Is it time for your farm shop to diversify?

The UK has seen customer awareness grow significantly and positively for local farm shops throughout 2020.  Following the issues that Coronavirus has caused, farm shops stepped up to the plate to take the pressure off supermarkets,  helping the community and the UK as a whole. 

Generically, customer understanding is that farm shops focus on offering a fresh, full range of quality produce, often combined with quality food and drink not generally found in a supermarket.  This is a great point of difference for customers, but  often the opportunity to create add-on sales from other products is missed throughout the year; either because the customer is unaware they are on sale in their local farm shop, or often because the farm shop does not offer any other options.   Giftware especially is an area that farm shops could consider in greater detail; with other rural retailers such as garden centres and visitor attractions benefitting greatly from such ranges.

A farm shop’s business proposition and identity is something every owner has to consider very carefully when thinking about business development, whilst also understanding why customers choose to visit. Simply introducing new products isn’t a strategy that works, and farm shops often have to consider what their proposition is.

However, if a farm shop can maintain its business proposition while introducing new ranges to exceed customer expectations and help grow the business, then the opportunity is certainly there for many to grab.

Many farm shops typically have the footfall and customer loyalty to turn a giftware opportunity into reality. 

Giftware is a year-long retail opportunity for farm shops!

Many farm shops find giftware sells very well, particularly during the Christmas and Easter periods, but potentially they may miss these sales throughout the rest of the year.

Christmas has become the official start of the core gift shopping season and is a kindred spirits to farm shops: the UK Garden Centre industry reports that approximately 38 per cent of turnover in giftware comes between October and December, with 35 per cent of annual turnover in clothing coming in the same period.  There is also a huge opportunity for Christmas ranges; decorations, trees and lights; which take approximately seven per cent of a garden centre’s turnover.   

In some ways, Black Friday has grown into its own shopping period, lasting all the way through December, and we have seen a very visible shift in marketing philosophy throughout the UK due to this.  The how, when, where, why and who of Black Friday promotions has had a profound impact on how a customer shops and what they see as an offer.  The role of Black Friday promotions is something that migrated from the USA, despite it being focused on clearing stock after Thanksgiving, and whether as a business you believe in this promotional day or not, the customer certainly does, and looks out for it.  It is a game changer in customer attitude, dictating when they buy, and Black Friday has become the catalyst to start Christmas shopping.

With such high sales potential in the last quarter of the year, often a retailer’s success or failure for the year depends on the success or failure in this specific period: retailers reach their pinnacle during the run-up to Christmas because consumers add gift purchases to their routine shopping lists.  However, January to September creates an opportunity to potentially treble giftware turnover, with two thirds of giftware turnover left to play for. 

Farm shops continue to focus much of their attention on the fourth quarter and this is potentially caused by a misunderstanding about the giftware market. When it comes to giftware, the annual last quarter receives the lion’s share of retailers and marketer’s attention when it comes to shouting about their product.  The reality is that gifting represents a significant marketing opportunity throughout the whole year.

As a result, giftware represents an important all-year-round selling opportunity.  Farm shops can’t afford to wait for Christmas any longer, thereby putting all of their eggs in one basket and risking that period being affected by factors including online shopping, the UK weather and the unforeseen, just as we have seen with the Coronavirus impact.

Customers often divide their gift-giving budget into categories: gifts bought for Christmas being the most important, followed by Mother’s Day, Valentine’s Day, Easter and year-round occasions such as birthdays, Father’s Day, anniversaries, weddings, and baby greetings.

As such, farm shops really need to make gifting a year-round business, building turnover and repeat business opportunity.

Gifting is an exponential retail opportunity 

The gift market represents an enormous opportunity for farm shops, and what makes the gift market so powerful and different to the typical farm shop market is that it is a unique marketing opportunity to touch two target consumers at once: the gift buyer who makes the purchase and the gift recipient who receives the gift.

At a time where Covid-19 has created a ‘Be kind’ attitude this is extremely relevant.

With one gift purchase personally touching two people, gifting becomes an exponential opportunity for farm shops – it’s a form of word-of-mouth marketing but delivered in a concrete, real-world way. Farm shops often offer a personal, unique, fresh, community-based experience to their customers.  Transferring this into the giftware is not only something the business would benefit from, but will also meet customer demand.

