comment piece Constructing ranges
that make sense In his new regular column for GCU, Andy Campbell examines why price points matter
S
ense to you, the retailer, from a profit generation point of view, but also sense to the customer shopping the fixture is important. It is oſten the case that product ranges come about more by a set of independent decisions rather than a single well thought out process. As a consequence, each product in
isolation might look right in terms of the benefits it provides, the retail price and its overall profit contribution. However, when similar products are inevitably grouped together within the same display, do your customers see one cohesive range that makes it easy for them to decide on the right product for their requirements or do they see a complex and confusing offer?
The customer base is likely to be made up of a mix of reluctant or disinterested participants through to enthusiastic amateurs and professionals at the other end of the spectrum
During the first 18 years of my career I’ve spent working in the industry with Sainsbury’s Homebase as the home and garden enhancement market division, progressing to head up their Horticultural and Garden Centre Trading division. In this time I discovered the importance of discovering your customer base.
Customer Base
The customer base is likely to be made up of a mix of reluctant or disinterested participants through to enthusiastic amateurs and professionals at the other end of the spectrum. Therefore, it is vital you make it as easy as possible for everyone to find the right product for their own particular needs and budget, especially in a largely self-service environment.
Products within the same range will possess different features, which are really the characteristics that manufacturers bestow upon them.
For example, in the case of a garden spade, ergonomic design and stainless-steel blade. However, it is the benefits that consumers buy not features; avoidance of back pain and easy to clean.
Price Points Taking the garden spade example further, you may decide there is space for three quality/price levels, often referred to as good/better/best. The range you construct needs to appeal to the maximum number of potential customers offering genuine choice but with clear differentiation between them at price-points of say £14.99, £19.99 and £24.99 or £29.99. For the extra money, the consumer can understand the additional benefits they will get, make a well-informed decision, being encouraged to trade up to the next level than they might otherwise have done and as a result, the cash profit generated per single item sold is increased. Win-Win!
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www.gardencentreupdate.com
Andy Campbell is an independent business development consultant, specialising in the gardening and DIY sectors at both the retail and production ends of the supply chain.
Andy Campbell Consulting was established in 2001 to offer business development advice and support to the garden centre industry throughout the UK and Ireland. The skills and experience gained whilst employed by a highly regarded, large retail business in Homebase, were expected to be in demand by independent businesses, on a freelance self-employed basis. This proved to be the case with over 200 assignments completed successfully for over 150 different clients.
andycampbellconsulting.co.uk GCU Autumn 2020
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