Big Box competitors continue to nag at dealers. In our 2016 Dealer Business Trends & Outlook Report, competition from Big Box or Mid Box competitors ranked fifth among the top 10 concerns for dealers, with 16.6% saying they are most concerned about it.
That’s up slightly from the 2015 survey when it ranked eighth and 15.3% said they were most concerned about it. In 2004, it ranked fourth and 25.2% said they were most concerned about it.
Dealers are paying closer attention to bigger issues in their dealerships, such as low sales margins and finding good employees. However, they’re keeping their “eye on the box” and that’s a good thing since one Big Box, Tractor Supply, reported it had a net sales increase of 10.2% and it opened 36 new stores in the first quarter.
We recently asked dealers to share their thoughts to this question: “How has your dealership recently been affected by Big Box competition and what changes have you made to stay competitive?” The responses were insightful and honest. Here are a few that stood out:
- “The Big Box stores can help us more than hurt us if we try to create a relationship with them via service. Customers see the service we can provide and we have the opportunity to sell them their next piece of equipment in 5 or 6 years,” says Dale Magie of Moe’s Outdoor Equipment & Supplies, a dealership we profiled in the last issue of eBrief.
- “Our biggest issue/complaint with the whole thing is the fact that the units involved are not the long life, quality units we are accustomed to selling. We feel that Deere has received a big ‘black eye’ for selling such a type of tractor,” says C.H. McCutcheon of Elder Ag & Turf.
- “It seems most people buy price rather than value … you have to blame the manufacturers for that,” says Stanley Diguiseppi of Easy Wheels.
- “I have watched many types of businesses come and go through the years and the one that is still growing is the internet. It's not done yet and it's taking more profit from local dealer stores and Big Boxes from both parts and wholegoods sales!” says Art White of White’s Farm Supply.
- “One area we can beat the Big Box is a package deal. When a consumer buys from us they get the product and service after the sale. That is huge if the consumer plans on using it for more than a year. Pricing is another area. We have more flexibility than a big box store,” says Dave Smith of MJB Home Center.
We plan to share more of the feedback we received from dealers in our new “Dealers Sound Off” feature in upcoming issues of eBrief. Today, we share comments from Tim Berman of Big Red’s Equipment and a member of our editorial advisory board — 14 ways his dealership competes head-on with box stores. Read his comments here.
Do you have ideas to share? Let’s keep the discussion going to keep our dealer community strong.