A Brand New Strategy?
When I ask local garden genter (LGC) owners why there is no Scotts, Bayer or Weber on the shelves, a common response is that they want to differentiate themselves from the big, corporate “box” stores. Besides, they sell their “independent” version of similar products. Owners and managers tell me they’ll lose their independent identity, that their brand is reflected in the array of different products and names not seen in larger, corporate stores.
I would argue that the long term value of their brand is based on customer success with the product, any product. Brand value of anything is based on trust of the outcome. Increasingly in Home and Garden, customers want an outcome with a short time frame, little fuss or low risk.
Retailers who shun national brands are missing a big opportunity. National brand advertising campaigns get consumers off their couch and into the garden, so retailers should take the opportunity to ride on the back of these traffic building programs. The correlation between a declining traffic count in LGCs and the rise of national garden brands might not be coincidental.
Cover All the Bases
A two brand strategy answers both issues. It’s a win-win. It achieves the goal to be different from the big guys coupled with the desire to carry what customers know and seek out. When consumers are told the store doesn’t carry a product just seen on TV, it encourages thoughts of doubt and confusion. A customer who asks for a specific brand has already been sold before they leave home.
Consumers trust national brands in every facet of their daily lives and brand power is immense, especially with younger consumers. This group doesn’t have time or inclination to listen to a “try this unknown brand because we think it works better,” sales pitch. A national brand like Roundup carries credibility, assurance and familiarity, especially with newer, fearful homeowners – all for $5.99!
Driving traffic with national brands while differentiating by service, information, customer confidence and success, covers all the bases. This strategy actually strengthens the LGC’s market position.
Not “Either <–> Or”
But the brand strategy for LGCs is NOT mutually exclusive, i.e. to carry either big brands or small brands. By all means carry “differentiating” products, have more volume of them and feature them as much as possible. But give the national brands their place in the customers’ shopping experience. Two brands, one to differentiate, one to assure and sell at a glance.
Consumers will appreciate the choice, “Try our different/local/custom product or go with the option you have seen advertised.” Some situations (e.g. pest control on edibles) require a one on one conversation, where the salesperson has the chance to suggest their recommended line, be it national or unknown. But other needs, such as potting soil, lawn food or a grill are familiar and trusted, so it seems unproductive to deny customers the few products they will recognize.
“I Can’t Get the Margin I Need”
This is a familiar push back to which my response is “Good, don’t try to on national brands, that’s not where you make your money anyway.” Remember that not everything in the store has the same mark-up potential. My margin mantra is: You get it where you can and give it back where you have to.
An LGC owner told me he tried a national brand item once but it didn’t sell; then I saw the 60% Gross Margin they were asking! Here is the rub, national brands MUST be priced competitively, because they are nationally known, promoted and used by others to drive traffic. Don’t expect national brands to sell at LGC mark-ups! In reality they don’t need to. The loss in margin dollars is a very small price to pay for the benefits these brands can bring. I’d even suggest seeing the “loss” of margin dollars on known-value lines as a promotion cost subsidized by the marketing budget.
Who knows, you might even make more money in the long run as the familiarity of national brands have taken a lot of the fear out of buying – meaning a quicker sale, increased turns and better return on inventory.
We live in a brand-obsessed world. National home and garden brands such as John Deere, Rain Bird or Osmocote, are everywhere in many retail channels. They bring familiarity and trust to the name long before the customer enters a store or opens a retailer’s web page. It’s hard to ignore that reality, so why fight it?
Put another way: Let’s assume you sell your garden center and follow your life’s dream to open a liquor store. Would you really not carry Bud Light?