Editorial
Using CRM to conquer the "price illusion"
Link to article on how Lowe's has used in-store CRM
Hardware News Network
A customer satisfaction study by IBM highlighted factors other than price
Link to article on successful adoption of CRM by small businesses
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Australia's big-box home improvement retailers have worked hard over the past 20 years to convince consumers that price is all that matters.

The reality is that price is not so important when it comes to home improvement projects. Value is the most important thing.

There is not a one-to-one correlation between value and price.

As big-box retail stores continue to proliferate, the advantage smaller retailers once had in being located close to their customers is vanishing. The best response to this and other pressures is for the affected retailers to improve their marketing.

Improved marketing means communicating what they offer that larger retailers would struggle to match. To do this small retailers need to think beyond price, and their marketing needs to help their customers to look beyond price, too.
Why "price first" marketing is mostly spin

The reason price has been so effective as a marketing tool is that it is so easy to communicate. $99. Down from $199. Sold!

This is especially the case today. Price is the one thing that can be clearly communicated in Google searches, Facebook ads, comparison websites, and in blogs.

If we assume that price is not quite as overwhelming a factor in informed buying decisions as current big-box marketing indicates, what might take its place in the value proposition offered to customers?

If we think of a typical DIY project, a number of factors enter into the value equation:
  • cost of consumables (eg., nails, paint, tiles, wood)
  • cost of tools
  • cost of completed units used in the task (eg., appliances, furniture, plants)
  • ease of performing the task
  • time required to perform the task
  • quality of the results of the task
  • longevity and durability of the result
  • reuse potential for elements used in the task, such as tools

  • For the first three items price is important. For the remaining five items, price is not a factor. If you consider those five items, it is also clear these are the ones that really affect customers' willingness to attempt a task, their experience of the task, and their satisfaction with the completed task. These are the real drivers of value.

    Few people, for example, would say: "I built this bookcase, it isn't very good, but I bought this power drill at a great discount, so I'm happy."
    Marketing the real value of retail

    If we accept that there is value to be found outside of price, how would you go about marketing that?

    It is possible to nominate the different aspects of this value: pre-sale advice on selections, sale support to make sure the right price is paid for the right thing, post-sale follow-up to see if things are going to plan, advice on how to recover from mistakes, advice on technique and application - and so on.

    What it really all boils down to is relationship.

    The problem, of course, with retailer relationships with most DIY consumers is that, unlike relationships with tradespeople, they tend to be intermittent, and thus relatively low in yield. DIYers work in spurts, completing one project, and not starting the next one for another six months or even a year.

    The solution to the problem could rest with technology. Customer relationship management (CRM) tools can help small retailers to better customise their interactions with consumers. As importantly, they can also help customers to better interact with retailers.
    Imagining CRM

    What would be the details of such a CRM system?

    To begin with, it would likely be driven by an app on the customer's smartphone. The first element of that app would be to clearly identify the customer to the retailer. That would mean "joining up", with possibly a discount or other incentive offered.

    The second element would be to do the reverse: identify the retailer to the customer. For example, sales assistants would have a QR code on their name badge. Customers could scan this code with their smartphones whenever they are helped by an assistant. Later they could enter in a few details about what was discussed, and possibly rate the advice received on a scale of one to five.

    Two other items that would really boost a CRM would be a "wish list" facility, and some record of purchases actually made. A wish list could include items the customer wanted to buy, or even just photographs of great rooms and gardens they wish they had.

    Purchases pose some additional problems. To do this thoroughly would mean tying the CRM system into the sales database. This could be costly and difficult. If the retailer's POS enables emailed receipts, a receipt for be emailed to the CRM system and processed accordingly. Or a simple snapshot of the paper sales receipt could be added to the customer's record.

    Once this relationship has been established, it opens up a range of possibilities. The customer can send a "follow-up" to the sales assistant, and the sales assistant can use the CRM system to identify the customer and recall what was discussed. If an item is on order, when it is available the retailer could send a message through the CRM app.

    The CRM system could also be used to provide after-sales advice to the customer. The customer could take a snapshot of something not working, or even video a particular situation, and send this to the retailer.

    One advantage of such a system is that the retailer could choose when and where to respond. Instead of having the customer drop in for advice at 11am on a busy Saturday, the retailer could reply at 8:30am on the Sunday, when the store is almost empty.

    This can even be taken one step further. Suppose the CRM system is also used to connect customers to each other? Someone with a problem could post it on the app. Because it is a closed community, it's unlikely that foolish or annoying responses will be made, and there is even the possibility that neighbours might find they have some shared interests.

    Even further, what if tradespeople were included in the community? Professionals the retailer knew could be trusted and that were regular customers could offer their services, and the need for those services could be identified through the CRM activity.

    These are just some of the possibilities.
    Associations can make CRM happen

    A major difficulty about implementing such a CRM system is scale. While getting a basic app coded would cost less than $2000, this app depends on a fairly advanced backend system for it to function properly. Systems like that can't simply be built, they also have to be run, maintained and constantly improved. The expense and planning required for this is well beyond the means of most small retailers.

