Two things for 2012: Energy and Community

(Originally published in the January 2012 issues of Merchant Magazine and Building Products Digest.)

It’s January, a time when we’re all staring into the headlights of an oncoming new year bearing down and wondering how it’s all going to turn out.  Perhaps you’ve had the same premonitions I’ve had about 2012.  Clearly, there are going to be some rough patches.  It’s an election year and the electorate seems in a bad mood.  The economy seems in a bad mood, too, with high unemployment, rising foreclosures, and little building activity. 

Some dealers will do well and some won’t – it’s going to be a mixed bag.  So what can you do to put yourself in the former category?  It all depends, of course.  Do you serve mostly pros or consumers?  Are you are a chain or a locally-owned indy?  There is no one size fits all strategy.  I’ve said it before and I’ll say it again, green dealers seem more buoyant, more resilient.  But I think this year’s going to take a little more effort.  What’s my advice for taking your green strategy to the next level?  Two things:  energy efficiency and community.

First and foremost, make energy efficiency job one.  If you’re a dealer in this channel this needs to be top of mind for everything you do.  I’m talking about the whole picture – operations, products, merchandising.  If you can find a way to pay for it, do a lighting retrofit, install solar panels, insulate every building you’re heating. This is going to reduce your operating expenses and demonstrate your leadership.

Stock products that will save money for your customers:  insulation products that meet LEED or other green building program criteria, triple-glazed windows, insulated doors, LED lighting.  Finally, do your homework on rebates and other incentives and plaster the information everywhere.  Label products that are energy efficient and can reduce bills.  Stocking the right products and merchandising them effectively will help maximize your sales.

(Besides, if you don’t who will, BestBuy?  Yes, apparently.  They’re piloting a new home energy retail concept.)

Secondly, do everything you can to get closer to your community – customers and other stakeholders, too.  Whether you’re primarily serving pros or consumers, be energetic in learning about your customers’ needs and finding ways to serve them.  Who is building houses?  Who is remodeling?  What are homeowners doing on their own?  Host events in your store that bring your buyers and customers together and get them talking.  Walk the aisles and the yard with your customers and listen carefully to their feedback.  If you’re getting this information from manufacturer reps you are listening to the wrong people. 

Don’t be afraid to leave the comfy confines or your store, either.  Attend local USGBC meetings.  If your community has a “shop local” campaign or a business alliance, such as a chapter of BusinessAlliance for Local Living Economies, for example, join it.  And don’t forget other groups who are active in your community.  Forging these links may make all the difference this year.  It will keep you from stocking useless inventory and will identify the products and materials your customers need.

Energy and community.  It’s simple and clear.  It provides a solid mission for your staff that’s imbued with optimism.  It can provide the basis for a marketing campaign.  And if you follow through, if these are truly priorities for your organization, you will be doing all the right things to appeal to green builders and remodelers, home owners and DIYers.  Certainly, you’ll learn about other needs, products and opportunities along the way, too.  And whatever turmoil the year may have in store, I believe, you’ll find that energy and community will see you through.

Hot Cities and Cool Roofs

(Originally published in the September 2011 issues of Merchant Magazine and Building Products Digest.)

This summer’s heat waves have been horrendous.  Hot weather is known as a silent killer and is responsible for more weather related deaths than tornados, hurricanes and blizzards, combined.  Summer days are hotter than they used to be, setting all kinds of records, but even worse are the hot nights.  Overnight lows are also setting records for high heat, making it much more difficult for at-risk populations, such as the very young and very old, to recover. 

In cities, the problem is worsened again by something called the Urban Heat Island Effect.  Cities are paved with asphalt and built up with concrete and other materials that absorb solar radiation during the day and re-radiate it during the night.  Cities can be 15° F hotter in the daytime and 22° F warmer overnight than neighboring suburbs.  More city heat means more air conditioning and more electricity consumed, leading to blackouts and, of course, more carbon emitted into the atmosphere. 

The heat island effect has been understood for a long time – I first learned about it in high school.  But more recent scientific knowledge indicates that we should expect more extreme heat waves like those this summer.  I’ve argued in this column and elsewhere (see our in-depth report, The Future of Home Improvement, here: www.williamverde.com), that dealers and distributors have an obligation to learn to anticipate changing climate and weather patterns in order to serve their communities, as well as boost their revenue.  In fact, as purveyors of building supplies, we are in a prime position to take the lead on mitigating the effects of hot summer nights and urban heat islands.

