Home improvement retailers are a distinguished marketing channel for a variety of types of construction and remodeling products. Such products include: building materials and supplies, lighting and plumbing, lawn and garden, construction tools and equipment, and much more. In the new whitepaper, “Marketing to Home Improvement Retailers”, we provide a snapshot of the home improvement industry, along with the results of the 2011 survey, conducted by the Construction Marketing Association, which reveals valuable insight regarding best retail practices.

1. Marketing to Home
Improvement Retailers
ConstructionMarketingAssociation.org Building Expertise™

2. Marketing to Home
Improvement Retailers
Home improvement retailers are a specialized marketing channel for many
types of construction and remodeling products including building materials
and supplies, lawn and garden, lighting and plumbing, construction tools
and equipment, and more.
This whitepaper provides a snapshot or basic statistics on the retail home
improvement industry, along with the results of a 2011 survey on home
improvement retail marketing practices conducted by the Construction
Marketing Association. In addition, three important aspects of home
improvement marketing will be considered: merchandising, packaging and
retail line reviews.
Retail Snapshot
Retail home center and home improvement stores have a combined
revenue of $132.54 billion in 2011; with overall home improvement channel
sales totaling $205.9 billion in 2011. (Source: Home Channel News).
The retail home improvement category consists of several segments
including big box home centers like The Home Depot and Lowe’s,
hardware cooperatives including Ace Hardware and True Value, Lumber
and Building Material dealers (LBM’s), mass merchants like Walmart and
Sears Holdings, and specialty retailers that sell products such as paint,
flooring, and farm goods.
The following chart identifies the top ten largest home improvement
retailers in North America by number of stores and earnings in 2011
(Source: Home Channel News).
Retailer Sales ($M) 2011 # Stores 2011
1. Home Depot $70,395 2248
2. Lowe’s $50,200 1749
3. Walmart* $19,400 3868
4. Sears Holdings* $12,200 3510
5. Menards $8,800 263
6. Shermin-Williams $4,780 3450
7. Tractor Supply $4,230 1085
8. ProBuild Holdings $3,300 439
9. Harbor Freight Tools $1,650 380
10. 84 Lumber $1,430 258
PAGE 1 /// Construction Marketing Association | Marketing to Home Improvement Retailers

3. * Note: Mass Merchants like Walmart and Sears Holdings were not included in past
rankings. However, they are included today because the influence of these stores on
home improvement is so large. Mass merchants generated $33.12 billion in revenue,
or about 16% of overall home improvement channel sales in 2011.
Home Improvement Retail Marketing Survey
The Construction Marketing Association recently conducted a survey on
retail marketing practices to shed insight into this important channel.
The following questions were asked:
• What retail channels do you sell to?
• What approximate percentage of sales are retail (vs. non-reital)?
• What types of retail initiatives do you undertake?
• What types of products do you sell to retail?
Retail Channels Sold To
HOME CENTERS/BIG BOX 70%
HARDWARE CO-OP 40%
ECOMMERCE 40%
LUMBERYARDS 30%
OTHER 20%
Home centers/big box home centers were the top retail channel sold to with 70
percent, followed by hardware cooperatives and ecommerce with 40 percent each.
.
Percentage of Retail Sales
100%
53%
15%
HIGH AVERAGE LOW
On average, 53 percent of respondent’s sales are retail. Responses went as high as
100 percent, and as low as 15 percent.
PAGE 2 /// Construction Marketing Association | Marketing to Home Improvement Retailers

4. Types of Retail Initiatives
MERCHANDISING DISPLAYS 90%
PROMOTIONS 80%
PROPOSALS/RFPS/BIDS 70%
PACKAGING 60%
LINE REVIEWS 60%
OTHER 40%
Merchandising displays, promotions, and proposals/rfps/bids ranked as the top
three types of retail marketing initiatives.
.
Types of Products Sold
50% BULDING MATERIALS
30% TOOLS
10% EQUIPMENT
10% OTHER
Home Improvement Retail Merchandising
Merchandising is the visual presentation of products in the store including
all types of displays, signage, and in-store promotions.
Planograms are used to specify merchandise sets by department and stock
keeping unit (SKU), and corresponding point-of-purchase (POP) signage.
Typical merchandise sets include in-line (bays for home centers), end caps
and solution centers; promotional displays include in-aisle stack outs,
quarter pallets (QPs), bin merchandisers, clip-strips and various dispensers.
PAGE 3 /// Construction Marketing Association | Marketing to Home Improvement Retailers

