Australian merchandisers have had their work cut out for them over the past two years, not only tackling store closures but staff shortages as well. But the on-going challenges have only led to diversification and evolvement, as local service providers continue to deliver high-quality service to Australian and New Zealand retailers.
FIT Merchandising has undergone significant change within its culture and reach over the past two years. Once a predominantly Bunnings-based service, the company has recently diversified into a variety of retail outlets, with FIT Merchandising Managing Director ANZ Dale Keating saying this “makes good business sense” for a variety of reasons.
“Firstly, by branching out our suppliers benefit from the exposure to other outlets and this leads to an increase in their sales and profits. Secondly, this diversification provides FIT and our suppliers with a level of protection. FIT exists to help other businesses navigate the retail environment whether this is hardware, grocery and everything in between,” he said.
“As a national service provider FIT services both Bunnings and the independents which allows the majority of our suppliers to reduce risk by exposing them to new ways of selling their products. For FIT the advantage is that we also reduce our risk by not having all of our eggs in one basket while offering more to our suppliers.”
“What we have found is that Bunnings and the independent stores do not necessarily want the same type of product and occasionally want a product modified or packaged differently, depending on their market, shelf size and space. This can lead to some suppliers having obsolete or unwanted stock,” Dale said.
It is for this reason that FIT Merchandising will launch a new initiative this year in an effort to provide a solution to its suppliers to clear unwanted stock. While this is another advantage for FIT, Dale says it also allows FIT to partner with suppliers on a more ‘cost effective’ and meaningful level.
“It is important for the FIT team and myself to constantly review and re-visit the FIT business so we remain ‘relevant’ within this ever-evolving industry while also providing meaningful partnerships with our suppliers.”
Company culture is another major focus for FIT post-COVID Dale says, with employee well-being and mindset an ongoing priority for the business.
“We found there was a genuine interest in the team’s well-being throughout this time. Re-focusing on our mental and physical well-being throughout COVID became particularly necessary as team members battled many challenges including lockdowns, reduced income, minimal social interaction, working from home, staying motivated, and the list goes on,” he said.
“It is for this reason that most suppliers have given up on employing their own sales teams and maintaining them due to the paralysing effects of what is now referred to as the ‘great resignation’, whereby workers had a ‘re-think’ of how and where they want to live, work and play. There has definitely been a trend and mind shift around employment that varies significantly for each individual.”
“Employees now want their roles to be more versatile including having the ability to work remotely so they can live where they want, moving into a similar role in another city or area, early retirement because some individuals actually made excellent financial gains during COVID, while others changed jobs due to their views on vaccinations,” Dale said.
Although most COVID issues have dissipated, monitoring the mental health and welfare of staff remains an important focus for FIT Merchandising, particularly as those in New South Wales and Victoria struggle with the on-going effects of the lockdowns.
“This has led FIT to appoint a new National Manager, Michael McDonald with his role centred around uplifting our team and providing support. The long-term focus will be to help drive our team towards their goals and uplift their performance whilst upholding FIT’s core values. This will ultimately lead to happy and confident employees who feel supported and valued; and no doubt happy suppliers as well.”
“In the meantime remaining diverse has become an important attribute for FIT. I believe all businesses, whether they made a profit or not, had a ‘scare’ by COVID. When we started to see the possibility of a decline in business we were concerned as to how the pandemic would affect us, which is why we chose to acquire another business that complemented FIT and this type of diversification really saw us through,” he said.
When considering the businesses FIT works alongside, Dale says COVID saw a minimal impact around product sales initially but a significant impact in other areas. Importing, product availability, transport and warehouse staffing were just some of the many areas to be affected during this time, he said.
“All of our suppliers had a genuine uplift during the early stages of COVID and then a slowdown, followed by a steady decline with 63 per cent of businesses reported being negatively impacted by COVID, 12 per cent saying they are considering cutting costs through staff layoffs and 41 have experienced a 50 per cent or more decline in revenue in the past 12 months.”
But Dale says it is not all bad news with many aspects of the business improving in a variety of ways during this time.
“I believe we have a closer relationship and understanding of the needs of our suppliers since COVID because we all ‘hung on for dear life’ together. Our team has also organically become more supportive of each other and the business. We have learned not to become complacent and in many ways, we have been able to instigate new areas of our business, ultimately improving our ‘bottom line’. Maybe it is the shake-up we needed,” he said.
