Eisenwarenmesse means “business”
COLOGNE, GERMANY —For American observers, the International Hardware Fair held here served as a stage upon which the various characters of the international home improvement scene strutted their stuff.
The contrast of European and American styles of business was also on display. One man particularly well-suited to comment on both worlds is John Herbert, a former Home Depot executive and current general secretary of the European DIY Retail Association.
One difference is in the way the American booths tend to be more aggressive when they go after leads during shows. “When you walk by the American stands, they’re all trying to catch your eye,” Herbert said. “To me, the U.S. is still the capital of capitalism.”
Also impressive, he said, was another observation of American business—the way the team from Mooresville, N.C.-based Lowe’s systematically covered the show.
“They walked every gangway, they looked at every booth,” he said. “The way that one company has so intensively and systematically operated has impressed me immensely. I couldn’t imagine any German company or European company doing that so thoroughly as they have done.”
There was a decidedly Asian flavor once again at the Eisenwarenmesse (or “hardware show”). The country with the largest number of exhibitors here at the sprawling Koelnmesse convention facility was China (884), followed by Taiwan (410).
In all, there were 2,868 suppliers, down 14.6% from the 2008 fair, when the organizers tried a combined trade-and-consumer approach. This year it reverted to the all-trade strategy. An estimated 56,500 trade visitors attended the four-day event in early March; that’s down about 10% from the biennial event’s 2008 figure.
The numbers can be an imperfect measure of a show’s impact.
At the General Pipe Cleaners booth, where a high-tech video-enhanced pipe-cleaning unit was among the products on display, David Silverman presided over a steady stream of what he called productive conversations.
“The meetings we have right here in our booth are the kinds of meetings you’d expect when you make a special trip to Europe,” he said. “This is a great show for us.”
General Pipe Cleaners was one of about 30 U.S. companies that exhibited in a block called the USA Pavilion. Here visitors’ companies were promoting a sheet metal cutter attachment (Malco Products), wet/dry vacs (Shop-Vac Corp.) and LubriMatic Green lubrication (Plews/Edelmann), to name a few.
Dean Hardwick, of Seattle-based Hardwick & Sons Wholesale Tools and Hardware, would agree with that assessment. Hardwick was among those walking the aisles. One of the areas where he took particular interest was the high-quality vise manufacturers. He also used the show to reconnect with existing suppliers.
Another visitor walking the aisles was Manfred Maus, the semi-retired German retailer credited as one of the founders of OBI, Germany’s No. 1 player. He thrust a business card from “Orient Home” into the hand of a reporter, describing the Chinese home improvement and furniture retailer as one to watch. “Everything under one roof,” Maus explained. “If the customer renovates, he needs furniture, and the furniture has to harmonize with the paint or the wall coverings or the carpet.”
When asked for product innovations, Maus said he was still looking for something really outstanding—“There are a lot of small things, details and a return to quality.”
Some of the products gaining attention were a multi-function ratchet tool from Wera that doubles as a hammer and uses the Colossus of Rhodes as a marketing icon. American companies Cosco and Little Giant were among many names displaying ladder innovations of many varieties. Show organizers pointed to multi-functional tools, dampening techniques for locks and fittings, and new retailer-friendly concepts in DIY product packaging.
On day three of the event, publishing company Dähne Verlag led a group of show delegates to a diverse trio of German retailers. A Home Channel News editor tagged along for the tour of OBI (pronounced “Oh-bee”); Max Bahr and Mobau Bauzentrum.
Dähne’s stats for the top 20 German operators showed comp-store sales were down 3.3% in 2009, as total sales increased 0.4% to 27.5 billion euros.
Market fragmentation is a fact of life in German retailing, and there is no dominant single player. The top operators—many of which are held tightly by family run companies committed to the long term—offer a diverse marketplace of retail ideas.
OBI, the big orange
It’s the nation’s leader. It’s orange. And it’s a 10,000-sq.-meter (107,000-sq.-ft.) warehouse home center format, including lumber and an impressive lawn and garden department. But from there, the similarities between Home Depot and OBI get harder to spot. For instance, an American could walk several aisles without seeing a familiar brand.
Dominating the shelves in many aisles is “Lux”—exclusive to OBI, and, in fact, a sister company. It was wholesaler Emil Lux who created OBI in the early 1970s. Today there are 330 stores.
The first familiar brand to appear during this American’s tour was Weber grills—“Das original, top qualitat,” according to the signage. Some other familiar logos belonged to Fiskars, Osram, Energizer and Black & Decker.
Oliver Weisse, sales manager for three area stores, pointed to paint and garden as two very strong categories in the Hilden, which opened in March 2009. One of the key new trends here is the emphasis on themes, as opposed to aisles. “In our store the biggest change is the structure,” he said. “We go electrical, to lights, to wall covering, color [paint]—these are all individual shops.”
OBI had a female-friendly feel, even to the extent that the power tool and hand tool sections were subdued compared with big boxes in the United States. Another difference: the bakery-cafe in the store’s large entrance vestibule looks remarkably upscale—almost as if it doesn’t belong attached to a home center. But there it was.
Mobau: Builders welcome
Here’s one way to try and describe the I&M Mobau Bauzentrum Erft business in Bedburg: Take a huge open space and divide it in two. On one side, put an upscale builders’ showroom with museum-quality displays, including an elaborate two-story clay roofing tile fixture. On the other side, put a well-stocked hardware store and garden center for the do-it-yourselfer. Between the two, imagine a big sunny open area and an espresso bar. And to complete the picture, throw a building material dealer in the back.
It’s a bit unusual, but that’s the easiest way to describe this multi-tasking pro dealer and DIY center. The store is part of the Eurobaustoff cooperative, which has 400 German members. To the left of the espresso bar, builders bring customers for home design ideas. It’s here where an American visitor sees how successfully the environmentally friendly, dual-flush bathroom technology has spread in Germany. Another distinctive German tradition is the aforementioned clay tiles, which help give so many German towns their distinctive look.
To the right of the bar, the hardware store seemed popular with female shoppers, based on the checkout lines. Once again, Weber grills and Black & Decker power tools were neatly arranged. Here the tour caught its first glimpse of Stanley, the American powerhouse.
Store representatives explained that current sales were disappointing, but an effort to expand the geographic area of its customer base was under way as a response.
Max Bahr: “Own” brands
Situated with old-world charm in a sort of suburban town square, complete with a towering church steeple, the Max Bahr store in Frechen is 12,000 sq. meters (128,000 sq. ft.) of warehouse retailing with an upscale flavor. One of 77 Max Bahr locations in Germany, it converted from an OBI store in 2007. Inside, another transformation is taking place on the shelves, according to CEO Andreas Mauz, who surprised the group by showing up to lead the tour.
The CEO showed an attention to detail—pointing to a catalog of sunny lawn and garden pictures, and explaining that they were photographed in Majorca or South Africa, “where the lighting is much better.”
Weber and Osram were again among the familiar brands to Americans, but one of Mauz’s first talking points was the company’s effort to boost its “own brand,” or private label, performance from its current level of about 40% to above 50%—not an easy task, he said. “It includes every employee discussion with customers,” he said. “At the end of the day, they must bring the product to the customer.”
One of those “own brands” is the company’s Max Bahr brand, of which Mauz is going after the premium end of the product spectrum across multiple categories.
“We don’t want to gamble with the quality when your name is on the product,” he said. “You must have good quality.”