWARD – Noel Green, Head of Sapphire Trade Transformation

Blue Blood award winner Noel Green said he was humbled to receive the award particularly because he works with the other candidates as well and said they are just as passionate as he is.

“They do the hard yards; they take on the tough jobs and make it work. This is the best job I have ever had in 40 years of hardware and it is because of the members, the team and the passion in our executive team which I just wanted to be a part of,” Mr Green said.

2022 CEO OUTSTANDING CONTRIBUTION AWARD – Rick Sola – General Manager Supply Chain & Logistics

IHG 2022 CEO OUTSTANDING CONTRIBUTION AWARD – Rick Sola – General Manager Supply Chain & Logistics

Introducing a new award at this year’s event, Ms Welsh said award winner Rick Sola always found a way to ensure the members and the community always got what they needed, particularly throughout COVID and natural disasters. 

Mr Sola said, “Our team really wants to support the independents, alongside the suppliers who want to ensure our customers are served. It was an honour to be given the opportunity to build distribution centres and ensure that we service our customers more effectively at the lowest possible cost.” 

2022 CEO RECOGNITION AWARD – David Woodman – Woodmans Mitre 10, Beenleigh QLD

IHG 2022 CEO RECOGNITION AWARD – David Woodman – Woodmans Mitre 10, Beenleigh QLD

Mr Woodman was recognised for his years of service to Mitre 10, serving on numerous committees and lending his counsel to ensure the success of all independents. Mr Woodman said he has enjoyed his time at Mitre 10, pointing out that, “Whatever you give to this organisation you always get back in spades” 

STORE AWARDS

2022 VILLAGE OF THE YEAR – Northern Independents representing NSW

IHG 2022 VILLAGE OF THE YEAR – Northern Independents representing NSW

Northern Independents Business Development Manager Chantel Jackson said the village had shown an incredible amount of passion and determination over the past 12 months while achieving an average sales growth of 8.7 per cent. 

2022 STORE OF THE YEAR – CONVENIENCE FORMAT – Gove True Value Hardware, Nhulunbuy, NT.

IHG 2022 STORE OF THE YEAR – CONVENIENCE FORMAT – Gove True Value Hardware, Nhulunbuy, NT.

The Store of the Year Convenience Format recognises stores within both the True Value and Thrifty Link brand. Gove True Value Hardware owners, Bob, Nathan and Samantha were awarded for achieving phenomenal growth at their store which is located in Arnhem Land. 

“We are in a unique location so thank you to the team and Sam, my right-hand lady, for making my role a lot easier. To IHG, suppliers and logistics partners, we could not do what we do and support the local community and wider region without the quality products and services that you provide,” Nathan said.

2022 STORE OF THE YEAR – SMALL FORMAT – Sunlite Mitre 10, Paddington, NSW.

IHG 2022 STORE OF THE YEAR – SMALL FORMAT – Sunlite Mitre 10, Paddington, NSW.

Sunlite Mitre 10 Managing Director Steven Czeiger said it was an honour to receive the recognition but said the award was for Lee and Chris, who run an amazing store. 

“They continually lift the bar every single day and deliver an outstanding experience every single time. They make sure our customers are truly raving fans and I thank you guys. You are truly amazing,” Mr Czeiger said.

2022 STORE OF THE YEAR – HOME HARDWARE – Mackenzies Home Hardware, Goondiwindi, QLD.

IHG 2022 STORE OF THE YEAR – HOME HARDWARE – Mackenzies Home Hardware, Goondiwindi, QLD.

Store Owner Clive Quartermaine said after 28 years in the hardware industry he never would have envisaged that he would be standing on the podium as an award winner. 

“In 2021 we completed a Sapphire program and this is what has given us the ability to be the Best Store in town. My wife and I were fortunate that our son Cameron has come back into the business, and he has helped drive the business to where it is today,” he said.

2022 STORE OF THE YEAR – MEDIUM FORMAT – Pontings Mitre 10, Warrnambool, VIC.

IHG 2022 STORE OF THE YEAR – MEDIUM FORMAT – Pontings Mitre 10, Warrnambool, VIC.

Third-generation, part owner Pam Madner said she was so proud to receive such recognition as the store celebrates its 100th birthday this year. 

“My brother John and I are very lucky to be third-generation operators after our grandfather started this business. I feel that since we changed to a Sapphire store in 2019 it has been the best decision we have made in our 100-year history,” Ms Madner said.

2022 GARDEN CENTRE OF THE YEAR – McLaren Vale Mitre 10, McLaren Vale, SA.

IHG 2022 GARDEN CENTRE OF THE YEAR – McLaren Vale Mitre 10, McLaren Vale, SA.

Owner Mark Loveday said he and his wife Fiona have always wanted to be award-winning store owners. 

“Twenty years ago I was a hardware manager and the boss said we were going to the IHG national awards night. I sat there that night and I was blown away by all of the winners who were so proud of their stores. From that night on I knew I wanted to be a store owner and stand on stage as an award winner,” Mr Loveday said.

2022 TRADE CENTRE OF THE YEAR – Provans Mitre 10, VIC

IHG 2022 TRADE CENTRE OF THE YEAR – Provans Mitre 10, VIC

Founder Barry Rosenburg established the business with his father aged just 20 years old in 1966.

Upon receiving the award Barry said, “One of my older customers thanked my daughter Marnie and my son Jarrod for running this business and I am very happy that in the last few months they have become directors of Provans.”

2022 STORE OF THE YEAR – LARGE FORMAT – Margaret River Mitre 10, Margaret River, WA.

IHG 2022 STORE OF THE YEAR – LARGE FORMAT – Margaret River Mitre 10, Margaret River, WA.

Margaret River Mitre 10 originally opened in the main street of Margaret River on the Bussell Highway in 1984 and was originally known as Lloyds Hardware. Over the years Lloyd Shepherdson and his wife Anne have grown the store so Margaret River Mitre 10 could become the award winning store that it is today. 

“This is unbelievable because we are one of the smallest stores in this sector. We are a happy crew and it really is because of them that we are standing here tonight,” Mr Shepherdson said.

2022 HALL OF FAME – Stephen Iser – Hume & Iser Mitre 10, Bendigo, VIC.

IHG 2022 HALL OF FAME – Stephen Iser – Hume & Iser Mitre 10, Bendigo, VIC.

Daughter Sarah Tarrant spoke on behalf of her father Stephen Iser, when receiving the award.

“Entering the business in 1972, aged 17, Stephen took over as Managing Director in 1994 and was responsible for many positive changes in the business as it entered the twenty-first century, while sailing through adversity throughout the decades. He was also the first member to move from Home Hardware to Mitre 10 when IHG consolidated into one buying group. His retirement took him to 50 years of service and achievement in 2022.”

Upon receiving the award, Stephen Iser said, “If you asked me if I would do it all again I would. Our business is now 143 years old and still owned by the Iser family. We have gone through the ups and downs. But since our Sapphire transformation in 2018 we have just boomed and it is still going strong. We are in very good hands as a group and such a good future ahead.”