Dan Starr is the president and CEO of Do it Best Corp.»
Launching a series of interviews with key wholesaler execs this year, Editor Chris Jensen interviewed Do it Best Corp. President and CEO Dan Starr.
1. How has Do it Best and its members weathered the pandemic so far, and in what ways has this made the company and its members stronger for the future?
Our member-owners have responded very well and continue to benefit from the increased consumer focus on home improvement and outdoor living projects, as well as the strong demand for housing. For Do it Best Corp., eight months into our fiscal year, we’re on pace to break the records we set in 2020 in both hardlines and lumber and building materials.
Overall, the pandemic has made Do it Best members and the co-op stronger in several important ways. First, with so many disruptions cropping up on a nearly daily basis, we’ve all gotten better at staying focused on the main thing—putting our members’ businesses in the best position to serve their customers. We’ve also strengthened our readiness, agility and speed of decisions. Whether it’s overcoming supply chain challenges, setting up safety protocols in-store, creating curbside delivery, implementing same day in-store pickup or any number of other ways our store owners and their employees have worked to exceed customer expectations, everyone has learned that those who are decisive, nimble and action-oriented are going to be more successful. The last way we’ve gotten stronger is through more effective communication. It’s been especially important as the pace of change has picked up that we don’t forget to communicate early, often and differently. We’ve developed podcasts and text alerts to supplement emails, along with relaunching our member website, to keep our members better informed. They, in turn, have leveraged social and digital media to get the word out quickly to their customers as in-demand products become available.
We were fortunately able to hold an in-person market last February before everything shut down. Since then, our teams embraced the challenge and used new technologies to provide our members and vendors a virtual fall market experience that became another record-setting event for Do it Best Corp. We continued to make investments and enhancements for our 2021 spring market, which our members have responded to very favorably.
We’ve also driven increased activity with members aggressively investing in their businesses. We’re partnering with them on a record number of merchandising resets and store expansion projects right now. We also have members adding new locations, both ground up and through acquisitions, and we’re providing support with design, merchandising and a variety of financial incentives and tools.
2. E-commerce capability, BOPIS and curbside pickup service have all taken on increased importance during the pandemic. How ready was Do it Best for these challenges, how have you stepped up your efforts in these areas and how have Do it Best retailers embraced these retail programs?
This is an area where lots of advance planning and some good timing have worked out well for our members. In 2018, our team mapped out the anticipated future needs of our e-commerce platform. We realized that our system couldn’t support the enhancements we knew our members would need, although it’s fair to say no one anticipated that need would come as quickly as it did. So we partnered on a new platform and began getting everyone ready for a launch in December of 2019.
During that transition, we were already at work building out the elements to support curbside delivery, same day in-store pickup and our members’ ability to feature and sell their own sourced products and prices. We also introduced our Pick N Pack app to streamline the in-store order fulfillment process. That’s where the great timing came into play. Just as the pandemic started driving more shoppers online, our members were positioned with a more robust platform that could handle the tremendous volume increase and support new functionality. And we’re not done by any means. Among the other features in development, we’re currently pilot testing a home delivery option. I’m really excited by how our team was able to move from concept to execution and how our members have embraced these new features.
We had already been working on a new warehouse management system, to be followed by some substantial small parcel processing enhancements. As the pandemic took hold, we made the decision to move up the small parcel work, because that would enable us to better serve our members. That’s where our agility really shined.
Dan Starr is just the fifth leader in Do it Best’s 76-year history.»
3. 2020 was a challenging year for the industry’s supply chain. What are some of the steps you have taken to address this, and when do you anticipate all of Do it Best’s distribution centers being back to normal fill rates?
Providing dependable, uninterrupted service to our members without restrictions or limitations on ordering quantities has been a top priority for us over the last year. The supply chain challenges have been severe for hardlines as well as lumber and building materials. We’ve expanded our distribution capabilities by investing in operational efficiencies, more storage space and adding more shifts at our warehouses. We’ve worked diligently to provide safe work environments for our team, who has worked tirelessly to meet the sustained, increased activity our members are experiencing in their businesses.
Our merchandising and LBM teams have also worked very closely with our vendors to secure product for our members by collaborating daily with our key vendors for accelerated recovery while also finding alternative sources of product. Even though there has been improvement in our service level to members, it’s not where we want it to be and this continues to be our top priority. Today, we’re talking about a relatively small group of vendors contributing to about half of all service level concerns. Our LBM traders have also been partnering closely with home center and lumberyard members to firm up their buying strategies so they can leverage every opportunity to secure product.
The pace of business hasn’t slowed any during the first quarter of 2021. Warehouse sales are continuing to far exceed both last year’s results and our plan for this year. Lumber is running even stronger. We’re seeing increases not just in pricing, but also in footage. That’s a great combination! All of this activity is making it harder for our vendors, mills and manufacturers to move into recovery mode. But there are some bright spots ahead with a steady but gradual recovery of our overall service level over the next three months. Most of the manufacturers we work with have made major investments to increase their capacity in order to support the sustained growth. Their main challenge continues to be rebuilding appropriate inventory levels while overcoming COVID-related quarantines and shutdowns along with those raw material issues.
4. What can you share about opening up a new prototype location for a next generation of store design? Did the pandemic cause you to rethink any of the design elements?
At our virtual fall market, I previewed our plans to introduce a new store design option for our members, one that we’ve spent two years developing. We completed construction on the prototype home center in partnership with a member-owner who couldn’t have been more excited to collaborate with us. Honestly, I was hoping to unveil it by now, but like so much else, COVID had other plans. Construction was temporarily delayed early on due to a statewide shutdown, but I was happy to join the owner for a late October grand opening.
What’s interesting is that the pandemic didn’t cause us to rethink the design. Instead, it validated the research we’d done to appeal to a much broader range of today’s home improvement shoppers and delivered in the way they want to shop. For the prototype location, the owner had run a very successful second-generation business that catered almost exclusively to contractors. In their new home center built nearby, they immediately started drawing in more retail customers—DIYers and female shoppers—while still serving the needs of their pros. The store’s bold look inside and out, attractive merchandising and assortments, easy-to-navigate layout, featured departments like paint, power tools, grills, and lawn and garden, and an overall better use of space all work together to drive higher customer counts and sales.
We’ll have more to share this summer and I’m looking forward to our members getting to see the design components in person this fall at our market in Indy.
5. What major initiatives are on tap for Do it Best in 2021 and how are you planning for growth in these still uncertain times?
The times may still be uncertain, but I’m certain about this: We are committed to helping our members grow. And there’s never been a better time to invest in growth. Interest rates are low. Millennials, a group now larger than the baby boomers, are moving into home ownership. More customers are rediscovering the value their local home improvement store brings to the community. There’s certainly renewed interest in the buy local movement. All of that is good for growth in our industry.
Many of our members have had their best sales year ever. They’re in a good cash position to reinvest in their businesses and we’re fully engaged to help them with our Gear Up 4 Growth initiative. We want to help those successful members who have many locations, as well as members who have one, two or three locations add another one to grow their business. We’re actively doing that across the country and it’s very rewarding to be able to assist owners as we help them achieve their goals and dreams.
In addition, we will continue to invest in our distribution excellence with the rollout of the new warehouse management system across our network. We’re already developing even more enhancements for our members’ ecommerce platform. And we are working on a series of business playbooks to provide our members a resource to strengthen their operational practices. There’s much more to come as we further strengthen Do it Best as the first and best choice in the home improvement industry.
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