TruServ exhibits new vitality of buying groups

Home Channel News, Feb 21, 2000 by Wyatt Kash

One of the fascinating aspects of today's new electronic economy is the tidal wave of creativity it has unleashed and the onslaught of new strategies it has inspired even traditional businesses to attempt. That point hits home in this special issue report, in which the editors of National Home Center News take an in-depth look at the changes underway at America's leading hardware buying group, TruServ. This issue is actually the second of three special reports NHCN is publishing on the remarkable, and under-appreciated, vitality reflected in this industry's buying groups. What distinguishes all three groups these days, as well as independent distributors like Orgill, is the depth and breadth of specialized programs and formats each offers to dealers, of which e-commerce and online initiatives are just a part.

TruServ, among others, has moved well beyond traditional hardware store merchandising and assortments. It has been an active developer of stand-alone stores and power department programs, including "The Paint Shop," "Power Place" (for outdoor equipment), Grand Rental Station, Taylor Rental, Induserve and Party Central. And it is preparing to offer several new concepts this year, like 'The Grill Zone," specializing in barbecue grills and accessories, and a new store for home decor.

More broadly, all three groups have long since become as much marketing and selling co-ops as they are buying co-ops.

But it is out on the Internet frontier that some of the buying groups' most innovative work is taking shape.

The buying groups, in fact, are in an intriguing and potentially powerful position in today's online world. They have thousands of distribution and community service points across the country and a rich knowledge of distribution logistics that a lot of dot-com companies are only beginning to fathom. On the consumer front, they also, for the most part, have valuable brand identities. In a retail sector where the store is the brand consumers choose more often than the products themselves, that will be doubly important, as the brand becomes a destination itself in the online world.

But it is the business-to-business arena where the buying groups may play an even more dynamic role.

TruServ's Net Warehouse initiative (see story, page 32) which serves as an electronic catalogue clearinghouse with 330,000 skus, a number expected to double by year end, offers a revealing look at some of the new possibilities for service businesses online.

The changes at TruServ are all the more impressive, given the monumental job involved in merging True Value, ServiStar and Coast-to-Coast programs. Certainly, one of the legacies of Dan Cotter and Paul Pentz, both of whom retired in the past year, was their vision for merging Cotter and ServiStar and setting the stage for this electronic revolution.

Pragmatically, each buying group has the Achilles Heel of having a vast array of diverse and often recalcitrant members, which makes it challenging to move forward as fast as they would like.

But given the premise that there is no monopoly on creativity, and the assets each group has to work with, this is indeed a potentially exciting time for dealers who take advantage of today's buying groups and progressive distributors.