Regaining retail: yes, the bib boxes took some—OK, maybe a lot—of your cash business, but there's still plenty to grab if you target your efforts

Prosales, Feb, 2005 by Rich Binsacca

Like a mix of products that serve pro and consumer customers, value-added services are equally appreciated by both segments. While strategizing services primarily for pros, dealers also see retail customers benefit in terms of access to the showroom, depth of inventory, delivery options and equipment, and design and takeoff services.

At Spahn & Rose Lumber, there's "nothing special for consumers," says Hannan, in terms of extra services not already offered to pro customers--unless you consider a bit of extra handholding beyond the call of duty. "All of our people are able to walk anyone through a project and suggest ideas and materials to get it done," he says, a service few builders and contractors require, but that most consumers do. "They appreciate the help."

Targeting Consumers

Despite a definite focus and reliance on the pro side of the ledger, dealers that want to grow or at least retain a measure of retail sales rarely sit by and wait for it to walk in the door. Palmer Lumber's 5,000-square-foot expansion of its retail space and $70,000 annual investment in newspaper advertising and local home show participation helps reel in retail customers. "That has brought in extensive walk-in business," says Pruitt of the expansion, which also led to a discovery among cash customers. "They found out we're [price] competitive, as well."

A vast difference in price, or at least promoting the perception of it, has been the wedge The Home Depot and Lowe's have used to take retail business away from pro yards. But rather than buy into it, Kotter shops the two big boxes down the road from his store on a biweekly basis, then compares prices. "They can squash the best yard in the beginning, but over time, they need to show a profit and can't sell below cost," he says. "We're still higher on a few things, but maybe 25 percent lower on lumber and building materials." which both pros and loyal consumers quickly discover on their own.

More outwardly, Stone Lumber recently remodeled its exterior facade, updated its landscaping, and installed an electronic sign out front, while also adding more delivery trucks and equipment and upgrading its Web site with an "Ask the Experts" page and links to brand-name product manufacturers. "We're not digging a gopher hole, saying 'Woe is me,'" says Kotter. "Arson destroyed our business in 1994, and rebuilding from that was a stiffer hill than any big-box competition."

--Rich Binsacca is a contributing editor for PROSALES.

Tips for Targeting Retail

* Know your strengths and differentiating points from the big boxes and other hardline retailers in your market--and leverage them.

* Hire and retain sales associates with real and extensive product and project knowledge.

* Price-shop the competition and work with vendors to gain better pricing, if necessary.

* Refer consumers to your contractor customers and support their marketing and sales efforts, as well.

* Offer a higher grade of products across all categories.

* Offer the same services (if not pricing) to consumers as you do to pros.