May 30, 2018
Differentiation Key To Lee Valley Success
Differentiation is what sets Lee Valley apart from other retailers, especially mass merchants, says Jason Tasse, chief operating officer of Lee Valley. Speaking at the session, ‘The Secret Sauce: How Retailers Are Achieving Supply Chain Efficiency’ at the Retail Council of Canada’s ‘Store 2018’ conference, he said Lee Valley is a specialty high-end store that offers premium products no-one else has. The company depends on technology and relationships with carriers in order to stock the long-tail inventory that customers expect to find in stores. Long-tail inventory is products in low demand with low sales volume that can collectively make up market share that can rival or exceed mass or popular products, but only if the store or distribution channel can manage the supply chain. Tasse said the company balances its inventory to make it available to stores and to customers who want to touch and feel it. This is accomplished through strategic partnerships with carriers in Canada and abroad. He said the carriers with strong service levels and good fulfillment rates are quite receptive to the company`s operations despite territorial challenges due to customers in Canada, the U.S., and overseas. Integrated technologies are also an important element to successful supply chain management. And although the company implemented new systems about five years ago, it’s always looking to better improve its efficiencies and keep those platforms current.
Wowing Customers More Critical
In today's competitive retail landscape, wowing customers is more critical than ever, says the sixth annual ‘Canadian Retail Insights Report’ by American Express Canada. It shows 87 per cent of retailers agree their customers are getting more selective about where they shop. This means to maintain a competitive edge, retailers are focusing on improving the in-store experience while investing in new technologies to provide seamless shopping experiences that leave customers wanting more. Almost all retailers (97 per cent) agree that improving the in-store experience is important and 69 per cent agree investing in new technology is integral to driving business success. Over half (58 per cent) of retailers surveyed say they plan to make more updates to the in-store experience this year. When it comes to enhancing in-store shopping, forward-looking retailers have their eyes on emerging technologies that have the potential to transform the customer experience. The data revealed 29 per cent of retailers are interested in investing in new technologies like automation or data personalization and 14 per cent are looking to artificial intelligence or augmented reality to provide a better in-store experience.
RCC Honours Retail’s Top Achievers
Jeff Kinnaird, president of The Home Depot Canada, and the retailer were presented with the Retail Council of Canada’s ‘2018 Distinguished Canadian Retailer of the Year Award’ at RCC’s ‘Store 2018’ conference. Kinnaird and Home Depot Canada received the award for their continued business success, their customer-focused approach to store and online operation, their ongoing commitment to the communities they serve, and living their values every day. Robin Lee, president and chief executive officer of Lee Valley, was presented with RCC’s ‘2018 Lifetime Achievement Award’ for his outstanding contribution and unwavering 40-year commitment to Lee Valley. As well, ‘Excellence in Retailing Awards’ were awarded to Canadian Tire Corporation for instore merchandising and supply chain innovations; RONA, a Lowe’s Canada Company for mobile experience; Federated Co-operatives Ltd. for philanthropic leadership; and IKEA Canada for pop-up experience and design and talent development.
Wesfarmers To Divest Homebase
Wesfarmers plans to divest its Homebase business in the UK and Ireland to a company associated with Hilco Capital. Under the terms of the agreement, the buyer will acquire all Homebase assets, including the Homebase brand, its store network, freehold property, property leases, and inventory. The 24 Bunnings pilot stores will convert to the Homebase brand following completion of the transaction. Wesfarmers says the transaction is in the best interests of its shareholders and will support the ongoing reset and repositioning of the Homebase business. Homebase was acquired by Wesfarmers in 2016.
Tyson Named Customer Experience Officer
Charles Tyson is chief customer experience officer with Lumber Liquidators. He has 30 years of experience in broad retail and commercial merchandising and omnichannel marketing from department stores and big box and specialty retail concepts.