Farm shops need to focus on delivering a reputation for an outstanding gifting experience for both the purchaser and the recipient, which meets both their personality and individualism.  A positive, emotionally satisfying gifting experience can help to build a stronger connection to a wider audience and increase future loyalty.

This means that farm shops need to not only think about merchandising good gift selections all year round, but also how they personalise, package and deliver gifts to their customers in store and online.  In turn they can confidently and proudly present those gifts to the recipient: packaging often makes the gift special and its presentation an emotional experience. Those who do this benefit from the emotional afterglow from the both gift giver and the gift recipient.

An example a key area to diversify an overall offering is kitchenware. The link between food and the kitchen is something that can’t be missed, yet many farm shops do not range these products.  Sometimes this is down to their own business philosophy and sometimes it is down to size, but often it is down to lack of confidence and the not wanting to step in to the unknown. 

On Shrove Tuesday wouldn’t it be great to visit a farm shop that not only stocks all of the ingredients but also the utensils to cook them in and even a book showing alternative pancake recipes? Some do this very well, but there is definitely an increasing expectation from the customer have such an offer available. 

This linking of products extends throughout the year, whether they are seasonal or health focused, and farm shops need to make the most of every single gift opportunity.  Why? – because in an age of diversity and change, those that stand still may well be over-taken.

When other areas of giftware are considered, the opportunities for add-on sales through cards, books, candles and decorative giftware also appeals in the farm shop market.  Some of these products are impulse purchases, but there are so many stories and themes that link a farm shop’s food range to a gift or homeware purchase that it creates a huge opportunity.

Is this right for your farm shop?

Three questions farm shops have to ask themselves in order to make the most of a giftware opportunity are:

1) Will it benefit a business both financially and reputationally without affecting its core strength of being a farm shop?  

2) Does the local economy and competition provide an opportunity for giftware?

3) What is required to make it credible and a success?

For the Farm Shop market, lessons learned from the high street are essential.  The high street has been affected greatly by supermarkets, retail parks and online retailers.  Understanding the local competition and identifying ways to be different is essential prior jumping into this market. 

What giftware a shop offers is the difference between being a generic retailer or an outlet with an individual offer, ambience and culture.  Farm shops lend themselves to a unique profile, and while some top selling giftware products should be considered, having a unique feel can make a shop a destination in its own right.  For example, generic gift cards sell without affecting other sales so it is important to stock them, but if retailers take their time choosing unique gift cards to their area, customers will visit for those alone.  The Spring Fair at the NEC has a hall full of card suppliers and I defy anyone not to find something unique that matches their brand!

Farm shops need to ensure they have the correct planning permission in place to be able to sell the right products.  How rural, countryside retailers affect the local town centre is a major factor in the local town’s planning strategy.  Malcolm Scott Consultants not only looks at the operational areas of a business,  but has a proven track record in town planning. We work with many clients who need to secure planning permission to sell a different range of products in addition to their current offering, and any business wanting to diversify needs to look at these requirements carefully.

Another issue is space.  Not only do businesses need space to merchandise in and sell from, but that space must support the correct ambience, quality and cleanliness for the range.  Farm shops choosing to sell giftware, particularly unique, quality giftware, need to showcase it in an environment that grabs the attention and meets – or ideally exceeds – the customer’s expectations.

The amount of space dedicated to product ranges is also essential in planning for displays, turnover potential and productive service.  Many businesses work to stringent sales per m² and linear metre potential to maximise turnover.  Farm shops tend to work their retail space well, but it essential to ensure that another product range is not put at risk and into a negative situation when going through the planning process.  Whether it is building a long-term plan, gaining planning and building a new extension to a shop, or simply remerchandising am existing shop, this exercise is key to the success of the vision.

Finally, customer time is a huge consideration. An essential factor when growing offer is car parking.  Farm shops traditionally do not have excessive ‘dwell time’ for the customer, and as such car parking hasn’t been a focal point, but introducing a giftware range creates more shopping time for the customer, meaning a higher demand for car park spaces. So, when planning growth in business, working to future-potential visitor numbers and planning for extended dwell time helps understand the car parking requirements.

So, what have you got to lose?

The bottom line is that many farm shops have a great opportunity to build on their current offer, grow their trade and service the local community in a safe and positive way.  They can do this while maintaining their own personality and focus on quality produce, and help position the shop as a destination in its own right.

For guidance, contact Andrew Burton at MSC at andrewb@malcolmscottcons.co.uk