Rubbermaid hopes to capture toolbox market

Discount Store News, Nov 5, 1990

Rubbermaid Hopes to Capture Toolbox Market

DAYTON, Ohio - Rubbermaid, a household name in housewares, is banking on its new toolbox line to help establish a similar presence in hardware.

Flexing its marketing muscle, Rubbermaid is working its six-sku line into the planograms of Caldor and Jamesway and two of the six into the K mart planogram, all at the expense of competitors.

In addition, Wal-Mart will test Rubbermaid toolboxes at four stores, said Jim Dehner, hardware group product manager.

Some home centers are merchandising the toolboxes on endcaps as Christmas promotions, he said.

Rubbermaid began shipping toolboxes Oct. 1, Dehner said, and K mart was the first discounter to get them onto the shelves.

K mart is pricing a 16-inch tent-top box at $18.44, compared with Rubbermaid's suggested retail of $19.99, and a 20-inch flat top model at $24.44, against the suggested list of $26.99, Dehner said.

At retail, the Rubbermaid line costs about 5% more than competing brands of plastic toolboxes from Plano, Flambeau and Contico, Dehner said.

But Rubbermaid hopes that consumers will overlook that price premium in the face of Rubbermaid's reputation for attention to styling details and quality, he said.

Among those details on its toolbox line are a padded handle on larger boxes for more comfortable toting, extra compartments for storing small items, such as nuts and bolts, including two compartments in the lids of tent-top models, and coordinated styling with its Roughneck Rough Tote storage box line.

The toolbox line offers the same six-year warranty as does Rubbermaid's garbage can line, Dehner said. The Rubbermaid toolbox line consists of: a 12 1/2-inch flat top, with suggested retail of $8; 16-inch flat and tent-top models, with retails of $16.99 and $19.99; 20-inch flat and tent-top, retails of $26.99 and $28.99; and a 24-inch flat top with a retail of $31.99.

Rubbermaid introduced its new toolboxes at the August Hardware Show. A previous entry in the hardware line was its Rough Neck Organizer (originally named Work Space Organizer) introduced in January 1990. The Roughneck Rough Tote storage boxes are another Rubbermaid hardware line.

Toolboxes represent a $250 million market at retail, with unit sales of about two million, Dehner estimated.

Although the overall category is flat at about 3% growth, plastic boxes are growing at a 10% rate, he said.

Plastic, which now accounts for 45% of toolboxes, will overtake metal in a couple of years, Dehner predicted.

Plastic boxes cost "a bit less" than metal and are 17% lighter and are rustproof in the bargain, he said. Dehner declined to discuss what effect the recent rise in oil prices will have on the price of goods made from oil-based plastic.

Although refusing to disclose any estimates of market share for plastic boxes, Dehner said that the three leaders are Plano, Flambeau, and Contico.

Dehner declined to disclose Rubbermaid's sales goals and production projections for its toolbox line.

Changing demographics also buttressed Rubbermaid's entry into a field that lacks a dominant player in plastic.

About 90% of American homes own toolboxes, Dehner said, and about 45% own two or more.

Although the DIY market in automotives is flat, the DIY market for home repairs is growing 14% a year, Dehner said.

In addition, women now account for 50% of home DIY purchases, he said.

And, as family income increases, so does the number of DIY projects around the house, he said.

Dehner declined to disclose any details about future hardware ventures. But "hardware is a real opportunity for Rubbermaid," Dehner said. "We definitely are considering new hardware products to increase our presence in the category.

"Look for us next August."

As an indication of the importance on new products to Rubbermaid, chairman and chief executive officer Stanley C. Gault told company associates at a recent gathering that 30% of Rubbermaid's sales come from products that didn't exist five years ago.

PHOTO : Rubbermaid hopes its six new toolboxes, which complement the company's Work Space line, will make an impact on the hardware market.