SPECIAL REPORT
Entrepreneurial Spirit
Retailers show a willingness to invest in their people and their businesses
By Ken Ryan
O
rgill customers include home
centers, lumberyards, hardware
stores, and farm and ranch businesses. They operate throughout
the United States and Canada, in rural markets and urban settings, and bring different
skills and strategies to their specific markets.
But there is at least one thing these businesses share, and that is their willingness to
take risks, to invest in their businesses when
the economy is struggling or competitors are
encroaching.
HCN spoke to some of these entrepreneurs
about what makes them unique and successful in their markets, and about decisions
they made that improved their operations in
the past year.
Investing in a down market
A wise businessman once said, “During the
good times prepare for the bad times, and
during the bad times prepare for the good
times.” Many home improvement businesses
took bold action during the years-long
downturn, investing in their stores — whether
through hiring or expansion — when economic conditions were dire.
For Al Schoeneman, owner of Schoene-
man’s Building Materials Center, Sioux Falls,
S.D., the desire to enhance his business, no
matter the doom and gloom, always trumps
the hunker-down approach. “Even though
we were in a down market, we were not
afraid to invest in people,” he said. “Our philosophy has always been that if a promising
young candidate comes along, we would hire
“We are always listening to what
the customer needs, not what we
think they need.”
— Kirk Reams, Hooten’s Hardware
that person, and we’ll weed out the poorer
performers. In other words, we will invest in
a down market if it means the potential of
longer-term benefits.”
H.G. Page, Poughkeepsie, N.Y., operates in
a similar fashion. General manager Jim Morrison said the addition of key salespeople in
recent times has helped the home center better serve an expanding territory. The result:
a 10% increase in sales.
Brent Perry, president of Alf Curtis, a
home center in Peterborough, Ontario,
Canada, responded to the arrival of Home
Depot in his market by building out his
existing store. Today, the expanded Peterborough location consists of 3,200 sq. ft. of
merchandise with a separate 1,400-sq.-ft.
showroom, a 1,600-sq.-ft. contractor sales
building and 60,000-sq.-ft. warehouse, plus
an 18-acre outdoor storage yard.
“We were able to expand our product lines
and selection, and therefore were better able
to service our existing customer base along
with being able to draw in new customers,”
Perry said.
Step two for Alf Curtis was to concentrate on serving the professional tradesman,
contractor and builder, essentially becoming
a one-stop shop. “Now when the contractor gets us to deliver the lumber, insulation
and drywall for the renovation, they also get
their electrical, plumbing and paint from us,”
Perry said. “This saves the inconvenience for
my customer having to go to two different
places for his product. It gives me the sale
and, best of all, it removes the opportunity
for my competition to get the chance to talk
to my customer.”
Likewise, Hooten’s Hardware in Emory,
Texas, strives to be the one-stop shop in its
market. “We have everything from building
materials, paint, plumbing, tools, kitchen
supplies (cookware, dips, sauces, pots,
Hooten’s Hardware
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Sticks & Stuff
Castle Building Centres
Barrows Hardware
pans, spices, etc.), appliances, guns, knives,
outdoor power equipment and repair, ag
equipment, welding and fabrication,” said
Kirk Reams, store manager. “We are always
listening to what the customer needs, not
what we think they need.”
Pro dealer Sticks & Stuff in Vermont
made a bold physical expansion at its Derby
location, which is currently in its final
stages. When complete in February, the new
54,000-sq.-ft. building will include 14,000 sq.
ft. of retail hardware and home supplies, 5,000
sq. ft. of kitchen and bath, a flooring showroom, and a millwork showroom of Marvin
windows and doors. “The remaining 35,000
sq. ft. is a drive-through U-shaped, full-service lumberyard with building materials,” said
Kris Bullock, co-owner.
Winning assortment,
smart merchandising
For Barrows Hardware, Worcester, Mass.,
refreshing the assortment by rotating more
than 50 endcaps weekly separates it from
other stores, according to owner Brian Bar-
2
Schoeneman’s Building Materials Center
rows. “We keep things current, fresh and exciting with timely items that our customers
want,” he said. “And we are big on presentation and merchandising; we’re easy to shop.”
Barrows has been able to maintain consistent sales by finding new pockets of revenue
in the urban market of Worcester, population 180,000. “We have taken advantage of
opportunities in small urban repair work,”
Barrows said. “In our city, there are many
older buildings, some of which are antiquated
and in need of constant upkeep. Many of our
customers are in the apartment rental business with multiple units. So we find there is
great demand, for example, for toilet parts,
sink faucets, water tanks, locksets … endless
repair items.”
