Paint yourself some profit
|“Paint”. A coloured substance which is spread over a surface and dries to leave a thin decorative or protective coating : definition Oxford Dictionaries. In the hardware and DIY markets, paint can be defined as an opportunity to sell to more customers by having the right range, with all the necessary accessories available in prominent locations throughout the store. Doing so will mean more satisfied customers and extra sales through the register as DIY decorators look to upgrade their home’s appearance, perhaps spurred into action by TV shows such as The Block and House Rules plus magazine activity that talks new season’s colours.
For those stores with a trade centre, the opportunity is there to satisfy local commercial painting services and take the ‘pain’ out of painting. A bonus for larger independent hardware operators is to achieve official trade centre status for one of the big paint brands. These are not allocated lightly. Size of store offer, ability to carry range and most importantly staff that have the ability to offer sound advice on any job at hand, are often what the manufacturers look for.
From hints on preparation, the right brush ware, rollers and accessories for getting into nooks and crannies and the correct advice all ensure customers will keep coming back for more.
Market size and opportunity
The Australian paint and coatings market in Australia is worth $3 billion, according to IBISWorld’s report Paint and Coatings Manufacture in Australia. It is big business and paint is in the top three departments for many hardware stores. It is no wonder that the traditional paint department has evolved out of the hardware store and into the realms of specialist paint stores.
IBISWorld research leads to a forecast that industry revenue is expected to decline by an annualised 3.2 per cent over the five years through to June 15, to $3 billion. Over the next five years green perceptions, resource sustainability and green public procurement policies will all result in an increased focus on eco-innovation and green growth. This also will see the introduction of new coatings that meet environmental regulations.
According to IBISWorld, the largest product segment by volume is the architectural and decorative (A&D) paints segment, which accounts for roughly 57 per cent of all industry products. This segment includes household paints, including interior and exterior water-based (latex) paints and interior and exterior solvent-based (oil) paints.
Water-based paints now account for over 90 per cent of all A&D paints. This is despite the introduction of improved solvents with extremely low volatile organic compound emissions. Australian produced paints dominate the market, with imports accounting for just three to five per cent of Australian A&D paint sales. Households and tradesmen, who predominantly use architectural and decorative paints, comprise of almost half of the industry’s purchases.
|Price war on paint At a time when traders remain concerned on the economy generally, as well as retail margins specifically, the last thing needed is a price war on paint. Late last year a skirmish broke out as Masters looked to steal an advantage over Bunnings, which led to claim and counter claims, before the situation moved from the spotlight.The so-called price war was limited to bottom end products and was not a “we will not be undersold statement” across the board. Heavy discounting on paint will simply transfer some market share and erode margins and is not expected to expand the market.That said, there will always be a segment of DIY paint consumers who will seek out the lowest price they can obtain. This is where paint specialists can offer choice and good value due to a specialised range of, just paint and accessories, with no mowers, hoses, sheds and such like involved, so inventories are smaller.By specialising in paint and accessories, paint specialists employ staff who know the industry. This translates to consumers receiving the best tips on how to complete the paint job, be it a room, the home, or some external painting. It leads to more opportunities to sell accessories.Following and creating trends in home decorIs paint front and centre of your store? For the paint specialist stores it obviously will be. However often this department, which can contribute 15-20 per cent of store sales, isn’t normally at the front entrance of hardware stores.
In the UK recent reports are in on B&Q’s (Block & Quayle) move to put paint in the foreground at its B&Q Extra in Farnborough, Hampshire, which is a large format outlet. Interestingly B&Q is moving to a ‘colour first, brand second’ layout and believes that colour and paint is at the heart of most DIY jobs. In the B&Q scenario brands are mixed in the colour swatches, rather than each brand having its own colours placed together.
According to British Coatings Federation in the UK, 30 million DIY painters use 200 million litres of paint each year.
If your store has the space and you wish to create something different, an idea would be to set up some examples of “mini walls” painted with the on-trend ombre effect. For those not familiar with the effect, in the paint world, an ombre finish is typically three shades of colour on one wall. The ombre look has the lightest colour bleeding into the medium colour, which leads to the darkest hue so that the wall seems to get darker as it goes to the floor. It would certainly become a talking point.
Advice can be conflicting when considering advice on trends. Currently in the US market, Sherwin Williams’ colour of the year for 2015 is Coral Reef. The uplifting, vivacious hue with floral notes is the perfect mélange of pink, orange and red that can be used to liven up any space.
However, according to US retailer Benjamin Moore ‘Guilford Green’ is the 2015 colour of the year, which is described as neutral colour that is a natural and a silvery green that works a wide range of colour combinations – from neutrals to daring shades.
The final piece of the paint puzzle can be unlocked by the company sales representatives who visit your store. They can detail their own latest trends and the rest is up to your expertise in front of the customer.