Who’s winning in specialty hardware retail?

While the big national hardware retailers may have near ubiquitous awareness, another segment of the hardware market is far more important to the millions of Americans who are in the trades or are amateur craftsmen: the specialty hardware business. 

In this market, three of the biggest specialty hardware players are Harbor Freight, Northern Tool and Tractor Supply. How are each of those retailers positioned and how are their brands performing?

Tractor Supply is the biggest of the three by number of locations and revenue followed by Harbor Freight and Northern Tool. It’s natural, then, that a greater percentage of the population engages with the bigger chains. The differences start to appear, however, when we look at frequency of use. Consumers shop at Northern Tool far less frequently than they do at Tractor Supply or Harbor Freight.   

Interestingly, this corresponds with Northern Tool’s brand perception which is very clearly defined but very narrow. As we can see in Exhibit A, Northern Tool is seen to be practical, professional, authentic, powerful, and tough as compared with Harbor Freight.

Exhibit A

This same emotional definition of Northern Tool is consistent when compared with Tractor Supply. To Northern Tool’s credit, their marketing campaigns are doing a wonderful job positioning the brand as a place for tough, hard core workers and craftsmen. 

But is this narrow brand definition working for Northern Tool as it tries to improve brand KPI’s and expand market share? A quick scan of Brand eDNA in Exhibit B shows us that Northern Tool’s brand KPI’s fell significantly from Q3 to Q4 ’24. 

Exhibit B

And the key emotional drivers of those KPI’s also fell. 

Compare with this Harbor Freight and it looks like Northern Tool is under pressure. 

Exhibit C

Harbor Freight also saw key emotional brand drivers decline QTQ but they were starting from a greater position of strength and the declines weren’t as severe as those for Northern Tool. 

This begs the question: is Northern Tool being hurt by its narrow positioning? Should it broaden its position to incorporate attributes that will drive greater market share?

Brand eDNA provides not only the full emotional profile of a brand, but the emotional attributes that are responsible for driving brand KPI’s. In specialty hardware, we can see those drivers below and how both Northern Tool and Harbor Freight are performing on them. 

This is where Harbor Freight is putting the hammer down on Northern Tool. It is perceived to be far more relatable, approachable, and wholesome than Northern Tool while being every bit as honest. 

We would posit from examining the data that while Northern Tool has positioned itself for a certain customer in the trades and among amateurs, it could attract more customers if it were more approachable, relatable and wholesome. From our vast experience in customer experience design, the fix for these weaknesses is often about small human-centered gestures. Be welcoming, be warm and nice, and meet consumers where they are (eg., don’t get hung up on rejecting someone because they aren’t “tough”). As we say at Magid, “Small Things are Big Things®.” 

The market insights and potential future directions presented by this tool are based on our research data analysis as of a specific point in time. Future market conditions are inherently uncertain and subject to change due to various factors. These insights are not guarantees of future performance or outcomes. Users should use this tool carefully and exercise independent judgment.