DIY Powers Through Tough Times1 May, 2009 By: Doug McPherson Response
Direct response continues to build a strong foundation for hardware marketers facing cautious consumers.
Talking to Brian Harker, you'd think the Dow Jones average is about return to the good old days of 14,000. "We're now tripling production," says Harker, managing director of Better Tools & Fasteners, the Indiana-based maker of the Grip-Tite™ Super Sockets & Wrenches line of tools that remove stubborn and hard-to-reach nuts and bolts.
And he adds the company has doubled its profits each of the past three years — a period when most businesses have been struggling just to keep their doors open.
In fourth-quarter 2008, a line of the company's tools sold out on Amazon.com. And when Harker got on QVC? Well, you guessed it — sold out.
Harker chalks it up to consumers wanting to keep what they have longer versus buying something new. (Of course he also credits DR, too. More on that in a minute.)
"It's about making stuff last longer. Consumers are looking to keep their cars a little longer in this economy," he says. "They want to save a little money instead of buying a new car, so they need tools to work on their cars. And homeowners are in the same boat, fixing things instead of buying."
Better Tools & Fasteners, the maker of the Grip-Tite Super Sockets & Wrenches line of tools, has doubled its profits each of the past three years — in a period when most other businesses are struggling.
And that, of course, causes the do-it-yourself (DIY) market to grow. "Part of this is people want to do the work themselves — they like it, it's a hobby," Harker says.
There's objective evidence to back up Harker's happy outlook. The Freedonia Group, an international industrial research company in Cleveland, reports that U.S. demand for power and hand tools will approach $14 billion by 2012, a 3.3-percent annual increase. And world demand is projected to increase more than 4 percent annually through 2011 to almost $29 billion.
Why the jump? Freedonia offers three reasons:
1. Continued consumer interest in DIY and home remodeling activities
2. The ongoing introduction of new products
3. A recovery in the professional construction market.
The report, which analyzes the $12.3 billion U.S. power and hand tool industry, with forecasts for 2012 and 2017 by product and market, also found that power tools (especially cordless electric) will continue to outpace hand tools.
And even though Bob Vereen, retired senior vice president of the North American Retail Hardware Association, says the economy is having "a major effect" on some hardware categories, a number of hardware retailers he's talked with recently have reported sales are doing better than expected.
When the Grip-Tite™ Super?Sockets & Wrenches got a mention on the TV show "Two Guys Garage," the company's Web site got 16,000 visitors within one day.