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Shaw Building Supply Boosts Sales by Expanding Hardware Offerings
On Mt. Olive Road, about 12 miles north of Birmingham, Ala., Willard Shaw stood eyeing his pocket watch and counting the passing cars. Every minute, about six cars would roll down the road. Good enough, Willard thought. With that kind of traffic, he believed it would be a good place to open a building supply store, and the grand opening was November 16, 1974. Since then, Shaw Building Supply has become a multi-million dollar, multi-generational family business.
Willard Shaw passed away in 1991, yet his family business legacy continues. Just about every member of the Shaw family is involved in the business, including Willard’s wife, Evelyn, son Herbert (who recently retired), son Jerry and his wife Cathey McCluskey Shaw, daughter Tracy Shaw, and daughter Nelda Butler and her husband Jim Butler.
The next generation of the Shaw family has also started working at the company and it includes Jerry and Cathey’s daughter Catherine Price and her husband Robert Price, and Nelda and Jim’s daughter, Caroline Cummings.
And just as the family grew, so did the company. For decades, the company enjoyed steadily increasing revenues, topping $12 million in 2006. Then came the economic downturn. Like so many other retailers across the country, Shaw Building Supply was hit hard—perhaps even a bit harder because the bulk of their business relied on housing starts, which dropped to near zero in just a few months.
“Housing is a big part of our business and when the housing starts dropped off, our trucks weren’t moving,” Cathey says. “It was the first time we had to lay off anyone, ever.”
In response to the economic downturn, the store shut down a lumberyard and reduced inventory. The store also cut the number of employees. At its height, the store had 40 employees and now employs about 25. The business now needed to rely more on hardware.
When the business first opened in 1974, it offered contracting services and lumber with a minimal hardware selection. After about seven years, the store introduced its first full line, and now hardware accounts for about 40 percent of the business.
When the company’s main hardware supplier, Moore-Handley, was acquired by House-Hasson Wholesale Hardware in 2009, it led the Shaws to explore their options. To make the climate a little tougher, it was about this time that Lowe’s opened a store about eight miles south.
“When Lowe’s first opened, a lot of our walk-in business disappeared,” says Jerry, who adds that the family quickly realized that their new distributor would need expertise on competing with the big boxes.
After evaluating several wholesaler suppliers, the Shaw family decided the House-Hasson Wholesale Hardware program fit their needs the best. Adds Jerry, “And when we looked at the final line, House-Hasson had better prices.”
House-Hasson Wholesale Hardware believed the store could benefit from a resetting, a rejuvenated advertising campaign and an evaluation of in-store pricing. “It took a while for us to decide how to proceed with House-Hasson and they were very patient and came up with solutions that worked for us,” Jerry says.
During the course of three months this past summer, House-Hasson Wholesale Hardware helped the Shaws redesign the store, beef up the assortment, add new merchandise and adjust pricing.
“House-Hasson really helped us with our displays and restocking,” Cathey says “We just had a bare minimum. Because we didn’t have that much on our shelves, word got out that we were going out of business. That obviously wasn’t the case, but it’s about perception. We weren’t providing the right perception.”
The Shaws appreciated how House-Hasson Wholesale Hardware was able to tailor the remerchandising to the needs of the business. “House-Hasson worked with us and used shelves we had,” Cathey says. “We couldn’t have done the reset if they didn’t work with us. They really bent over backward to help.”
Along with redesigning some endcaps, one of biggest changes in the store was creating a display wall of power tools. Previously, the tools were on shelves in the middle of aisles. “Before the reset, some customers didn’t even know we sold power tools,” admits Robert, who points out that power tool sales have tripled in the past few months.
But one of the biggest benefits to the store’s bottom line was examining the pricing structure within the store, especially compared to the new big-box competition.
“We didn’t know what items were price sensitive or impulse buys,” Jerry says. “House-Hasson helped us with perception. Lots of folks think the big-box stores are cheapest, but House-Hasson helped us show people that they’re not.”
In addition to making suggestions on what products to add to the store’s inventory such as heaters, garden accessories and herbicides, House-Hasson Wholesale Hardware helped the Shaws identify which items are price sensitive in their area. “It turns out we were high on price-sensitive items and on other, higher-margin items we were way low,” Robert says.
Insulating spray foam and ladders were a couple examples of price-sensitive items the store had priced too high. On the other end, items such as nuts, bolts and screws could be priced higher for a better return.
According to Casey Williams, the House-Hasson Wholesale Hardware territory manager for northeast Alabama, one of the goals is to continually introduce new products and help tweak displays.
“Anything where we’re changing an endcap and the look of the store will get the customer’s attention,” Williams says. “Having new items in the store means you’re keeping up with the competition. It’s important for customers to know about new products and that stores keep adding new items that will sell in their market. That will continue to increase customer traffic because they know they are a one-stop shop.”
Once prices were set right and the store was stocked with a larger assortment, it was time to give the store’s marketing a little freshening. Previously, the store would place quarter-page ads in the local paper, and often wouldn’t receive much response.
Shaw Building Supply has started using House-Hasson Wholesale Hardware’s circular program, which has already helped drive foot traffic. In addition to the circular, Williams and the House-Hasson Wholesale Hardware team helped Shaw plan a customer appreciation day for November.
In 2009, sales were $4.5 million and the following year revenue increased to about $6 million. Walk-in traffic continues to pick up, and three or four employees have to be at the front counter at all times to handle the steady foot traffic.
“They’re a great store with friendly people and hometown atmosphere,” Williams says. “The customer service they provide is through the roof.”
House-Hasson’s next dealer market is scheduled for January 5-7 at the Opryland Hotel, Nashville, Tenn.
In its 105th year of operation, House-Hasson Wholesale Hardware serves 17 states, the Caribbean basin, and several other foreign countries. The company is approaching $200 million in annual sales.