Strong Retail Revenues For Ace Hardware
Ace Hardware Corporation had first quarter 2018 revenues of $1.31 billion, an increase of six per cent from the first quarter of 2017. Total retail revenues for the quarter were $63.1 million, an increase of 21.3 per cent. Net income was $11.9 million, a decrease of $16.4 million from the year-ago period. Same-store sales increased 2.2 per cent year-over-year and the average ticket increased 3.3 per cent for the period. Wholesale gross profit was $139.6 million, a decrease of $6.6 million from the first quarter of 2017. The wholesale gross margin percentage was 11.2 per cent of wholesale revenues, down from 12.3 per cent last year. Retail gross profit was $29.1 million, an increase of $4 million from 2017. The retail gross margin percentage was 46.1 per cent of retail revenues in the first quarter of 2018, a decrease from 48.3 per cent in the first quarter of 2017.
May 29, 2018
New Housing Construction Rises
New housing construction investment totaled $4.6 billion in March, up 9.7 per cent from March 2017, says Statistics Canada. This increase was mainly attributable to higher construction investment in apartment buildings. The increase in apartment building construction investment accounted for 81.7 per cent of the total growth in new housing construction investment in Canada. In comparison, single-home construction accounted for 77 per cent of the total increase in investment. Investment in new housing construction grew year-over-year in March for every building type except single-family houses, which fell by 1.1 per cent. This drop was mostly explained by lower spending on single-family house construction in Ontario. Quebec continued to post the largest increase for apartment building construction. Alberta was led by an increase in single house construction. British Columbia and Prince Edward Island were the only two provinces to post increases for all building types.
Sales Associates Key To Brand Loyalty
Sales associate engagement with customers remains the key to customer satisfaction when buying paint, says J.D. Power’s ‘2018 Paint Satisfaction Study.’ It shows that while most customers believe talking to a sales associate is essential, only 33 per cent of purchasers actually spoke with a sales associate at length about the products. Satisfaction is significantly higher among purchasers who spoke with a sales associate at length rather than briefly or not at all. And, customer satisfaction is important because it drives loyalty and advocacy. Among satisfied customers, 76 per cent say they “definitely will” repurchase the brand, and 79 per cent “definitely will” recommend the brand to others.
Lawson Opens Alberta DC
Lawson Products, Inc., a distributor of products and services to the maintenance, repair, and operations (MRO) has opened a distribution centre (DC) in Calgary, AB. The centre, co-located in the recently acquired facility of the Bolt Supply House, allows Lawson to reduce product delivery time to within one to two business days to its western Canadian customers. The 43,000-square-foot DC stocks more than 15,000 items and is managed through the company’s existing SAP and GAINS inventory forecasting systems. The Illinois-based company has had a presence in Canada since 1984.
Chervon Facility Gets LEED Certification
Power tool manufacturer Chervon has earned the LEED certification for ‘Leadership in Energy and Environmental Design’ for its North American headquarters in Naperville, IL. The newly constructed, state-of-the-art building boasts 78,000 square feet of office space and 46,000 square feet of high-end R&D/industrial space. The innovation hub is 100 per cent eco-friendly and includes a prototype lab, design studio, model shop, 3D print lab, brand showroom, and a photo and video studio. It offers employees amenities such as a gourmet café, gym, outdoor terrace, landscaped patio, ergonomic, height-adjustable desks, and open collaborative spaces. It is surrounded by 13.1 acres of wooded and wetland areas and is complete with over 7,000 square feet of outdoor space overlooking the Freedom wooded pond.
McMullen Promoted At Liteline
Steve McMullen has been promoted to national sales manager, commercial industrial – Canada with Liteline Corporation. He joined the company in 2016 as regional sales manager for Ontario.
Online Sales Lead Williams-Sonoma Growth
Williams-Sonoma, Inc. had revenue of $1.203 billion in the first quarter of 2018, an increase of 8.2 per cent compared to revenue of $1.202 billion in the first quarter of 2017. Retail net revenues increased 4.9 per cent to $557 million from $531 million in year-ago period. Comparable brand revenue growth for the quarter was five per cent year-over-year. Operating margin was 5.5 per cent for the quarter. eCommerce net revenue growth grew to 53.7 per cent of total company net revenues and grew 11.3 per cent to $646 million in the first quarter compared to the same quarter a year ago.
