In partnership with local Kiwi business owners, leading outdoor power equipment brand STIHL has created its own retail category. Undaunted by the recession, the company added 13 more stores to their STIHL SHOP™ retail group in 2009. The latest three store openings in Hawera, Masterton and Cambridge takes the group to a total of 56 stores nationwide (generating $80 million in annual revenues) – within reach of its goal of 65 stores by 2011.
Before 2002 the outdoor power equipment market was merely embryonic. This changed when STIHL decided to develop a retail chain of locally owned stores under its own brand; called STIHL SHOP™. The outcome for STIHL after years of groundwork is improved store branding and infrastructure, investment into human capital through training, a focus on customer service and top position in the now highly competitive retail category.
The steady growth of the STIHL SHOP™ retail brand follows a tough decision made by STIHL CEO Jim Bibby seven years ago. Faced with a choice between attempting a risky new distribution strategy (through big-box stores) or investing in their own loyal Dealer channel, Mr Bibby opted for the latter, creating the STIHL SHOP™ retail concept as a hub for quality, technical know-how and customer service in both urban and provincial areas.
In his mind, the case for change was clear – STIHL’s brand visibility and shop appeal urgently required modernising. It had an inconsistent and low-profile image and needed to keep pace with retail trends, match the store experience to customer expectations in order to withstand increasing pressure from mass merchants while improving service and providing better options (including exit strategies) for owners.
Kiwi STIHL SHOP™ owners’ approach to marketing and selling their products is based on extensive groundwork, including customer research. In developing the concept, Mr Bibby and his team worked with consumers in key STIHL markets (forestry, farming and landscaping) to learn what they wanted, and the result has since been seized upon by home and property owners who liked the combination of quality product, know-how and service.
Based on the idea of delivering on the needs of the market, he wagered that the STIHL SHOP™ concept would achieve store owners’ aims, and since that turning point, 56 STIHL SHOP™ stores have opened, and revenues have increased by 30 percent in a declining market.
The STIHL SHOP™ retail model is unique in the STIHL brand’s global presence. Its success has been such that visiting senior managers from STIHL’s international head office have been inspired to explore the formula in the rest of STIHL’s markets, where products are sold through conventional retail channels. In New Zealand, STIHL SHOP™ is the only national retail brand specialising in outdoor power equipment.
Phil Weedon, STIHL SHOP™ Group Manager, says, “Eighty percent of the stores are family-owned small businesses run by baby-boomers; the remainder are operated by an increasing complement of younger entrepreneurs who find the business proposition appealing.”
“All our owners are experienced businesspeople, many of whom have worked in other industries,” Mr Weedon says. “The attraction to STIHL SHOP™ has been the facility for Kiwi businesspeople to live in their hometown while benefiting from a strong international brand and systemised approach as their business foundation.”
“Comparing the margins of the new business model with the old way of doing business demonstrates why it’s such an appealing model. Two examples are stores in Christchurch and Auckland, where margins have improved by 25% and 22% respectively since the conversion to the STIHL SHOP™ programme.”
Mr Weedon says, “New Zealand has a lot of great businesspeople who live here because they want a particular lifestyle, whether urban or more rural, but often they have to compromise on where they live if they want to run a successful business. STIHL SHOP™ is a great example of what a thriving Kiwi business can look like, and it’s an example of how a global brand like STIHL can be given a true local feel, if you adjust it to suit your market.”
Would-be STIHL SHOP™ owners operate under a license and are required to undertake a rigorous training programme – another unique point of practice in the global STIHL market.
ends
Dwayne Alexander
Alexander Communications
+64 (0)9 522 5541
+64 (0)21 324463
dwayne@alexanderonlinepr.co.nz
About STIHL SHOP™
STIHL SHOP™ is a national chain of independent, locally owned specialist outdoor power equipment retailers. With 56 shops located nationwide, there is a STIHL SHOP™ near you that knows outdoor power equipment inside out. Each STIHL SHOP™ is an established specialist dealer with exceptional products, spare parts, accessories and access to highly trained STIHL Technicians. Renowned for the quality and craftsmanship of Chainsaws, each STIHL SHOP™ also offers a variety of outdoor power tools from Lawnmowers and Hedgecutters to Linetrimmers and Vacuum Cleaners.
About STIHL
STIHL is the world’s leading brand of Chainsaws and is a market leader in the outdoor power equipment industry. First introduced to New Zealand in 1984, STIHL Ltd now distributes through a national network of 105 Specialist Dealers in both rural and metropolitan markets, 56 of which are designated STIHL SHOP™ Retailers. Historically a Chainsaw based brand with a farmer and professional bias, STIHL has now diversified to cater to the occasional user by offering the same quality products and expertise in a retail environment. The STIHL product portfolio range includes Chainsaws, Brushcutters, Linetrimmers, Blowers, HedgeCutters, Cut-off machines, Earth Augers, High Pressure Cleaners, Safety Clothing and various Accessory items.
STIHL Ltd is recognised as an industry pioneer committed to quality and service. Due to the nature of the equipment we manufacture, operational safety and environmental considerations are paramount. STIHL actively encourages the cultivation of tress through sponsorship of agri-forestry and community tree-planting programmes.
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