A swelling population in the town of Margaret River, Western Australia, led a local independent business to undergo a complete transformation, ensuring it kept up with the huge demand placed on local builders. Then the pandemic hit and a true test of its operations began.
Business: Margaret River Mitre 10
Owners: Lloyd & Anne Shepherdson
Location: Margaret River, WA
Buying Group: IHG (Independent Hardware group)
Margaret River Mitre 10 owners, Lloyd and Anne Shepherdson, have been at the helm of the popular business in the centre of the Western Australian surf town since 1984. While the store has been the ‘go-to’ for local tradies and DIYers for many decades, it was only three years ago that the couple invested in a full refurbishment after the business reached capacity.
Trading in Margaret River in the 1980s was a vastly different experience to what it is today, with tourists only visiting the area to take advantage of the local surf. Store Manager, Paul Brown says it has now become a popular destination to live, with many new families moving to the area and building new homes. This growth is also fueling the development of the store’s trade and retail offer.
Lloyd and Anne own a number of businesses in the regional town and are highly active community members. Lloyd’s family has been in the local area since 1893 and were heavily involved in the local sawmilling industry for many years.
Paul has also worked within the Shepherdson Group of businesses for a long time, marking up 27 years in 2021. He says it is incredible to see how far the store has come since its origins as Lloyds Hardware.
“The recent population growth has been phenomenal. It stems from people moving down from Perth and across from the eastern states, and it has meant we have had to remain on our toes and ensure the store grows along with it. There is plenty of new housing being built in the area, including a new eco-village with 400 odd blocks of eco-friendly housing. This development has been huge for our business as we work with local builders to make sure they have all they need to complete their projects on time.”
“After COVID hit, people realised they do not have to live in a city to work which is why regional areas have become so popular. However, with so little stock on the real estate market and limited rentals, this is also preventing a lot of people from working in town at the moment,” Paul said.
In 2019, just before the pandemic, the store underwent a substantial change, rebranding from Home Timber & Hardware to Mitre 10 as well as embarking on a full transformation of the store’s operations under IHG’s Sapphire program. The extensive renovations saw Lloyd and Anne invest in significant building upgrades to trade and retail, external yards and the Home Improvement Selection Centre, while also focusing on new ranges and layouts to improve the service experience for customers.
“There would be no way in the world we would be able to supply our trade customers currently if we had not undertaken the Sapphire Program and transformed our hardware store to the outstanding business that it is today. We were at full capacity three years ago and we had to make a decision which way we wanted to jump. Thank goodness we took the punt when we did given what we have experienced over the last 18 months during the pandemic,” Paul said.
“Our trade area is bigger than ever after we created a destination point for our trades during the transformation. This area now features a designated trade desk and three TV screens above to promote products and our services. Also on display is a map of the south west which highlights IHG’s investment in technology like Truck Tracker, and shows customers where our delivery trucks are at all times. All of the racking on our timber walls were completely gutted with new racking installed alongside a new mezzanine so our overstocks are stored properly, and a new drive-thru traffic plan to help tradies get in and out more easily.”
Paul also mentioned the significant fleet upgrades the store has invested in that have well and truly already paid dividends: “four trucks on the road, three utes and a couple of vans all helping to improve our capacity to service builders. Since the transformation the store has grown to 70 per cent trade/30 per cent retail, up from 60 per cent trade before the renovations. And this number just continues to grow with the construction boom at all-time highs.”
The business transformation was not just limited to the main 1500 square metre retail and trade premises on Station Road, with upgrades also undertaken at the Shepherdson’s existing Plasterboard Outlet and Home Improvement Selection Centre, located two kilometres and 100 metres from the main store respectively. The selection centre now displays a more expansive variety of kitchens, bathrooms, flooring and home appliances that capture the ‘whole of house strategy’ that IHG is driving across the network.
“When our builders deal with us, they know they can source so much more from us than just timber and cladding. It is also plasterboard and plasterboard accessories, a large choice of insulation materials and Hardies products available from our Plasterboard Outlet, while the Selection Centre features kitchen, bathroom and flooring displays, wood fired heaters, alfresco kitchens, barbeques and outdoor furniture. The transformation has taken the business to an entirely different level,” Paul said.
“The team at IHG are always bringing out new initiatives to strengthen our businesses and ensure we are more streamlined. We have offered kitchens to our customer base for over seven years and we are now the biggest seller of Principal Kitchens in Western Australia and in the top five Australia wide. I believe we have achieved this because we have dedicated staff who have worked closely with us from day one. No advertising is required as all of our customers are directed to the store through word of mouth because we have such a good quality product to sell.”