5. Typical POP includes channel headers and posters, laminated how-to
instructions, shelf-talkers, banners, ceiling danglers, and floor decals. Each
retailer has departments and guidelines. Sometimes a retailer will appoint
a category captain to oversee category management. Following is an
example of category management for The Home Depot “Tool Corral”.
Following is an example of category management for Lowe’s tool
department, or “Tool World”
PAGE 4 /// Construction Marketing Association | Marketing to Home Improvement Retailers

6. Following is an example of a category management planogram for power
tool accessories from Vermont American.
To the left is an example of a
merchandising planogram brochure
for hardware chain Do it Best from
National Div. Stanley, created by
Construction Marketing Advisors.
Following is an example of a category management planogram for RIDGID
jobsite and truck storage equipment by Construction Marketing Advisors.
PAGE 5 /// Construction Marketing Association | Marketing to Home Improvement Retailers

7. Following is an example of a Home Depot end cap with quarter palette
display, and “conversion cart” portable display.
Retail Packaging
Each retailer will have packaging requirements related to bi-lingual or
tri-lingual, bar codes, and for some products, security strips (Sensormatic).
Following are examples of home improvement packaging including blister
card packaging for Ideal Industries, Bosch and Vermont American.
PAGE 6 /// Construction Marketing Association | Marketing to Home Improvement Retailers

8. Home Improvement Retail Line Reviews
Retailers continually evaluate their vendors and merchandising mix with
point-of-sale (POS) data, margin analysis, and supplier performance
(fill-rate 95%+, inventory turns, sales per square foot).
Depending on the product category and/or department, line reviews are
typically 1-year contracts, but could be up to 3-5 years. For certain product
categories or departments, the retailer will hold online price auctions.:
Depending on the product category, a retailer will often seek one or more
national or pro brands, and a price brand, which often is a
proprietary (house or private label) brand. Some line review
trends to consider:
• Retailers focused on SKU rationalization and vendor consolidation
• Retailers are requesting more frequent line reviews, and
demanding more support
• Note that home center retailers seek pro contractor business, and
likewise seek pro contractor brands
A challenger brand (not in the retailer) can win placements with
special promotions:
• Approach differs based on narrow or broad line supplier
• Identify the department or category merchant and pitch
• Provide market intelligence (share, equity, brand support)
• Hardware co-op is different; pitch individual stores, as well as
corporate buyers
Incumbent suppliers and challenger brands can defend or gain placement
with home center retailers through proactive merchandising and/or
promotional support. Below is a USG cirular ad for Lowe’s.
PAGE 7 /// Construction Marketing Association | Marketing to Home Improvement Retailers

