Sales agents: Talking to the hardware channel’s not so secret agents

By Jess Brunette February 15, 2016 Sales Agents

Independent sales agents continue to prove their worth in the hardware channel but the landscape is changing. Can they keep up?

To view a PDF of the complete feature as it appeared in NZ Hardware Journal magazine, click the download button at the bottom of this page.

With the hardware channel and big box retailers continuing to do well in New Zealand, so too are the independent sales agents. Indeed, those that I spoke to for this feature have had as much work as they can handle.

Hardware Sales AgenciesDiane Malcolm reports that the company has seen substantial growth in the last year.

“The manufacturers we represent, and the stores we call on, value our commitment and we are reaping the rewards of that at the moment,” she says.

Derek van der Vossen of Vendor Refill Management has also been flat tack (in the best possible way) in the last 12 months.

“We’ve continued to grow and have been asked to provide more expanded services. This year we did a number of major relays across Bunnings and some work in Mitre10 as well. So our team numbers have grown and from September to November we did quite a few relays right around the country.

“We did PPG paints in eight Bunnings warehouse stores with 30-40 bays per store, which was a major exercise. And we also did a lighting relay for Brilliant Lighting across all 23 Bunnings stores ranging from three- to seven-day setups including display setups.”

As a result, the VRM team has expanded to cover that additional work with Andy Locke, VRM’s business support team member, running a lot of those relays and the expansion of the business.

With so much on his books recently, I asked Derek van der Vossen what he has learned from the experience.

“One of the key learnings for us is, once you have committed to do something to a standard, you need to follow through and deliver on that consistently.

“And at times we have been called in to pick up where other companies have not done that and certainly the feedback from Bunnings has been great in terms of actually executing and having it done within the agreed timeframe to the agreed standard – and we won’t budge on that. So, if we need to put more resource in, we will do that and get the job done.”

 

ALL ABOUT CONFIDENCE

Over at G-Force, Director George Alexandridis says the company has also done well since the company started making inroads into Kiwi stores.

“Our business has grown exponentially in New Zealand over the past two and a half years, driven by even stronger growth in the last financial year. 

“We did this by maintaining our stringent focus on excellent execution across the board, from account management to intense team training and field support. 2016 is also shaping up to be another fantastic year for us, our partner brands and Bunnings.”

In the last two years, Alexandridis has noted that the sales agents who are able to offer the channel total confidence in the consistency of their service should outlast those who take on jobs without quite realising the full demands of the market.

“I would say the opportunity for improvement is there for all service offerings as execution seems to be so wildly variable,” he says.

“Those who deliver on their promises, day in and day out are the ones who will win the day and be in the market for the long haul,” he says.

 

GOING WHERE IT’S EXCITING

Offering a fresh perspective on the hardware channel is Angie Samuel of Storelink. The company has built a solid reputation in grocery but has only dipped its toes into the hardware channel with merchandising for several years before taking on sales in 2014.

“We are in hardware at the moment and one of our strategies is to expand into other channels. And we are very interested in securing clients that are active in the hardware space. We have a couple of clients we represent from the merchandising perspective and a few we sell for in hardware and we are definitely seeing it as an expanding opportunity for growth,” Samuel says.

Asked for her impressions on the hardware channel, Angie Samuel shares the feelings of several players I have talked to who have come from grocery to hardware.

“One of the reasons we are expanding into the hardware channel is that the trends are showing it’s a growing category. Obviously, Kiwis are into DIY and programs like The Block get people more excited about that, so it’s an exciting channel.”

 

WHO CALLS THE SHOTS?

While the opportunities are there, the hardware channel does pose challenges for sales agents, whether they are new on the scene or established players.

“Whenever you have a situation where some decisions are made at head office and some made at a discretionary level in-store, that’s a challenge but equally an opportunity,” explains Storelink’s Angie Samuel.

“In merchandising we have a good reputation as we’ve been doing it a long time and have a great team and management structure. But, to some extent, we are at the mercy of what the client sales team or head office negotiations have been able to influence.

“However, because of our relationships at store level, we’ve been able to add a lot of value to the clients we represent even if it’s just the merchandising aspects. Looking at it from a sales perspective, the same is true.

“The clients we have a good integrated relationship with, we are able to really drive their category growth and sales way beyond how the category is performing overall. The ones where you are a little more distant from the client, you are a little more hamstrung. So it really does depend on the relationship you have with the client you represent,” she says.

 

LOOKING TO THE LONGER TERM

Stephen Edlin of Central Region Sales has represented Browns Brushware in the hardware channel for years and happily shares his thoughts about how sales agents might best meet the demands of the market in future.

“I think there’s going to have to be an increased emphasis on product knowledge and training that sales reps and agents have to give the shop floor staff. One of the reasons they have to do that is there are so many avenues that a person can check to see how something is done on YouTube and the like.

“So I think staff need to be trained to the highest level because there could be people coming in who know more than the shop assistant!

