Time to get serious about globalization

Home Channel News, Nov 22, 1999 by Don Longo

The home improvement industry is becoming increasingly global. It's no longer just an American, nor even an American-European market. Associate editor Jason Gonzalez just returned from a trip to Hong Kong and the International Hardware and Home Improvement Fair, where the American Hardware Manufacturers Association for the first time sponsored a pavilion for about five American-based exhibitors. Jason's trip also took him to Shanghai, where he not only saw the first mainland China store operated by B&Q, England's division of France-based Castorama, but also visited the offices of German franchiser Obi, which plans to have its own store in China open next year. After its merger with B&Q last year, Castorama now operates stores on four continents: Belgium, Germany, Italy, Poland and United Kingdom in Europe; Brazil in South America; Canada in North America; and China and Taiwan in Asia. Obi has franchisees in Austria, the Czech Republic, Hungary, Italy, Switzerland and Poland.

But, beyond those two internationally oriented chains, Jason found a handful of Chinese-owned firms developing home improvement stores, like locally owned Xin Pin, a down-and-dirty Home Depot warehouse imitation; and Home-Mart, a state-owned modern home center chain.

Of course, foreign companies often must operate stores quite differently than U.S. home centers. Taxis line up outside Chinese stores waiting to be hailed by customers to haul goods home because so few Chinese own automobiles. Then again, these stores' well-merchandised bath vignettes rival that department of any home center in the world.

Further driving home the global theme was last month's press preview of the International Hardware Fair, being held again in Cologne, Germany, from March 12 to 15, 2000. It was good to hear that the eight high-profile tool makers that skipped the show last year are returning as exhibitors, albeit in a different hall than they've traditionally been located.

Hans Wilke, executive director of the fair's sponsor, the KolnMesse, used the press luncheon to announce new wrinkles at the show, including a new services exhibitor area for companies providing business software, in-store displays and logistical support. More than 3,750 exhibitors from more than 50 countries are expected to fill the convention center's 14 halls. Some 96,000 visitors from 120 countries are expected at the four-day fair.

The internationalization of the home improvement business will also be a key element of NHCN's first annual Innovator's Conference 2000. Building on our annual issue of the same title, we will produce a two-day program highlighting the industry's top innovators worldwide and how they are shaping home improvement's future. John Herbert, CEO of upscale German home improvement retailer Knauber, is one of several international guest speakers who will discuss the best retail ideas worldwide.

Other topics to be addressed by speakers from companies such as Home Depot, Sears, Stambaugh and Scotty's will include creating innovative store formats, marketing and selling environmentally safe products, with an emphasis on retailer and supplier strategies for selling timber from "certified" forests as well as the e-commerce revolution.

(For more information on this conference, to be held in Orlando, Fla., from Feb. 17 to 18, 2000, at the Orlando World Center Marriott Resort, call Sonya Ruff at 212-756-5015.)

With the continued growth of global sourcing and the acceleration of retailers' international expansion, I anticipate that 2000 will be a watershed year for the global DIY and home improvement business.