    One possible solution to this would be for the state-wide hardware associations to consider contributing to the development of these systems. Not only would this distribute the expense of the system across a large number of small retailers, but there would be considerable advantages to such a system in having a wide-ranging and dispersed retailer membership.

    It would be interesting to see if the big-box retailers were even able to mount an effective response to such a development.

    Until next time,

    Betty

    For any feedback, comments or story tips, you can contact me directly via email betty@hnn.bz or Twitter @HNN_Australia
    Bigbox
    Big box update
    Bunnings Warehouse West Ipswich has hired over 165 locals
    HNN Sources
    Woolworths executive Julie Coates has quit but will remain on the Masters board
    Eight mature fig trees chopped down for entrance to Masters Lismore
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    A recruitment process is currently underway at Bunnings' new West Ipswich outlet in Queensland. In other news, Woolworths senior executive Julie Coates will leave the company but remain on the board of Woolies-owned Masters Home Improvement. Conservation concerns surround the entrance to the latest Masters store in Lismore (NSW).
    Bunnings team building

    Over 165 locals have become official team members of Bunnings Warehouse West Ipswich which is set to open its doors in late August. Complex manager Roy Ram said team members will be offered extensive training and the chance to further their careers. He told The Queensland Times: "Bunnings provides a number of career development options for all team members, and I'm confident our new recruits will relish the opportunity to learn and grow with us." Qualified team members include a bricklayer, cabinet maker, tiler, mechanic, plumber, electrician and a number of horticulturists. Bunnings is working to replace the store that is closing in nearby Booval (QLD).
    Woolworths' loses key executive

    Woolworths executive Julie Coates has quit after more than 12 years in senior roles including five years as head of discount department store Big W, according to The Australian newspaper. However she will stay on the board of the company's hardware joint venture with US home improvement giant Lowe's until the end of the year.

    Coates moved from Big W in late 2013 to steer an overhaul of Woolworths supply chain as director of business transformation in a project called Mercury 2. She exits after only 10 months, leaving behind the billion dollar, 10-year task of transforming the company's entire supply chain and logistics operation. A brief company statement said Coates was leaving to pursue other career opportunities. During her time at Woolworths, Coates also served as head of human resources and chief logistics officer.
    Masters Lismore update

    Eight mature fig trees have been chopped down in conservation-friendly Lismore to make way for a roundabout at the entrance to the new Masters Home Improvement store. Council staff imposed conditions after Roads and Maritime Services (RMS) approved the roundabout.

    Lismore mayor Jenny Dowell said the development application (DA) for Masters included the roundabout. She said Masters is required to plant two trees for each tree removed, and they would be planted along the avenue to fill gaps. Cr Dowell told Echonet Daily: "This DA was advertised for community comment but no one drew attention to this condition...Because this is a highway the RMS has the ultimate say on what happens so there would be very little that council could do."

    The Lismore city council approved the $11.5 million development in December last year. The store will cover 9,903sqm and have 389 car parks. It will provide direct competition to the neighbouring Bunnings warehouse. Masters hopes to open its doors in January 2015.
    Statistics
    Mobile-based marketing under-utilised by retailers
    The study by Frost & Sullivan is a free download
    Digital Journal
    Google's "Our Mobile Planet" report for Australia
    Telstra report: "How mobility is cHanging tHe rHytHm of retail"
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    A study of smaller Australian retailers conducted by Frost & Sullivan indicates most retailers are not connecting to their customers via their mobile phones. Entitled "Mobility: The new opportunity for Australia's retailers", its results were released in late July 2014.

    Overall, it reveals that Australian retailers are unprepared for rapid growth in mobile commerce with less than 30% that have mobile-enabled websites. Only 21% have developed a mobile app for customers, despite the fact that approximately 65% of the population owns a smartphone.

    The research was sponsored by NetSuite, a provider of omnichannel software suites, and the Australian Retailers Association (ARA). The study sample consisted of 120 Australian retailers (members of the ARA) with fewer than 50 retail outlets each.

    The study presents a reasonable overview of mobile phone usage by retail shoppers, though much of the data used to support this part of the study is quite general in nature.

    For example, a chart which indicates that the proportion of customers who use their smartphone at some stage in the shopping process has grown from 38% in 2011 to 52% in 2013, draws its data from Google's geographically general "Our mobile planet" report of 2013. Other data is drawn from Telstra's "How mobility is changing the rhythm of Australian retail", also from 2013.

