Distribution America says pricing program working

Home Channel News, Jan 10, 2000

'Priced Right Everyday' draws new devotees

CHICAGO -- About 30 independent retailers each month are converting to Distribution America's Priced Right Everyday program, and the wholesaler marketing firm expects that momentum will gather momentum in 2000.

Of the roughly 4,500 retailers participating in DA programs, 200 now belong to Priced Right Everyday, a program that provides dealers with product assortments from DA member wholesalers that are customized based on what's selling and at what prices in local markets.

Curt Burdick, DA's vp- sales promotion, expects that in the next three to five years, the "priced right" program will become the dominant reason retailers convert to DA member distributors. "In the last six months we've seen the program's highest performance," Burdick said. "We're anticipating it will accelerate."

DA has experienced a marked pickup in conversions in the wake of an aggressive campaign launched in mid-1999 to increase retailer awareness of the less than three-year-old program, according to John Sullivan, director of retail development. In 2000, the marketing group will continue the pricing campaign, which cost about $500,000 in the latter half of 1999 for disposable videos and direct mail explaining the program, Sullivan added.

The program, which took several years to develop with vendors and then implement with DA's distributor membership, is "exactly the same system as the Home Depots of the world use," Burdick said. The program implements point-of-sale and other information gathered centrally by DA. This information is sent to its distributor members. Distributors can then offer retailers customized assortments based on what is selling in specific markets, with each of the 10,000 to 15,000 items stocked in a typical hardware store competitively priced, based on the local market.

The idea is to ensure participating stores carry enough stock to complete whole projects, while defusing the perception that hardware store prices are higher than their big box competition. "It is a vehicle to change public perception; that you don't have to wait for us to run a sale," Burdick offered.

One recent convert is Vogler's Home Center in Jasper, Ind. Owner Bernie Vogler signed onto the Priced Right Everyday program in August 1999, opting out of' membership in a hardware cooperative after his former co-op, Our Own Hardware, merged with what is now Do it Best. "After being in a co-op and being out, I prefer to buy from an independent wholesaler connected to programs and services that can keep us competitive," Vogler explained.

Vogler, whose 25,000-square-foot store has an annual sales volume of approximately $2 million, anticipated a sales increase of 8 percent for 1999, a jump that follows several years in which sales were flat. He attributed his recent jump to his participation in the DA program, which was supplied through wholesaler, The Kruse Company of Cinncinnati, Ohio. As he put it: "For the first time in 34 years I don't have the fear of being priced wrong."