K mart takes aggressive lead in hardware

Discount Store News, Dec 14, 1987

For example, Wal-Mart was the first of the three discounters to begin offering Schlage's new Keepsafer Compact Home Security System, even though K mart and Target worked with Schlage to develop it.

But since last January when Wal-Mart started selling the Schlage Keepsafer Compact at 35 stores, only 50 to 70 stores currently have the item. Target added the system last April and has it available in all its stores, and K mart, now offering it at 400 stores, will have the Keepsafer Compact in all stores by next Christmas.

The Keepsafer system was developed by Schlage with the assistance of K mart and Target because both companies expressed an interest in developing a home security product that cracked the $100 price point, was convenient to stock and appealed to a specific demographic audience: females between 25 and 40 years old, married, with children and household incomes of $25,000 to $35,000, said Markes, of Schlage.

Home Security

Home security is only one product area in the hardware department that these retailers are showing a more aggressive stance on than in recent years.

A spokesman for Black & Decker, the Maryland-based power tool supplier, said that these retailers are also looking for more cordless tools, such as the cordless screwdriver, which it just started to ship. And, Rayovac, the Wisconsin battery company, noted that the top discounters are "getting very aggressive" with promotions on batteries.

In fact, merchandising is taking on a new luster in the hardware department, particularly with batteries.

Now thought of mainly as a hardware item, batteries originally were merchandised in the sporting goods department. Now they are cross-merchandised throughout the store in such departments as toys, automoatives, electronics and photography, in addition to hardware, sporting goods and at the checkout area. And, they are advertised now.

The competitive arena of hardware is shaking out the sales dollars into distinct categories.

The Shapiro survey revealed that when it comes to actually spending money at these retailers, Target customers bought more hardware products if a Wal-Mart store was in the same market. K mart did best if shoppers could chose among the three discounters, but lost out if it faced just Wal-Mart.

And Wal-Mart did best if it was by itself in a market. It was the least successful in the hardware category if it faced K mart, the study showed.

Despite its small market thrust, Wal-Mart did especially well in hardware in large metro stores--populations of 1 million or more. These urban stores attracted more hardware buyers than they did in small metro areas--populations of 50,000 to 1 million-- and in non-metro communities. This is probably due to its sharp pricing advantage over its competitors.

In the large metro areas, 5.1 percent of Wal-Mart shoppers said they mainly spent their money on hardware products during their visits to the store in the past year, compared to 3.6 percent in small metro areas and 3.8 percent in non-metro communities.