May 28, 2018
Orgill Earns ‘E’ Award
Orgill, Inc., was one of 43 U.S. companies recognized last week by Secretary of Commerce Wilbur Ross with the President’s ‘E’ Award, which honors companies throughout the country that export U.S. goods and services. The award is the highest recognition any U.S. entity can receive for making a significant contribution to expanding U.S. exports. This year marks the 56th anniversary of the award. The 2018 honorees come from 18 states and include 33 small and medium-sized businesses and 17 manufacturers. Orgill received its first ‘E’ award in 2014. This year, Orgill was honored with an ‘E’ Star Award for Exports which recognizes previous awardees who have reported four years of additional export growth. Memphis, TN-based Orgill, Inc., was founded in 1847 and is the world’s largest independently owned hardlines distributor. It provides retailers in nearly 60 countries around the world with access to more than 75,000 products from its seven distribution centres and three export consolidation facilities. The ‘E’ Award was created in 1961 when President John F. Kennedy signed an executive order to recognize companies that make up America’s exporters.
Retailers Coming Up With Differentiating Concepts
Pop-up shops, showrooms, and experiential retail are three growing retail concepts that are both promising and significant, says a report by commercial real estate firm Phillips Edison & Company. Retailers are taking advantage of the pop-up shop movement to generate brand exposure, test new products and concepts, and create positive engagements with consumers. By combining eCommerce and bricks-and-mortar retail, showrooms have also become a powerful way for brands to create meaningful interactions with consumers. While retailers seek to meet consumer demands for convenience, they also recognize the power that real-life contact with staff and products can have in generating a positive, long-lasting relationship. And, in response to an increasing desire for unique and exciting experiences to draw customers offline and into stores, a number of retailers are implementing interactive elements in their locations such as workshops, classes, coaching, and advice. There is tremendous opportunity for innovative retailers to present their brands in more immersive and experiential ways, says Phillips Edison. The retail industry has shown true resilience in the face of disruption as brands have gone back to the drawing board to reimagine the entire physical retail model and some amazing creative concepts have taken shape as a result.
Outdoor Living To Propel Outdoor Lighting Demand
The demand for outdoor lighting fixtures is expected to increase 6.7 per cent per year to $5.5 billion in 2022, says a report by the Freedonia Group. Demand will benefit less from building construction activity than it did during the construction market’s rapid expansion in the 2012 to 2017 period, when it was recovering from recessionary declines. However, acceleration in non-building construction – highway and street construction in particular – will support continued strong growth. On the building construction side, increasing consumer interest in outdoor living will support strong growth for area and floodlighting.
INVISTA To Invest In Texas Facility
INVISTA, producer of brands such as STAINMASTER, ANTRON, and FLEXISOLV, has entered the final design phase for a $250 million upgrade to the manufacturing technology and production of adiponitrile (ADN) at its Victoria, TX, facility. Construction for the project is slated to get underway in the first quarter of 2019. The ADN technology, developed and in use at the INVISTA facility in Orange, TX, brings improved product yields, reduced energy consumption, lower greenhouse gas emissions, enhanced process stability, and reduced capital intensity, compared to existing technologies.
Lowe’s Names New CEO
Marvin R. Ellison will be president and chief executive officer of Lowe’s Companies, Inc., effective July. He will also join the Lowe’s board of directors at that time. He currently serves as chairman and chief executive officer of J. C. Penney Company, Inc. He succeeds Robert A. Niblock, who previously announced his intention to retire. Richard Dreiling has been appointed chairman of the board as of July. He is currently a director.
ROCKWOOL Has Strong First Quarter
ROCKWOOL Group had sales of €603 million for the first quarter of 2018, an increase of 17 per cent in local currencies, including acquisitions, which contributed three percentage points. EBIT in the quarter was €70 million, an increase of 53 per cent year over year. There was an 11.6 per cent EBIT margin, which was up three per cent over the same period a year ago. Investments were €48 million, up €13 million compared to last year, primarily due to ongoing expansions in Poland and the U.S. Annualized return on invested capital reached 18.6 per cent compared to 15.5 per cent last year, driven by higher operational earnings.