To refresh its look, H.G. Page worked with
Orgill to redesign all of its stores. The result
has produced a more modern layout, and
deeper product selection for its customers.
“We are more efficiently utilizing our existing
store space, which has made it an easier place
to shop, and that has enhanced our customers’ overall experience,” Morrison said.
Going green
Although it does not immediately show up
on the bottom line, being good corporate
citizens and stewards of the environment is
meaningful to businesses like Sticks & Stuff.
Bullock said the company is demonstrating its commitment to the green-leaning
state of Vermont by using biodiesel fuel to
run its business. Bullock explained that by
transferring to this cleaner form of energy,
“we not only use up a waste product of the
restaurant industry and cut our own heating bills, but we are also able to reduce our
own carbon emissions by as much as 75%.
In focusing on developments like this, we
are taking large strides to truly help the
people and environment of Vermont.”
Other Orgill customers are making similar investments in green operations. H.G.
Page, for example, installed energy-efficient lighting in all locations, and re-evaluated and purchased newer equipment.
“This allowed for our daily operations to
run more effectively and efficiently,” Morrison said. n
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Market Knowledge
Concept stores and product showcases lined up for Orlando
By HCN Staff
I
t’s known as a buying show, where
writing orders is the order of the day.
But there’s more to an Orgill Dealer
market than transactions, according to
the event organizers.
Case in point: The distributor’s model stores
are expected to be one of the hottest areas of the
upcoming event in Orlando, Feb. 27 through
March 1. Cobblestone Hardware, Kodiak Trail
Hardware and Supply, and Everglade Building
Materials will serve as retail laboratories for,
respectively, a core hardware store decked out
with spring merchandise, a Canadian-compliant
store and a pro/lumber format.
“Our customers come to the stores and mine
them for presentation techniques, signage,
adjacencies, seasonal sets and promotional presentation,” said Jeff Curler, Orgill VP advertising and dealer promotions.
Another big part of Orgill’s show strategy is
the product showcases, designed to present the
entire offering of a particular buying segment.
Following up last year’s emphasis on hand tools
and plumbing, the Orlando event will showcase “The Great Outdoors … Backyard Getaway,” and also
a 15,000-sq.-ft.
“vivid Solutions” presentation of paint
and paint sundries. The latter
will include
Orgill’s new
and exclusive
“expressions”
paint label
from Valspar.
“The ‘vivid
Solutions’ showcase is our latest
thinking as to
what a paint
3
Retail ideas spring from Orgill’s “model” stores.
department can and should look like in today’s
competitive arena,” Curler said. “We believe we
have the most compelling and dealer-friendly
paint program in the industry, and we plan to
present that to our customers in Orlando.”
To make the most of the event,
Curler recommends attendees
develop a plan before arriving,
and be honest about strengths
and weaknesses. And a key
part of any market is to
take advantage of deep
discounts — Orgill
calls them “Door
Busters.”
“We know that if we
remain focused on the
dealer experience in
everything we do, then
we remain on the right
track,” Curler said. n
“Things to do” in Orlando
From a building business perspective,
here are five suggestions for attacking the hardware buying market, from
Orgill’s Jeff Curler:
1. Develop a plan. Base it on your store’s
particular needs and strengths.
2. Use a monthly promotional folder for
the March through September time frame.
3. Visit the product showcases. “The
Great Outdoors … Backyard getaway”
and “vivid Solutions” will offer concept
and assortment ideas.
4. Walk the aisles. Look for enhancements to areas identified in step 1.
5. Stop at the Retail Services and Retail
Concepts area.
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Orgill CustOmer insights
Five Reasons
To Attend the
Dealer Market
Now, Orgill Gives All
Dealers A Choice.
Fall Dealer Market
Location: Chicago
Dates: Aug. 14-16, 2014
The Dealer Market team is pulling out all the stops
to make the upcoming fall show bigger and better
than ever. If you still haven’t decided whether you’re
attending, let us help you with the top five reasons
retailers love attending Orgill Dealer Markets.
1. show-Only Deals and Dating
In addition to creating new promotions for its customers such as
the popular Flash Market, Orgill continues to offer its tried-and-true
methods of promotions including Market Busters, Coupon Area, Pallet
Area and six-month dating.