Paul continued: “IHG have also aligned itself with some great suppliers which means we never have any issues with stock from kitchen suppliers and they are all Australian made cabinets as well. We have found that so many consumers now seek to purchase Australian made products and we cater to this growing trend.”
COVID building boom
Prior to COVID, Paul believed there was a substantial lack of confidence within the market but since the pandemic, “it is like someone has hit the trigger and we just have not stopped.”
“The local area is growing at such a fast rate and local business owners are finding it very difficult to source workers. This includes those in the building industry who are desperately looking for qualified trades and labourers. This puts a lot of pressure on the local builders, trade and suppliers as well,” he said.
Sourcing material has become challenging due to shipping delays but Paul believes these issues can be overcome if staff continually communicate to local builders on the importance of ordering well in advance.
“Two years ago, a builder could place an order for delivery the next week, but we have communicated to them that if they have a specific order, it will not come for four to six weeks. While it has been a learning process to flag your orders well in advance, I believe our local builders are much more tolerant now and they know they have to put the correct processes in place so they can run their businesses properly.”
The store also has a dedicated trade sales rep on the road who not only maintains communication with suppliers and customers, but also ensures customers know why supply might be held up. This also reduces angst around the trade desk as builders source materials..
“The biggest learnings I have come away with after running the store is the need to communicate well and listen to our suppliers. I believe the business continues to do well because of this.”
Since the pandemic, only minor alterations were required in-store, including the implementation of Click & Deliver because of the global shift to online shopping, according to Paul.
“When it comes to servicing the trade, Mitre 10 have an online trade portal that we have implemented with great success. This includes a delivery management system called Truck Tracker where we log orders and deliveries through this trade portal and it gives us a good perspective on the volume of work that we have and how many deliveries per day that we need to do, ensuring we also deliver what customers need on time,” Paul said.
A community-minded approach to servicing customers also extends to the wider IHG family, with the store acting as a hub to provide purchasing options to surrounding smaller stores. Paul and his team work collaboratively with any IHG member to share their knowledge and understanding of trade.
Further stand out qualities of the business include aligning with the right suppliers and ensuring on-going communication between suppliers and the store’s customers.
“We have aligned ourselves with trusted suppliers through IHG including many local suppliers who provide quality, Australian made products to the store. We are so lucky to have the Wespine Mill in Bunbury, which provides Western Australian pine, while our LVLs are also sourced from Wesbeam. Our philosophy is to align ourselves with local producers and this has paid dividends for us.”
“We also project any supply issues to our customers months in advance so there are never any issues. This also requires on-going communication with our builders to ensure they receive all orders on time. It has become second nature to them to continually communicate with us.”
“With price increases coming through every week, we also send through weekly bulletins ensuring builders know when prices are expected to increase on certain products so they do not get caught out on quoting either. Communication is such a crucial discipline to prevent problems with our customer base and by all working as one it has ensured that we have got stock when our customers need it,” Paul said.
Store staff remain mindful of the capacity to service its regular trade customers. Paul said if someone comes out of left field requesting a certain product, staff are not afraid to say “no” if the store cannot meet their needs because it is important to maintain the store’s high standards for its loyal customers.
“The consensus of members across the IHG network is that we all need to be careful taking on the world because you might burn the bread-and-butter builders who support you 100 per cent. Plus, there are plenty of stores in Busselton and Bunbury who can service customers who are bouncing from store to store. Local hardware stores are all just trying to keep up in our businesses because the building trade has gone completely nuts,” he said.
The Shepherdson’s, along with Paul’s, future plans for the store include continuing to grow and evolve the ‘Selection Centre’ with the team very keen to tap into a host of initiatives that IHG is driving. “The ‘whole of house’ strategy is one area we need to grow with because there are big opportunities for us. This includes with supply and install services for renovators and working with our top builder customers on how we can supply them with more of the house build, from foundation to fit out. Trade wise we will want to continually align ourselves with the right suppliers and the right products.”
“You cannot ever rest on your laurels. There is so much new technology and products coming out all the time to make the business more effective and economical. There is new market share that needs to be serviced, particularly as people continue to invest in their home with the pause on overseas travel.”
“If we can source products in Margaret River, it will keep the money in town and see local people employed which is great for everyone,” Paul said.