Posted by: Diane Capuano
New Benjamin Moore CEO and President Robert S. (Bob) Merritt identified “rebuilding relationships within the independent retailer system” as the company’s top priority.
“Right now, we’re focused on re-establishing some credibility that we had lost within the retailer network,” said Merritt, who comes to Benjamin Moore after a successful three-decade career as an executive in the restaurant and food preparation and distribution industries. He took the helm of the Montvale, N.J.-based paint manufacturer in early June following the abrupt dismissal of predecessor Denis Abrams.
In a 30-minute telephone interview with Paint & Decorating Retailer magazine on Aug. 7, Merritt acknowledged that the company needed to “take a good hard look” at past decisions that were viewed by the Benjamin Moore’s independent retailer network in a negative manner.
As an example, Merritt cited the company’s initial foray into e-Commerce in 2010—a move that drew ire from many in the company’s retailer network when it was introduced primarily because there was no component to push sales through local retail stores. However, that situation has since been rectified. More than a year ago, Benjamin Moore began testing an in-store pickup program in several markets. In July of this year, the company announced that it was opening up the program to qualified retailers in all U.S. markets.
“We understand that people want to use technology and want to use the Internet to make selections and to order things, but there’s no reason why we can’t put those sales back in the hands of the independent retailer and let them earn the revenues and the profits that are associated with that,” Merritt said.
Merritt also reported that Benjamin Moore is working at rationalizing its entire product line. This re-evaluation process will ultimately lead to a discontinuation of some products, resulting in fewer SKUs for the retailer to manage, and a solidification of Benjamin Moore’s position in the premium-performance market.
“Our focus is going to be on premium and super-premium products across all of the categories of paint,” Merritt said. “We expect to be the premium brand that people want to go to for better-performing paints. On the lower price points, the lower performance levels, I think we’ll let some other folks have that space.”
In addition, Merritt indicated that the company would be reviewing and simplifying its discount structure, which has faced criticism for being too complex, and would make adjustments to other programs to make sure that they meet the company’s strategic objectives while also meeting the needs of the independent Benjamin Moore retailer channel.
Merritt added that Benjamin Moore will be doing more to promote and build the brand with a national broadcast advertising campaign while increasing the availability of co-op dollars to support retailers in their local marketing efforts. “Our intent is to try to build the brand at the same time as we’re building up the independent distributor,” he explained.
Going forward, Merritt stated that Benjamin Moore would work at improving communications with its independent retailer network. Since joining the company, Merritt has spoken in person with a number of retailers and plans to do more of that in the coming weeks. In addition, Merritt observed, “We have an independent retailer portal that we’ll put regular communications up on. To the extent to which it’s necessary, we’ll do videoconferencing, just to try to use some technology to improve our communication.”
Indicative of the company’s commitment to more open communication, Merritt and his management team sent out a letter on Aug. 16 to Benjamin Moore retailers in which they acknowledged concerns and enumerated the decisions they were making to improve retailers’ competitive position. The letter included an invitation for Benjamin Moore retailers to participate in an Aug. 20 conference call that would address their questions and concerns.
During the PDR interview, Merritt stressed Benjamin Moore’s commitment to the independent dealer channel, something reinforced by the Aug. 16 letter, in which the company’s management informed retailers that the company had passed on lucrative opportunities in other distribution channels in order to honor that commitment.
“We do have a handful of operations that are under company management from markets where we had purchased them for various strategic reasons,” he said in the PDR interview. “Our long-term intent is not to get into the company-owned store business, but to the extent to which we own those stores and they are under our operation, we want to make sure that they operate like independent operators and that they’re the very best that we can make them. We can use that as a way to try to learn and better understand what our policies and our actions are going to do to the independent retailers before we take those actions. If we have that kind of direct communication from our owned operations, I think we can be better manufacturers and partners with the independent retailer as well.”
Read more of the Bob Merritt interview in the September 2012 issue of Paint & Decorating Retailer, available online and in mobile app format for iPad and iPhone users on or around Sept. 10.
Tags: Benjamin Moore