HomeBase’s New Pitch : Retail: The Irvine-based home-improvement chain finds that low pricing isn’t always enough and turns its focus to more customer service.
Ila Bramhill knows what she likes--and the service she had been getting at her neighborhood HomeBase store just wasn’t it.
She could never find what she wanted, and employees were of little assistance. Said the Tustin resident: “I used to get so mad at the salespeople that I’d walk out.”
But when Bramhill walked out of the do-it-yourself store on Barranca Avenue in Irvine last week, she had a $75 purchase in hand and a whole new attitude.
“I don’t know what happened,” Bramhill said, “but everyone in that store helped me.”
That warm reception for shoppers like Bramhill is part of the new hospitality at the Irvine-based home-improvement chain. HomeBase is recognizing that, in an increasingly competitive field, low price and wide selection aren’t enough to satisfy consumers.
“Service is king these days,” said Terry McEvoy, an analyst who follows the home-improvement industry for the brokerage Janney Montgomery Scott Inc. in New York. “And you’ve got to have guys in the store who can help,” he said, because most do-it-yourself shoppers “are basically unskilled laborers.”
HomeBase’s major competitor, Atlanta-based Home Depot, has long balanced price, selection and service. And San Jose-based Orchard Supply Hardware, a 45-location home-improvement chain in Northern California, recently said it will use its reputation for high-quality service to enter the competitive do-it-yourself market in Southern California.
But Allan Sherman, who joined HomeBase as president in September, 1993, acknowledged in an interview last week that in the past, experiences like Bramhill’s were all too common. “We knew customers recognized us for price and selection,” Sherman said. “What we didn’t give was service.”
“The customer is dictating that service be an integral part of the total (sales) equation,” said Sherman, most recently an executive with Waban Inc., HomeBase’s Natick, Mass.-based parent company. “I think the so-called category killers in consumer electronics--Circuit City and the like--are showing how it can be done with experienced salespeople.”
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In addition to bolstering service, HomeBase is completing a costly restructuring that will include the closing or relocation of 24 stores that were too small, too old or too far away from the chain’s stronghold in California, where 31 of its 81 remaining stores are located.
HomeBase is abandoning an ill-fated bid to become a national chain and is putting renewed energy into its operations in the West. (Waban reported a $101-million pretax charge in connection with that restructuring at its subsidiary.)
Waban executives are optimistic that the restructuring is working: Operating income at the 67 HomeBase locations slated to remain open when restructuring is complete rose to $11.8 million for the quarter ended April 30, up from $8.4 million for the same period a year earlier.
Observers suggest that HomeBase’s failure to recognize earlier the importance of customer service was in part because of its history as a membership club. Up until just two years ago, the chain was known as HomeClub, and its customer base was mostly contractors whose main concern was low prices on bulk purchases, plus convenient hours and fast check-out lanes.
Today, though, three-fourths of HomeBase’s customers are do-it-yourselfers like Bramhill, who typically need guidance to tackle leaky faucets, broken door hinges and worn-out electrical fixtures.
Sherman is encouraging employees to steer customers to the licensed contractors, plumbers and interior designers who are now on site at HomeBase stores. Employee counts at stores, which had ranged from 80 to 170, have risen noticeably to 120 to 250.
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Because builders have different needs than weekend warriors have--pros, for example, often buy top-of-the-line power tools or lumber by the truckload--HomeBase has dramatically increased the number of items it stocks to 25,000, up from 10,000.
Some industry insiders, however, question whether warehouse-style operators can make good on their pledge of lower prices and increased service.
