How Can Hardware Stores Attract Customers and Grow Revenue?

By |March 12th, 2019|Category Trends|

In parts of the U.S., many local hardware shops have noticed an uptick in business, brought on by rising disposable income, higher-value residential construction, and increased private spending on home improvements. This would explain why the industry saw 2.9 percent annual growth between 2013 and 2018. But growth is projected to decline to less than one percent over the next five years, largely as a result of deceleration in consumer spending and disposable income as well as tough competition from other hardware retailers. In this kind of retail environment, the stores that will come out ahead will be those that offer something that differentiates them from those retailers and appeal to the right kind of consumer. While researching hardware store consumers living in our Mspark mailing areas, we came across a few survey responses that shed light on the hardware store shopping habits of rural consumers. Let’s dig into a few.

Reasons Shoppers are Loyal to Their Favorite Hardware Store

If we look at survey data where rural consumers were asked why they shop most often at a hardware/home improvement store, we see that the reasons that top the list are familiar ones – price, location, selection. These seem to be common not only with hardware stores but also many other types of retailers – nothing too surprising.

What did raise our eyebrows was a metric on the above chart that doesn’t seem awfully significant but has been generating chatter in retail circles – Buy Online/Pick Up in Store, or BOPUS. For hardware stores, 9.4% is an 8% increase from the previous year, the first year the BOPUS question was asked in this survey. While it’s still too early to tell if this metric will continue to trend upwards, it’s interesting to see it on the list of primary reasons why rural consumers shop most often at a hardware store. And it’s neat to see local hardware stores adapting to the new retail environment.

Are Rural Consumers Ideal for Hardware Stores?

We were curious if rural consumers tended to be handier around the home and in their gardens. We could see from survey results that they prefer to paint, stain, and do woodworking on their own, versus hire someone else to do the job.

They are also more likely to take on gardening projects and 32% more likely than their urban counterparts to shop at ACE Hardware, 61% more likely to shop at Menards, 117% more likely to shop at Tractor Supply Company, and 57% more likely to shop at True Value. This means that when it comes to hardware stores, consumers in the Mspark mailing areas may be an ideal target audience for marketing – and certainly not a group to ignore.

How Hardware Stores Can Stay Competitive in the New Retail Environment

When considering ways to drive traffic to and grow a hardware store in a tough retail environment, a few things come to mind. First, offering customers what they are looking for – great prices, selection, service, convenience – like BOPUS (Buy Online/Pick Up in Store). Next, appealing to consumers who are more likely to be handy around the home, who build or restore things for a living, or are more likely to have a workshop. Target consumers in rural geographies like Mspark’s mailing areas and make their shopping experience both convenient and enjoyable. Ads and coupons are a great way to get them in the door or even promote discounts for buying online to pick up in store. Shared mail, where your postage cost is shared with other advertisers, is a cost-effective way to target ads to very specific areas. According to recent numbers from the DMA (Data and Marketing Association), direct mail ranks first among high-response media, making it an ideal component of your marketing mix.

For hardware stores in a high-competition retail environment, the key is having a good targeting strategy, a well-designed ad, a great offer, tracking what works, what doesn’t work, and refining over time. Through our high-response shared mail solutions and consumer data services, we can be your go-to resource to give you the competitive edge that sets your store apart from the rest.

Sources:
IBISWorld 2019
Prosper Insights & Analytics 2019
NHCS Adult Study 2019
ANA/DMA Response Rate Report 2018

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