Over the years, Stoneway Electric Supply Co. Inc., and Minerallac/Cully, Hampshire, Ill., have looked upon each other as prized marketing and sales partners in the Pacific Northwest. They've taken that relationship up a notch.
A comprehensive merchandising effort in the distributor's South Seattle, Wash., branch has seen sales climb to new levels. The effort took root three years ago when Eric Haines took over as branch manager for Stoneway's South Seattle location, one of the Spokane, Wash.-based distributor's 14 branches in Washington, Oregon and Idaho.
“I had been with the company for 14 years, but I never had the space available to implement such an effort,” says Haines. “I always had a great relationship with Minerallac/Cully. Now I had the room.”
Helping accomplish the task from the manufacturing side was Steve Yoder, Minerallac/Cully's western regional sales manager for the United States and Canada. Cully, which was purchased by Minerallac in the first quarter of this year, makes fasteners, anchors and tools, contractor accessories, chemicals and paints.
“We realized that we had a unique opportunity to be the first Stoneway location to reach $100,000 in annual sales with our product line,” says Yoder. The distributor had been growing annually from $30,000 to $50,000 to $70,000 and was on pace to do about $80,000 with our product line. We decided to push that.”
Haines and Yoder developed a plan to merchandise the showroom and add products that were currently not stocked at that location, including contractor-related products such as paints, chemicals, rags and peripheral products. Added to the effort was the creation of new packaging for existing products. To get the job done, Stoneway allotted 68 feet of counter area to the Minerallac/Cully line — a dramatic move up from roughly 12 feet.
“When you undertake an effort such as this, you naturally consider the value of the counter real estate,” says Haines. “But in making your decision you also consider the trust that has built up over the years with the vendor. We knew the effort would improve the impulse buy. The vendor's return policy was so distributor friendly we knew if it didn't work out, they'd take the products back with no hassle.”
Yoder's previous experience in the drug and grocery industries helped him develop the plan. He removed the slow-moving products from the existing displays and added impulse items such as paints, masonry bits, two gondolas of screws, hard hats, tool bags, pouches, saws and knives. Yoder says important considerations when redoing a counter area are placing products at the proper eye level, using the right color schemes and using eye-catching packaging.
Customer reaction to the re-merchandising efforts are evident in the increased level of sales, says Yoder. “Customers benefit because they can purchase products that they typically would have to go elsewhere to buy. From Stoneway's perspective, they have gained added market share from products they didn't stock before. They accomplished that by taking business from other business channels.”
Minerallac/Cully's sales to Stoneway's South Seattle branch are quite impressive. Sales increased 45 percent from 2001 to 2002 and are on pace to increase 42 percent this year.
Haines pegs the increases in sales to customers of the Minerallac/Cully line at 16 percent the first year, followed by 20 percent in 2002. This year, he expects a 15 percent increase.
“Those are huge figures, especially in the hard-hit Northwest market,” he says.