As a national service provider, FIT’s 250 employees now service both New Zealand and Australia with its strongest states located along the Eastern Seaboard.
“Victoria is certainly a stand-out because the team there are quite diversified and utilise each other’s skills. The Victorian team is made up of our National Business Development Manager, National Project Manager, Victorian State Manager, and assembly team. Victorian team members also manage our reps and assembly teams across New Zealand as well.”
“In saying this, New South Wales and Queensland hold the largest territories. Both states have two territory managers each due to their size and spread,” he said.
Current standout categories within the industry centre around building and home maintenance such as paint, timber, cement fibre board and plumbing, according to Dale, which is primarily due to consumers investing heavily in DIY projects, while the need for highly skilled and qualified tradespeople was, and still is, in high demand.
As a sales solutions-focused business, Dale says FIT Merchandising provides all the functionality of sales, ranging, relay/refits, including ‘in house’ products, analytics, ‘off location’ displays, demonstrations, training and all elements of ‘supplier support’, throughout Australia and New Zealand.
Just last year the business launched ‘FIT Assembly Services’ to provide large roll-out and re-fit solutions throughout Australia and New Zealand allowing suppliers to use FIT as a ‘one-stop-shop’ for all their needs within the industry, he said.
When it comes to on-going issues within the industry, Dale admits maintaining standards and supplier expectations continue to be a challenge.
“In Sydney and Melbourne particularly there were significant periods of time where reps were not allowed to attend stores even after the lockdowns had ended. This saw the physical display of supplier’s products needing significant attention.”
“There were two problems here. One is that many agencies employ casuals due to the fluctuating nature of the hours. When these employees were prohibited from attending stores, many resigned to take on alternative employment for monetary reasons. The second problem is getting the suppliers’ physical displays up to par again. This requires a lot of time and needs to be in partnership with both the supplier and the store’s team members,” he said.
On-going supply chain woes have also forced suppliers and retailers to work smarter by introducing several new measures within business.
“Supply chain issues have reiterated the need for technically advanced importing and manufacturing mindsets, including the on-going support of Australian Made products and the introduction of renewable and environmentally friendly products. There has also been a lot of shuffling due to supplier dissatisfaction around the 3PL space and transport. Some are even moving from 3PL to their own warehouse spaces creating large buffers of stock levels. There is also a growing focus on product analytics tools, as well as an increase in the amount of training for retail staff in an effort to uplift sales within the last few years,” he said.
For now, as the market recovers from the past two years, Dale believes suppliers will continue to seek stability when it comes to merchandising.
“The majority of small to medium suppliers are staying put due to all of the uncertainty that exists around unsteady sales and the uncertainty of employment. Medium to large size businesses however have moved a lot of the workload from their own salesforce to third-party agencies. This seems to be due to frustrations surrounding uncertainty in the industry, including the inability to complete regular calls due to illness, resignations, recruitment difficulties and on-going cost pressures in fuel and transport.”
“Some of the larger global players have put tenders out to the marketplace and are actively looking. But one constant remains steady, the catalyst for change is driven by dissatisfaction,” he said.
For now, FIT Merchandising will continue to build its excellent reputation and is proud to have the majority of suppliers referred to them via word-of-mouth, which Dale says is, “a great feeling”.
A Team’s expansive crew services hardware with ease
As with most industries, A Team Merchandising was impacted by COVID over the last 12 months particularly as blanket lockdowns continued in New South Wales and Victoria.
This, combined with the phenomenon of staff being unavailable due to isolation requirements, General Manager Lyn Coghlan said that fortunately, the sheer scale of her team has meant that A Team easily swings staff around to fill gaps where required.
“While the ‘great resignation’ has been thrown around in the media we have done well with staff retention because we have made such a concerted effort to stay in touch with our people throughout every state,” Lyn said.
For now, staff shortages along with rising fuel prices are on-going challenges for the team, particularly considering that a fundamental part of A-Team’s role is to be out on the road servicing Bunnings stores on behalf of clients.
“In reality, it means we will deliver even greater efficiencies compared to clients doing it themselves. But the fact remains, costs of doing business are being driven up,” she said.
As a merchandising company that exclusively services the hardware industry, Ms Coghlan says A Team pride itself on knowing the industry intimately, “while our longevity comes from doing it well.”
“Bunnings is definitely our key focus as we have a large national team dedicated to this task. In saying this we also have a great understanding of hardware independents after having worked closely with them over the journey and we are always open to assisting with special projects,” she said.
