When retailers get really big and sales begin to level, they go off into new directions or they eventually disappear or even become irrelevant. Wal-Mart discovered groceries. Home Depot created HD Supply by buying up industrial distributors who sell to industrial and commercial builders. Today, HD Supply is a $12-billion business - 13 percent of Home Depot's total revenue - and this past third quarter, was 90 percent of Home Depot's growth. Apparently, even when you disdain doing business with distributors, it's okay to become one. Oh, the irony of it all...
Wonder if Home Depot noticed that the margins for HD Supply are just a "bit lower" than for its retail business? The shareholders certainly have.
Have you noticed an item in our industry that's becoming disposable? Good for you! You are paying attention! So how do you feel about it? Probably like I do - all kinds of mixed emotions. Just like the low-costs, disposable razor, low-cost lawn mowers, trimmers and even chain saws are making it economically logical for consumers to throw them away when they're "used up" rather than pay to have them serviced and restored to a "like-new" condition. What is the effect of this trend on our industry? We can be assured of fewer parts sales and fewer service opportunities. And more and more low-cost products will continue to be sold, and the cycle will continue. So, if we agree on these conclusions about the increasing availability of disposable equipment, what should you and I be doing differently in our businesses in response, if anything? Tell me what your think.
The U.S. unemployment rate for December 2006 remained unchanged at 4.5 percent. In 2006, payroll employment increased by 1.8 million, or an average of 153,000 per month. Meanwhile, service jobs kept increasing, while the number of manufacturing jobs continued to trend down. No surprises here.
Speaking of Home Depot, its innovation center in Atlanta still has lawn equipment in it. Thus, you could surmise that Home Depot's future still includes selling outdoor power equipment. But what about service?
Today, Home Depot's equipment sales have created enough service business for both Altaquip and independent service centers. There was speculation at one time that Home Depot might include OPE service in its in-store tool rental sections. But I wouldn't bet on that happening. Why not? My opinion is that whenever a mass merchant rationalized other reasons for having in-store service and put it in place, it discovered that at the end of the day those reasons were simply not as compelling and important as revenue and profit derived from its real business - retailing.
Big or small, multiple-store retailers have a huge impact on our industry, our country and our lives. I think that it's important to know what they're doing, how they're doing it, and how they are changing their business models, because I believe that it will most certainly affect our businesses and our lives sooner than later. And we can learn a lot from them, both good and bad.
If you are the only person left in North America who still hasn't read "The World is Flat - A Brief History of the Twenty-First Century" by Thomas L. Friedman and you want to understand why it seems like any business news we read or discuss has global implication, read this book - as soon as you finish Jim Collins' two books mentioned last month. This book is a great read and deserves your attention because today, the world is truly "connected" and "flat." And we are all affected whether we want to be or not.
Friedman also writes a foreign affairs column for The New York Times, and it is a weekly must read if you want a clear understanding and logical solutions for what's going on around us in the world. You can find his columns on the Internet.
Wonder if Home Depot noticed that the margins for HD Supply are just a "bit lower" than for its retail business? The shareholders certainly have.
Have you noticed an item in our industry that's becoming disposable? Good for you! You are paying attention! So how do you feel about it? Probably like I do - all kinds of mixed emotions. Just like the low-costs, disposable razor, low-cost lawn mowers, trimmers and even chain saws are making it economically logical for consumers to throw them away when they're "used up" rather than pay to have them serviced and restored to a "like-new" condition. What is the effect of this trend on our industry? We can be assured of fewer parts sales and fewer service opportunities. And more and more low-cost products will continue to be sold, and the cycle will continue. So, if we agree on these conclusions about the increasing availability of disposable equipment, what should you and I be doing differently in our businesses in response, if anything? Tell me what your think.
The U.S. unemployment rate for December 2006 remained unchanged at 4.5 percent. In 2006, payroll employment increased by 1.8 million, or an average of 153,000 per month. Meanwhile, service jobs kept increasing, while the number of manufacturing jobs continued to trend down. No surprises here.
Speaking of Home Depot, its innovation center in Atlanta still has lawn equipment in it. Thus, you could surmise that Home Depot's future still includes selling outdoor power equipment. But what about service?
Today, Home Depot's equipment sales have created enough service business for both Altaquip and independent service centers. There was speculation at one time that Home Depot might include OPE service in its in-store tool rental sections. But I wouldn't bet on that happening. Why not? My opinion is that whenever a mass merchant rationalized other reasons for having in-store service and put it in place, it discovered that at the end of the day those reasons were simply not as compelling and important as revenue and profit derived from its real business - retailing.
Big or small, multiple-store retailers have a huge impact on our industry, our country and our lives. I think that it's important to know what they're doing, how they're doing it, and how they are changing their business models, because I believe that it will most certainly affect our businesses and our lives sooner than later. And we can learn a lot from them, both good and bad.
If you are the only person left in North America who still hasn't read "The World is Flat - A Brief History of the Twenty-First Century" by Thomas L. Friedman and you want to understand why it seems like any business news we read or discuss has global implication, read this book - as soon as you finish Jim Collins' two books mentioned last month. This book is a great read and deserves your attention because today, the world is truly "connected" and "flat." And we are all affected whether we want to be or not.
Friedman also writes a foreign affairs column for The New York Times, and it is a weekly must read if you want a clear understanding and logical solutions for what's going on around us in the world. You can find his columns on the Internet.
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