    Where the study provides very good and very specific data is on the behaviours of retailers themselves, where it draws on Frost & Sullivan's own research. It found just how unprepared Australian retailers are to handle this shifting behaviour. For instance, here is an informative chart of the mobile strategies currently implemented by retailers.
    Mobile strategies currently implemented by Australian retailers

    From this it is clear that the largest difference between "small" retailers (fewer than five outlets) and their larger brethren is in the category of apps for smartphones. However, even those stores that do have mobile apps tend to offer only a limited range of functions:
    Functions of apps provided by retailers

    The study suggests that there are five aspects of mobility retailers should consider:
  • Design for integration: data that is collected anywhere about a customer should then be used to inform marketing everywhere.
  • Be imaginative with customer communications: by creating "communication events" customers will continue to receive messages from retailers
  • Drive loyalty through mobile reach: any store loyalty program should be hooked up to mobile marketing
  • Improve the in-store experience through mobile: use of elements such as QR codes can integrate the virtual and physical experience of a store
  • Staff should be involved in the mobile strategy: mobile devices can make staff more readily available to customers

  • The three main obstacles for retailers seeking to adopt mobile are: hardware costs, system integration costs, and a simple lack of internal resources. The report suggests that many of these obstacles can be overcome through the use of cloud-based systems.
    Conclusions

    Overall this is an interesting and fairly informative report. While the numbers it presents tracking consumer behaviour are not strictly applicable to Australia in some cases, the analysis of the gaps in retail technology are well-researched.
    Reports
    Studies explore future demand for "smart home" systems
    Internet of Things report from Raymond James & Associates
    HiddenWires
    Forecast markets for smarthome devices and services from Internet of Things report
    Internet of Things timeline
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    NextMarket, a provider of research into emerging markets primarily in the USA, has released a report entitled "DIY Smart Home Market: Market Analysis, Vendor Profiles & Forecast". The report forecasts that the size of the smart home market in the US will reach US$7.8 billion by 2019.

    While much of the industry interest in smart home has been centred around managed offerings from service providers, many consumers are first exposed to the smart home through self-installable point products such as smart thermostats, smart locks, and smart lighting. Others are experimenting with self-installable smart home systems that connect multiple products.

    Michael Wolf, chief analyst at NextMarket Insights points out that where smart home devices were once the purview of elite, luxury providers, they have become almost everyday objects now. He said:
    The DIY smart home is becoming a 'hits-driven' business. Products like the Nest thermostat, Kevo smart lock and Dropcam are raising awareness and offer entry points to the smart home for the consumer. We believe new initiatives such as Apple's HomeKit and the new Works With Nest initiative from Google/Nest will create additional momentum for the consumer-managed smart home over time.

    The report from NextMarket is available for US$2,500.

    Another report, released in January 2014 by Raymond James & Associates, largely agrees with these conclusions. This study is entitled: "The Internet of Things: A study in hype, reality, disruption and growth". It is available for free.

    This study cautions that adoption of smart home devices is unlikely to enter an "S curve", exponential climb, as it will remain a series of loosely-connected vertical markets, rather than a single integrated market.

    Like the NextMarket study, it sees smart home devices moving away from the luxury market, but unlike that study it believes the most significant growth will be in various types of managed services.
    Forecast markets for smarthome devices and services
    Retailers
    Homebase could be spun out of Home Retail Group
    The current standard layout at Homebase stores
    DIY Week
    Home Retail Group sales to FY14
    Interest in home improvement retail partially driven by rising house prices in the UK
    Give to Amnesty International
    UK retailer Home Retail Group (HRG) has mooted plans to spin-off its home improvement division, Homebase. The move comes as the main business of HRG, Argos, continues to improve its profitability after a major change in strategy in 2012.

    While HRG has released nothing definite, it is common knowledge that the HRG CEO, John Walden, is undertaking a strategic review of the group, and Homebase's fate will form a major part of its recommendations.

    The possible sale of Homebase would not be a result of distress, but rather success. The network of over 330 stores in the UK and Republic of Ireland has continued to improve its fortunes over the past two years.

    It reported growth of 5.9% in like-for-like sales in early 2014, reaching Stg 1,489 million. Argos in contrast grew by 3.3% on a similar like-for-like comparison, returning sales of Stg 4,051 million. Nonetheless, the profitability of Homebase remains low, with the profit from those sales reaching only Stg 10 million.

    However the division's value is regarded as having doubled since 2012, to reach an estimated Stg 1.4 billion. Any sale is more likely to be made to a private equity firm, rather than a listing on the stock exchange.

    An investment analyst source is quoted by UK website Mail Online as saying:
    In the last few months [the Homebase sale] is back on the table and has become one of the key considerations of Walden's review. The question is straightforward: Would you rather invest all your available resources into developing Argos or have to split it between the two?
    Argos: Digital success

    The main change Mr Walden made when he gained control of Argos in 2012 was to vastly ramp up the retailer's online and multichannel approach to sales. In October 2012, when he delivered the results of his strategic review, Argos had already managed to make multichannel sales account for 51% of total sales, and its websites made it the second most visited retailer in the UK.

    In 2014 pure online sales now represent 44% of the retailer's sales, while purchases from mobile devices account for 18% of its total sales. The company has launched a series of "digital stores", which provide advanced facilities for online ordering, but no actual store stock.
    Changes at Homebase

    Meanwhile at Homebase itself, the retailer is introducing changes in how it displays and sells its wares. Having paid attention to a growing trend where younger people have few if any DIY skills, the stores are repositioning product displays so that they are arranged in task groupings. It hopes that this will encourage shoppers to try to do common every day tasks, such as attaching electrical plugs or put up some shelves.

