Spotlight on ToolKing.com
Donald Cohen and his staff didn’t reinvent the wheel, they just reinvented the company, bit by byte. Their resource fulness in transforming Tool King into a home improvement trendsetter wasn’t built on something revolutionary—they merely used tools available to any retailer to take their business to a new level.
“They are not afraid to take a chance with new ideas,” said DeWalt rep Brett Kinzler, a Tool King customer. “They know how to seize the opportunity.”
Seize the opportunity, they did.
Cohen, the founder and president of Tool King, consolidated his nine brick-and-mortar stores into one 20,000-square-foot superstore—a store “with the finest selection of tools anywhere”—and built an e-commerce hub that continually grows and expands. During the November 2008 to January 2009 time frame, for example, ToolKing.com posted a 30 percent increase in online sales. For 2008, an abysmal year for most retailers, Tool King’s Web sales grew by 10 percent to $24.2 million from $22 million.
Tool King took advantage of a void in the marketplace. According to Forrester Research, the tool category is one of the least penetrated, with only about 5 percent of total sales occurring online.
“I think the key to ToolKing’s success is their willingness to change,” Kinzler said. “When the Internet first started to get popular, they were the first tool dealer I know of to recognize the changing marketplace. They bring a very progressive attitude to the business.”
What market downturn?
Tool King and Tool King.com clearly weathered the economic downturn, buoyed by the strength of the tool category itself and by being able to take advantage of market opportunities. As more businesses transition their purchasing habits from brick and mortar to online, Cohen said this change should allow for significant growth potential.
But beyond the rapid online growth, Cohen maintains that his brick-and-mortar store will thrive because “tools are a basic need of society” and therefore will always be in demand. “No matter what the state of the world, people will always need drills, saws, hammers, etc. Tools are what make modern civilization possible,” he said.
Within that popular category, Cohen said cordless tools are especially popular because they have widespread appeal to users of every type. He noted that lithium-ion powered cordless tools are catching on in our ever-increasing energy-efficient environment.
While it takes advantage of green trends, Tool King has not forsaken its tried-and true merchandise—reconditioned and closeout tools. In this sector, the bad economy has created an abundance of factory overstocks and closeouts. “Businesses are more cost-conscious than ever, and this provides additional motivation for businesses to shop for the best deal,” Cohen said, adding that because of his company’s Web efficiency, it is able to “get these deals out to our customer base within hours of finding out about it.”
He added, “The Web levels all playing fields.”
Using the Web
After Tool King experienced an 18.5 percent drop in sales in 2007, it began implementing new interactive features to capture more repeat customers and attract new shoppers who wanted more information before making a purchase. The company expanded Toologics.com , a site that lets visitors share information in various forums, as well as post and view classified ads and access product buying guides. The site now features an in-depth blog and more tool-related news, product reviews, contests, product recalls and how-to guides. ToolKing. TV has more than 100 internally produced product and “how-to” videos.
The company has also produced more than 100 videos for YouTube to augment its branding strategy. “We’re getting a huge amount of traffic to those videos,” Cohen said. “Most of our demographic is getting onto YouTube too.”
Shoppers are responding to the new advanced features and functions, which in turn is helping to drive Web sales higher. “We were placing too much emphasis on new customer acquisition,” Cohen said. “Now we’re focused on customer retention, and we’ve narrowed our merchandising categories and made the site much more interactive.”
To appeal to bargain-minded tool shoppers, Tool King also added TooliDay.com , another site that offers a deal on a specially selected tool or accessory. The deal is available until the end of a given day or until the available inventory is sold out. TooliDay.com , which Tool King launched in October 2008, is drawing about 4,000 unique visitors per day, Cohen says.
“We’re a small company adding the same Web 2.0 applications that a shopper would find on a much bigger brand name site. We’re remaking ToolKing.com into an online destination with relevant content and not just a site that sells tools.”
Cohen believes his business, based on its recent success, is positioned for greater expansion. To that end, he wants to speak with regional chains about creating a ‘store in a store’ concept to “enhance their retail appeal” while reaching sales and profitability goals.
DeWalt’s Kinzler said there is always something exciting about logging into ToolKing.com . “They are always on the cutting edge,” he said. “They truly have an innovative Web site focusing on tools, and it’s always evolving.”