The Marvin’s code
It’s called “code 2.” And when there are two or more people waiting in line to check out at Marvin’s Building Materials and Home Centers, it’s in effect.
Loosely translated, “code 2” means “all hands on deck,” said Darrin Gilliam, who was promoted to CEO of the 26-store home center in March of this year, and who is a big believer in checkout speed. During a code 2, store associates from the sales floor are expected to ease the pressure at the point of sale. And that’s why all the operations managers, from Gilliam on down, know how to work the cash register.
“That whole thing about making it easier on the customers is something we try to live and breathe,” Gilliam told Home Channel News.
Marvin’s is the official Home Channel News 2010 Retailer of the Year—an award the Leeds, Ala.-based company will accept at the Golden Hammer Awards Ceremony May 4 during the National Hardware Show in Las Vegas. Customer-centricity was just one of the factors that propelled Marvin’s to the head of the class. The recognition also rests on the company’s steady store growth, comp-store transaction growth, willingness to experiment on store concepts and overall retailing excellence—all during a difficult home improvement economy.
And while its operations are firmly 21st century, Marvin’s is a throwback in a couple of important ways. Its success harkens back to the days of the dominance of the regional home center, and it continues to carry that flag in an era of national chains. Inside the store, the average age of the Marvin’s employee is above 45. And management uses the same vision laid out by Alfred Cohn, who initiated the company’s expansion from the single store founded by his father, Marvin, in the 1940s.
“Marvin’s vision is to be the friendly ‘hometown’ store where customers like to shop and associates like to work,” president Craig Cowart said.
The formula works.
Marvin’s has shown steady growth. From 2004 to 2010, it has expanded from an 18-unit company to a 26-unit company, with four new openings in 2009 alone. Also in 2009, the company saw comp transactions increase.
The company’s comparable-store sales story was negative—but it outperformed the Big Blue and Big Orange competition. While Lowe’s comps declined 6.7% for the year and Home Depot comps were negative 6.6%, Marvin’s held its decline under 5%, Cowart said.
“Our team has become proficient in understanding our customers and, in turn, are focused on serving them better than anyone else in those markets. In 2009, even in rough economic times, we saw traction in market share and comparable positive transactions.”
The challenge in 2009 was the soft demand in core LBM and construction categories. But Cowart said Marvin’s merchants compensated with a focus on lawn and garden and seasonal departments and promotions. And its focus on the DIYer has insulated it from the worst of the downturn.
“When others changed from a Do-It-Yourself to a Buy-It-Yourself and hire someone, we never left the DIY sweet spot,” Cowart said. “Our customers never really left that segment, so we didn’t either.”
The company is also intent on upgrading some of its older stores into what it calls its “new format” concept. Since the first in Talladega, Ala., was unveiled in 2003, the company has unveiled 17 of the new concept stores. The general idea is to combine the best of both worlds—the hometown hardware store and the big-box home improvement store.
“We are constantly refining that concept, making it better each time and rolling those improvements back in the rest of the chain,” Cowart said.
One of the latest examples of the new format store is in Calera, Ala. Walking the aisles of the Calera store, several of the company’s retailing principals are on display.
Floor plan
The first thing the new customer notices in the 35,000-sq.-ft. store (not counting the outdoor garden center and drive-through lumberyard) is the wide aisles and clear sight lines. While most retailers subscribe to the “racetrack” theory of generating advantageous customer flow, Marvin’s does not. Its new format stores have a central main aisle and the kind of visibility that allows most customers to make a beeline to their appropriate aisle.
“We want to get you in and get you out quickly,” he said.
Another important floor plan feature is the Solution Center—a kind of command center, store hub and information booth. “From here, they can manage the floor like a field general, and see where they need to flex,” Gilliam said.
Shelf strategy
Another example of customer-centricity at Marvin’s is the arrangement of products on the shelves. Instead of putting the highest margin product in the prime shelf space at eye level, Marvin’s decided to give that prime shelf space to the high-volume, low-cost item—the 59-cent outlet.
According to Cowart, it’s better to ensure customers get what they want, rather than risk losing them because they couldn’t find it.
“Our focus is still on what we know we sell a lot of,” Cowart said. “You’ll see that throughout our sets.”
The retailer worked with electrical supplier Pass & Seymour to develop a planogram that’s better suited for Marvin’s customers. For instance, products are grouped by color, not by device, because that’s how customers shop it.
Drive-through lumberyard
The company’s make-it-easy system extends to the drive-through lumberyard, an important part of the company’s new format. Wide lanes allow plenty of room for multiple trucks to move through or turn around. But more than that, customers—generally DIY customers—don’t have to load a cart and then reload into their car or the truck.
“With us on the drive-through lumberyard, your vehicle is your shopping cart,” Gilliam said. “We load it for you and you don’t have to touch it, or you can pick through and go at your own pace.”
Another option: The load gets delivered to the customer for free.
Gilliam said the company was “very interested” in increasing store count and growing at the right pace. “We’ve had a great experience in the last five years to grow our company,” he said. “Our plans still are to aggressively pursue growth, and we’re evaluating other markets now.”
A RETAILER OF THE YEAR LOOKS AHEADThe much-anticipated home improvement recovery is under way in some metrics—housing starts are seeing a slight increase nationwide so far in 2010.
And Marvin’s executives say that they’re excited about the prospects of another record year in lawn and garden and seasonal merchandise sales.
But the clouds remain—particularly the unemployment situation in Alabama, which is more than 11%, and not likely to retreat very much in 2010. “Large projects are still being put off,” president Craig Cowart said.
“Chasing a $10,000 kitchen remodel has never been what Marvin’s is about,” he said. “We are just as happy selling you the $10 part you need to fix a project.”
In this environment, “value” is the buzzword for Marvin’s customers and merchants. Key indicators throughout the recession showed some positives—customer transaction traffic and market share, for instance. Average ticket declined throughout the downturn, but it’s beginning to turn up, leading to cautious optimism among the company’s executive team.