    While the skills may have declined, the core rationale behind learning those skills - saving money, especially when you have just moved into a costly new home - has remained in place, and is of growing importance.

    Homebase has extended this repositioning into the online space as well, making its products easier to find, and adding a range of helpful videos detailing basic tasks.

    This follows other experiments by Homebase in store layout and design. Its store at Battersea in South London is a high-style compendium of retail choices, including special concessions for Laura Ashley and Habitat.

    In some way it is a full-circle evolution of the Homebase concept. The stores began as an offshoot of the Sainsbury's supermarket chain (in association with the Belgian retailer GB-Inno-BM) in 1979. Its original marketing point was the display and sale of home improvement products in a supermarket-style layout. It was also an early adopter of using a distribution centre rather than direct supplier deliveries to keep its stores in stock.
    Products
    Sustainability Victoria guide for renovation
    Sustainability Victoria offers advice on some of the better ways for them to spend their renovation dollars
    http://www.google.com/url?sa=t&rct=j&q=&esrc=s&sou...
    Double glazing advice
    Downlight covers that allow insulation to be continuous
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    In a guide that describes itself as "a call to action for the home renovator", Sustainability Victoria offers advice to aspiring renovators on some of the better ways for them to spend their renovation dollars.

    Titled "Your guide to smarter renovation", the point the report attempts to make is that sustainable practices in renovation dovetail neatly with the kinds of changes that make a house more comfortable. Those same changes can also help to reduce the running costs of a house, by cutting down on energy bills. As the report states:
    Throughout this guide, we link energy efficiency to energy saving and comfort as these are the tangible benefits that you can see and feel.

    Its primary point is that while cosmetic changes are wonderful to behold, they do not always translate into renovations that are satisfying in the longer term:
    In a renovation it's really important to have the 'Wow' factor. But, what about the 'Ahh' factor? The 'Ahh' factor is what you will feel when your home is comfortable all year round. It will never be too hot in summer or too cold in winter.
    In renovations the focus is often on the new parts of the house, the kitchen, bathrooms, ensuite to give them the 'wow'" factor. To get the 'Ahh' factor you need to focus on improving the existing part of the home as well as the new parts of the home. This will provide year-round comfort.

    This is an issue of particular import for Victoria where, the report claims, some 88% of houses were built before basic energy conservation standards were introduced. Instead of the five and six stars, houses of today are awarded for their energy conservation based on set standards; the average for older houses is 1.8 stars. One result of this is that households consume 22% of Victoria's electricity output, and 37% of its gas.

    Not appearing in the report, this graph gives some idea of where Australia ranks in world terms (it might be helpful to remember that both the US and Canada have more extreme climates than Australia):
    Energy footprint of Australia
    Renovation regrets

    The report five major regrets that less well thought-out renovations can create.
    Inadequate insulation

    In ceilings the report points out that installation of downlighting frequently results in insulation that has many holes in it, as a clearance space must be established around these lighting installations. Adding insulation to existing walls, not just new ones, is a great task to add to a standard renovation. Insulation installed under timber floors is also very helpful.
    Air leakage

    Some 25% of heat loss in winter is caused by inadequately sealing a house with door seals, leaving gaps around windows, not closing off unused chimneys, air vents and exhaust fans.
    Poor lighting

    Once again downlights come in for criticism, with halogen lighting using upt to four times more energy than the equivalent LED lights. The report states that around 56% of lighting in Victoria's homes is provided through inefficient sources.
    Double-glazed windows

    Only 24% of renovators choose to use double-glazed windows. The least efficient double-glazed windows reduce heat loss by 30%, and the more efficient variety lift that number to 50%.

    While more expensive, double-glazed windows will likely result in overall savings over a number of years through reduced house running costs.
    Poor design

    Some simple design tips can radically change a house's energy consumption including:
  • Open up to the North, reducing the need for artificial illumination indoors.
  • Establish energy zones inside the house by enclosing areas such as stairwells that will create heat loss.
  • Pay attention to soft furnishings.
  • Cost benefit analysis

    The report continues with a series of example of different types of renovation, their costs and estimated payback periods. Items covered include:
  • Ceiling insulation
  • Wall insulation
  • Floor insulation
  • Draught proofing
  • Lighting
  • Windows
  • Heating systems
  • Hot water systems
  • Solar PV systems
  • White goods
  • Types of renovations

    The report concludes with some recommendations for the renovation of specific house types. These include:
  • Weatherboard cottages
  • Double brick house
  • Double fronted brick veneer house
  • Brick veneer estate style house
  • Products
    Kids crafting category
    Colorific is a major supplier in the kids craft range at Bunnings
    Bunnings
    The Kids Projects range was featured at the recent Bunnings Expo
    The Wood WorX range celebrated its 10th anniversary in early 2014
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    Since 1990, Colorific has been developing and marketing children's products and it is a major supplier in the kids craft range at Bunnings. As a family-owned business with experience in toy retailing, the company focuses on innovative product development and knowing what its young customers want. At the recent Bunnings Expo, it highlighted the latest products in its Kids Projects and Wood WorX brands including:
    Sand Characters Project

