The (True) Value of Secondary Product Lines
Recently an article was published based on an interview with a divisional VP of merchandising for True Value. The article focused on the co-op’s rather aggressive merchandising plans for the VP’s assigned product categories- Automotive, Pet, and Farm & Ranch. The plan is to significantly grow these categories over the next five years.
Interestingly, none of these are products most people immediately identify with the local hardware store. In fact, most dealers in our retail market are not nearly the first that come to mind when contemplating these product categories.
When it comes to automotive products, there is a vast network of specialty retailers, chains and independents that populate our landscape. Chain Store Guide covers these in great detail through our Database of Automotive Aftermarket Retailers and Distributors. Of course these products are also associated with big box discount stores and general merchandise retailers. Increasingly dollar stores have entered the mix. All of these retailers are thoroughly researched through our Database of Discount Stores and Specialty Retailers, which contains the Automotive Aftermarket database as well.
The Database of Discount Stores and Specialty Retailers also features a section detailing Pet Store Chains. Here again, one can conveniently enjoy a one stop shopping experience and cross over to the sections featuring the big box discount stores and general merchandise retailers. The pets market has also become an increasingly popular lure for dollar stores. As with products of the automotive aftermarket, it is amazing how many of these items can be found even at single price dollar stores, as the range of product grows with the popularity and command of dollar retailing.
Of course the Database of Home Center Operators and Hardware Chains, features rich listings detailing Farm & Home retailers. For companies wishing to access dealers of farm products and supplies, these listings can’t be beat. Most hardware stores aren’t associated with this type of inventory.
Why then is True Value aggressively seeking to grow these product lines? As our nation looks back at the recession, hopefully through a rearview mirror, we can see that each of these product categories pretty much proved to be recession proof.
In our industry, the farm and home store category was unique in actually growing during the recession. This, as all other markets visibly suffered and most shrank, both in terms of sales as well as unit/store count. True Value’s inclusion of the term ranch here likely was inspired by the incredible growth of Tractor Supply after focusing on ‘gentleman ranchers’, as an important base to its market.
Though this trend was clear even before the recession, the average life expectancy of automobiles continues to noticeably increase. Consumer interest in increasing the lifespan of their cars greatly grows as tough times present themselves and persist. Thus the AutoZones, O’Reillys and Pep Boys continue to expand their store counts as well as products and services (Pep Boys) to meet actual and perceived demands.
The pet products industry has been a staple of strength throughout the recession and this trend is continuing as we hopefully leave the recession behind. Even during the harshest of recent economic times, many consumers indicate that their pets often come first. They seem to find it easier to cut back on other items in their household budgets, including the family food supply, rather than shortchange their precious pets. In fact, True Value has rolled out its own private label – Pet Expert, dog food and dog treats.
The idea of a hardware store, chain or co-op seeking to beef up sales through products not normally associated with their respective domain should not come as a surprise. Years ago, Orchard Supply Hardware gained considerable customer loyalty by bringing in bottled gallons of water during a drought. When the drought was over and the company announced it would discontinue the now seemingly unneeded offering, many customers chimed in to insist that they continue to be allowed to make these purchases to show their appreciation for Orchard’s help when times were tough.
Rather than wonder how successful True Value’s current merchandising plans will be, dealers should attempt to determine which not necessarily traditional products might be a hit with hardcore and/or prospective customers in their markets. This could prove to be a neat insurance policy against the next economic downturn, which might well lurk around the corner.