Toutant’s marketing mantra:

Eighteen months ago, Sylvain Toutant, then VP marketing and merchandising for Montreal-based home improvement chain The Building Box, dared to drive the brand into Ontario, despite analyst warnings that the province was already too cluttered by rivals like Rona, Home Hardware and Home Depot.
Yet somehow, the retailer, which sunk $350 million into the expansion, was able to establish a foundation, in part through a distinctive ad campaign that starred a quirky foam mascot known as Hammer Head.

Eighteen months ago, Sylvain Toutant, then VP marketing and merchandising for Montreal-based home improvement chain The Building Box, dared to drive the brand into Ontario, despite analyst warnings that the province was already too cluttered by rivals like Rona, Home Hardware and Home Depot.

Yet somehow, the retailer, which sunk $350 million into the expansion, was able to establish a foundation, in part through a distinctive ad campaign that starred a quirky foam mascot known as Hammer Head.

Toutant, recently promoted to president and CEO of the company, now confronts what appears to be an emerging battle with Home Depot in Quebec. Meanwhile, Home Depot recently introduced a new TV spot with the tagline: ‘Lower Prices. Nailed.’ It depicts a graphic hammer – the tool is also the icon of The Building Box – that floats around the store, smashing down prices on featured products.

While Toutant wouldn’t comment on his competitor’s advertising or any similarities to his own creative endeavors, he chatted with Strategy about his marketing philosophy and his plans for fighting off the competition on his own turf and elsewhere.

You faced a hefty challenge coming into Ontario, where Home Depot dominated. Why do you think you were able to break through?

When you go into a new market, you want to break parity and make sure people know you’re there. That’s what we did with Hammer Head. Our first goal was to catch the attention of the customer, to make sure they knew there was a new player in town. We didn’t go unnoticed. Hammer Head is part of our brand – it’s fun and unique and that’s what we’re trying to tell our customer.

Also, we have a warehouse format and we believed there was room in this market for a pure warehouse store. And that’s reflected in the way we do our print advertising. We show very basic, black-and-white products in our flyers.

But wouldn’t The Building Box attract more consumers with pretty pictures in its flyers?

We don’t want to compete against magazines. They give the customer ideas. We believe that when a customer walks into a warehouse store he’s looking for products and good prices. He’s not looking to be entertained. He knows what he wants. The planning part happens outside the store, so we’re serving a purpose to offer the best quality product and best price possible, and that’s our core competency.

We’re focusing all our energy on that and it reflects in all our advertising.

What is your positioning on price?

We think winning on price is not necessarily the single most important strategy, but you want to make sure your customer can shop with confidence. We’re working with vendors to get new products at unbelievable deals. You’ll find the best prices on ceramic tiles and laminated flooring in our stores. We’re trying to bring value to the customer on very important categories of product.

To do that, we’re using our worldwide leverage as part of [European home improvement conglomerate] Castorama Group, which operates in 11 countries. So we have an edge over North American-based retailers. And we’re trying to use that edge to bring new products to the market. So that’s our game plan – to make sure we offer the best value on innovative products. I think we also bring an alternative to the customer. When you’re shopping for home improvement, you want to have something different than your 10 neighbours. And that’s been part of the success in the stores we’ve opened so far.

Are you highlighting the chain’s most unique products in print?

We’re starting to focus on unique products in print, but we know that there’s always the 20/80 rule, where 20% of the products will generate 80% of the sales. Really the feeling is that when consumers walk in they see selection and that’s a big loyalty factor.

Is the direction of your marketing driven by Castorama? How much autonomy does The Building Box have?

Castorama is not at all involved in our marketing strategy. One of the strengths of Castorama is that they are not a global company but they are really an international business. Each [banner] is completely independent and responsible for its success. However, we have the opportunity to learn and exchange best practices with the others.

The major criticism about the home improvement category is that there aren’t many distinctions between the players, aside from the colour of the aprons. What is your response to that?

Our strategy is to win on product, and we offer a unique selection, as well as the largest product in stock. People don’t have time to plan ahead. We want to make it easier for customers to find products and enjoy them right away. They don’t have to wait a couple of weeks for a faucet because it’s a special order program.

We’re trying to make home improvement shopping as painless as possible. You go in on Wednesday or Thursday to shop for your project, and you can start on the weekend, you don’t have to start two or three weeks later. And that’s really the big difference.

We’re more sku-intensive, we have more choices. That’s really where the tag line, ‘There’s more in the box,’ comes from.

What is your overall marketing philosophy?

Integrity is the name of the game for building a long-term relationship with customers. So in TV, radio and print, we are promising what we know we will overdeliver to the customer, which in the end creates loyalty because we’re not disappointing them.

As far as service is concerned, we don’t promise on service. We spend a lot of money training our people. So that’s how we underpromise and overdeliver on service. That’s been our policy since day one.

Any plans to alter your communications efforts down the road?

For now we’re really hammering the same messages. It’s worked for us. I believe that longevity in advertising positioning is key. It’s funny to see companies change positioning and slogans all the time.

It goes back to my philosophy about what we are really delivering to the customer. It’s like BMW, where performance is still the ultimate message. That’s how you create a strong brand, you have to go after a real USP [unique selling proposition] and when you believe you’re winning on that USP, you have to keep communicating on it. That’s what makes your brand come alive.

If you claim to be the best at everything, people will realize you’re either lying or not delivering. So our focus is always ‘best selection at the lowest price possible’.

What are your goals for The Building Box in terms of market share?

My main target is to build critical mass in Ontario as soon as possible. When that’s done we’ll venture outside Ontario and Quebec. But 50% of the market is in those two provinces, so we absolutely want to be a major player in both first.

We want to get 25% to 30% market share in each metropolitan area we operate in.

In Montreal, we’re over that number, and in Quebec City we’re at about 35%. In the GTA, where we have three stores, I can’t give you an exact number at this point, but in the next two or three years, our growth will bring us to the level we want to be at.

What is your reaction to Home Depot, which just opened its fifth location in Quebec?

In Quebec, we dominate the market and we intend to keep it that way. Part of our growth will come from smaller markets.

In Laval, we opened two stores in reaction to Home Depot coming into Laval. We also opened a second store in Quebec City. We saw there was some weak market share in certain areas.

Quebec was a very competitive market before Home Depot came in. But we also have a very strong brand in Quebec. We’ve been here since 1933, and our main focus is to maintain our leadership.