    Using coloured sands fill the bottles to create fun and funky layered designs, kids can invent their own crazy characters. A classic craft activity for a rainy day, children's parties, or when children are feeling creative. It is suitable for anyone between 5-12 years old.
    Mug Makeovers and Glass Paint Painting

    Both boys and girls can complete this activity throughout the cold winter months and create a gift at the end of it. They can personalise a mug or plate with their name or a picture and paint it. Simply paint them, bake them and use them. An ideal craft activity for children aged between 5-12.
    Garden Stone Mosaic Kit

    Using the plastic mould provided, all kids have to do is mix the simple cement power, pour it in and then use the bright and colourful gems to mosaic the mould. Let it dry for a day and they can have a one-of-a-kind garden piece. It should suit children aged anywhere between 4-12.
    Racing Car Kit

    This revamped kit comes with detailed coloured instruction sheets and a double ended brush for more detailed painting. Kids can easily build a complete wooden racing car from the ground up. Each set includes wooden pieces, glue, paint, brush and sticker graphics.
    Jewellery Stand Kit

    Girls can create a finished design with new stencils and display their jewellery, trinkets and funky accessories using the hangers of different sizes. These kits come with easy-to-assemble wooden pieces, colourful paints, stencils and decorating pieces.

    The Wood WorX range helps children with their construction skills and hand-eye coordination. It also encourages design and creativity. Ideal for boys and girls aged 5-12, the kits are made from strong, high quality wood.

    In early 2014, Wood WorX reached its 10-year milestone and celebrated with a brand refresh. Launched in 2004 and winning the Australian Design of the Year Toy industry award in its first year, Wood WorX has released almost 70 wood modelling kit designs over the past decade.

    Now Wood WorX models are easier to build with new components trays that lay out the parts so kids can easily visualise the finished product as soon as they open the box. There are also detailed, step-by-step coloured instruction sheets. The double ended paint brush can add more intricate detail to their work.

    Introducing a lower price point to the range, Wood WorX Minis include four designs in a convenient foil bag.
    Products
    Sika keeps Eco House safe from damp
    Sika Sarnafil G410-15L Felt membrane was used on the Forest Lodge Eco House roof garden
    Sika
    The Forest Lodge Eco House roof garden provides a range of ecological benefits
    FarmRoof enables people to grow vegetables on their roof
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    While having a garden growing on your home's roof is not every homeowner's dream, it is good to know it can be accomplished. One of the keys to this kind of innovative, ecologically aware design choice is making sure there is a secure barrier between the roof garden and the rest of the house. Otherwise, significant structural water damage through damp could result.

    When Chris Knierim of Code Green Pty Ltd set about building his Eco House in the Sydney suburb of Forest Lodge, he specified a 1.5 millimetre thick Sika Sarnafil G410-15L Felt membrane for the project. This was adhered to the roof space with Sarnacol 2142s to prevent leaks and water ingress under the membrane, should the membrane be breached with punctures or damage.

    Sika Sarnafil is root resistant. As plants grow, its roots are unable to penetrate the membrane. So the chances of the membrane being breached are somewhat reduced by the capacity of the membrane to resist penetration by the growing roots of plants. Designed for flat exposed roofs, it offers a high level resistance to weather and high water permeability.

    Sika Sarnafil is a thermoplastic membrane, so the builders could heat-weld sections on-site, making installations much easier in the restricted area available. Seams and flashings were welded together with Sika Sarnafil's automatic hot-air welder, resulting in one monolithic layer of material that is impervious to moisture infiltration.

    Though a garden on the roof might seem an odd choice, Knierim had good reasons for adopting this design. Describing the reasons behind his choice, he said:
    We opted for a green roof to not only improve insulation and reduce the Eco House's carbon footprint and energy costs, but also to add an aesthetic appeal and conserve water by reducing storm water runoff. The roof collects and stores storm water, providing a water supply for the roof top garden, vertical gardens and the house.

    The resulting building has received considerable acclaim and notice. It was featured on the TV series Grand Designs Australia, and officially opened on completion by Sydney Lord Mayor Clover Moore. Mayor Moore is backing a move to encourage Sydney's residents to expand the existing 96,000 square meters of roof space already used for gardens.

    Some companies, such as FarmRoof in the USA, offer solutions which enable people to plant and harvest vegetables on their roof space, adding food production to all the other benefits of roof gardens.
    Bigbox
    Kingfisher results poor in Britain and France
    Overall sales at Kingfisher-owned chain B&Q dropped 3.2% in the 10 weeks to July 12
    Yahoo News
    A sad end to a good story - Kingfisher stock price chart
    Sir Ian Cheshire visits a Scottish branch of B&Q
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    Brazilians were apparently not the only people to suffer from the travails of the FIFA World Cup - investors in Europe's largest home improvement retailer, Kingfisher, also have had reason to grieve.

