Diamond Valley Mitre 10
Sapphire program
(l-r) Frank Benton, Chris Lodi and Paige Hastings stand at the entrance of the store
(l-r) Frank Benton, Chris Lodi and Paige Hastings stand at the entrance of the store
 
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Long-time Mitre 10 store carefully balancing an independent approach with corporate marketing advantages
HNN Sources
Diamond Valley Mitre 10 began in 1979 as a store name "Timber King". It was little more than a tin shed in a leased paddock outside the town of Diamond Creek, about 25km north of Melbourne. Flash forward 39, almost 40 years later, and the business Norm Hastings started in a tin shed while living in a small caravan has moved closer to the centre of Diamond Creek, and now occupies a block that is 1.4ha., with a main store of 2000sqm and an extension of 1380sqm of floor space, plus an additional 1300sqm under cover in the outside yard. The renamed Diamond Valley Mitre 10 (DVM10) also has a turnover of well over $20 million a year.

Though none of those numbers completely tell the story. The real value of the company is in its human capital, which extends through its 85 total employees (many of whom are, of course part-time). It's a crew that includes Norm's children, as well as an outstanding team of veteran retail staff, many of whom have been with the store for over 15 and even 20 years.

It's the kind of human capital that is valuable to everyone involved: the store management, because it gives the business excellent capabilities in the field, the staff itself as it means experienced, high performance people get to work with colleagues of equal standing, and can learn from experienced people at first hand - and, of course, it really benefits the customers, who get such great service many of them may not even realise just how lucky they are.
Progress

Obviously, all that didn't "just happen". The progress from the tin shed to the 2000sqm, high ceiling, high-finish store required lots of effort and even more risk-taking.

The development of the first store, the tin shed, started only a year after it first opened. As Norm tells it:
The tin shed that we had, we decided to put some hardware into that. We put some hardware into the shop but we ran out of space. So we were going to rebuild a double storey building onto the front of the tin shed, and we made that the hardware store. And we joined Mitre 10 at the same time.

The next really major change took place in 2007, when Timber King moved from its original location to the new store in the centre of Diamond Creek, and changed its name to Diamond Valley Mitre 10 (DVM10). Timber King had bought up a local company, Valley Outdoor Supply, and the new enterprise was partly a result of merging those two businesses.

That wasn't the only change. Timber King's long-time manager of hardware operations, Frank Benton, also bought a part of the business, becoming a partner. As operations manager, Paige Hastings explains:
Frank is the one who developed the whole retail side of things in terms of the hardware store. Before that, it was mainly timber, and Frank gave some pizzazz to it and developed that side (DIY and retail) of things.
Frank is a merchandiser. That's what he's done throughout his career. He's built that from scratch. He used to work for McEwans. He brought that to the store and he took my brother and various other people under his wing, and he's been very stringent in terms of the merchandising. Now he's starting to bring some of that theory out into the trade area, and it does help. It's your silent salesperson. It really attracts people to the area.

Frank's influence is really felt everywhere throughout the store. When you point out some very good feature of how products are presented and sold, the floor staff will just about always say something like "Yeah, that was Frank's idea".

Even with a great team, the store expansion, move and name change carried a high degree of risk. But it started to pay off almost instantly. The new store fully opened to the public on a Saturday, and by the end of Sunday demand had been so high that the store completely ran out of paint.

What makes this a really notable achievement is that at the time, in Mitre 10's pre-Metcash days, the buying group had opened a large number of "Mega" stores, almost all of which had started to fail by 2008. Sources have told HNN this was in large part due to difficulties in keeping them stocked - they had the stores, but they didn't have the supplychain. The one exception was an independently owned Mega store in Packenham, which, some of the floor sales staff told HNN, had been a source of inspiration for the original merchandising at DVM10's second location.
Sapphire

Ten years after the move to the new premises, in 2017, the DVM10 team decided it would be a good idea to make moves to keep the store fresh and at the forefront of good design and presentation. So the management decided to sign up for IHG's Sapphire store program.

As Paige describes the decision:
So we were 10 years old. Sales are still kicking along and about where we wanted them to be. However, we wanted to keep up with the industry. We knew that Bunnings were building new stores out in the northern suburbs. And we just wanted to stay fresh. We wanted to keep up with the market and to evolve with the community. So we needed to give them a reason to shop here instead of anywhere else, to keep shopping local and keep supporting the local community.
That's the main reason why we did it. Through the merchandising and the way that the store looks, people can actually see that you are investing in what you've got.

DVM10 store management is very pleased with the result of the Sapphire transformation. Talking to the people on the floor who manage departments, it's also evident that there was a great deal of give-and-take when it came to implementing "standard" Sapphire design policies. When HNN asked Paige about this, she explained:
We had to [make changes to Sapphire] because one of our biggest growth areas is garden and outdoor - which is quite unique for a Mitre 10 store. And the profits are quite healthy in that area as well.
We wanted to invest money in that department, and we changed some of the elements that Sapphire had. For example, they wanted us to have the paint counter right at the front. But we saw the need to push for placing faster-moving kinds of items up front for impulse buys. That is mainly because our store is so narrow and slim. It's not really wide like a lot of Mitre 10 stores are, so we pushed to have paint remain at the back, which is where it was before.
You can still see the paint desk from the front, and that was our compromise with them. However, we weren't missing impulse sales. Paint is ... you're only going to buy it if you really need it. It's not like you're going to just walk past one day say, "Oh, I really want that".
So we were very strict on the fact that we wanted to still have the "prettiness" at the front. A lot of our customers are female, so that's also very different to many other Mitre 10s. In fact, in the retail area, 80% of our clientele is female, and that's what we needed to keep pushing.

Part of the compromise on the paint desk was that, while the Sapphire team wanted the paint card display shelves at right angles to the desk (which is parallel to the front entrance wall), DVM10 pointed out it would be better if they were angled so that they, too, were visible from the front. The end effect is a "V" of display cards in back of the paint desk, all presenting to the entrance of the store. It's highly effective.

There was a similar development of the above-shelf signage. While this was originally a two-dimensional, flat display, DVM10 pointed out that it could be used instead to front additional shelving, making a handy storage place for additional stock. (That's important to DVM10 as they operate with minimal warehouse storage for stock.) The result works so well, that it's likely you will see a similar system appearing in more recent Sapphire conversions.
Download

To read the full version of this article, please download the magazine, HI News, Vol.4, No.8, by using the link below:
HI News, Vol.4, No.8: Diamond Valley Mitre 10
HNN Sources


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