Add Some Green to Your Inventory
Selling green products is a process that began to gain momentum in the last four years for Bill Snider, owner of an Ace Hardware store. Offering green items is part of a plan Snider has to gain an edge on larger businesses like OSH, Home Depot and Wal-Mart. "Green is the growth path for my business because I can do a better job helping my customers learn about and buy green than the big-box stores that are staffed with mostly clerks," Snider says.
Ace Hardware is a business cooperative that allows owners like Snider to customize their businesses to meet the needs of customers. Such freedom has allowed Snider to re-engineer his hardware store into a pioneering green business within the emerging trend known as the green economic revolution.
He decided to house green products after gauging customers' needs and asking for feedback on what products they'd like to see in his store.
"A majority of customers that come into a hardware store are seeking knowledge on a particular item like a type of screw or lighting fixture or pumping joint," Snider says. "I get to listen to what customers want and part of what they want is to learn about new products. And the new products customers are increasingly buying are things that work with the environment."
One such example is a biodegradable garbage bag that sells for about $5 compared to a non-biodegradable bag that sells for about $3. Four years ago Snider bought a large inventory of the biodegradable bags, convinced that customers would "get it." They didn't. He had to put the bags on sale for $1 each just to get rid of them. But over the last year, the biodegradable bags have begun to sell, even at the original price. "Timing is everything," Snider says, "and there is more and more interest in how to be green from my customers--even if it costs a little more."
Snider sees the path for growing a green business as an educational process. Often customers come to him seeking a green product he doesn't have, like Dr. Earth organic gardening products. He'd never heard of it before, but customers started to request it. He took the cue and decided to stock the product. The products are found in a center aisle display and Snider has found they generate increased sales and new customer inflow to the store.
At other times, it's Snider who's educating his customers. "Compact florescent light bulbs save money and energy compared to the regular light bulbs, but they cost more. So a year ago I put a display right by the cash register and had the cashier offer every customer an opportunity to buy a bulb at no risk; money back guarantee. Now I have them displayed back in the lighting section because customers are educated on the environmental and cost benefits of CFLs and are coming into my store specifically to buy them."
CFLs are also an example of how the learning process flows from Snider's store "upstream" to suppliers and other impacted institutions. "The untold story on CFLs is the mercury vapor in the bulb," says Susan Marconi, marketing director at Snider's store. "Disposal of these bulbs requires special handling and shipping so they don't break. And they should be disposed of at a hazardous waste facility. We're telling bulb suppliers and the local government that there needs to be a process for disposing CFLs that's cost-effective and convenient for customers."
Another part of the educational process is labeling. "There are no rules established by government that really helps the customer figure out which product is truly green compared to those merely labeled green," Marconi says. "We spend a lot of time reading labels and keeping our staff educated on what they say and don't say."
In addition, Snider and Marconi try all of the products before they decide whether to add them to their inventory. "Some work and some don't," Marconi says. "Our customers want performance first and they want to achieve this performance in a green manner." One particular product they tested--an organic cleaning product made from lemons and oranges with a high concentration of citric acid. They found the product worked on wood and linoleum but scarred granite and tile counter tops. Instead, they decided to carry a lesser-known plant-based cleaning product called Natrics with no petrochemicals that's very effective, biodegradable and safe to use on all surfaces.
What are the lessons entrepreneurs can learn from Snider's experiences? Here are a few that will apply to your business:
- Educational marketing. A sea change in customer procurement is underway. Price and performance are still core buying parameters, but customers want green educational services as well. Some need help figuring out what is green. Others already know they want to buy a particular green solution and are looking for a "green store." An educational marketing strategy that fulfills the informational needs of the customer is a growth path toward increased sales.
- Competitive advantage. An educational marketing strategy that engages and educates customers creates strong customer loyalties to a supplier's brand. Establishing a portfolio of such brands that big box retailers don't stock or discount creates a lasting competitive advantage.
- Learning is the ultimate competitive advantage . Going green is a grassroots phenomenon. Customers working with innovators like Snider and Marconi are shaping the green economic revolution. Going green is a process of listening and learning that engages customers, work associates and suppliers. The playing field is wide open with no dominant competitors. It's a huge opportunity for risk-taking entrepreneurs to figure out products, services and new business processes at the grassroots level. Today's grassroots green business holds the potential to become tomorrow's national IPO.