    That at least is the story Kingfisher is telling, blaming slow sales during the month of July 2014 on Britain's football obsession. As sales slumped by 8% in the second calendar quarter for Kingfisher's B&Q stores, the company has blamed soccer fans who would rather watch the telly than do DIY.

    An additional burden, apparently, is a large number of St George themed garden gnomes, destined to celebrate Britain's success on the soccer pitch, which have remained unsold after the nation's early exit from the competition.

    If this is true, then B&Q apparently has a very soccer-dominated market share.

    Overall sales at the chain dropped 3.2% in the 10 weeks to July 12, with big-ticket sales of kitchens, bathrooms and bedrooms diving 6%.

    However rival kitchens business Howden revealed it saw a 14% boost in total sales in the four weeks to June 14, suggesting families were still willing to splash out on big purchases.

    Elsewhere in Europe Kingfisher fared equally poorly, with sales in France and Poland both declining. The sales decline in France was put down to reduction in forward building approvals, which may be reflecting uncertainty over the country's fiscal policies.

    Whether unconvinced by Kingfisher's interesting story, or perhaps taking out their soccer grief on the stockmarket, the release of the results has seen Kingfisher's shareholders sell the stock, which plummeted down by 7.9%.

    The managing director of Kingfisher, Sir Ian Cheshire stated that:
    Trading in our second quarter was always expected to be more difficult, annualising a very strong second-quarter performance last year and following this year's weather-boosted first quarter.

    This seems to mean that sales were strong in the second quarter of 2013, while sales boomed during the first quarter of 2014, resulting in a double-whammy.

    Sir Ian's plan for reversing the situation is to improve margins and reduce costs.

    Analysts seem to have been less then sympathetic to both the football explanation and Sir Ian's interesting statistical interpretations. Some have pointed out that while sales at B&Q dived, those at another Kingfisher hardware business which is aimed at professionals, Screwfix, surged up 11.8%. It may be, they say, that in B&Q Kingfisher has concentrated too much on consumer sales and should have shifted more of its market capacity to the professional market.

    Analysts have cut expectations for profits at the company by over 2%.
    Products
    Glow in the dark DIY product
    The Britestep product functions as an anti-slip, glow in the dark step and stair nosing
    Everbrite Safety Products
    Britestep's glow in the dark properties
    Britestep can reduce the safety risks of steps and ramps
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    Australian company, Everbrite Safety Products has released its multi-use Britestep product that functions as an anti-slip, glow in the dark step and stair nosing.

    It has very high slip resistance ratings and three glow stripes. Through its design and material choice, it can also be used bent as a step nosing, flat as ramp tread, reverse bent as coving or applied flat to a vertical surface to form wall skirting.

    Britestep can reduce the safety risks of steps and ramps. Anthony Rogers, managing director of Everbrite, says:
    Aluminium products have been around for years in the commercial and industrial sectors. Where Britestep stands out...is that it is the first product to bring all the benefits and quality of a commercial grade product to the DIY consumer. It can do this because of the materials and processes we have developed to manufacture the product and its design.

    As a DIY product, Rogers said Britestep had to satisfy three criteria before it could offered to the consumer. It had to be cost effective; must comply with national regulations and standards; should be easy to install; be durable and easy to transport.

    In the past, hardware stores or home improvement centres found it difficult to handle the bulky and awkward lengths of aluminium nosing products. So many retailers simply chose not to stock it.

    To address this problem, Britestep is packaged in convenient rolls that fit on any shelf and can simply be carried home by customers.
    Companies
    Fastenal Q2 earnings in line with expectations
    Fastenal Company's strong top-line performance was offset by weak margins
    Nasdaq
    During the last quarter, the company signed 4,137 vending machine contracts
    Fastenal had 2,684 stores at the end of the second quarter of 2014
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    Fastenal Company's earnings grew 7.3% year over year as strong top-line performance was offset by weak margins.

    Fastenal reported net sales of US$949.9 million in the second quarter, up 12.1% year over year as underlying markets improved, vending revamped, sales improvement efforts showed results and comparisons eased.

    Net sales, however, marginally missed the analysts' consensus estimate (put together by Zacks) of US$951 million, possibly due to a slight slowdown in daily sales growth rates in June.
    Overall, top line is growing

    Fastenal's total average daily sales growth rate in the last quarter was 12.1%, up from 5.3% in the prior-year quarter, as a result of an increase in sales volume. However, foreign exchange dragged down first-quarter daily sales growth rates by 0.4%.

    Daily sales growth was 10.0% in April, 13.5% in May and 12.7% in June, much higher than a respective 4.8%, 5.3% and 6.0% in the corresponding prior-year months.

