How do Retailers like Home Depot and Lowe’s Influence the Tool Industry?

Home Depot and Lowe’s seem to have some form of control over the direction of the tool industry. How? Why? Aren’t there other large tool retailers?

What most people don’t consider is that Home Depot and Lowe’s are customers in the brand-retailer relationship. The details are complex, but they both are essentially customers, and tool brands the suppliers.

Let’s say you are a baker that supplies restaurants with cupcakes. You came up with a new style of cupcake that requires new equipment that can only be justified if you sell large quantities. Your biggest customer says “nah, we’ll pass on this one.” Can you still justify putting the time, effort, and expense into the new cupcake?

We have seen examples of this from tool companies such as Stanley Black & Decker (Dewalt, Craftsman, Irwin).

To major tool brands, we’re the end users and Home Depot and Lowe’s are customers – or potential customers.

End users and retailers sometimes share the same demands.

Lowe’s came out with Kobalt mini tool boxes 2 years ago, and they sold really well. Every retailer has their own mini tool chests and boxes this holiday season. Did end users express interest in more brand name options? No – retailers sought to try to copy Lowe’s success.

What about Menards. I’ve heard Menards is great, but they’re a regional chain with fewer stores and I’m sure also few online sales. There are others, such as Tractor Supply, but I’m under the impression Home Depot and Lowe’s are much bigger with respect to tool sales.

Visibility at Home Depot or Lowe’s isn’t the only thing that matters, but it can be impactful.

Consider the Dewalt organizers that were discounted at Home Depot stores for Black Friday.

My store seemed to have 120 organizers. Let’s say Home Depot had 100 organizers at each of 2,000 stores in the US. That would be an order of 200,000 organizers for Black Friday.

Dewalt didn’t just pull this out of a warehouse, they built a roughly estimated 200,000 organizers, with 2,000,000 removable bins (10 each) for Black Friday.

How much do you think Home Depot paid for these organizers? What terms did Dewalt have to agree to for this floor space?

Even if nobody made a ton of money on these organizers, there are other benefits such as brand familiarity.

Branding is important. Speaking of which, Lowe’s is selling this Dewalt automotive jack. Is is typical to have a brand name in 3 different places on the same product?

When is the last time anyone has talked about Southwire hand tools?

Southwire was the main electrical hand tool brand at Lowe’s for a while before being replaced by Ideal. Ideal tools have since been replaced by Klein Tools.

Retail visibility is important with respect to customer awareness, familiarity and sales, but also keep in mind that contracts can be very lucrative.

Similar to what might be arranged for Black Friday promotions, a lot of money changes hands when retailers place purchase orders to fill their shelves at hundreds and even thousands of stores.

Winning a contract at a major retail store can mean big money, and sometimes it means the opposite.

Around 10 years ago, the Dewalt ToughSystem Music player launched at Home Depot first, and could be found in the holiday season gift center.

The ToughSystem Music 2.0 product launched around 6 years ago, also at Home Depot. It received a lot of negative reviews fairly quickly. Dewalt suspended production to understand the issues, and that was it.

There was no updated model. The original was back around Father’s Day a year ago before disappearing again.

Why? What if Home Depot said this was something they really wanted in their holiday season deals and gift center this year?

That wouldn’t happen, of course – Milwaukee’s Packout doorbuster didn’t sell very quickly last year. Milwaukee’s $149 jobsite radio with battery and charger doorbuster bundle looked to sell better and faster this year.

Lowe’s has a Dewalt speaker bundle with battery and charger for $129, and it’s not selling very quickly at my local store.

If you’re Home Depot, would you place a large volume order for Dewalt ToughSystem radios?

If you’re Dewalt, would you bother to set up a production line if you weren’t guaranteed a minimum order quantity?

The retail industry isn’t as clear as I assumed.

Consider a convenient store on a college campus. With limited space in the beverage refrigerator, do you think they’re going to carry prune juice, or maybe another flavor of some energy drink, soda, juice, or seltzer product that’s trending on TikTok?

The tool industry starts to make a lot more sense when you realize we’re end users and not customers. Why doesn’t tool brand sell [some kind of tool you want]? Ah, because their customers didn’t want to buy it.

Craftsman seems to have given up on their plans to manufacturer hand tools in the USA. Why? Maybe they couldn’t sell their customers on the idea.

Klein Tools is making more imported tools. Why? Maybe that’s what the customer wanted.

There was a Home Depot-exclusive Milwaukee hole saw set in stores’ holiday gift centers a few years ago, and there were some atypical bundle decisions. I asked them why. “It’s what the customer wanted.”

I greatly disliked a new tool that launched for the holiday season a number of years ago. I shared my honest feedback with the manufacturer and asked them why the tool was designed the way it was. “It’s what the client asked for.”

Lowe’s seems to be shoving Flex and Skil brands out the door, and a lot of people rightfully commented that you can still buy them at other retailers. Sure, but the absence of volume sales and widespread visibility will hamper growth and expansion.