2. new Products
Our newest items at deep discounts help you keep your store current at
minimal investment. Need we say more?
3. merchandising ideas
From model stores to product showcases, the Dealer Market offers a host of
inspiration for retailers to freshen up their merchandising displays.
4. educational Opportunities
Located off the Market floor and each held twice throughout the duration
of the Market, the seminars are created with an interactive component to
allow attendees to interact and ask specific questions they may have on
important industry topics.
5. incentives
In addition to its popular Market Club, a program that helps retailers
cover their costs of attending the shows, Orgill is offering a one-time
Market-only deal for those who register for the Fall Dealer Market at the
Spring Dealer Market in Orlando. Be sure to stop by the Chicago display
booth out near the front of the Market floor to register and get your free
voucher before it’s too late.
Worldwide Distribution & Retail Services
“Orgill is offering a one-time,
Market-only deal for those who
register for the Fall Dealer Market
at this year’s Spring Dealer
Market in Orlando.”
Contact your Orgill sales representative or you may call
Orgill Customer service at: 800-347-2860 ext.141
SPECIAL REPORT
Keeping things moving
Orgill’s operations guru sees distribution as an art and science
By HCN Staff
R
andy Williams doesn’t get offended
if you use the phrase “label licker” or
“box kicker” to describe his duties as
senior VP operations and logistics for
Memphis, Tenn.-based Orgill. These are phrases
he uses himself.
It’s not on Williams’ agenda to push for intraorganizational glory. “We don’t get hung up on that
stuff,” Williams said. “We’re just trying to figure out
better ways to improve what we do.”
But on closer examination, the label “box kicker”
doesn’t begin to fairly describe the complexity of
those working within Orgill’s distribution network.
Standardization of distribution centers? Check.
Pick to voice? Check. Small order fulfillment for
e-commerce? Check (with an asterisk). New trucks
and a network of drivers that serve as de facto sales
representatives and ambassadors? Check and check.
The story of Orgill’s modern distribution network begins in Tifton, Ga., where the company
opened a new distribution center back in 1995.
Since then, a steady series of new openings and
expansions have put the company in an enviable
position, he said.
Today, the five distribution centers (and the
company calls the facilities by their straightforward
name: “distribution centers”) are all relatively new,
with about the same footprint, operating scenario
and management structure. Similarity acts like an
oil lubricating the system.
“Having the similarities really allows us to
focus on continuous improvement,” Williams
said. “It allows us to better share ideas, find the
best of the best, and benchmark one DC against
another. Importantly, it allows everyone to be on
the same page.”
One of those improvements is the 2013 implementation of voice-pick technology. With its
Jennifer by Lucas system in the DCs’ broken case
area (an area that handles about 70% of the flow of
products), Orgill saw a 35% increase in productivity,
Sales drivers: A secret weapon on the road
They drive a truck. But they’re more than
truck drivers.
Over the years, truck drivers have
ascended to a special role within the
Orgill logistics scheme — driver, delivery
specialist and, maybe more importantly,
ambassador.
“We consider our truck drivers almost
our second sales reps,” said Randy Williams. “They’re in the stores every week.
We’ll hear our customers say, ‘If you need
to make a route adjustment, that’s fine.
But I don’t want to lose my driver.’ ”
The relationships pay off — whether it’s
calling ahead to the store manager when a
truck is stuck in traffic, or picking up feedback
from a store operator, often avoiding small
problems before they grow into big problems.
One of the keys to fostering those
relationships at the store level, Orgill says,
is in route planning. The company offers its
drivers the luxury of consistent and regular
routes. “We’re telling our truck drivers, you
get to sleep in your own bed at least five
nights a week,” Williams said. “For most
truck drivers industry-wide, they’re not
doing that.”
Other steps to boost driver morale: The
distributor says it conducts wage surveys to keep its pay scale competitive.
And trucks are equipped with Peoplenet
onboard and pallet jacks — both designed
to make it easy on the drivers.
“Everybody talks about driver shortages,
and that may impact us someday,” Williams
said. “But that’s generally not an issue for us.”
An Orgill truck hits the road near the company’s Hurricane, Utah, DC.
(story continued on page 6)
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Message from the top: Improvement
O
rgill chairman,
president and CEO
Ron Beal says the
concept of constant
improvement is fundamental
to the way the company runs
its business. The proof is in the
growth. The Memphis, Tenn.based distributor has grown by
more than 50% in the past five
years, and has more than doubled
in size in the last decade. Here’s
Orgill’s Ron Beal
the HCN Q&A with the CEO:
HCN: What’s the latest area of improvement for Orgill?