    After struggling for several quarters, Fastenal's top line turned around in the first quarter of 2014 and continued into the second. Prior to this, end-market slowdown and broader economic uncertainty were lowering fastener sales which in turn weighed down Fastenal's top line. In order to accelerate sales growth, Fastenal took the strategic decision to increase sales personnel at the stores.

    The added selling energy largely boosted sales this year. Importantly, easy comparisons from a relatively weaker 2013 also boosted sales growth rates in 2014. Moreover, vending trends have improved in both the quarters of 2014 and the construction business is showing signs of improvement.

    Daily sales to manufacturing customers (representing almost 50% of revenues) grew 11.2% in the second quarter, higher than 5.9% in the prior-year quarter. Both fasteners and non-fastener sales improved in the quarter.

    The daily sales growth rates of fastener products (used mainly for industrial production and accounting for over 40% of the company's business) were 5.5% in the quarter, better than 1.9% in the prior-year quarter.

    Non-fastener product sales (used mainly for maintenance) increased 17.1% in the second quarter of 2014, up from 8.5% in the prior-year quarter and 14.2% in the prior quarter. The non-fastener business improved due to the pick up in the industrial vending business.

    In the non-residential construction market (representing 20% to 25% of revenues), daily sales grew 7.5% in the second quarter of 2014, up from 0.7% in the prior-year quarter and also 2.9% in the previous quarter due to improvement in construction trends.
    Vending trends continue to improve

    As of Jun 30, 2014, the company operated 43,761 vending machines (irrespective of the type of machine), up 7.3% sequentially and 20.1% year over year. During the quarter, the company signed 4,137 machine contracts, up 2.8% sequentially.

    Daily sales growth to customers using vending machines was 20.9% in the second quarter, up from 19.7% in the first quarter and 18.9% in the prior-year quarter. The vending machines now account for 37.0% of the company's sales, lower than 37.8% last quarter.

    Vending trends have started improving after remaining soft in the past 2-3 quarters as management's recent effort to improve the quality of signings/installs seems to be working. Even though percentage of vending customers declined sequentially in the quarter, signings and the number of customers using vending improved.
    Weak margins

    In the first quarter, gross margin declined 140 basis points (bps) year over year to 50.8% due to an unfavourable product mix (resulted from weakness in fastener products which generate higher margins) and changes in end market mix.

    Moreover, gross margins declined 40 bps sequentially and also fell short of the company's long-term guidance range of 51% to 53% as the company's focus shifted toward improving revenues.

    In fact, management warned that near term gross margins could remain at the lower end of the long-term range and maybe even below due to company's emphasis on improving sales.

    The company recorded operating and administrative expense of US$276.0 million in the second quarter, up 10.1% year over year due to higher payroll, labour expenses and selling transportation costs.

    Higher store headcount, increases in sales personnel as well as higher investments behind vending increased operating costs, thus pulling down margins.

    Pre-tax profit was 21.8% of revenues in the quarter, down 90 bps year over year, due to weak gross margin and higher operating costs.

    Fastenal had 2,684 stores at the end of the second quarter of 2014, compared with 2,683 stores at the end of the first quarter.
    Products
    Affordable iPhone-based thermal imaging camera
    Flir One image of a front door showing heat escape
    FIIR
    The case attaches easily to an iPhone
    Leak detection with the Flir One
    Subscribe to HNN weekly e-newsletter
    US-based thermal imaging company FLIR Systems is bringing the capabilities of its stand-alone products to the Apple iPhone. The "FLIR One" iPhone case converts the iPhone into a thermal imaging device. The initial price for the case and software, to be released during August 2014 is US$350. Many of FLIR's standard products cost over US$10,000. An Android phone version is also under development.

    The case contains its own thermal imaging camera, which is based on FLIR's Lepton technology. The camera is less than a centimetre square and has a resolution of 80 pixels by 60 pixels. A breakthrough, wafer-based means of producing the lens is what enables the camera to be so tiny. Images are produced by the camera in under half a second.

    The images from this camera are combined with visible light camera images using another FLIR technology, Multi-Spectral Imaging. The standard camera images are embossed over the thermal images to create a visual readout that is easy to interpret.

    The FLIR One is based on what has previously been military-spec only technology, and produces a "live" thermal image. According to FLIR's CEO, Andy Teich:
    FLIR is dedicated to developing and delivering technologies that provide users with a sixth sense. Based on technology that was formerly reserved for the military, FLIR ONE is the first in a new generation of affordable thermal imaging devices designed to inspire imaginative and innovative uses by consumers. This represents a revolutionary step forward for both FLIR Systems and thermal imaging.

    FLIR is overtly targeting home improvement with this product. Energy conservation continues to grow as a concern for home owners, due both to carbon emissions monitoring and cost-savings. The FLIR One provides contractors and concerned home owners with a convenient and relatively inexpensive means of imaging a house to detect areas where heat or cool air may be escaping.

    There are a number of other handy applications as well. Thermal imaging can aid in the detection of gas and water leaks, and provides a great way to check that air-conditioning systems are functioning as expected. Used on machinery, it can also help find "hot spots" which are receiving inadequate lubrication. It is also possible to find certain electrical "shorts", when these produce heat through sparking. Another use is clearly detecting architectural construction features, such as the exact location of hot and cold water pipes or radiant heating coils.

