Focusing on growth
Home Channel News recently asked Do it Best Corp. President and CEO Bob Taylor what he thought was the key to boosting the Fort Wayne, Ind.-based co-op’s performance in a tough year. In a nutshell, he pointed to the company’s direction and agility.
It’s a common theme not only at headquarters, but also among retail members around the country and around the continent.
“It has been a challenging year for the industry, but the key to boosting the performance of Do it Best Corp. has been our ability to remain agile and focused on our No. 1 goal of helping our member-owners grow,” Taylor said.
Macroeconomic statistics, including those measuring housing sales, employment and consumer confidence, are well-documented. And Do it Best wholesale sales reflect the downturn. The most recent full-year statistics available—for the 12-month period ending June 30, 2009—show the coop’s wholesale sales at $2.46 billion, a 7.2% decline on the previous year.
Still, the company moved up the HCN Top 150 Distributors Scoreboard from fourth to third, behind only Ace Hardware and Lumbermens Merchandising Corp. on the sales ranking.
Other metrics offer the Fort Wayne team encouragement. Signature Stores—those stores operating under merchandising and design best practices promoted a la carte by the company’s store development team—continue to see double-digit comparable-store sales growth. And the Do it Best e-commerce business also continues to show double-digit sales growth, the company said.
“Our team [members have] been great financial stewards of the business, managing resources effectively throughout the year while continuing to drive improved operational efficiency,” Taylor said. “This agility helped us maintain the lowest operating overhead percentage among the co-operatives. And, by having no long-term debt, we are able to pay larger rebates to members, rather than interest payments to banks.”
On developing business
Any retail organization faces challenges keeping up with trends and market forces. Do it Best is no different. Jay Brown is VP of sales and retail development, and he has a front-row seat on the initiatives to drive improvements.
“I don’t know if I’d say that we’re going to see a fundamental change to the co-op model, but I would say that we can’t just sit still and not change,” Brown said. “The marketplace is changing, the generations are changing, how those generations acquire product is changing, and we have to be ahead of that.”
One new initiative that is based on staying one step ahead of the trends is the co-op’s Category Solutions Program, launched about 18 months ago. In partnership with vendors, the program is designed to help stores offer the right mix of merchandise in increasingly important categories.
So far, program areas have been created in putty knives and scrapers, paint applicators, PEX plumbing fittings, chain and chain accessories, fire and home safety, hand and power sanding, tarps and tape. New categories are being added at a rate of about one a month.
The updated planograms range in size from about 4 ft. for putty knives and scrapers to about 16 to 20 ft. for sandpaper. Prices are typically 50% off with 180 days dating.
“It’s really helped members refresh their assortments and offer some sharp price points and, more importantly, have the right product at the right time,” Brown said.
Though it has yet to be launched formally, the co-op’s Inventory and Pricing Dashboard program has been presented to members and will be further explained at the Do it Best market in October. It leverages POS data collected over the years from a large group of members, creating meaningful and actionable business intelligence packaged in 10 specific reports.
“We’ll be able to deliver information to the membership so they can see basic things: best selling items, what’s moving at what time of year and price elasticity, too,” Brown said.
For instance, the data will help members understand which products sell for $7.99 in one part of the country and $9.99 in another part of the country, and which products have the biggest opportunity for margin growth.
“We can help members with this information today, but with the dashboard, it’s really at their [fingertips],” Brown said.
Do it Best Corp.’s merchant offered Home Channel News general insights into what’s selling through the co-op’s nine distribution centers—outdoor living, lawn and garden and pet-related products seem to be enjoying the highest general demand, said Steve Markley, VP of merchandising. “None of these [is] a surprise,” he said. “It ties in with folks taking care of their homes/yards during spring/summer and always being willing to spend on pets. [We are] also seeing good growth with PEX plumbing products, ‘As Seen on TV’ items, and our Channellock licensed products.”
That last item was a major initiative in 2009, bringing certain Channellock products exclusively into Do it Best stores in the categories of protective gear, wet/ dry vacs, flashlights and other licensed products.
Executives describe themselves as constantly on the lookout for similar ways to bring an advantage to members. And, in today’s economy, every advantage helps.