There are a variety of ways we can make our cities cooler, simply and affordably.  Replacing high thermal mass materials with trees and green space is one effective strategy and where we need to go, long term.  Living roofs are being boosted in major cities for just this reason.  But there’s another strategy that can deliver results in the short term, is less expensive, and offers opportunities for most dealers and distributors right now. 

Increasing albedo, or the ability of surfaces to reflect solar radiation, using special paints and coatings, or reflective roofing materials can dramatically reduce heat gain and electricity demand.  A white roof, for example, can reflect almost 90% of the sun’s radiation, reducing interior heat and the need for air conditioning.  And the savings are not trivial.  The White Roof Project (www.whiteroofproject.com) reports that about 10% of electricity produced by cities is used to compensate for the urban heat island effect.  If enough roofs were painted white, the nation could be saving billions of dollars and hundreds of lives.  And dealers could be doing well, while doing good.

Two excellent resources to help you stock appropriate roof coatings for your community, or improve your existing product mix, are Energy Star (www.energystar.gov) and Cool Roof Rating Council (www.coolroofs.org).  Keep in mind, reflective shingles and roofing tiles offer effective solutions for residential applications, too.  But don’t stop there.  Develop a promotional strategy that combines in-store materials with larger-scale efforts in the community.  In-store signage should educate customers, highlight rebate opportunities, and promote city-wide campaigns.  Get involved and get your manufacturers involved.  New York area dealers might ally themselves with the White Roof Project, for example.  Dealers in other sizzling cities might think about creating their own “white roof projects” in conjunction with local city agencies or non-profit organizations.  Last but not least, teach your staff about the urban heat island effect and the importance of taking measures to reduce it.  It can literally save lives.

The Long View

(This piece was originally published in the January 2011 issues of Merchant Magazine and Building Products Digest.)

“In the long run, we’ll all be dead.” That unfortunate utterance from a now dead economist has provided a handy excuse for shortsighted business planners focused only on extracting the maximum profit from the here and now. That kind of thinking is responsible for many business failures, yes, but also many environmental problems more daunting even than the federal deficit. Failure to consider the future implications of decisions made today virtually guarantees a legacy of difficulty and hardship for the next generation.

Taking the long view, on the other hand, is at the heart of green thinking. Therefore, this January, I encourage you to forget about 2011’s top trends for a moment and invest some quality time considering the next decade and the opportunities and threats it will present to your business and community.

The best place to start is at the end – what will your business look like in 2020? Has it been passed down to your children? Acquired, shut down or thriving with you securely at the helm? Is it connected to the same old supply chain? Is the local economy vibrant and strong, or struggling along? Most importantly, what do you want your business to look like and what sort of realistic scenarios will lead you there? To answer these questions one must first consider the long term forces reshaping our industry.

The next decade will see plenty of change and probably as many surprises as the last. Obviously, “green building” is on its way to becoming the new normal, whether it’s LEED or another approach, creating new opportunities for growth. Transport fuel prices are trending higher with the very real possibility that periodic episodes of price volatility will devastate marginal businesses. Households, businesses and governments will continue to shift purchasing to less toxic and more eco-efficient products from socially responsible producers. Competition between “big box” chains and independent dealers will continue, with increasing activism from localization groups. The green DIY and urban agriculture movements will continue to take root across the country. And a host of global and domestic macroeconomic factors will attenuate or amplify these opportunities and threats.

But underlying whatever scenario one wants to envision for the next ten years, there is the inescapable reality that the global climate system is changing, most likely due to human activity. The last decade was the warmest on record, but more important to consider are the local and regional impacts. Damaging and costly extreme weather is becoming more common. NASA has published a slideshow depicting the number of temperature anomalies each decade going back to 1880, (earthobservatory.nasa.gov/Features/WorldOfChange/). The trend is unmistakable, which should be cause for concern, especially in the context of the massively destructive heat wave that hit Russia last summer.

Regional climate patterns are changing in ways that dealers and distributors should understand and anticipate. The US Global Change Research Program, (www.globalchange.gov), provides useful analysis for each region of the country. Depending on your location, expect more drought, more fires, more floods, more heat waves and cold snaps, and more precipitation when it comes. And when these “anomalies” occur, they will probably be at the wrong time, disrupting water supplies, agricultural harvests, supply chain logistics and more.

These broad trends suggest that merchandising and business model innovations will be required to sustain a successful business. Households, businesses and governments will be forced to invest in mitigation and adaptation strategies. Dealers will, too. But those long-term planners among them will be prepared to weather whatever the decade has in store, with solutions that will help their customers and communities, too.

