Building Better Merchandising

As the home center market continues to consolidate into two niches -- giant category-killing warehouse chains and small, service-oriented hardware and building-supply stores -- packaging and merchandising approaches are evolving to fit these formats. The result is a growing number of manufacturers looking to organize their products into easy-to-understand systems that coordinate a vast number of SKUs in small and large assortments. In many cases, that also means redesigning packaging to ensure that it tells the proper story and helps the customer find the proper product.That customer may be a professional contractor or a consumer. In the past, it didn't make much difference. Not today. "Among the product trends we're seeing this year is a move toward items produced and targeted for specific customers, such as professional users," says Beth Black, a spokeswoman for the National Hardware Show, the Chicago trade show where many manufacturers introduce their new lines and merchandising programs each August.Marketers are increasingly pursuing niche markets, Black explains, to offset intense pressure from reduced margins and a tougher fight for market share and shelf space. Rather than trying to be all things to all people, companies are aiming for one type of customer by repackaging products in different assortments and redesigning graphics and copy to fit the target market.The 1998 Market Measure Report from Do-It-Yourself Retailing magazine supports this view. It indicates that fewer independent home centers are trying to target both do-it-yourselfers and professional contractors. That means merchandising assortments are being changed to suit one or the other type of customer, the report says."Many lumberyards are either returning to their professional focus or expanding their selections to resemble a true home center," says Black. "Those adding shelf space have expanded assortments, allowing them to capture complete project sales, especially in the electrical and plumbing departments." At the same time, hardware stores are dropping peripheral departments that do not fit their core businesses, even if those areas were marginally profitable, in order to provide additional depth and breadth to core categories.This year's National Hardware Show and adjacent Building Products Expo presented an opportunity for more than 3,000 manufacturers to entice retailers of all sizes to buy into their new merchandising strategies and product lines. The show, said to be the third-largest in the country and the largest in Chicago, covered 1.3 million square feet of space at McCormick Place.Image UpgradesOne consumer-oriented company that sees more potential with professionals is The Stanley Works, New Britain, Conn. The company announced at the show that it was launching a new integrated branding program targeting construction professionals and "expert enthusiasts with a pro mindset." The program includes not only new broadcast advertising and a corporate image program, but also redesigned product packaging, new retail signage and a product-licensing program.The program centers around a new tag line, "Stanley: Make Something Great." The strategy is based on a market analysis that revealed "an untapped branding opportunity with professionals and the insight that they are motivated by personal accomplishment on the job site," says Kenneth O. Lewis, vice president of marketing and brand development. The new program, he says, is based "on the emotional and rational bond between professionals' aspirations on the job and the products they use."The initiative, which began with TV and print ads in September, will update all packaging and display materials as it rolls out, says Gary van Deursen, corporate director of industrial design. "We did extensive research on our existing packaging to find out what was right about it and what was wrong. Then we took the parts that were working successfully and preserved and improved them and completely redid the other parts."In general, van Deursen says, the contractor line was well received, but it didn't project the rich, bold, high-quality look the company intended. Specifically, they discovered that the existing Stanley signature yellow color was perceived as offering a weak, lower-quality image and that package information was inconsistent between products.Marketers worked with Stanbitz Design Inc., Collinsville, Conn., to create a new look that features a richer, darker yellow and shifts the contrasting color from mid-tone grays to a solid black. "The perceived image from this change was that the products were much more high end," van Deursen says. The resulting yellow is a custom blend that will be used for all products as new packaging rolls out.Copy points and type styles on packaging are also being made consistent to ensure customers can quickly find information when shifting from package to package. That includes formatting feature/ benefit copy in the same location on each package. In addition, the company is producing quadlingual packaging, adding Portugese for its Brazilian market in addition to the traditional Spanish/ French options. "Our goal is to keep the copy concise and focused on key terms, so the various languages don't overwhelm any one consumer."The company is seeking a P-O-P house to handle its needs, van Deursen notes, so thus far, no displays have been produced using the new materials. The graphics and visual changes don't represent the end of the company's packaging improvements, either. "The next step will be to make structural enhancements to the packages to provide more protection and improve durability," he says. "We definitely have more plans in mind for down the road."Systems RuleMaking product copy consistent among product packages makes it easier to lead consumers through a bewildering array of choices. More often today, those approaches are being enhanced with unified merchandising systems that begin with packaging and expand to include headers, information cards and other pieces to direct the customer from the moment he approaches the display until he finds the specific product needed.A good example can be seen in Dormont Mfg.'s E-Z Select program, being introduced by the Export, Pa.