May 25, 2018
Challenges Remain For New Home Market
In April, the new home market in the Greater Toronto, ON, Area (GTA) saw lower sales and an increase in remaining inventory, as well as a decrease in prices, says the Building Industry and Land Development Association (BILD). There were 1,727 total new home sales, the lowest number of sales for April in over 20 years. Single-family home sales, with 502 detached, linked, and semi-detached houses and townhouses (excluding stacked townhouses) sold, were down 65 per cent from last April and down 70 per cent from the 10-year average. Condominium apartments in low-, medium-, and high-rise buildings, stacked townhouses, and loft units accounted for 1,225 new home sales, down 65 per cent from April 2017 and down 38 per cent from the 10-year average. The lower number of sales means that remaining inventory increased for both single-family homes and condominium apartments in April, with total new home remaining inventory at 14,297 units. This included 9,958 condominium apartments and 4,339 single family homes.
CRAFTSMAN Now At Lowe’s Canada Banners
Lowe’s Canada now offers CRAFTSMAN products at its Lowe's, RONA, Reno-Depot, and Ace banners. Initially, CRAFTSMAN mechanics tool sets, tool storage, and flashlights can be purchased in stores from these banners as well as online. Later this year, the retailer will have a broader offering of CRAFTSMAN products as hand tools, power tools, and select outdoor power equipment categories are phased into stores. Lowe’s Canada will also honour CRAFTSMAN warranties.
Renoworks Updates Visualizer Tool
Renoworks Software Inc. has updated its visualizer tool to include TruWood Siding and Trim engineered wood products. The TruWood Visualizer is a web-based design experience built upon the latest version of Renoworks' web visualization platform that allows distributors, remodelers, builders, and homeowners to design with a variety of different products and colours offered by TruWood. As well, updates to the tool include enhanced photo-realistic rendering and mobile responsiveness. Renoworks will continue to build upon the technology and will provide additional value through shared analytics and insights to its clients. As TruWood customers interact with products and design, a much better understanding of consumer remodeling preferences will be revealed, growing Renoworks' data value and helping to fuel future innovations.
Younger Consumers Say Loyalty Complex
NextGen consumers are leading the retail industry to a new view on loyalty, one that is much more complex, finds research by Alliance Data's card services business. It shows Gen Z and Millennials have been empowered by unique experiences, technology, and the power of choice to engage brands and experience loyalty in truly new ways. For example, loyalty is earned. Most younger consumers (63 per cent) say they have many choices of where to shop, so a brand must show them loyalty to earn their business. Alliance Data says loyalty is complex and can span a continuum from traditional and mostly functional loyalty to brand love and emotional loyalty. Re-thinking a brand’s approach to loyalty means understanding that true loyalty requires a combination of function and emotion. Loyalty is also fragile, with 76 per cent of younger consumers only giving brands two to three chances before they stop shopping them. Brands must understand customers’ unique needs and think differently about measuring loyalty. Some consumers want the basics while others need more.
May 24, 2018
Social Responsibility Bringing Back Trust
Canadians' willingness to trust business has dropped significantly in the last year, but the most reputable companies are bucking the trend through social responsibility, shows a study on corporate reputation by the Reputation Institute (RI). The ‘2018 rankings of Canada's Most Reputable Companies’ shows companies that cracked the top 50 include Canadian Tire (14th place) and Home Hardware (21st place). Canadian Tire earned strong ratings for its citizenship and governance, the latter category defined as the perception that a company is open, honest, and transparent in its stakeholder and public relationships. Bosch climbed to 14th position, while 3M fell to 26th. RI says there is a direct correlation between corporate reputation and business performance, so companies have an opportunity – with the use of reputation measurement tools – to understand key opportunities and gaps and put processes in place to manage reputation.
