Page 26 - HW FEB 2021

sales agents
DEREK VAN DER VOSSEN is not alone in reporting the busiest Christmas/New Year period that he and his inventory management team at VRM have enjoyed for some years.
“A lot of it can be attributed to the continuing DIY surge,” he concludes.
“In the past, many people would traditionally have had this time off. But we worked right through in the Bunnings stores and saw a lot more people than is usual at this time.”
Stephen Edlin of Central Region Sales got to enjoy a hard- earned break during which he also observed lots of activity in the big box retailers with many couples and families appearing to make joint purchases, he notes, and sizeable ones at that.
“Some of my suppliers are doing particularly well. In some cases, their sales would range between 10-20% up on this time last year.
“I’ve always said that people spend more on hardware when they love their houses. They tend to be loving them at the moment when they find they’ve increased dramatically in value over the past year.
“It seems to justify buying that timber for the back deck, or putting in the French doors, or doing the jobs that may seem a bit boring, like the new roof or windows.”
At Storelink, director Angie Samuel describes an unrelenting start to the year as “very much business as usual” but, she explains, things have taken on a different complexion this year.
“On one hand we have some clients that have had to reduce their spend dramatically, particularly in the hardware channel where they didn’t have the advantage of being an essential service and their business was so adversely affected by COVID.
“And on the other hand, we’ve had clients who have seen phenomenal growth in their business and that’s transferred into additional work for us.”
CROSS-CHANNEL MIGRATION
Another noteworthy trend for Storelink is an expansion into hardware by existing clients who were previously focused on mass retail or the grocery sector.
“Migration to hardware is very pronounced,” confirms Angie Samuel. “It might be brands that were in Briscoes and are now moving into hardware, and brands that were just in grocery moving into the Mitre 10s and Bunnings.”
This is perhaps unsurprising, she adds, “in the sense that sales may have reached a saturation point in a particular channel, so companies start looking at other channels for expansion.
“But it is interesting to observe these shifts and also the opportunities that clients are seeing in the hardware sector. I think COVID has probably accelerated some of these moves.”
For Storelink, overall demand for third-party support has been as strong as ever, especially in the last six months.
“Companies are continuing to look at outsourcing as being a very viable opportunity, largely because of the geography of New Zealand and the expense of having your own workforce.
“During COVID we were getting enquiries from companies
requiring merchandising support which were assessing their financial performance and looking at alternative ways to service and support the hardware market.”
In terms of metrics, Storelink has seen 13% growth in the number of hardware clients it represents compared with a year ago, but the impact of COVID has resulted in an 8% reduction in the number of hours invested in hardware, despite the additional clients.
“But another positive,” adds Angie Samuel, “is we’ve noticed the investment in Bunnings has increased versus what it was a year ago, and that’s proven quite significant for us, too.”
A SHAKEN SUPPLY CHAIN
The challenges presented by today’s disrupted supply chain certainly keep coming.
Now that VRM’s customers and suppliers are back in the swing of things, there’s a surge of catch-up to contend with, says Derek van der Vossen.
“We’ve been trying for the last three months to get the stock in. In the last quarter of 2020, it was simply a case of demand exceeding the ability of people to get stuff in from overseas and on the shelf.
“That’s just a retail theme; even in the whiteware space, you could see people selling goods but not actually having the stock, meaning customers were waiting months.
“It’s no different in the hardware sector; even businesses manufacturing in New Zealand really struggled to keep ahead and some of them experienced feed stock issues because sales were so advanced.”
Central Region Sales’ Stephen Edlin agrees the current quarter has begun as “a strange mix between firefighting and the economy appearing to do quite well”.
“I think some new product introductions and promotions have been held off until the second quarter because of the ongoing tidal wave of out-of-stocks and delivery issues, which everyone seems to be addressing at the moment.”
Agreeing that the need for third-party support is as strong as ever, accordingly Stephen finds more time is currently being spent communicating with customers and end users.
“At the moment,” he says, “that support is even needed to explain to people on the shop floor, and even higher up, about the out-of-stock situation.
“If it keeps up, I’d say it’s not far away from being quite critical. Perhaps some of those issues could have been addressed earlier with more purchases of New Zealand-made products?” he questions.
BEING THE MEAT IN THE SANDWICH
Angie Samuel at Storelink is equally concerned about the supply chain: “Freight issues are definitely going to have a financial impact on our customers and that has a knock-on effect on the work that we’re able to do and the success that we’re able to achieve for them.
“And it will have an impact on the overall retail channel and the economy.”
24 NZHJ | FEBRUARY 2021
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