-based maker of gas fittings and connectors. The approach was touted not only as making it easy for consumers to buy from the shelves, but also for retailers to set it up and keep it stocked.The program, like most systems, includes color-coding to break the array of options into specific types of pieces for different projects. Dormont's program organizes its products into Green (heater), Red (dryer) and Orange (range) connectors. "By choosing the same color bags, cards or labels, the customer is ensured that all products will work together," says Jim Ziembowicz, vice president of residential sales.The packaging system works in combination with a series of headers, banners, magnets, stickers and table tents to create flexible display options in three forms: pegboard, H-rack and bulk packaging systems. The company offers several planograms for each format and will work individually with retailers to customize a product mix, Ziembowicz notes. The program's signage and banners were designed in-house and produced by Associates Visual Communications, Canton, Ohio. Bin-box labels for the H-rack displays were created by Alpine Packaging, North Versailles, Pa., and pegboard components were supplied by Vulcan Industries, Moody, Ala.Expanding Into RetailA similar program was introduced by electrical-product manufacturer Thomas & Betts, Memphis, Tenn. The company unveiled an integrated packaging and merchandising approach to help extend its products' popularity among contractor channels into the retail market, where the products aren't as well known. The program takes 2,500 of the company's SKUs, breaks them into 15 categories of projects, and provides supporting P-O-P materials to explain the sections."Our goal is to extend our preferred-brand status among contractors to the retail market," says Tracy Bilbrough, president of the company's commercial/residential/retail division. "The color-coded packaging also simplifies the restocking process for store personnel." The colors are overlaid on the company's traditional dark blue and gray, ensuring continuity with the branding image familiar to contractors. The packaging also breaks up the company's traditional volume-size products into small packages of three or four items each.The program includes a new patented package design, replacing the traditional blister card with a more durable style, Bilbrough says. "It brings together the best features of clamshell and blister-card packaging in a cost-effective way," he says. Each package features a product illustration, trilingual description and installation copy. The company focused its presentation on five sizes of packages.The new packaging began shipping this fall, and the company hopes the system will help generate retail-segment growth of 30 percent annually for the next few years, Bilbrough says. "We're on track to achieve that by continuing to leverage our extensive electrical offering with this new retail packaging and integrated merchandising system." Package design and P-O-P materials were produced by Joss Design Inc., Chicago, and Placon Inc., Madison, Wis.GE Repackages, CodesEven in cases without new merchandising systems, color-coded packaging has become the baseline in many home center departments. GE Lighting has extended its own color-coding system to include more of its lighting products, while also producing new product packages.Package graphics have been updated to provide a more contemporary look as well as to include easily recognized icons and graphics that highlight the type of bulb in the package and its applications. The graphics also use color to more effectively communicate variations among the products, explains Bob Herbolich, vice president of sales at the Cleveland-based bulb company. The colors denote differences in wattage or quality segments, helping convey a good-better-best merchandising scheme.Clamshell packaging has also been added to GE's slimmer energy-efficient CFL products, to emphasize how the product's size allows it to replace incandescent bulbs. The clamshell features an incandescent blister shape in which the CFL product is inserted, alluding to its replacement function.More UpgradesOther color-coding systems also help consumers, and examples were unveiled for building-product consumables. Convenience Products Inc., Fenton, Mo., announced it was changing the original yellow cap on its Touch 'n' Foam expanding insulation to three different colors that would better convey the three different application options: Green for triple-expanding products, blue for minimal-expanding formulations and orange for fast-drying options. The company will also provide a shrink-wrap band around each can to ensure that straws, covers and plastic triggers stay in place.The new programs will hit stores with a 48 stack-pack mini-pallet merchandiser, providing a middle-size unit between the company's 24-pack countertop merchandiser and its 72-pack pallet floor display.Wiremold Co., West Hartford, Conn., introduced upgraded package graphics for its line of do-it-yourself wire-management and on-wall wiring products, which integrates with the company's "Wiring Projects Made Easy" merchandising program. The packaging, created by Donaldson & Makoski, Avon, Conn., uses yellow and black throughout the assortment of blister-carded items. Each product category is color-coded to aid selection. The trilingual graphic elements include product features and benefits, system diagrams, and step-by-step installation instructions. These pieces are supported by new merchandising headers in 2-foot, 4-foot and 8-foot sections. Produced by Mintz & Hoke Inc., Avon, Conn., the headers feature application photos and systems' diagrams, and include holders for how-to brochures.Another color-coding option -- coding to show the color of the actual product -- was introduced by Union, N.J.