Retail Sales Decline

"Tony Nix has been a preferred supplier of complex research services and strategic support to Ideaworks for more than 10 years. No project is too difficult and their research gets to the heart of the matter."
Stephen Kulmar Joint founder and CEO (formerly) Ideaworks. Now owner of Retail Oasis (Steve is one of the most highly respected retail marketing & communication experts in Aust. & NZ).

After two years of good growth in sales there was a sudden decline. Barbecues Galore, wanted to understand why.

The Situation -

After two years of good growth in Barbeques Galore's sales there was a sudden decline over the previous three months. Sales had flattened and the expected growth in outdoor furniture did not eventuate. The retailer did not fully understand why this was happening and engaged Solutions Marketing.

How Solutions Marketing helped -

Through focus group research and analysis Solutions Marketing discovered:

BBQ sales had flattened due to a sudden decline in the sale of middle and high priced BBQs. The analysis revealed that the retailer was being squeezed by discount department stores at the lower end and by a major NSW expansion of Bunnings at the middle end of the BBQ price range.
Bunning’s aggressive entry into the market was supported by effective product advertising campaigns that meant major sales were being lost in the middle market. This was critical as the retailer’s major sales were in this middle market. However, when the retailer reduced prices in all three areas (low, middle and high price ranges) to compete aggressively, unit sales did not increase to compensate for the price drop. The reason was that customers had simply traded down, getting better value in the process.
There was poor cross selling of outdoor furniture and women didn’t feel comfortable in the ‘blokey’ environment of the store. This was established by way of qualitative focus group research with customers and non customers.
Men were buying BBQs, but the sales people were not pushing outdoor furniture. Generally women made the purchase decisions on outdoor furniture and the retailer was not connecting effectively to the female decision makers.
There was a mis-match between BBQ sales and outdoor furniture sales. The majority of BBQs sold were at the lower to middle end of the market. The outdoor furniture offering was at the high end of the market.

Strategic recommendations -

Based on the detailed sales analysis and focus group findings, Solutions Marketing recommended:

sourcing unique, middle range BBQs and to promote higher quality
softening the ‘blokey’ look and feel of the store by creating a vibrant outdoor living atmosphere
merchandising the furniture and BBQs together – thereby integrating the offering
promoting a bigger range, unique products, specialist service and improving the cross sell by pricing outdoor furniture more in line with expectations and better understanding customer needs
offering an interest-free period to meet the competition

The results -

The retailer better understood their target market needs and sold the company disclosing Solutions Marketing’s strategic recommendations.