Competing with Mainstream Green Retailers
From www.entrepreneurstoolkit.org
The retail sale of environmentally friendly products has experienced a major shake-out since it began in the 1980's in small specialty stores. There are four key reasons for the shake-out:
- Most green consumers prefer to buy environmental products in stores where they already shop.
- Mainstream retailers are featuring environmental products, creating special green sections, and even opening entire green-oriented stores.
- Established manufacturers are gradually offering greener products, targeted through mainstream distribution.
- Consumer-focused green entrepreneurs are supplying mainstream retailers, thus making green retailers less distinctive.
As these trends accelerate, and they will, the number of smaller enterprises in the market will continue to shrink. Larger companies will buy them up, mergers and alliances will occur, and businesses will fail.
With the exception of companies that find sound merger partners, shake-out survivors will be those with a defined clientele whose special needs cannot be met as well by the bigger companies.
Two competitive strategies are recommended for green retailers. First, discover a customer niche that depends on more than a green differentiation. Second, build a following among the deepest green consumers. Either strategy requires coherent, attractive merchandising concepts, superlative value-added services, and ongoing development of exclusive selections of the newest products. Establishing and retaining customer loyalty will be key.
For manufacturers that sell through green retailers, competitive strategies must be based on continual product innovation, exemplary retailer servicing, and a direct understanding of end consumers' evolving needs and tastes. Small and medium size green stores and chains, or other specialty outlets, may remain your distribution system of choice. However, if the cost efficiencies and financing for expanded production are available, mainstream retailers may be the best option to explore.
