You may regard yourself as being in the construction and home improvement business, but if you're a dealer, you're at heart a retailer. That's why I joined roughly 40,000 people in New York this week, looking for ideas at the National Retail Federation's annual convention. The NRF's Big Show produced a slew of products and trends that dealers should consider. Here are seven.
Electronic Price Tags/Info Billboards
You might have heard of these products for years but questioned how well they work and how long the batteries last. The old electronic tags were limited. Today's electronic tags can be controlled by wifi or through signals from the lights, with batteries that can last a decade. Perhaps more important, electronic price tags also come in far more sizes, making it possible to provide lots of information. They can even be made interactive. Imagine a price-tag bar that helps customers pick fasteners, or caulk, or tools, without ever needing help from staff. (If you go this route, keep in mind that you'll need to have staffers or outside help--probably in marketing--who can write the promotional copy for these screens.)
The tags also enable stores to change prices more often and more selectively. Offering discounts for only a few hours during a Ladies' Night is a classic example. And, with electronic tags, you can choose which products to discount and by how much rather than having to offer a certain percentage discount for every product in the store.
You might have heard about dealers like McCoy's Building Supply using robots to track inventory. The Big Show had several robots, but here's an alternative: a camera that you can hang on a shelf and have it scan what's in stock on the shelves across the aisle. The resulting picture, connected to software, identifies which products need restocking. And if you want to add your store's planograms to the software, what the camera sees also can tell whether the store's staff are following the home office's planogram instructions.
While a robot likely would be used on every aisle, the camera's maker, Vusion, envisions these cameras being used selectively, in rows that are particularly important. They can be moved whenever needed.
New Skills for Your Cameras
Several companies promoted software that use in new ways the images recorded by your existing cameras. Their software can spot potential shoplifters or people who simply look lost. Tractor Supply uses this software to watch people outside the store, checking out its tractors, and then tells employees there's a potential buyer outside who could use some help.
Smarter Grocery Carts
From Brazil and Germany came next-generation shopping carts already in use in the two countries. Both Brazil's nextop and Germany's SmartShopper come attached with a scanner and a weighing system that notices what was put into the cart. (Fun fact: a liter of Coke is heavier than a liter of Coke Light.) The systems can spot whether you scanned a cheap item and then put in an expensive one, as well as whether you placed something into the cart without ever scanning it. (The nextop cart has cameras around the top edge.) Both also let you make a credit-card payment, but they will summon an employee if it notices you tried to cheat along the way. Aside from not needing as many employees at checkout, nextop says a vendor also can defray its costs by selling advertising on the cart's sides.
Time to Rethink Physical Stores?
It's no surprise that surveys show a majority of people prefer to shop online rather than in a brick-and-mortar store. Over the past 25 years, physical stores have become warehouses, designed to be visited as quickly as possible, with uncommunicative staff and nobody having fun.
That reality contrasts with what a survey of 2,500 people by WD Partners and NRF found were the four qualities that people most appreciate in a store: inspiration, discovery of unexpected stuff, great staff, and an attractive vibe. Think Build-a-Bear workshops, convenience stores where you can sit and lounge, and a J. Crew in NYC's Soho that looks "like your cool friend's apartment," WD's Lee Peterson said. The key here is to marry online convenience with in-store cool. For LBM dealers, this means moving as much rote stuff as possible to e-commerce and to inside sales teams. Don't worry so much about what's in the store. Instead, use that space as a source of inspiration. Some LBM dealers already are doing this--note how Do it Best's recent redesign makes end caps a place to inspire customers.
Outsource Your Hot Runs
From Los Angeles comes Gently.io, which for $6 per package offers same-day (typically within three to four hours) delivery of products in several hundred ZIP codes around the City of Angels. It plans to expand into the New York City metro area in 2024's second quarter and in other major metro areas in the third quarter. The product must weigh less than 25 pounds, so its value to dealers is limited. But Gently will burnish your green credentials, as it uses only electric vehicles.
Businesses like Gently's come and go all the time, but the idea of outsourcing remains worth examining. The Home Depot uses Walmart's GoLocal on a white-label basis, and an Australian home center has teamed up with Uber to provide deliveries of smaller products (basically, what can fit in a trunk) for a set fee.
Avoiding AI Hallucinations
Yes, everyone at the Big Show was talking about artificial intelligence, but the comments during sessions with IT leaders were relatively cautious. Several speakers warned of AI "hallucinations"--when AI programs generate bad reports because they weren't trained well enough on which data matters and how to interpret that data.
"We need to do a better job teaching people how to ask questions" when they create tasks for AI, said Nida Pidskalny, Director of Supply Chain Technology for Canada's Federated Co-op, which includes 90 hardware stores in Western Canada. And once a bunch of AI-generated reports are created, IT directors need to examine which are being used most.
"This is a technology with tremendous promise, [but] when you try to apply it to scale you have to take your time," said Seemantini Godbole, Lowe's Chief Digital and Information Officer. She said her company is working on only seven to eight meaningful use cases at a time, declaring: "We don't want to die a death of 100 pilot [projects]."
Godbole, who has led Lowe's digital advances over the past five years, disputed suggestions that pro contractors wouldn't embrace an online relationship with a dealer. "Pros were the first to say 'I'll be the power user of omnichannel [communications]," Godbole said. She noted how pros had embraced a tech innovation in which an executive at a company could authorize one of the company's employees to, on a one-time basis, come to Lowe's and make a purchase. This move reduced to seconds a process that used to require the Pro Desk to contact the account owner and get authorization ... authorization that sometimes took a long time to receive.