As Canada’s largest distributor and retailer of hardware, home renovation and gardening products, RONA operates a network of close to 800 corporate, franchise and affiliate stores of various sizes, formats, and under several banners. RONA also operates a network of 55 commercial stores and a network of 14 hardware and construction materials distribution centres. Besides its own stores RONA also supplies nearly 1,500 sales outlets, including close to 600 clients and independent dealers in its distribution network.
The Canadian Business Journal spoke to Luc Rodier, Executive Vice-President of Retail at RONA about the difference RONA offers to its customers and the ever-changing demands of the customer and the market.
New Realities, New Solutions
One of RONA’s major business undertakings in 2012 has been implementing a business plan which combines new retail sales approaches and new store models, and creates a variety of solutions based on the needs of each and any potential or existing RONA store location. In this plan, RONA redefines its “proximity store concept”. This concept targets specific communities with the appropriate size stores. The goal of the new approach is to bring RONA closer to the Canadian consumers while taking into account the new social and economic realities.
“Our focus is currently on revising our multi-format of RONA stores network across the country. So yes, we do have and will continue to have the big-box stores which average 100,000 square feet, but we also have the proximity format — a mid-size store that focuses on do-it-yourself, home renovation projects support; and the satellite format, a small, about 8,000 square foot store which targets small communities by providing home support in terms of minor house repairs, paint and so on,” says Rodier.
RONA took on this innovative plan based on the results of the company research in regards to consumer expectations and behaviours; these new models has been successfully tested in 2011 in Georgetown, Ont., and Granby, Que (satellite) and in Edmonton West, AB (proximity).
The idea is to be in proximity of customers’ homes. According to Rodier, the customers’ online habits were the precursor of these significant changes. “We have always been talking to our consumers in Canada, surveying customer preferences and what they are looking for. For example, 10 years ago people sought variety, so the customer’s objective was to go to the store and find just about everything. However, with the evolution of the internet, what has been happening in our product category is that people pre-shop online, and they visit the store afterwards. This caused a shift from interest in variety, to more interest in proximity and service. While the big-box stores are relevant, the customers want to find the right product, service and support in the store nearby.
This is where we saw the opportunity. We saw that we could reduce the number of large stores, and open smaller size stores — all supported by our website and the choice to shop online with home or store delivery.”
The large centre store remains the ultimate destination for large house projects, offering more products and broader choice; the proximity store offers customers project support, and the satellite store focuses on house repairs and convenience and uses the large RONA centre as its distribution centre. “We have been running this model in Quebec for quite some time, and it has been a great success for us. These smaller stores perform extremely well. They are faster and easier to set up, they cost less to build, and they provide a very good return on investment — they provide exceptional results really fast.”
According to Rodier it’s the entrepreneurial spirit that continues to drive the RONA brand and its success, and the company also continues to offer its dealers and franchisees a powerful brand, but also high inventory flexibility. “For example, a satellite store in cottage country will not carry the same inventory as an urban centre, due to the simple fact that the needs of the cottage country customers can be vastly different from those of the customers in urban centres. Our franchisees and dealers have the flexibility to adapt to the customer in their area,” explained Rodier.
Following the proximity format, RONA will turn 13 big-box stores into the new concept RONA proximity stores by the end of 2014. Ten of these large format stores will be closed, and their volume redistributed across 15 new proximity stores (average area of 35,000 square feet), and 10 new satellite stores (5,000 to 20,000 square feet).
The New Consumer
Following the economic downturn of 2008, RONA continues to adapt to the new realities faced by the consumer — the customer had become more frugal, spending more time evaluating each larger house project. To remain competitive, RONA made sure that the customers receive the service and professional support they require, and that they find the product they are looking for.
RONA improved its product selection decision making process, working to do the homework for the consumer, and making more refined product selections — selections that align better with customers’ needs. The idea lies in simplifying the product selection process — offering a smaller range of products, but making it the best choice in the market, whether it’s for a household use or a professional use.
RONA also continues to lead in regards to sustainability, follows the products’ life cycle analyses (working with CIRAIG, the world largest research centre in life cycle assessment), and protecting the environment by making sound product choices. In 2010 RONA offered customers over 400 eco-products under the RONA ECO product line, and carried over 2,000 eco-responsible products in total.
RONA environmental policies include Forest Products Procurement Policy (2008), Policy on the Sale of Pesticides across stores in the RONA network (2008), Policy on Plastic Shopping Bag (2009), Responsible Procurement Policy (2010), Paper Products Use and Procurement Policy (2011), and Sustainable Policy Packaging (2011).
“It’s all about the products we purchase and it’s also what motivated us to source and buy products locally. Approximately 84 per cent of our products are purchased in Canada, as we work to stimulate local economies. This is all part of our Corporate Social Responsibility and Sustainable Development Programs,” says Rodier.
RONA remains the largest hardware retailer in Canada, and its current plans hint it’s not about to change anytime soon, all due to the fact that RONA bases its business plans on sound research, answering the right question — “What are the customer needs?”