THE DEALER ADVANTAGE
DEALERS vs. MASS MERCHANTS
Finding the competitive advantage
By Brian Ethridge
All photos courtesy of Toro
onsumers have more ways than ever to shop for outdoor power equipment. For independent dealers, that means competing for customers who may begin their purchase journey online or at a mass merchant before ever stepping into a dealership.
That changing retail landscape does not necessarily make the traditional dealer model less relevant. It creates opportunities for dealers to differentiate themselves through the areas where they have an advantage: product knowledge, service and an ongoing relationship with the customer.
To better understand how the two channels are evolving and where independent dealers can differentiate themselves, OPE + Landscape spoke with Jennifer Pearce, senior director of dealer sales and experience for Toro’ s residential landscape contractor division. Pearce discussed the role of independent dealers, changing customer expectations, purchasing trends and the opportunities and challenges facing dealerships.
“ There is a 114-year history at The Toro Company, and from day one, the focus has been on the end customer and serving them how and where they need to be served. Because of that ethos and culture, the independent dealer has remained, and will continue to remain, an important pillar in how we structure our overall dealer channel. They ensure we ' re in the right places to meet the needs of the customer and are prominent members of the communities they are in.
“ Dealers are our in-market experts. In today ' s environment, with consumers shopping across so many different channels, there always comes a point where a customer wants to talk to a true subject matter expert. That expert is the independent dealer.”
Different channels, different roles
The growth of mass merchants does not necessarily mean independent dealers and large retailers are serving customers in the same way. Both channels can play a role in getting equipment in front of consumers, while dealers have an opportunity to build their value around expertise and the customer experience that follows the purchase.“ Mass merchants and dealers both support critical roles for our customers."“ Mass merchants, on the whole, are critical to the overall health of Toro and our business. It drives our brand positioning and brand equity. It ' s the old adage that a rising tide lifts all boats— having placement in mass merchants is significant for the brand, which is significant for our dealers."
“ Where dealers add so much value, and offer a differentiated experience and value proposition, is by providing that expert product knowledge. They are Toro experts. Dealers are critical in supporting our professional customers and residential customers.”
That distinction becomes particularly relevant once a customer needs help with equipment after the initial sale. A customer may purchase a machine through one channel but turn to a local dealer when the equipment requires service or when the customer needs additional expertise.
“ Mass customers will eventually seek service, and when they do, they look for trusted dealers who are experts with our products – that, in turn, creates the opportunity to build a lifelong relationship with a Toro customer. Even if the customer didn ' t buy their first unit from an outdoor power equipment dealer, when that dealer creates a differentiated experience for the customer, their next purchase will likely be with that dealer.”
The broader purchasing environment also means customers may encounter a brand through one channel and develop a relationship with it through another.
“ Ultimately, we want to be when and where our customers are shopping, giving us the chance to introduce them to the Toro brand. That is why we utilize an omnichannel go to market approach.”
For dealers, that environment can mean the customer relationship begins before the customer ever enters the dealership. The opportunity is to provide enough expertise and support to become the resource that customer turns to when questions arise, equipment needs service or it is time for another purchase.
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Value is more than price
Price remains a consideration for equipment buyers, but value can mean something different than simply finding the lowest price. That distinction is particularly important for dealers because their value proposition can extend beyond the equipment itself.
“ Over the last year or so, we’ ve seen a general shift toward value across the board. Importantly, value doesn ' t mean‘ cheapest.’ It means,‘ Am I getting what I should for the money I ' m spending?’”
Financing options are also becoming more important to both professional and residential buyers.
The dealer ' s role can be particularly important when customers are evaluating what they receive for their investment rather than simply comparing the price of one machine against another.
“ Dealers are positioned to deliver that value. Toro isn ' t the cheapest product and for good reason— we offer a tremendous amount of value through build quality, warranty coverage and overall support packaged with our equipment. Many customers tell us they buy Toro because it’ s a great value, it delivers on its promises, they trust the brand and they get reliable support beyond the sale.”
For professional customers, the definition of value can become even more closely tied to productivity and equipment performance. A machine that is unavailable during a busy work period can affect more than the equipment owner ' s schedule.
“ On the professional and large landscape contractor side, we are seeing a distinct shift in buying behavior as that market grows, evolves and rapidly consolidates, driven in part by private equity entering the space.
“ Machine uptime, cut quality, warranty coverage and post-sale support are critical to these commercial operators. We understand how vital uptime is to a landscape contractor’ s bottom line, and at Toro, we do everything we can to maximize that uptime for our professional customers. Most recently we have exploring several software solutions that help address what keeps the professionals‘ up at night’.”
Meeting changing expectations
The challenge for dealers is not simply competing with another place where customers can buy equipment. Customer expectations for the dealership itself are changing from how equipment is sold to how service is delivered after the sale.
“ I think the biggest opportunity and threat to dealers are one and the same. Because consumer expectations regarding the service and capabilities they receive from a dealership are rapidly shifting and evolving, there is a significant need for our dealers to evolve alongside them.
“ That applies to customer service, sales processes and dealer capabilities, up to and including mobile service, unit pickup and delivery, and priority servicing, to name a few.”
That shift can also mean taking the sales process beyond the dealership itself, particularly when working with professional customers who may be spending their days on jobsites rather than visiting a dealership.
“ From a capability perspective, the most successful dealers we see today are hiring outside salespeople who engage with end users where they are. They’ re not waiting for landscape contractors to walk through their doors; they’ re meeting them at their branch locations, connecting with them on jobsites and performing demos in the field. That is a critical differentiator between the dealers who are really winning in the market and those who aren ' t.”
Finding the dealer advantage
The changing retail landscape means customers can encounter outdoor power equipment brands through an increasing number of channels, but that does not eliminate the need for independent dealers. If anything, it puts greater emphasis on what happens once a customer needs more than a place to purchase a machine.
For dealers, the opportunity is not necessarily to replicate the mass merchant experience, but to make the dealership valuable enough that customers see a reason to seek out its expertise, service and support. That can be important whether they are considering their first machine or returning for their next one.
That can mean adapting sales strategies, taking demonstrations into the field, expanding service options or making equipment pickup and delivery more convenient. It also can mean helping customers understand the value of equipment beyond its initial price.
In an increasingly multichannel market, the dealer ' s competitive advantage may ultimately come down to the parts of the customer relationship that cannot be reduced to a transaction: knowing the equipment, understanding the customer ' s needs and being there when that customer needs help before, during or after the sale.