“This also means that when we do take on projects in the independent space, we can hit the ground running because we already have a strong knowledge of the products and we have the flexibility to ramp our team up as required.”
Currently A Team primarily works with brands that are looking for national solutions.
“We service every single Bunnings store in the country and have the feet on the ground to do so. Our national representation is well-balanced so we can meet the needs of the stores. In New Zealand we also have a great alliance with a strong merchandising organisation with a similar approach to doing business to meet the needs of the market as required.”
As A Team continues to evolve and move with the times, the crew have learned that it is important to be more flexible than ever, particularly over the past two years.
“Fortunately our systems have made it easy to share information with clients remotely. Like many others, Zoom has been embraced and we are finding many clients are still preferring online meetings for time efficiency. In the field, staff stability is showing signs of settling down with isolation requirements being less of an issue now. We also look forward to more consumers getting into stores to drive demand,” she said.
While there is still some uncertainty with supply as the industry comes out of COVID, Lyn says even though the team has felt circumstances are completely out of their control, they know there are ways to adapt by thinking outside the box.
“Most of the time it involves adjusting facings and being extra diligent that all stock is drawn down from top stock etc. Timber has been a good example of a challenging supply category where we have been able to be more proactive. Orders in the timber department are generally large and very bulky. At the best of times it is critical to avoid over-ordering or duplicating orders as it is very space sensitive.”
“As Bunnings has now moved some timber over to Auto Stock Replenishment, we can still manage this in a more manual way. Our team review daily incoming orders and place orders as required to ensure there are no overstocks and we do our best to avoid understocks. We even work with Bunnings to transfer stock from store to store,” she said.
When it comes to seeking out new clients, Lyn says that historically she has found that the frequency of agency reviews has been very much driven by corporate policy.
“Some have a program of putting it out to the market on set time frames. It would be fair to say some of these have been pushed back due to COVID. The market may see more reviews over the next 12 months as we are all hopeful for more stable trading conditions.”
“On the flipside, we deal with many clients who take the approach that we are doing a great job and they see no reason to change. We are very open to trials so both parties can gain a better understanding of each other. We have never lost a trial yet,” she said.
Versatility sees Classic Duo thrive
Remaining versatile within the current climate is a priority for Classic Duo, with National Account Manager Zac Nicol saying it is important to not be limited to one company within the hardware industry, particularly considering the current climate.
“We at Classic Duo believe we need to be invested in all hardware businesses across Australia because when we do this, we become a greater sales and merchandising team. Classic Duo is always looking for new opportunities great and small. We believe there is nothing too big for us to take on which is why we believe we can offer any new brands the best opportunities within the independent space,” Zac said.
While Classic Duo continues to service all hardware retailers on a national level, Zac pointed out that the company has not yet had the opportunity to get the ‘boots on the ground’ in New Zealand due to border closures throughout COVID.
“In saying this our Chief Executive Officer, Keith Nicol is hoping to bring the Classic Duo name to all New Zealand hardware markets by the end of 2023 which will include Bunnings as well as independents,” he said.
“Like most businesses within this sector we have found the past two years to be very tough. We have had to adopt alternative methods of communication through mediums such as Zoom and we have also had to adapt to doing more things over the computer which has made us a great team,” he said.
“In the past Classic Duo would only hold quarterly meetings due to the significant amount of time, cost and planning that goes into conducting conferences over two or three days. But now we can hold conferences with our entire team and any of our suppliers with the click of a button,” Zac said.
Throughout COVID Click ‘n Collect has played a major role in maintaining, and taking full advantage of unprecedented sales throughout lockdowns, with Zac saying that his suppliers would not have achieved such incredible results if Bunnings had not been so quick to utilise its Click ‘n Collect facilities throughout this time.
For now, Zac believes the business will continue to navigate its way around supply issues, as well as the elevated costs along with rising fuel costs that continue to change the coal face of the industry.
“At present, we are reviewing call cycles weekly to get the most cost-efficient model as well as making sure we fish where the fish are”
“In saying this our current customer base is extremely strong and we are proud of the sturdy record of long relationships we have built with our customers. For example, we have been in partnership with Bailey ladders, Le Maar Door Furnishing and Silvan Products for over 15 years now.”
“For new clients, we are always happy to offer a trial as we believe our service skills and attention to detail will ensure a successful trial period, as well as the start of another successful, long-term relationship,” Zac said.