Beal: This year we have made a concerted
effort to improve our replenishment fill rates,
which were already consistently good at 96%
plus. For the second half of the year, we’ve
achieved 97.5% company-wide, and two of our
DCs have averaged over 98%. It will be hard
to improve much over these numbers going
forward, but we will certainly try.
HCN: With housing starts up 18% in 2013,
have we hit a full-fledged recovery mode?
Beal: We’re all wanting this to be the case. We
have seen steady growth in the pro dealer sec(story continued from page 5)
without a loss in accuracy. And in some DCs,
the accuracy improved.
It works just like it sounds. An employee
wearing a headset is instructed by a digital voice
(called “Jennifer”) to go to a certain place and
pick a specific number of items. It’s a handsfree system designed for ease-of-use and
ease-of-training.
Orgill made a substantial purchase of
160 new tractors in 2013 and converted to
ultrashift transmission — a type of automatic
transmission for the big rigs. “We’ve seen almost a full-point increase in miles per gallon,
which is huge,” Williams said.
There’s an old saying in retail operations. When the logistics are going well,
hardly anybody notices. It’s only during
crunch time or crisis management when
6
tor of our business, both in terms
of same customer sales as well as
overall segment improvement.
HCN: You have said distribution seems simple, but it’s very
difficult to execute. What are
some of the complications that
have arisen in recent months?
Beal: Most of the complications
to normal operations recently have
been weather related. Twice during
recent weeks, transportation staffs
in all of our distribution centers
were battling snow and ice at the same time. I
can’t remember this ever happening in the past.
HCN: What do you think distinguishes
Orgill from other distributors?
Beal: Conceptually, almost all hardware distribution companies are doing pretty much the
same things; providing wholesale product delivery to the retail store, and offering varying levels
of retail support. It really boils down to execution.
We’re unique in that we’re the only national
non-co-op distributor. We don’t spend much
time trying to simply be different from distributor competitors. We think it is much more productive to instead devote our energies toward
providing the best possible mix of goods and
services to our retail customers.
HCN: In terms of categories of merchandise, what’s on your list of highgrowth areas?
Beal: We think that core departments will be
especially strong this year. Any pickup in housing
activity ripples throughout the industry. Coupled
with the severe weather we’re seeing so far this
winter, this should generate a lot of fix-up and
repair projects. Plumbing, lawn & garden, paint
and tools should all benefit as a result.
HCN: Are there any ways that your retail
customers are changing?
Beal: Retailers are definitely getting more
sophisticated in understanding the need
for the whole area of electronic commerce.
This is driven in large part by the changing
habits of consumers in general. For us, this
means programs like our new Boost system,
which allows a local retailer to customize a
local Internet commerce presence without
the significant backend costs of supporting
an individual system. We’ve also significantly
enhanced our small order fulfillment capabilities to support shipments direct to consumers
on behalf of our dealers. n
the guys in the warehouse are seen as heroes
who save the day.
Williams says he agrees with that wisdom.
Luckily, he can point to a 99.7% rate of product
getting where it’s supposed to be.
What about those 0.3% of shortages or
mispicks or billing errors? Those play an important role in the process of continuous improvement. “We try to have the mentality that if a
customer calls to complain, they are doing you
a favor,” he said. “Because they are giving you
an opportunity to fix a problem, and now you
have the opportunity to do something good.”
More improvements are in the pipeline —
Orgill’s distribution centers are wired to learn from each
expanding voice pick to more areas of the DC,
other. “Every time we opened a new DC, we’d make a
onboard automated truck-to-store communilittle modification to improve,” said Randy Williams. “And
cations and continuing to adapt to the world
if it works at that DC, we take it back to the others.”
of e-commerce.
Tifton, Ga.: opened 1995, expanded 2003
The company rolled out e-commerce in
Inwood, W.Va.: opened 2000, expanded 2005
all of its DCs in 2013, accommodating small
Hurricane, Utah: opened 2004
order fulfillment direct to the end user. “We’re
Kilgore, Texas: opened 2005
still tweaking a few things,” he said. “It’s still a
Sikeston, Mo.: opened 2009
small percentage of our distribution business,
New location: to be determined
but we anticipate that growing.” n
DC Nation
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