- change ups
Independent hardware stores thrive in niche markets
Even as bigger stores invade, they survive by making changes.
One of the largest and most important sectors in the global market, the hardware industry has grown by leaps and bounds in recent years. Hardware parts and components have fueled the economic boom and growth and development in several industrialized nations and have become an integral part of business in just about every major industry.
The stores in this category engage in the sale of a number of basic hardware lines: tools, builders’ hardware, paint, glass, cutlery, housewares and household appliances. Some even offer a modified line of groceries and clothing.
IBISWorld’s Hardware Stores market research offers an interesting report and an insightful industry analysis that is logical and consistent. The industry report includes key areas: industry trends, statistics, market size, growth, and profit forecasts for a five-year period.
The industry faces challenges despite an improving economy. Competition from the Big Box home improvement stores threatens hardware stores, since consumers choose making purchases from retailers that offer a large variety or products. Since the introduction of these do-it-yourself stores (Lowe’s, Home Depot, Menards), the landscape of the American hardware store has changed.
Independently operated hardware stores continue to find a healthy niche. A close look at the independent hardware business led me to Rylee’s Ace Hardware on Michigan Street NE, which is located in a good, strong neighborhood. A plaque on the outside of the building reads: “In 1946, John Rysdyk Sr. and Edward Leedy, brothers-in-law, combined their talents and resources to create Rylee’s Ace Hardware.”
Today, John Rysdyk’s granddaughter Lori Terpstra (third generation) is at the helm of the business. My conversation with her was quite informative. The business has undergone many changes. In the ’80s there were many neighborhood hardware stores, and people stayed in the neighborhood to shop. Then the Big Box stores came into the market. Presently, there is a backlash to frequent neighborhood stores again. Why? I asked.
Terpstra believes it is due to gas prices, closer proximity and markets moving closer to the city. “That is why the business opened a store on the west side of Grand Rapids.”
I asked why Rylee’s has been so successful, and she stated the following reasons: One, Rylee’s spends lots of money training its employees, including managers. “We can’t own a price image; we have to be in the ballpark. We can own service and convenience; thus, we allocated dollars to training for products and customer service.”
Rylee’s has a customer coordinator who chats with customers and quickly determines their needs. Many employees have been with the business a number of years. While one often can hardly find help in the Big Box stores, Rylee’s has friendly, knowledgeable employees who immediately greet customers and address their needs.
Second, the business must differentiate. According to Terpstra, “You have to differentiate and find niches. It is the only way to grow.” One example of this strategy includes fixing, repairing and maintaining old hardware. She feels it is necessary for the store to shift to need-based rather than want-based. Rylee’s offers more than 900 types of one of the oldest tools — knives. Customers can purchase them in store or order online.
It has added products that appeal to females — decorative pieces, Fiestaware, duct tape in colors and patterns, and fun cookie cutters, to mention a few.
Rylee’s also offers a mom and pop soda shop experience, selling old brands such as Bubble Up, Dog n Suds and Kickapoo Joy Juice. There is a category she calls “fun stuff,” which includes decorative lighting, shower curtains and towel bars. A category she refers to as “cool” includes bird feed, The Armory guns and ammunition, live bait with fresh minnows, a work area for lawnmower tune-ups, and an Ace Fix It area where customers can see the well-organized parts.
A third reason for Rylee’s success is the fact that it meets the needs of its target market. The primary customer base consists of homeowners, and the secondary market is small businesses. Most of its 2,000 charge accounts consist of small commercial accounts.
In the late 1950s, the business became an Ace Hardware Corp. franchise.
“Ace gives us good service as we give our customers, and that is what cooperation means,” Terpstra said.
“I love my job. I’m always looking to do more, do better. We don’t rest. It’s challenging and rewarding. Can a small business survive against a large Big Box giant? Yes! Rylee’s is a small hardware store with a heart.”
Maria Landon is an affiliate professor of marketing at Grand Valley State University.