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Bob Vereen, DIY in Europe, USA
For decades there have been predictions in the USA of the demise of independent dealers in the hardware and DIY industry, yet somehow thousands of them are still doing business. True, the number has shrunk substantially in the past 25 years as Home Depot and Lowe’s have fought out their acrimonious battle to dominate the market. But thousands of independent hardware stores, home centers and lumberyards – single stores and small chains – are surviving and growing. They are the ones who have figured out how to co-exist by developing their own expertise in service and their own assortment, in combination with competitive pricing and shopping convenience.
Looking back, it seems the group hardest hit by the emergence of Home Depot was the smaller, regional pioneering DIY chains such as Forest City in Cleveland, Hechingers in Washington DC, Lindsley in Miami and Central Hardware in St. Louis, Missouri. In their time, these chains were the big boxes of the era at 3 000 - 5 000 m² in size, compared to hardware stores of 300 - 500 m² and independent home centers of
1000 - 1500 m². They were not low-margin stores, however, as Home Depot was at the start. The early pioneering chains worked with margins of 30-35 per cent, and the independent hardware stores with 35 - 40 per cent.
When Home Depot opened 26 years ago, who could have foretold that most of the DIY pioneers would disappear, while thousands of single stores and very small chains would survive? History has proved that better personal service remains the hallmark of independents and small chains, and represents a fundamental competitive advantage even in the face of lower prices. And now, with Home Depot and Lowe’s increasing their margins to 33 per cent and higher, the future could be even brighter.
Naturally, the pricing difference cannot be too great, but superb service, a convenient location and smarter pricing strategies on the part of smaller chains and independents can mean survival against the big players. It is a lesson that should not be forgotten.
For decades there have been predictions in the USA of the demise of independent dealers in the hardware and DIY industry, yet somehow thousands of them are still doing business. True, the number has shrunk substantially in the past 25 years as Home Depot and Lowe’s have fought out their acrimonious battle to dominate the market. But thousands of independent hardware stores, home centers and lumberyards – single stores and small chains – are surviving and growing. They are the ones who have figured out how to co-exist by developing their own expertise in service and their own assortment, in combination with competitive pricing and shopping convenience.
Looking back, it seems the group hardest hit by the emergence of Home Depot was the smaller, regional pioneering DIY chains such as Forest City in Cleveland, Hechingers in Washington DC, Lindsley in Miami and Central Hardware in St. Louis, Missouri. In their time, these chains were the big boxes of the era at 3 000 - 5 000 m² in size, compared to hardware stores of 300 - 500 m² and independent home centers of
1000 - 1500 m². They were not low-margin stores, however, as Home Depot was at the start. The early pioneering chains worked with margins of 30-35 per cent, and the independent hardware stores with 35 - 40 per cent.
When Home Depot opened 26 years ago, who could have foretold that most of the DIY pioneers would disappear, while thousands of single stores and very small chains would survive? History has proved that better personal service remains the hallmark of independents and small chains, and represents a fundamental competitive advantage even in the face of lower prices. And now, with Home Depot and Lowe’s increasing their margins to 33 per cent and higher, the future could be even brighter.
Naturally, the pricing difference cannot be too great, but superb service, a convenient location and smarter pricing strategies on the part of smaller chains and independents can mean survival against the big players. It is a lesson that should not be forgotten.
