Hardware Retailing

MAY 2018

Hardware Retailing magazine is the pre-eminent how-to management magazine for small business owners and managers in the home improvement retailing industry.

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Page 176 of 248

HARDWARE RETAILING | May 2018 164 360 SWOT Analysis Strengths • Broad Inventory. From plumbing and electrical supplies to sports drinks and plush dinosaur toys, Menards is known for its wide selection. In 2017, customer experience analysis firm Market Force Information surveyed 7,800 U.S. consumers to learn about shoppers' opinions of home improvement stores. Menards scored highest in the merchandise variety and value category, topping Ace Hardware, Home Depot and Lowe's. • Memorable Marketing. Menards' signature "Save Big Money" song is memorable and has run on TV and radio for decades. The retailer's billboard and print circular advertising often looks like it could have come from a local business, and some of the language sounds similar to small business marketing material, such as, "Put your money where your house is." Menards has also advertised on race cars, emblazoning its logo on Menards-sponsored vehicles and race team uniforms. • An Affordable Reputation. Menards' "Save Big Money" mantra and regularly advertised 11 percent discounts on products have helped the company establish itself as an affordable option against competitors, according to Anne Brouwer, retail consultant from the firm McMillan Doolittle. • Business Diversity. In addition to its retail outlets, Menards operates subsidiary businesses, including Midwest Manufacturing, Menards Self Storage, Menards Transportation and Menards Real Estate. Weaknesses • Mobile App Adoption. Menards, as a regional company, is a distant No. 3 behind national companies Home Depot and Lowe's in many areas. For example, Market Force surveyed more than 7,800 Americans and learned that their usage of Menards' mobile app lags behind use of apps from Lowe's and Home Depot. The Menards app offers bar code scanning to learn more about products, in-store department maps and augmented reality to help customers visualize home renovation projects. • Store-Branded Credit Card Use. Menards also trails its main competitors, Home Depot and Lowe's, in the number of consumers using its store-branded credit card, the Market Force survey reveals. Among respondents, 25 percent used Lowe's credit card, 21 percent used Home Depot's and 7 percent use Menards' store-branded credit card. • Being Regional. Brouwer calls Menards "a regional player." Because the retailer operates stores in only 14 U.S. states, many Americans do not have local access to Menards locations but can shop at the brick-and-mortar locations of the company's largest big-box competitors all across the country. • Unclear Trajectory. If founder John Menard is still the business' majority shareholder and continues to provide close operational oversight, then the company's future is highly dependent on an untested succession plan. Unless other sources are cited, the opinions expressed in this SWOT analysis are based on market knowledge and research from the Hardware Retailing editorial team.

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