When Barbeques Galore tried to expand into camping gear, its staff and customers lost brand focus. Now, it is working hard to grow its core business - in the backyard.
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Entrepreneur: Gary Heading, General Manager retail/licensees
Company: Barbeques Galore (Australia)
Business type: Specialty retailer
Founded: 1976
Employees: Over 800 in Australia
Turnover: (2002 - 2003) About $140M
Head office: Auburn, New South Wales
Contact details: +61 2 9704 4177
The Barbeques Galore Story
Barbeques Galore is an icon brand in Australia. It began in 1976 as a backyard operation at Silverwater in New South Wales. The company now has 138 stores in Australia and the United States. Of the 86 Australian stores, 36 are company-owned and 50 - mainly in regional centres - are operated under licence. Although Barbeques Galore has successfully developed into a large retail business, it is now going through a period of profound cultural change.
Gary Heading, general manager retail/licensees, says: “Traditionally, we have manufactured our own barbecues here in Australia. But we now find ourselves moving offshore. Most of our barbecue range now comes from China. Everybody can do it cheaper in Asia, including our competitors. So we are no longer a manufacturing-based company selling barbecues through a retail outlet. Barbeques Galore is now a true retailer. That is the paradigm shift for us.
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Key learning points:
- Culture change - Changing an organisation’s culture is hard. All staff must understand why it is necessary, what will be done - and be enthused about the need for the change. This requires meeting with staff, explaining the strategy, and listening to their concerns.
- Market knowledge - Understand which market the business is in. Do not try to sell new products that will blur focus among consumers or staff.
- Customer focus - In retail, the customer is king. All divisions must understand what their customers want - and how to provide it to them.
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“Our retail division has always had a strong customer focus. But other parts of the business still retain some of the baggage that came from being a manufacturing-centric company. The battle has been to convince the entire organisation - accountants, logistics people, IT people - that everything they do must focus on serving the customers who come into our stores. Products must be there on time and in the right quantities, for example.
“We must produce what the customer wants rather than saying to them ‘Here is a barbecue, you need to buy this’. Customers are now saying ‘I want this type of barbecue’. We need to be able to supply that - or our opposition will because of the low barriers for entry as a result of low-cost product from China. We need to be very nimble, very dynamic, very innovative to stay one step ahead of our competitors.”
In keeping with that philosophy, the company has restructured its retail division with a strong emphasis on procurement. Barbeques Galore has a procurement team to develop the product range from a retail perspective rather than a manufacturing one.
The organisation also has redesigned its stores and widened its product range in an effort to shed its image as simply a retailer - mainly to men - of barbecues and wood heaters. Its new range includes barbecues, outdoor furniture and many backyard accessories. It wants to provide a sophisticated shopping experience that will attract more women. The new range includes acrylic tableware, outdoor lanterns, candles and citronella flares in fashionable colors.
Heading says: “Differentiation is the key. We want to separate ourselves from the market clutter. We want Barbeques Galore to mean a lot more than just a heap of barbies at discount prices. In the past, we were caught up in that down-and-dirty discount mentality. We want to be competitive but we don’t want that as an over-riding strategy.”
The company has learnt a painful lesson about losing market focus. In 1985, Barbeques Galore decided to also compete as a retailer of camping equipment. However, the extra stock only diluted the energy and strength of its brand.
Heading says: “We found out that if a consumer was going to buy a tent, Barbeques Galore would not be the first retailer on that customer’s list. We had to clear stock and we are still exiting the last of the camping product.”
For Heading, the fundamental lesson for any company is the importance of understanding its core market. “In driving our brand strategy, we emphasise the seven ‘P’s. You must have your product right, place of trading right, you must have your presentation in store right, you must have your promotions right, your pricing must be correct, your processes must support it and the most important one of all is people.”