Oil Dependency and the LBM Supply Chain

(This originally appeared in the August '10 edition of Merchant Magazine and Building Products Digest.)

The oil spill in the Gulf of Mexico is a huge environmental calamity, but it should serve as a wake up call for the LBM supply chain for another reason. Why? The spill will certainly have an impact on local economies and local LBM dealers. But the spill is emblematic of a much bigger issue, the end of cheap oil. And that will shape the future of this industry, bringing tough challenges and green opportunities.

Many analysts are pointing out that most, or all, of the world’s easy oil has been extracted and what’s left is vastly more challenging, energy intensive, and expensive to get – pumping oil from 5,000 feet deep on the floor of the Gulf is but one example. Meanwhile, according to a US Department of Energy report, new oil discoveries are lagging consumption. And some analysts have pointed out that the point of peak oil production may have been reached, or may be reached soon.

Peak oil, as the phenomenon is known, is based on the work of a Shell Oil geologist, M. King Hubbert, who showed that just as an oil well reaches a peak in production long before the oil deposit runs dry, so too, does an oil producing region have a peak in its production curve. Once the peak is reached, production volumes flatten out, then decline. Add the fact that worldwide demand for oil is growing, (car sales in China and India are going through the roof!), and if we are at or near a peak oil situation, then oil prices will surely rise and perhaps very rapidly.

The LBM supply chain is predicated on cheap transportation costs. When fuel prices rose dramatically during the summer of 2008, many distributors and dealers took hits to their already thin margins. While that price spike was due, at least in part, to Wall Street speculators, it provided a taste of what an expensive oil future will bring – higher transport and commodity costs, and marginal businesses going bust.

So, how can you prepare and create resiliency within your organization? First, start shifting your own product mix. Identify those products most vulnerable to rising oil prices and find better alternatives such as local and green products. This will also help you meet the rising demand for such products as the green building movement continues apace. Look especially at those solutions that help your customers, (or their customers,) become more sustainable or self reliant. Also, find opportunities to supply a greater range of need within your community or operating area. If gas prices rise dramatically, your customers will be looking for one-stop shopping.

Dealers and distributors should also be actively seeking ways to reduce gasoline or diesel use within their own operations. Electric vehicles or diesel trucks that run on locally-sourced waste cooking oil might be viable options. Increasing drop ships, from manufacturer to dealer, or from distributor to end-user, will help, too, but only marginally.

Finally, get involved in community efforts to create local resiliency to oil energy shocks. Transition US, (www.transitionus.org,) is a new and growing network of groups throughout the country – 69 at last count – aiming to find ways within their own communities to reduce their dependence on oil. Groups like these are gaining influence with local policy makers, and their efforts naturally support green building and like-minded local businesses. Your involvement will help you identify emerging opportunities, make important connections within your community, and get support for reducing your own oil dependency.

Community Insulation

Community Insulation
(Originally published in the November '09 issues of Merchant Magazine and Building Products Digest.)


With the economy still in doldrums and the cold winter months around the corner, I continue to be fascinated with insulation. Not the rebate-earning, energy-efficient, recycled-denim kind your customers will love you for, but the economic kind that will sustain your business through the lean times and propel the inevitable upturn to come. There’s little doubt that energy efficiency and green building will define the shape of this industry for decades to come, so it makes sense for every LBM dealer to bone up on these issues, stock and promote the products, train the staff, etc. But creating sustainable “economic insulation” requires deep community collaboration.

There are good examples of multi-generational, family-owned dealers that are well-placed in their communities, have staved off the “big boxes” and done well, even in hard times. These are good models, but the reality is that these examples are getting harder to find and even harder to replicate. Two organizations, BALLE, the Business Alliance for Local Living Economies, and AMIBA, the American Independent Business Alliance, are focused on helping local businesses thrive, creating new models.


In the Rockies just outside of Denver, sits Big Horn Building Materials, a big local supplier for the surrounding mountain towns and resorts. Founder, Don Sather, has been a big proponent of energy efficiency and green building, walking his talk – the store is fitted with solar panels and is involved with a local non profit studying the feasibility of wind power in the community. He was also one of the founding member of Summit Independent Business Alliance, (SIBA), an AMIBA affiliate. “A few years ago, our community successfully fought off a new 'big box' chain and that really opening my eyes,” Don told me. “One of the most important things about being involved in a local network is getting closer to local officials and educating them about the economic benefits of supporting locally-owned business versus national chains.” Strong relationships with other local businesses and SIBA’s shop local campaigns have kept his business doing well, even though the economy overall has been weak, he added.