Residential Buildings Lead Construction Prices
Prices for the construction of new residential buildings rose more than those for new non-residential buildings in the first quarter of 2018. Increases for both building types were driven, in part, by higher costs for masonry work, as well as for materials including steel, lumber, and concrete, says Statistics Canada. Contractor prices rose 1.8 per cent for the construction of new residential buildings in the first quarter, following a 1.4 per cent increase in the previous quarter. Higher prices for the construction of new low-rise apartment buildings (2.1 per cent) led the gain. Among the 11 surveyed census metropolitan areas (CMAs), prices for new residential building construction rose the most in Winnipeg, MB (7.3 per cent). Other notable price increases occurred in Vancouver, BC, (2.2 per cent) and Toronto, ON (1.6 per cent). Prices charged by contractors for new residential building construction increased 7.3 per cent in the first quarter compared with the same quarter in 2017. Prices grew the most in Winnipeg (14.7 per cent), followed by Vancouver (9.6 per cent) and Toronto (8.3 per cent).
U.S. Retail Sales Up 2.8 Per Cent
U.S. retail sales increased 0.4 per cent in April seasonally adjusted over March and 2.8 per cent year-over-year as consumers continued to spend, says the National Retail Federation (NRF). The numbers exclude automobiles, gasoline stations, and restaurants. The three-month moving average was up 4.1 per cent over the same period a year ago, which is in line with NRF’s forecast that 2018 retail sales will grow between 3.8 per cent and 4.4 per cent over 2017. The April results build on improvement seen in March, which was up 0.3 per cent monthly and 5.2 per cent year-over-year. Building materials and garden supply stores were up 5.6 per cent year-over-year and up 0.4 per cent from March seasonally adjusted. Furniture and home furnishings stores were up 5.8 per cent year-over-year and up 0.8 per cent from March seasonally adjusted. General merchandise stores were down 0.8 per cent year-over-year but up 0.3 per cent from March seasonally adjusted.
Fibre Cement Will Continue To Dominate Siding
Demand for fibre cement siding is forecast to grow 3.3 per cent per year to 2.1 billion square feet in 2022, says a report from the Freedonia Group. Fibre cement siding sales will continue to outperform those of most other siding products. Market value will reach $1.6 billion in 2022, aided by increases in average prices and a shift in the product mix to higher value products. Growth will come from strength in building construction, gains in market share (especially at the expense of vinyl siding), and product improvements. The market for fibre cement siding totaled 1.8 billion square feet ($1.2 billion) in 2017, accounting for 70 per cent of total fibre cement sales. Fibre cement is the second most widely used type of siding behind vinyl and has captured an expanding share of the overall siding market in recent years largely due to its aesthetic and performance advantages over vinyl, hardboard, and natural wood.
MiTek Launches Planning App
MiTek USA has launched its Project Explorer app, designed to search for and plan outdoor projects. This app was built in conjunction with OZCO Building Products, the manufacturer of Ornamental Wood Ties (OWT). Users can access a gallery of images of finished pergolas, pavilions, and backyard projects. The project concepts are presented along with estimates of the material costs, a dealer locator, and the opportunity to share photos of selected projects with others. The app is a free download at the Apple App Store.
Lowe's Earnings Grow
Lowe's Companies, Inc. had net earnings of $988 million for the first quarter of 2018, compared to net earnings of $602 million in the first quarter of 2017. Sales for the quarter increased three per cent to $17.4 billion from $16.9 billion in the year-ago period and comparable sales increased 0.6 per cent. Comparable sales for the U.S. home improvement business increased 0.5 per cent. Gross margin was 34.6 per cent of sales compared to 34.4 per cent of sales last year.
Brandl To Retire IHA Leadership
After 22 years as president and chief executive officer of the International Housewares Association (IHA), Phil Brandl will retire from the association at the end of the year. He will transition to a consulting role from day-to-day responsibilities. He joined IHA in 1994 and was named president in 1997.
Innovation And Technology Covered At Seminar
Retail innovation, data, virtual reality, machine learning, and leasing are just some of the topics that will be discussed at the ICSC-CSCA Canadian Retail Research Seminar. The event takes place June 5 at the Ted Rogers School of Management, Ryerson University, in Toronto, ON. For more information, visit Canadian Retail Research Seminar