Quality remains the buzzword for cautious consumers frustrated by inferior power tools. “(Some) tools did not hold up, so (the consumer) is leery,” says Bob Barhydt, tool manager at Waters True Value Hardware in Salina, Kan.
Consumer caution, along with the growing sophistication of do-it-yourself projects, has increased sales of professional-level tools to the d-i-yer.
“Professionals have always known what tool to use,” says Cotter & Company Buyer Steve Genske. “Now, consumers are being educated into buying a better product.”
This trend has been maintained despite a slow economic recovery. Housing starts have remained sluggish early in the year–an ominous statistic since contractors provide the majority of power tool sales.
The bottom line for retailers, however, is that consumers are spending more money up front for higher-end tools, says Mark Hayes, store manager, Moser Lumber Do-it center, Naperville, Ill.
A reader survey by American Woodworker magazine indicates a quality-conscious end user. It reports more than 60 percent of respondents considered quality the most important factor in selecting power tools. Approximately 20 percent of respondents specifically replaced old tools with higher-quality ones.
Though consumers are willing to spend more money for quality tools, price is still a factor. “They want value for their dollar,” says Ellen Dennis, manager of Waters True Value. Consumers will shop around, so power tool prices must be competitive, Dennis says.
The d-i-yers’ step up to professional-level tools and an eventual increase in construction will keep the market healthy, says Tracy Bilbrough, director of marketing at DeWalt.
SELECTION AND SERVICE SELL
Mass merchandisers dominate the market for low-end power tools. But with the trend toward quality, d-i-y retailers can stake a profitable claim. Moser carries little low-end merchandise, but 60 to 80 SKUs in medium- to high-end power tools and accessories.
Product knowledge is as important as inventory to Moser’s Mark Hayes. “You’ve got to know what you’re selling,” he says. Barhydt, of Waters True Value, asks customers about their projects to advise them on the correct tool.
Response times, both when assisting the customer and servicing tools, is the key to repeat business. Moser has a liberal return policy and often services tools purchased from other retailers.
ACCESSORIES SOFTEN MARGIN WOES
Accessories provide do-it-yourself retailers with high-margin blind items that can make up for low margins on aggressively promoted power tools.
“If there weren’t accessories, I wouldn’t sell power tools,” says Dane Sheahen, Mutual True Value, Highland Park, Ill. “One sells the other.”
Power tool margins hover between 12 percent and 25 percent, experts say. But accessories average 35 percent and can reach as high as 75 percent.
Although the recession dampened recent growth figures, the accessory market grew an average of 5 percent a year since 1987, says Tim Miller, vice president of marketing, Vermont American Tool Co.
A big growth area is in special application accessories, buyers report. The trick is to sell the customer up to these high-end accessories. Knowledgeable salespeople who can explain the accessory’s advantages are the key.
“People are more discerning,” says Steve Schuknecht, of Hammond Hardware Do-it center, Jackson, Mich. “They want to know why they should pay $17 instead of $6.”
* Cordless technology remains the major growth area for power tools. Though some retailers reports a mild market saturation, sales remain healthy.
* Keyless chucks, biscuit jointers and hole saws are popular.
* Circular saws sell especially well in the spring, when people decide to add decks to their homes.
* Availability will remain, as will margins, which some estimated at 12 percent to 25 percent.
* The move toward quality is affecting the accessory market. Buyers report consumers are favoring carbide-based accessories.
WOODWORKERS REVEAL TOOL PURCHASING TRENDS
If retailers want to predict consumer buying trends, they should focus attention on avid woodworkers, says Gary Havens, editor of Family Handyman magazine.
“As the woodworker moves toward quality, so will the do-it-yourselfer,” he says. The American Woodworker reader survey was designed by Rodale Press Inc. and tabulated by Data Probe Inc. from 733 responses by American Woodworker subscribers.
[right arrow] A majority of woodworkers surveyed purchased (or planned to purchase) a power tool within a 12-month period. Sanders, as a category, were the most frequently mentioned tool purchase.
[down arrow] Quality and brand-name reputation are the most important factors in a tool purchase, according to the survey of woodworkers.
TOP 20 POWER TOOLS PERCENT OF RESPONDENTS PURCHASED PLAN TO PURCHASE LAST 12 MOS. IN NEXT 12 MOS. Biscuit/Plate Joiner 10 18 Plunge Type Router 9 14 Electric Screwdriver 17 3 Palm Sander 13 4 Belt Sander 12 6 1/4" or 3/8" Drill 13 3 Random Orbit Disc Sander 6 9 Air Driven Nailer 5 9 Power Planer 6 7 Circular Saw 9 3 Jig/Sabre Saw 9 3 Regular Type Router 9 3 Glue Gun 9 3 Disc Sander/Grinder 7 3 Chainsaw 6 3 Drywall Screwgun 6 2 Power Paint Sprayer 5 3 Finishing Sander 5 2 Reciprocating Saw 4 3 Electric Staple Gun 4 2