Woodland Building Supply, a 9 year-old dealer in Philadelphia, is another interesting model. Larry Reese, president and co-founder, was determined to make Woodland a destination for green building, stocking a wide selection of products, and recently opening a green showroom. “We’ve always focused on the triple bottom line and building relationships with local green builders,” Reese said. They joined Greater Philadelphia Sustainable Business Network, a BALLE affiliate, about a year ago. “It seemed like the natural thing to do. We’ve developed many more strong relationships with local builders, developers, and vendors and, to be honest, they’ve kept our business really busy over the last year.”

Paula Burke of Burke’s Hardware, a family-owned dealer with a 72 year history in Raleigh, North Carolina, told me a similar story. They recently joined their local network, Shop Local Raleigh, and were immediately impressed with the results. “We participated in a Shop Local TV ad, and even though we’ve been in the community for a long time, it was amazing how many people came into the store who’d never heard of us before!,” she said. They were motivated to join the network in part by the down economy, but mostly, she said, “because it was just the right thing to do, to support your community.”

The Green X-Ray House – a Community Affair

(Published in January '09, Merchant Magazine and Building Products Digest)

In past columns, we talked about the importance of community involvement, networking with green building leaders, and making sure the local municipal green building folks know who you are.  It costs virtually nothing and can only lead to good things, and sometimes even spectacular things. Nothing exemplifies this better than Beronio Lumber’s involvement in an exciting little project that put an otherwise unremarkable little town in Northern California on the green building map.

South San Francisco is an industrial suburb of San Francisco, whose fortunes waned with the outflow of manufacturing and airline jobs over the years.  Recently, city leaders had a vision to promote green building, community development, and the city’s attractiveness to potential new residents, and it all congealed around a single project.  The city owns several rental properties and decided to transform one of them, a modest 3 bedroom bungalow, into a showcase called the Green X-Ray House (see their website here:  www.greenxrayhouse.com.)

While the focal point of the project is the house, the real story is about the community that came together to make it happen.  The major player in this story is, of course, the City of South San Francisco’s Economic and Community Development Department who, earlier in the summer of 2008, convinced the Green Building Exchange to become part of another city project dubbed the Sustainability Center, a multi-use facility housing several green businesses.  The Green Building Exchange is a unique business, designed to provide a central location for green building education for builders, architects and home owners.  Beronio Lumber started building relationships with green building related organizations a couple of years ago, including the Green Building Exchange where they’ve even installed a permanent display.  So, when conversations began about what to do with the vacant property, the city consulted with the, now local, Green Building Exchange, who immediately brought Beronio Lumber into the process.  Thus, the Green X-Ray House was born. 

The concept was simple:  remodel the house with lots of green features to demonstrate how easy a modest green makeover could be.  Beronio Lumber provided decking materials, FSC certified flooring, FSC molding, window and door casings, as well as the windows and doors.  Meanwhile, the folks at Green Building Exchange talked up the project with other local firms – it seemed everyone wanted to be involved.  The modest green makeover quickly became a vibrant community project.  Over 19 local firms participated, nearly all directly involved in the green building industry.  Local builder W.L. Taylor Construction managed the project.  Local plastering company Get Plastered! (yes, that’s their name!) applied American Clay, an interior plaster product that is all the rage among interior designers.  The most surprising partner was Pepsico/Frito-Lay, whose business has nothing to do with green building, but as a local member of the community donated cash and over 25 volunteers to work on the house over a weekend.

The Green X-Ray House is now a symbol for the neighborhood, not just as another green show house, but of what can happen when a community comes together to try to make a difference.  Beronio Lumber created enormous community good will, as did other participants.  The Green X-Ray House neighbors are thrilled because their property values went up a tick and their community got some positive recognition.  Suddenly South San Francisco is a green leader, with cities from around the country sending representatives to learn how this successful collaboration can be replicated in their communities.

Green Collar Jobs

(This article appeared in the November '08 issues of Merchant Magazine and Building Products Digest.)

While the scramble is on to bail out our nation’s banks and financial institutions, most of the rest of us are wondering what’s next. The economy may well be headed for a nasty recession with rising unemployment and sinking consumer confidence. Is this the beginning of a structural economic adjustment analogous to the industrial restructuring of the 1980s that shipped thousands of manufacturing jobs overseas, what we call “Globalization”? Many longer term economic trends point in that direction: rising shipping costs, higher manufacturing costs in China, greater emphasis on green house gas reduction and local sourcing, huge venture capital investments in “green tech,” and government policy promoting green building and clean energy, to name but a few.

