HHI’s stores all face serious competition from national hardware chains such as Home Depot
and Lowe’s. These national chains have opened many new stores during the past few years, and
they are larger, carry more items, and offer lower prices on some items. The competition is fierce;
for example, all HHI stores have closed their lumber departments because of this competition. The
national chains buy lumber in such large quantities that they can offer far lower prices. HHI was
unable to earn a profit when matching the large competitors’ prices, and the lumber operations
consumed a large amount of store space. Hal is worried that this sort of problem could develop
in other departments, so he is always looking for ways to add value to the HHI customer experience,
especially in ways that the national chains are not willing or able to do. For example, Hal
believes that most people want to try out a new power tool in person before they spend hundreds
of dollars on a purchase. Thus, every HHI store has a tool demonstration area that is always
staffed with salespeople who are experts in power tool operation. For each major type of power
tool (drills, power saws, joiners, grinding tools, and so on), HHI has created a small booklet of hints
for using that type of tool. HHI gives these booklets to customers as free handouts. HHI also sells
its own low-cost instructional videotapes and DVDs.