9. Following is an example of a bi-lingual free-standing insert (FSI)
announcing a promotion, (buy a truck box get a free vacuum cleaner),
in support of a merchandising display placement for Ridgid Truck storage.
NeW from NeW from
NOVEDAD DE
A HolidAy Present
It would be a shame to throw
A HolidAy Present
It would be a shame to throw all those nice tools and supplies
all those nice tools and supplies in the back of your truck
in the back of your truck
for yourself!
exposed to weather and thieves.
for yourself!
exposed to weather and thieves. Especially when you can pick
Especially when you can pick up the pro-grade RIDGID®
up the pro-grade RIDGID® 4100/4105 Truck Saddle Box
4100/4105 Truck Saddle Box
Buy a ridgid truck saddle Box – Get a
®
Buy a ridgid truck saddle Box – Get a at such an affordable price.
®
at such an affordable price.
ridgid wet/dry vacuum free! ridgid wet/dry vacuum free! • Locking systems that are
®
®
• Locking systems that are virtually tamper-proof
virtually tamper-proof
• Full weather seal protects
• Full weather seal protects against the elements
against the elements
• Easy Find organization for
• Easy Find organization for storage of small parts and tools
storage of small parts and tools
• Heavy-duty reinforced • Heavy-duty reinforced
aluminum diamond plate aluminum diamond plate
construction with powder construction with powder
coat finish coat finish
• Full 10-year warranty! • Full 10-year warranty!
free ridgid model
®
free ridgid model
®
Wd1250 Wet/dry vacuum Wd1250 Wet/dry vacuum
$ 79.97 retail value
$ 79.97 retail value
tHe neW ridgid truck sAddle BoX ®
tHe neW ridgid truck sAddle BoX ®
AvAilABle At select locAl tHe Home dePot stores** AvAilABle At select locAl tHe Home dePot stores**
PurcHAse: RIDGID® Model 4100/4105 Truck Saddle Box.* PurcHAse: RIDGID® Model 4100/4105 Truck Saddle Box.*
receive: RIDGID® 12-Gallon High Performance Wet/Dry Vacuum Model WD1250 or similar. receive: RIDGID® 12-Gallon High Performance Wet/Dry Vacuum Model WD1250 or similar.
send: This completed form and original (Home Depot) receipt showing the RIDGID® Model 4100/4105 Truck Saddle Box and date of purchase to: send: This completed form and original (Home Depot) receipt showing the RIDGID® Model 4100/4105 Truck Saddle Box and date of purchase to:
Customer Response Center • RIDGID Redemption Program • 2917 N. Latoria Lane, Franklin Park, IL 60131 Customer Response Center • RIDGID Redemption Program • 2917 N. Latoria Lane, Franklin Park, IL 60131
Promotion vAlid: On purchases dated 12/01/10 to 12/31/10. Entry must be postmarked by 1/15/2011. Promotion vAlid: On purchases dated 12/01/10 to 12/31/10. Entry must be postmarked by 1/15/2011.
Name: ____________________________________ Email Address: ________________________________ Street Address: ____________________________________ Name: ____________________________________ Email Address: ________________________________ Street Address: ____________________________________
City/State/ZIP: ______________________________ Purchased From: ______________________________ Questions? Call 866-481-0212 (8 am - 4:30 pm CT) for more info. City/State/ZIP: ______________________________ Purchased From: ______________________________ Questions? Call 866-481-0212 (8 am - 4:30 pm CT) for more info.
*Promotion form must be postmarked on or before January 15, 2011 and received by January 25, 2011. One submission per handwritten addressed envelope and must be sent by individual consumer purchasing product. Limit ONE *Promotion form must be postmarked on or before January 15, 2011 and received by January 25, 2011. One submission per handwritten addressed envelope and must be sent by individual consumer purchasing product. Limit ONE
request per name and address. No group submissions. No copies of receipts. The promotion form must be filled out completely and legibly. Visibly altered documentation will not be honored. Requests from PO Boxes will not be request per name and address. No group submissions. No copies of receipts. The promotion form must be filled out completely and legibly. Visibly altered documentation will not be honored. Requests from PO Boxes will not be
honored. Use of fictitious names, addresses or organizations to obtain additional vouchers or premiums is fraud and is in violation of Federal Law and may result in prosecution and a term of imprisonment, fine or both. Offer void honored. Use of fictitious names, addresses or organizations to obtain additional vouchers or premiums is fraud and is in violation of Federal Law and may result in prosecution and a term of imprisonment, fine or both. Offer void
where prohibited, taxed or otherwise restricted by law. This offer cannot be used with any other RIDGID® Brand Promotion. Please retain a copy for your records. RIDGID® and its employees and affiliates are not responsible for where prohibited, taxed or otherwise restricted by law. This offer cannot be used with any other RIDGID® Brand Promotion. Please retain a copy for your records. RIDGID® and its employees and affiliates are not responsible for
lost, late, damaged, illegible or misdirected mail or forms. AFFIDAVIT OF ELIGIBILITY & LIABILITY/PUBLICITY RELEASE. **Limited to in-store inventory. lost, late, damaged, illegible or misdirected mail or forms. AFFIDAVIT OF ELIGIBILITY & LIABILITY/PUBLICITY RELEASE. **Limited to in-store inventory.
The Construction Marketing Association
Achieving Retail Marketing Success
provides professional development and
marketing training, resources and information, Manufacturers and brands that market to home improvement,
networking and recognition including the hardware and related retailers are challenged with competitive
Construction Marketing Blog, the annual CMA
threats, eroding margins and demanding merchants. These
challenges are more than offset by the sheer volume opportunity
STAR Awards, and the Certified Construction
from these retailers.
Marketing Professional (CCMP) program. For
more information, visit the website. How brands navigate retail line reviews is dependent on the specific
Construction Marketing Advisors is an agency product category, as well as the brand’s position as incumbent or
specializing in construction product and retail challenger. Effective merchandising, packaging, promotion, and line
home improvement marketing. For more review management can determine success or failure.
information, visit the website.
This whitepaper provides rare insight into this specialized industry
with a snapshot of the top retailers, the results of a national survey,
followed by examples of merchandsing and packaging, along with
line review tips. Following are additional resources.
Additonal Resources:
American Hardware Manufacturers Association (AHMA)
Hardware Retailing (magazine)
Home Improvement Research Institute (HIRI)
North American Retail Hardware Association (NRHA)
Technology Trends in Home Improvement Retail
PAGE 8 /// Construction Marketing Association | Marketing to Home Improvement Retailers