    This interesting information can be captures either as photographs, or in videos. This means contractors could, for example, present a thermal "tour" of a house, indicating the areas that require insulation.

    As an added benefit, the thermal imaging system also enables users of the device to virtually "see in the dark", using the heat differences between different objects to present a detailed image both indoors and outdoors.

    The FLIR One is part of a line of products FLIR is planning based on this technology, which it announced in January 2014. According to Mr Teich:
    FLIR is committed to the development of lower cost, user friendly thermal sensing technologies to enhance vision and measurement beyond light. Lepton represents our latest, most dramatic step toward our vision of becoming 'the world's sixth sense. Not only will Lepton support an array of new imaging applications, but its revolutionary price, size, and low power consumption will open new markets for the useful information and data that thermal technology provides.
    Online renovation forum gets new owner
    Oneflare has acquired Australia's largest online renovation community, Renovate Forum
    Startup Smart
    Oneflare is best known for its app that helps connect local renovators to plumbers, gardeners, removalists and other tradespeople. It has announced that it has acquired Australia's largest online renovation community, Renovate Forum, in a deal believed to be worth six figures, according to the Startup Smart website. Renovate Forum has over 40,000 members and is a community for renovators seeking advice and expert opinion on home improvement jobs. The forum has over half a million visits every month, and has hundreds of threads with questions, ideas, inspiration, and common mistakes. Oneflare connects Australians with over 45,000 certified tradespeople, and has booked over $50 million worth of job requests across Australia. It's free platform allows users to post a job request and let professionals bid for the work. The acquisition enables members of the Renovate Forum to connect with Oneflare's marketplace.
    Compact and accurate cutter
    The compact size of the WX523 makes it ideal for tight spaces and hard-to-reach areas
    WORX
    The 20V WX523 Worxsaw can cut through most materials with ease, including wood, metal, tiles, plasterboard and plastics. Unlike other circular saws that can be large and cumbersome, the compact size of the WX523 makes it ideal for tight spaces and hard-to-reach areas. To ensure users get an accurate cut each time, the WX523 has been fitted with a quick cutting depth lever so adjustments can be made easily and quickly. An 85mm blade provides a maximum cutting depth of 27mm and despite its power, the WX523 only weighs 2kg. This makes it easy to control and manoeuvre while cutting, which reduces the risk of botching a job. The WX523 Worxsaw is powered by a reliable 20V Lithium Ion battery with no self-discharge, so no matter how long users leave it on the shelf, it won't lose power.
    Lowe's adds home automation products for Iris
    Lowe's has launched new products for its Iris smart home solution
    Marketwatch
    US-based home improvement company Lowe's has launched new products for its Iris smart home solution. It has added a smart garage door controller, electronic pet door, window blinds controller and hose faucet timer. These products joins the 50 existing devices currently available for Iris. The four new Iris-compatible products can be monitored and controlled anytime, anywhere from a computer, smart phone or tablet. They include a Z-Wave Garage Door Opener Remote Command Controller with Tilt Sensor; PetSafe Electronic SmartDoor[tm]; Motorized Window Blinds Controller; and Orbit Hose Faucet Water Timer. Since its launch in 2012, Iris has helped to make home automation simple, affordable and scalable by giving consumers a single user interface that lets them monitor, control and customise a wide range of devices in and around the home.
    Haymes Paint consolidates range
    Haymes Paint has released a focused, exclusive version of its Ultra Premium Prep Coat range
    Haymes Paints
    Haymes Paint has released a focused, exclusive version of its Ultra Premium Prep Coat range. It is now called the Ultra Series range. With core prep coat products that complement each other, the latest range provides a solution for every painting project. Previously featuring eleven predominately single use products, the Ultra Series range now offers five multi-functional solutions, providing cost saving benefits. Put simply, the range has products that are water, solvent and spirit based. So there is flexibility and options for a wide variety of projects. The new Ultra Series range includes Ultracover, Ultraseal, Ultralock, Ultraprime and Ultrahold. Sizes range from 500ml to 15litres.
    Upsurge in high-rise construction
    The majority of new builds in Australia are apartment blocks
    Smart Property Investment
    According to a new report from BIS Shrapnel, dwelling building activity is reaching a new high in Australia and the majority of these builds are apartment blocks. Currently, two high-rise apartments are being built for every five detached houses, a rate twice the historical average, according to BIS Shrapnel associate director Kim Hawtrey. He said: "New housing starts are forecast to reach 190,000 nationwide in 2014/2015, which will surpass the previous peak of around 187,000 set back in the 1994 boom. In the next two years we'll also see the recent emphasis on high-rise units continue." Housing starts have grown by 14% in 2013/2014 to a total of 184,350 annual commencements. BIS Shrapnel predicts commencements will rise by a further three per cent in 2014/2015, before easing between 2015 and 2017.

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