How much effort has Dewalt put into their Xtreme 12V Max cordless power tool system in recent years? That was Lowe’s exclusive Dewalt line to Home Depot’s exclusive Dewalt Atomic line for a while. Lowe’s now has a couple of Dewalt 20V Max non-XR brushless tools.

Tool brands can thrive outside of major retailers, it just takes more time and effort. I would say it also takes more money, but from what I’ve seen it can take an awful amount of money to buy prominent placement at Home Depot or Lowe’s stores.

While I’m sure retailers have different preferences, they also have a lot of objective data about consumer purchasing behaviors.

They know what their customers are buying, and what they’re not.

Years ago, Sears had USA-made Craftsman Pro and imported Gearwrench ratcheting wrenches. The less expensive and regularly-discounted Gearwrench sets sold often, and the Craftsman Pro sets collected dust. My local Sears store had the space to carry both options. Let’s say they only had one spot – they would have they made stocking decisions based on sales performance.

Although this post focuses on Home Depot and Lowe’s, do you think it’s different with other retailers?

I used to think that brands would come out with new products, and that those new products would simply show up at stores. It’s just not that simple.

Well, maybe it’s that simple online, where online marketplaces will list and sell anything these days.

Amazon has a Flex 24V cordless drill kit at $99 right now, and according to Amazon’s sales data they sold 100+ in the past month. They don’t even have sales data for the Skil multi-head drill kit. The Flex kit is #83 in the drill drivers category with respect to best sellers rank, and the Skil kit #151, and so Amazon presumably sold even fewer of the Skil kit in the past month.

Amazon sold over 10K of a Dewalt brushless drill kit in the past month. That particular model drill launched 9 years ago.

Amazon sold a lot of brushed motor Craftsman cordless drill kits in the past month, and just 50+ of the brushless model.

Lowe’s also has a Craftsman brushless drill kit at $79, and they sold just “100+” in the past week. Lowe’s sold 1K+ of their $79 Kobalt brushless drill kit deal in the past week.

Do you think that Craftsman is going to put a lot of effort into launching more brushless tools when the sales data seems to favor their cheaper brushed motor tools?

Bostitch, another Stanley Black & Decker brand, was once big at Lowe’s. When’s the last time you saw Bostitch hand tools anywhere?

Bostitch later had cordless power tools that were exclusive to Walmart. When’s the last time you saw Bostitch cordless power tools? Walmart now has Hart, which is related to Ryobi at Home Depot.

Home Depot got rid of Estwing hammers (see Home Depot Stopped Selling Estwing Hammers) which were eventually replaced with Crescent (see Here’s What Replaced Estwing Tools at Home Depot).

The writing was on the wall months earlier (see Estwing Ultra Hammers are on Clearance at Home Depot).

Such shifts happen somewhat regularly.

By the time we see movement on store shelves, decisions have already been made, and those decisions are often informed by customer actions, not their words.

Saying “I wish [retailer] gave more floor space to [your favorite tool brand]” isn’t meaningless, but it’s a whisper compared to what your wallet screams out when you make a purchase.

“I really want to buy [tool brand] but bought [other more popular brand] instead” is what retailers listen to.

I hear this one a lot: “[Retailer] is in bed with [popular tool brand] while [other tool brand] gets no attention.” Why do you think that is?

Because some brands bring more customers to stores and drive more sales than others. Of course they’re going to get more floor space and attention.

It can also be argued that the floor space and attention result in more foot traffic and sales for some brands than others, and I suppose that’s why retailers will often run experiments.

Home Depot and Klein announced an exclusive arrangement in 2009, which ended in 2023 when Lowe’s and Klein announced a new partnership.

Milwaukee took over most of the electrical hand tool aisle at Home Depot. Ideal exited Lowe’s. Who’s to say what will happen over time – maybe Ideal will join Milwaukee at Home Depot. Maybe Stanley Black & Decker will acquire Ideal and then sign a contract with Lowe’s that minimizes Klein exposure there.

None of this has anything to do with what end users want, but it can all be influenced by how end users respond. And by respond, I mean purchasing behaviors, because actions are everything.

Yes, brands and retailers can sometimes make decisions for specific reasons – see Milwaukee Doesn’t Sell Tools on Amazon Anymore – Why? – but much of the time consumer purchasing behaviors are the driving force behind many other decisions.

Sometimes tools will sell themselves. Other times, in-store placement and both in-store and online visibility aren’t enough.

Where would Milwaukee Packout be today if Home Depot never carried the product line in stores?

In-store placement didn’t make or break the system, but has nudged it along over the years.

But what did in-store visibility do for Dewalt ToughSystem DXL? My store has a couple of boxes of DXL items in the pro deals area right now, and they look so faded and beat up I wonder if they were leftovers from last year’s displays.

Some tool brands are less dependent on retailers than others, but there’s no doubt how much influence and impact retailers have in their role as major customers.