Ag Retail's Value Proposition: There’s No Easy Button
With volatility and rapidly changing business environments, companies may feel tempted to chase the shiny penny. But industry consultant Brad Oelmann, president at Farrell Growth Group, encourages ag retailers to stay true to their value propositions.
“There’s a lot of buzz in the space right now; there’s a lot to think about,” he says. “Somehow, ag retail leaders need to stay anchored in how they bring ideas, technologies and perspectives to the farmer that serve their business in the best way.”
Make Room For Growth
Oelmann says many ag retail businesses have been built on reputation, which is a springboard for growth at times and an obstacle at other times.
To give an allusion, Oelmann likens this to a relationship with a financial adviser. If the adviser doesn’t bring new ideas, then the value proposition changes. Taking some risk yields reward.
Specific in ag retail, Oelmann highlights the growing biologicals space. From a retail point of view, seemingly dozens of biologicals companies are looking for retail partners.
“Retailers want to test products themselves before they take them to farmers. Their reputation is on the line,” Oelmann says. “But with some of these newer product categories, retailers should think about how to bring in new products and weigh the risk management in doing so. If they don’t approach things differently, they could miss a good opportunity for their business.”
Positioning with the farmer is the key. And he gives an example script: “We haven’t seen as much data with some of these new products as we like to be comfortable, but we are encouraged by what we see. It might be worth trying on some of your acres.”
Oelmann suggests retailers research as much as they can about the companies and the products. In doing so, establishing criteria for whom to choose as partners is important.
He also highlights the emerging trend of lower product volume being sold in the future. This is first being ushered in by selective spraying technologies as well as new product formulations further supporting spot-spray or variable-rate applications.
“Retailers need to keep an eye on this. It’s inevitable that they will be selling lower total volumes in the future. So if you will be selling less, how do you make up the gap? It’s time to think about how to put value on the services you provide,” he says.
It may be time to pivot but not throw yourself into a spiral.
“With any complex issue, you want to think there’s an easy button. There’s not,” he says. “In whatever way, shape or form, you need to be on top of all of the new technologies. That’s a big statement, a big undertaking—but it’s paramount to stay current.”
Oelmann says these are powerful topics to help retailers ponder how they go to market and what is their story to farmers.
“Strengthening your value proposition is the greatest challenge for an ag retail business,” he says. “But it’s also the strongest way to propel the sustainability of your business. Play to your strengths, and know that every ag retailer has a different value proposition.”
