New global association for merchandisers
Collaboration is the new theme behind a global association that will be available in Australia, according to AHJ reporter, David Burton.
The hardware channel is buoyant again and it seems housing developments are flourishing as interest rates remain low. The ability for consumer lending to continue means homeowners are choosing to trade in equity to refurbish or add on to existing dwellings.
As the hardware industry benefits from this industry boom, suppliers constantly look for opportunities to better service hardware stores. And this is when the sales agent or merchandising service comes into play – with the benefit of amortised costs across a number of clients versing the total cost of running in-house sales teams.
Merchandising teams are also ideal for vendor refill, while sales representatives are required for specialised selling and also for the essential relationship building with independents through Mitre 10 or Home Timber & Hardware Group (HTHG). Sales agency senior business managers also provide a higher level of account management that buying groups require on a regular basis.
It seems trends in merchandising often start off in one segment before filtering across to other channels. Industry bodies are often a source of updated trends in merchandising, with many of the agents in Australia having a role in the local hardware association and regularly attending functions and business briefings.
A recent emergence in Australia is the push for global association World Alliance for Retail Excellence and Standards (WARES), which was initially launched in North America and has membership in four countries outside its home base. In Australia, the Association of Sales and Merchandising Companies Australasia (ASMCA) is working in association with WARES to bring this global association project to life.
ASMCA, which is predominantly focussed on Fast Moving Consumer Goods (FMCG) through the brands that its members merchandise and represent, also has members who operate throughout the hardware channel.
The WARES offer, in conjunction with ASMCA, promotes benefits which ensure contact with emerging trends and global innovation in the merchandising industry. It also guarantees regular contact with other retail industry companies on merchandising issues, as well as access to workshops on new merchandising methods.
While the merchandising field spreads far and wide across many channels (including food, pharmacy, telecommunications and entertainment), the hardware segment by definition of its product offer is generally pretty staid. Perhaps some new thinking on the appropriate types of merchandising offers will lead to better execution in store and resultant sales increases.
All this relies on retailer collaboration and the point of difference that WARES pushes to ensure retailers become more involved in its membership. For more information, Keith Quigg from the ASMCA may be contacted via mobile: 0403 003809.
At the coalface
From a service provider’s point of view, business is certainly moving well, according to Strikeforce General Manager, Malcolm Rowley, who said the trading environment in the hardware channel also remains sound.
However, due to the increasing network of stores growing across the board, it seems businesses partnering within this channel is being stretched. For those businesses that benefit from a national reach, there are still enormous opportunities available, which include incremental resources across tactical sales programs.
Mr Rowley also believes that a national sales agency will be an attractive offer to suppliers that may not have the reach they need to service the channel, particularly when considering the increasing cost of servicing this market.
More recently, Strikeforce partnered with a retailer, to map a category in store within a week.
“Our field team have also recently visited every one of our stores, to capture several photos through our tablets and upload the data within hours of being in store. This was done whilst mapping all of their stores. The end result provided important data to give this some synergies across their store footprint,” Mr Rowley said.
Another positive endorsement on the vitality in hardware came from Paul Baxter of Paul Baxter Agencies. However, due to the changing climate, Paul did mention his business does very little now with the independent hardware industry.
Still, as a 25 year veteran serving both suppliers and retailers in this channel, Mr Baxter does know the trade inside out.
“Every year it seems opportunities, as well as business, have reduced as market share trends more towards the big boxes. It seems there are few independent hardware retailers in Australia now who maintain a positive outlook for the future,” he said.
Mr Baxter also said the merchandising offer for Paul Baxter Agencies continues to grow out of sight.
“We have really impressed our clients and their expectations. Our formula must be working where we work with the vendor and remain part of their strategy planning and take more ownership, rather than merely receiving direction and following their vision. Our referral activity has also increased significantly in the last six months especially,” he said.
Paul Baxter Agencies has recorded growth of around 30 per cent this calendar year, which has exceeded its client’s and its retailer’s (Bunnings and Masters) expectations.
“We are learning what it takes to be a true vendor partner, a stakeholder and we are also very busy growing,” he said.
Recent additions to the Paul Baxter Agency’s team is the appointment of two new regional field managers to support the company’s activity in the field. The new appointees have individually dedicated territories, with one representing Queensland, NSW and the ACT and the other Victoria, South Australia and Tasmania.
Trade of the future
For now, the market continues to be dominated by the Bunning’s big box retail offer, along with its dominating trade centres. However, it seems Mitre 10 and HTHG continue to allow merchandisers the opportunity to be more creative in an independent environment. The Mitre 10 business remains roughly a 50/50 split trade versus retail, which calls for different types of service calls required for each segment, and in trade, much of the business is on a charge through basis.
The issue facing merchandising teams that are calling on Masters is simply based on how many stores there will be and what volume expectations are required for the trade spend investment. This is in an account that is not growing at the rate promised at its launch.
Masters stores still need to be serviced, although there is a likelihood that range may continue to be tinkered as Masters looks to correct its offer.
Other buying groups, that run head office activity with members, are still able to access local specials or display activity from sales agency merchandising teams and are set to remain a vibrant segment based on the personality of selling to its local consumer base.
Whatever the type of call a manufacturer needs, there is a sales agent out there, national or local to do the job and get results. It’s what they stake their reputation on. The only difficulty is in deciding which one is right for your brand.