“That’s one way that sales agents can really assist stores is, in product knowledge, which is so important when people are making a substantial purchase like flooring because people want that confidence that a knowledgeable staff member can give them before making a big investment,” Edlin says.

 

LEARNING THE “EASY” WAY…

Rather than simply following the mistakes of others (learning “the hard way”), G-Force’s George Alexandridis has seen first-hand the failure of some of his competitors to meet the needs of the hardware channel and is committed to avoiding those mistakes.

“Two of the most challenging and ongoing issues is sales agents having good, stable and consistent representation and good stock management. Time after time I see out-of-stocks in stores across many categories and segments, this is very costly to everyone in the relationship - the sales agent, the brand and the retailer.”

Learning from the mistakes of others has also been crucial to the ongoing success of Derek van der Vossen of Vendor Refill Management. I asked where he felt people were failing the most when dealing with the hardware channel.

“The suppliers, channels and big box stores have timeframes and also have agreed on timeframes between them, so they look for a provider like us to execute within those timeframes to those standards and most times our competitors get into the job and it’s either bigger or more complex than they initially thought and it slips.

“In one instance we were brought in on short notice by a previous customer to finish off some work that their current provider couldn’t cover,” he says.

 

THE BALANCING ACT

Sales agents also have to perform a twofold operation, looking after the interests of both the supplier and the merchant. Derek van der Vossen shared his thoughts on how he maintains this delicate balancing act.

“From the supplier’s point of view, the supply of information is really vital. When they get new ranges or are doing relays or refits we try to keep that communication as open as possible and keep the time between when the channel lets our customer know as short as possible so we are in the loop as quick as possible.”

“On the other hand, there are the changing needs of the merchants which have brought about different rostering and scheduling of teams within hardware stores. When we are in doing the merchandising and ordering work, quite often team members aren’t available or not on the floor so that does mean we have to put orders away which the channel used to do themselves, so now there is a greater requirement to make sure that the stock is on the shelf.

“There is also greater pressure on stock turns and not having things out of stock and a high focus from the merchant on inventory and having the right product at the right time and not having too much of it.”

 

IT’S ALL ABOUT THE PEOPLE

Making sure that his team understands the needs of both parties and can respond to them accordingly is the biggest concern for VRM’s van der Vossen but finding the right people for the job isn’t easy.

“Because our business is about quality of people with knowledge and know-how, our biggest issue is finding the right people for our business and if we don’t have the right team who are engaged and passionate about what we are doing then we aren’t going to do a good job for our customers.

“They need to be keen, engaged, energetic people with strong integrity that share our core values. It’s not just about wandering around a shop and doing some ordering, they are protecting our customers real estate, they are our customers eyes and ears, they are picking up info about what’s happening in stores and in the wider market and with competitors.”

Angie Smith has also made finding the right people a key part of her ongoing business strategy.

“Two years ago we didn’t have a business analyst. And we have one now who shares best practice with our clients. The reality in the business we are in is that suppliers are being squeezed more and more with regard to margins whether its grocery, hardware, pharmacy, whatever channel you are looking at.

“New Zealand is a small country but very difficult to service because of its geographical spread from a return on investment perspective particularly when you are looking at a small to medium enterprise supplier, so it’s very expensive for them to be able to supply the merchandising frequency or the sales level of support that a company like us can provide.”

So by adding a business analyst to their ranks, has Storelink been able to provide their clients with knowledge they would otherwise struggle to afford?

“Absolutely, and the same goes for key account management. If you look at some companies, they might not be able to justify the resources for a dedicated key account manager, or in some cases, they might not have enough hours to keep somebody busy so they aren’t able to attract the right calibre of person.

“Whereas with us they can tap into the expertise and relationship we have with the head offices. Ultimately you’ve actually got to add value to your clients to stay relevant. We don’t have a product; it’s all about our client’s brands and what we can do to help them drive their sales. Because very often we are the company’s biggest expense whether it’s the merchandise or sales side, so for us to stay successful we have to be an investment rather than an expense.”

 

GEARING UP FOR THE FUTURE

Looking ahead to 2016, the players will be gearing up to take on the requirements of hardware channel by bolstering their resources.

“We are currently working on a mobile reporting system for our team and trialling devices to be used in stores. We are also gearing up to have more people in each store. We have a range of things but are now moving into heavier products like paint and we realise we need some stronger type people to complement our existing team,” says VRM's Derek van der Vossen.

Storelink will also add both human and tech resources to its offering in the hardware channel.

“To set ourselves up to take on more work in other channels, effective January we have just employed a new key account manager/brand executive, Philippa Griffiths, who came to us from 3M so having the additional resource in the team is really key.

“We are also implementing a CRM system this quarter so in terms of our technology and systems to move into other channels we are setting ourselves up to do that really well,” says Angie Samuel.

George Alexandridis also has plans afoot but is more enigmatic in his response: “All I can say without revealing too much is that 2016 is going to be a very exciting year, as G-Force prepares to launch the next phase of our strategy – watch this space!”

 

Has the market changed in a year? Click here to find out what we thought last year!

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