IINDUSTRY SPOTLIGHT MARCH, 2025
CREATING A SELLING MACHINE
In this report, we discuss the historic challenges of creating a profitable retail proposition within your heavy machinery showroom.
Originally written September 2023.
A History of Neglect
For generations, CAT dealers have struggled with their retail game. Often overlooked and poorly managed, the retail aspect of even the highest volume CAT location lacks proper representation for one of the biggest brands on the planet: CATERPILLAR. Plain and simple, Walmart, Costco and Amazon all have become the go-to outlets to find your branded CAT gear. Caterpillar dealers are missing out on a profit capturing sales from their own loyal audience. Though many of these obstacles are due to inefficient product tracking, disjointed inventory tools, a lack of supply network integration, and inconsistent product mix, the biggest reason these retail offerings fail is simply a lack of retail knowledge and experience.
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Caterpillar stores across all industries face a widespread issue familiar to retail 101: consistency. After visiting hundreds of CAT businesses across the globe, I've yet to encounter two dealers, or even two locations within the same dealer network, that incorporate a cohesive retail business model. This lack of uniformity leaves customers confused about what to expect from one store to another. The variations range from overstocked hardware stores selling every tool under the sun to those that don't even sell ball caps.
HISTORIC OBSTACLES
ROADBLOCKS TO A SUCCESSFUL RETAIL PROPOSITION
SHRINKAGE INSECURITIES
Dealers need to get past the fear of product loss. The reality is most product loss is due to internal ‘borrowing’ - where salesmen grab stock to give potential customers without getting the occasional hat or hoodie getting deducted from their paycheck. Promotional give-aways should be encouraged and supported
PRODUCT LOSS
GIFT SHOP STIGMA
General consumers are not visiting CAT dealerships. However, the audience who do are the most brand loyal of consumers. These mechanics, operators and owners are more than willing to purchase from a dealer baring these common obstacles:
• lack of impulse and last minute purchases selling tactics
• inflated prices
• same products available online
• no sense of urgency
REALITIES OF NON DESTINATION SHOPPING
OUT OF ORDER
LACK OF SHELF MANAGEMENT
Dealers lack the proper tools when it comes to retail merchandising. Historically vendors, of which there are many, offer up free fixtures and displays for dealers, and the dealers happily accept. However, instead of creating a compelling retail proposition, these display become just another layer of clutter in an already crowded and tired showroom environment. Common obstacles include:
• no category signage resulting in poor navigation and inconsistent replenishing
• CAT parts packaging not shelf-friendly
• lack luster visual merchandising impact
• no rhyme or reason to category adjacencies or layout
LEFT TO YOUR OWN DEVICES
LACK OF CORPORATE SUPPORT
Dealers would do better if supported by a national program supported, and funded, by CAT. Though historic attempts have been made, including recent co-op funding, for CAT merchandise to become profitable, corporate assistance in creating standards is imperative. Until this happens, any retail efforts are hindered by:
• Legacy fixture programs exist as dinasours whining most dealer showrooms creating fractured focus
• Dealers rely on distributing vendors for free and often self branded POP Displays
• Dealer retail promotions and sale campaigns should be CAT corporate created initiatives
LICENSING FREE FOR ALL
DILUTION OF BRAND EXCLUSIVITY
When consumers can find the same products in Walmart or Amazon, there is no urgency to purchase from the dealer. CAT brand licensing is of the most unregulated of any brand. And although this is an opportunity for free marketing, it greatly dilutes one of the strongest brands on the planet. Dealers must offer exclusivity in their product mix.
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CREATING A PROFIT CENTER
Showroom real estate is a valued commodity. Imagine a dealership who can actually make money off the price per square foot it takes for a sucdesful retail proposition. This is only possible when dealers start valuing their showrooms in the same manner as any retailer, sizing their facilities and showrooms in a way that makes sense for a stand alone business.
SHOW ME THE MONEY
Service Agricole
CREATING A SELLING MACHINE, ONE DEALER AT A TIME
As a valued partner to both the dealer and manufacturer, our challenge as designers is to bridge the divide, acting as a liaison between the manufacturer's desire for consistency and the dealer’s pride in the practices they have developed on their own. These factors have driven our approach to design and uniqueness in creating a sense of order in an environment that otherwise acted like the wild, wild west. We work individually with dealers representing a long list of manufacturers in elevating the retail experience. Dealers find us a valuable asset as we create for the dealers business interest as one size dues not fit all. We examine our clients' unique operations, designing retail showrooms that are money makers as opposed to money suckers.
Effective visual merchandising is a science in itself. The last thing most heavy machinery dealers are fluent in is window dressing. In fact, just keeping the shelves properly stocked is a common challenge amongst all dealers. This will persist until dealers create a dedicated role for branding, marketing and merchandising of their retail proposition across their showroom portfolio. Depending on parts consultants, warehouse workers or the stock boy to take ownership over how products are displayed is a tall order and often results in an unsightly store.
STACK IT HIGH AND LET IT FLY
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I often tell dealers the only way a product will sell is if the customer knows you are in the business of selling that product. Before working directly with CAT dealers, a product category may have existed as a single product placed on a shelf, with no profile point, promotion, or additional product information In order to attract customers to the product and convince them you are selling that product at a reasonable cost, your shelf needs to fully stocked with a wide space of face-outs, posted pricing, and the impression of a deep inventory.
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KEYS TO SUCCESS
PROMOTIONS​
• determine your loss leader attractor
• create a seasonal promotion calendar
• build an implementation system for the production of promotional signage
HIRE, TRAIN & CHANGE
• consider creating a dedicated associate position for retail management overseeing all locations
• ensure all associates understand and practice proactive retail service
• rethink existing inventory and warehouse management systems to better support the retail business
• conduct customer research through incentivized questionnaires, focus groups and intercepts
• create a customer facing lab store for testing of new products, assortments, displays, etc.
• allocate investment funds annually for continued improvements and concepts
TEST, TEST, TEST
Yancey Bros.
BCP Center, Austell GA
Since 2009, Caterpillar dealers across America have trusted Creative Toniq to transform their showrooms from ubiquitous B2B office environments to modern selling machines.