Business Essentials: Is the grass greener when a garden centre branches out?

Will Peter Barratt's attract or alienate its customers, asks Kate Hilpern, by adding fashion and homeware to horticulture?

"But as time went on, we realised we couldn't survive on gardening alone because it's so seasonal and weather dependent," says the company's founder and managing partner, Peter Barratt.

Today, the two stores have diversified into so many other areas - including giftware, homewares and furniture, clothing, shoes and restaurants - that they more closely resemble a department store than a traditional garden centre.

The problem Mr Barratt faces is how to communicate this diversification without alienating his core customers. In addition, he wants to know how to attract new customers who would normally buy their leisure products in the likes of John Lewis.

"When it comes to the gardening side of our business, we have fairly strong competition throughout our area, and much of it is made up of pure garden centres. Our worry is that people might think we no longer stock the best products because we now sell so many other things," he explains.

"We need to get the message across to our core customers that we are still serious about gardening."

It doesn't help that Peter Barratt's doesn't devote as much physical space to gardening as some other centres.

"And even when the space is the same, it can seem smaller because there are so many other departments."

Then there's the development that stores such as Tesco are starting to sell some gardening items, like bedding plants. "People may assume that because it's Tesco, it's better value," says Mr Barratt.

In addition to hanging on to its traditional customers, Peter Barratt's is keen to attract people who might otherwise shop in the town centre, in stores such as John Lewis or Fenwick, for furniture, household items and gifts. "So many people tell us that our leisure product range is better than these shops, but the fact remains that the town centres are where local people tend to go," says Mr Barratt.

"We want to get the message across to them that there is an alternative that is equally good value, if not better. But it's not easy to convince people that a garden centre is the place to come for a new cane suite or an outdoor fleece, even with benefits like free car parking."

Peter Barratt's is certainly not suffering financially. "While the average Wyevale [the quoted chain of garden centres] turns over £1m or £2m, our stores turn over around £8m each," says Mr Barratt.

"But we don't want to lose out on opportunities to grow further still."

www.peterbarratts.co.uk

WHAT THE EXPERTS SAY

Simon Wainwright, head of business banking, HSBC

"Peter Barratt recognises his key challenge: how can he attract new customers without neglecting his existing clientele and losing their custom.

"He mustn't forget that it's far harder to win brand new customers than to keep existing ones satisfied. He needs to maintain the strengths that have made the business successful in the first place, whether they be customer service, product quality, good value, or a combination.

"By keeping loyal people coming to the stores, he has a chance to entice them into other departments and build perhaps reputation by word of mouth.

"Mr Barratt should consider rewarding the loyalty of his customers - for example, by using exclusive special offers or a reward scheme.

"He may not have the marketing budget of the likes of John Lewis, but he can use sales promotions to reassure customers and highlight the benefits offered by his stores, such as accessibility and easy, free car parking."

Christine Cryne, chief executive, the Chartered Institute of Marketing

"Peter Barratt's has the perennial dilemma of seeking new customers as well as holding on to existing ones, and has a specific problem in that there are too many messages to deliver.

"Mr Barratt needs to build awareness and loyalty, but will not have the same budgets as, say, John Lewis and Tesco.

"He needs to think creatively and take an integrated but targeted marketing approach, communicating with the customers. One strategy would be to develop a database, reaching people with tailor-made articles on products and offers they are interested in. This would help retain loyalty and encourage footfall.

"Mr Barratt should support this initiative with PR, advertising and the development of an annual plan that takes advantage of peak seasons to promote particular ranges."

Allyson Stewart-Allen, director, International Marketing Partners

"Peter Barratt's needs active strategies for increasing the amount of money people spend in its stores. It could look to the successes of Amazon and Tesco, which have spawned the 'personalised communications' practice.

"To grow the spending of current customers, the stores need to develop wholly aligned offers based on the shoppers' past purchases, and cement the retailer's heritage in the gardening arena by launching advisory services.

"Developing these services, and gardening courses for avid enthusiasts, would greatly differentiate Mr Barratt's offer from the competition, while even attracting new visitors.

"To seed a base of new customers, Mr Barratt should develop in-store promotions with credit card companies such as American Express, consider concessions within Tesco stores, and even run reader offers with Gardeners' World magazine.

"To communicate the depth of both its interior and exterior ranges, it could also develop a strap line, perhaps: 'Expert advice - inside and out'."