But what about the short term? Will the bank bailout keep people in their homes, bring mortgage rates down and provide a small boost for our industry? Will another stimulus package from Congress do the trick? It just may be that the eventual economic recovery will be based, at least in part, on a grass-roots movement that is gaining traction with both local and national policymakers: “green collar” jobs.

From Oakland to Los Angeles, from the South Bronx to Chicago, New Orleans to Newark, local green collar jobs programs are revitalizing neighborhoods and giving people a chance to participate in the still growing green economy. A national organization, Green For All, (www.greenforall.org), founded by Van Jones and Majora Carter serves as a clearinghouse and resource center for local nonprofit-led programs, as well as municipalities seeking to develop their own program. These programs train workers for the clean energy economy and many include weatherization and retrofitting programs for existing homes and commercial buildings.

This is where it gets interesting for home improvement retailers. Getting involved in your local program could provide some immediate tangible benefits – you could be supplying the necessary products for these programs: weather stripping, insulation, lighting, roof coatings, and more. There are also opportunities to provide local leadership and expertise, gain community recognition, free publicity, find trained and motivated new workers, forge links with potential new customers, and more. And with federal green collar jobs programs coming soon, there may even be more opportunity.

On the national stage, it appears that plans to stimulate the growth of green collar jobs are already underway. Thanks in part to the efforts of Green For All and other grass roots organizations, Congress passed the Green Jobs Act as part of the 2007 Energy Bill, calling for $125 million to create the Energy Efficiency and Renewable Energy Worker Training Program. It’s a pilot program that would, (if funded in the next appropriations bill), jumpstart green collar job programs across the country. The House is currently discussing another stimulus package that would include investment in green collar jobs. In addition, both presidential candidates have expressed their support for growing green collar jobs. In any case, it appears that the green collar job issue is here to stay and that should be good news for hardware and home improvement retailers.

Get Connected: building community around your store

(This appeared in the July '08 issues of Merchant Magazine and Building Products Digest.)

For generations, the hardware store was a focal point in the community, where folks could get great advice, discuss the issues of the day, or catch up on the latest gossip. Obviously, things have changed as “big box” retailers have muscled in and literally changed the landscape. And it seems the bigger “the box”, the less community connectedness. In contrast to that disturbing trend, a recent report from Conscientious Innovation, a sustainability think tank, found that consumers ranked feeling connected to family and community as their most important sustainability issue. Also ranking high was the desire to support locally-owned businesses. These results lead to an important insight - forging deep connections within your local community just may be one of the greenest ways you can grow your business.

Last month we talked about things you can do to “green up” your store’s operations, suggesting that offering CFL, battery and paint recycling provides a valuable community service. Recycling programs provide convenience to your customers, but deliver something more important to your community. By diverting toxic waste, such as mercury that accumulates in the food chain, from the local landfill where it can leach into the ground water, you demonstrate a concern about the health and well being of your patrons.

But to get really connected with your community, you’ve got to get involved. Contact your local green building organization - it might be a city agency or a local non-profit – call them on the phone as soon as you’ve finished this article, go to their meetings, and let them know you want to be involved. This will get you access to valuable know how and help you connect with local green building leaders. Most cities with green building programs embrace interested retailers and will even include them in promotions. In San Francisco recently, the city took out ads in the local paper promoting the local hardware stores stocking green building products.

But don’t stop with green building, connect with other non-profit organizations. If your store is locally owned, join the Business Alliance for Local Living Economies, or BALLE, (www.livingeconomies.com). BALLE’s mission is about building community through local business networks. They can help you build the “buy local” advantage in your market. Don’t forget to support your local schools and parent groups. Making a small donation of organic compost for the school garden, participating in their fundraisers, sharing information about non-toxic alternatives – those small ways of showing your support will help to build long-lasting relationships. There are probably other organizations in your area that are focused on protecting local watersheds and bays, wilderness areas or providing job opportunities for young people. Find out what your staff members are interested in and encourage them to get involved, too.

You should also consider participating in local green events where you can educate your local community members about what your store is doing to make less-toxic, environmentally friendly, and resource conserving choices available. Better yet, host a green event at your store. If you’ve gone out and developed relationships with local green building and other sustainability organizations, you should find no shortage of enthusiastic help. Enlist the aid of your local green product manufacture and distributors, as well. After all, they are an important part of your community, too.

Getting connected with concerned community groups will make you feel good about offering eco-safe and non-toxic alternatives. It will also build your reputation and generate excellent word-of-mouth referrals, bringing new appreciative customers into your store. You can do good and do well and that’s what getting connected is all about.