Declaration of Independents

“Buy from the merchants who are your next-door neighbors. They are the folks who go to church with you, buy from other local firms and keep the money flowing within the community. Your local independent retailer is a longtime resident of the area who actively participates in and generously supports the community.”


That passage was written by a retail store owner, who worried about large competitors encroaching on his turf. The year wasn’t 2011, 2001 or even 1991. 


It was written in the 1930s by a James Lowry. He operated a retail plumbing and heating firm that felt threatened by a growing number of chain-store competitors. Back then, he was fearful of the rapidly expanding Sears, Roebuck and Co., and Montgomery Ward, which offered essentially the same lines of plumbing supplies that were available in his store.


More than 70 years later, the players have changed, but much of the story line has not. Independents are leery — and rightfully so — of big-box competition, and they’re looking for every edge.


Some of them are finding it in independent-minded vendors. In the corner of the independents are allies including Benjamin Moore, Stihl and John Deere — brands that have the power to decide how they are sold. Then there are smaller players such as Fertilome that might lack the mass following, but share the independent commitment.


But with the three leading big-box home centers accounting for about $125 billion in sales, is it a good idea to avoid them? 


For Benjamin Moore, which has sold to independents since 1883, the answer appears to be “yes.” A spokesman said the company has no reason to switch allegiances. “We’ve seen hard times before,” he said. “We’ve had a very successful track record selling to our independent network.”


Ditto for Fertilome, which began 43 years ago selling only to independent garden centers. “We were built on a commitment to independent dealers and have never thought of deviating from that course,” said Geneva Aragon, marketing operations manager for Fertilome. 


The company’s 1968 beginning pre-dated Home Depot and Lowe’s. Still, as Home Depot and Lowe’s have grown and prospered, Fertilome hasn’t budged from its position. “No. No, absolutely not,” Aragon said. “We have a loyal customer base of independent retailers and distributors, and they are adamant about making sure that their customers have access to their best product. At the same time, we are very customer-service driven. We are focused on the independents. It is a partnership that has served their needs and our needs very well, and so there is no need to change it.”


Steve Spiwak, Kantar Retail’s lead home improvement analyst, said not every supplier has the “luxury” to pick and choose channels of distribution. “Every sale is absolutely crucial to rekindling and sustaining growth,” he said. “Brands may feel the ‘big-box channel,’ such as Home Depot and Lowe’s, would dilute the brand’s equity and wish to avoid this, but such an attitude is a luxury in the wake of the housing bust and ‘Great Recession’ — with no end in sight to the housing pain.”


Changing channels 
and partnerships


The retail landscape has blurred to such a degree, experts contend, that consumers will shop for groceries in Target and paint in Pottery Barn. The latter is one reason Benjamin Moore is pushing its relationship with Pottery Barn, Spiwak said. “Finding shelf space at Home Depot or Lowe’s in paint would be nearly impossible because of the strong lines of exclusives at each retailer,” Spiwak said. “So they need to find other channels out of necessity.”


Benjamin Moore is established with Ace, which is engaged in a five-year plan to expand its paint business to 8% market share, up from its current 4% level, according to the co-op.


Stihl at the top


Stihl has garnered almost as much attention for its top-selling power tools as it has for its bodacious advertisements championing the cause of independents. Stihl’s devotion to its independent dealers is the core of its marketing strategy. Hans Peter Stihl, chairman of the supervisory board of Andreas Stihl AG & Co. in Waiblingen, Germany, told The Virginian-Pilot recently why Stihl sticks to its declaration of independents. “These big boxes are not able to give service,” he said. “No service, no sale.” 


Stihl’s advertising campaigns have both reinforced its commitment to the independents and tweaked the big boxes. “Why is the world’s number one selling brand of chain saws not sold at Lowe’s or The Home Depot?” one ad read. “What makes this handheld blower too powerful to be sold at Lowe’s or The Home Depot? You see, we won’t sell you a leaf blower in a box, not even a big one.”


Some market experts say Stihl’s approach works for manufacturers that can prove their products are worth a premium. Stihl insists its machines are worth the extra cost, pointing to features such as the quality of the chains, which are made in Switzerland and shipped worldwide. 


Having it both ways


Some premium brands find ways to sell both mass merchants and traditional channels. John Deere & Co. sells to both independent dealers (its biggest channel) and Home Depot/Lowe’s, and represents probably the best example of a stellar home-related brand that has forged an innovative approach to reach customers in new channels while engaging its traditional channel in the process.


“John Deere may be the exception,” Spiwak said. “For the vast majority of suppliers — brand names and no names alike — the question is where do you go with your products? A channel like Home Depot/Lowe’s where untold numbers will shop? Or at independent dealers, where the traffic is much lighter, but the service could be much greater.”


Spiwak said Deere showed its dealer networks that it they could benefit from sales of Deere products through big boxes by being the go-to guys for setup and post-purchase service. “There’s not much overlap between Home Depot and Lowe’s and [Deere’s] dealer customer bases, so it’s a net win-win,” Spiwak said.


Briggs & Stratton Power Products Group also sells its products through multiple distribution channels, including home centers, warehouse clubs, independent dealers and mass merchants. 


Benjamin Moore thinks so highly of its independent retail exclusivity that it invited outsiders to develop their own video that cleverly depicts its “Not in a Big Box” philosophy. Benjamin Moore offered prizes ranging from $500 to $5,000 for the top videos.


In its video message, the company wrote: “In an era where goliath retailers seem to have all but obliterated local shops, Benjamin Moore has stood fast in support of our independent retailers. We have done so since our company began back in 1883. ... Our reasoning is simple: We produce outstanding quality products and want to ensure that our customers receive unsurpassed service and trusted counsel as part of their product purchasing experience.”


Why big boxes matter


Despite the expertise and customer care that many independent retailers are known for, studies show consumers shop at Home Depot/Lowe’s for their convenient locations and selection. “Big boxes will remain the big players in urban/suburban markets in core home improvement categories such as paint, outdoor equipment and tools,” Spiwak said. “As categories get more competitive, it will be imperative for older, venerable brands to innovate and refresh the offer, or the big boxes won’t be interested anyway.”


A May circular from Home Depot reflected a perceived advantage of the big boxes. “If anyone tries to go lower, we’ll beat their price by 10%.” e