-based Red Devil Inc. Its caulk tubes now feature color-coded tube tips to convey the proper color and draw attention to the line when stocked on the shelves. The company offers caulk in eight colors, a spokeswoman notes, which helps ensure that customers realize the options and walk away with the proper color for their project.Other New Packaging Ideas:Old Smokey Products Co., Houston, introduced upgraded graphics on packaging for its charcoal barbecue grill line to enhance brand identity. The new look includes brilliantly colored flames on a shiny black background and a new company mascot, Lil' Smokey. The bilingual packages also feature color product photos to show which size grill is enclosed.Naan Irrigation Systems, Redondo Beach, Calif., also introduced a mascot, the Naan Irrigator Alligator, in conjunction with new package designs aimed at providing a higher profile in the store. The program, which offers trilingual copy, includes both cartons and hang cards and features vibrant yellow, blue and red hues. The grinning alligator will be prominent in the upper left-hand corner of each package.Woods Industries Inc., Carmel, Ind., introduced new packaging to announce that it has raised the performance specifications for its surge-protection products and to "better reflect the quality product inside," says a spokesman. The new graphics feature the image of electronic circuitry in the background to remind consumers of the sensitive components inside.Other companies focused their packaging introductions on the professional market in particular. Fluidmaster Inc., the Tustin, Calif.-based maker of plumbing accessories, introduced ProPacks, repackaged bulk versions of its most popular products that are targeted to plumbers and contractors. The products, including flappers or tank levers, come without display-card packaging. The no-frills packaging means more economy for customers who aren't looking for copy points or blister packs. Eight different ProPacks were introduced.Stocking Ease AidedAnother continuing trend, the push for easily-stocked bin boxes, continued as companies looked to help warehouse stores stock vast quantities of its products without having to handle each product. American Water Heater Co., a Johnson City, Tenn.-based maker of water heaters, for instance, introduced a bin-box program for its replacement parts. The packaging format is aimed at large retailers where keeping inventory stocked on shelves becomes a major labor cost."We have crafted our parts-supply program to help retailers build their profits with a minimal investment in inventory or space," says Robert Trudeau, president and chief operating officer. The bin boxes feature individually bagged replacement parts complete with appropriate installation instructions. Stockers cut the top and put it on the shelf, ready to be sold.The company has also switched its packaging to include bilingual (English/Spanish) copy, which carries over to its P-O-P materials, Trudeau notes. "We have received numerous requests from retailers for packaging and point-of-sale materials that can be read and understood easily by Spanish-speaking consumers," he says. The P-O-P materials are available in either or both languages. The merchandising program also includes the existing "Ready-To-Go" display programs planogrammed to 2-foot or 3-foot sections.Another hot home center market -- building maintenance professionals who run commercial buildings and multi-family housing -- is also gaining more attention and companies are responding. Lighting manufacturer Osram Sylvania Products Inc., Danvers, Mass., for instance, introduced a line that packages its popular Sylvania bulbs into case quantities with brightly labeled packs for sale to contract customers and building managers. "We want to take the lead in educating retailers about the commercial market as well as provide them with the tools to reach it," says Tim Lesch, vice president of sales for consumer products.Packaging to ProtectAnother retailer concern -- bulky packaging for large products -- was addressed by Clopay Building Products Co. The Cincinnati-based maker of garage doors introduced new packaging for its double-door garages. "Until now, retailers primarily sold single doors and avoided carrying double doors because of limited space," says John Palazzolo, vice president of sales for residential products. "With this new packaging and our training program to provide retailers with ways to better use space for inventory, they'll be able to benefit from selling double garage doors."The packaging features heavy-duty U-board construction on each side of the section bundle with a single-wall corrugated endcap. All material is held in place with plastic bands. This format protects the product while providing space for illustrations and copy. "The packaging offers a more manageable bundle and greater flexibility for the retailer who will be storing the product, and for the customer who will be able to transport his purchase home in a large vehicle," adds Tom Turchiano, product manager for residential brands.The home center environment is leading many manufacturers to ensure their products are well-protected against bumps, drops and other damage prior to getting them to the shelves. Broan Manufacturing Co., Hartford, Wis., a maker of medicine cabinets and ventilating fans, for instance, introduced new in-transit packaging to ensure products reach the selling floor intact. The new packaging features polyurethane foam-suspended guards at each corner to support the product, which itself is wrapped in gray plastic. The corners protect the cabinet from vibration and impact, with the actual mirrors for each product secured in their own container and suspended under the cabinet. The new shipping packages will be in use on all products by the end of the year, the company says.No matter what form it took, manufacturers exhibiting at the National Hardware Show were clearly focused on their packaging and the message it conveyed to their target audiences. That effort will continue as product lines become more extensive, stores become more focused on gross margin per square foot, and presentations become more complex. Certainly, there's little chance that homeowners' repair needs will be disappearing anytime soon.

Building Better Merchandising

P2PI MEMBERS

JOIN P2PI

Related Images

Business Topic

Company

Market Segment