Over the past decade, the Outdoor Living category has exhibited strong growth led by a combination of market drivers, such as demand for outdoor kitchens, offices, and year-round spaces, and new products that address consumer needs for durability, connectivity, and privacy.

    The pandemic accelerated that growth and brought new challenges:

    • Unexpected demand shifts by channel – Big Box DIY, Professional Installers, etc.
    • Supply chain disruptions in basic raw materials and manufactured intermediates
    • Rising variable costs – raw materials, energy, labor, etc.

     

    We sat down with Pete Fickinger, Vice President-Pro Fence Channel at Barrette Outdoor Living, to understand the strategic marketing challenges they faced and how they turned adversity into profitable growth.

    Interview with Pete Fickinger

    Market Edge: The pandemic generated uncertainty and volatility in the global economy. How did it affect your market?

    Pete Fickinger:

    If you go back to the very beginning of the pandemic, the biggest challenge was uncertainty. In the first few months, state mandates changed daily, and a few of our customers (installers and distributors) were shut down. Our initial concern was for them and their livelihoods. As a manufacturer in a seasonal industry, we were also just starting the 2020 peak season.  Our CEO, Jean desAutels did an amazing job in leading the company through that second quarter.

    The economy appeared to be cratering and our priority was to reduce costs. Initially, we cut sales, marketing, and production budgets. But after the initial shock of lockdowns in April, we started to see incoming orders increasing significantly. This is where it began to be evident that home improvement, and especially outdoor living, was going to benefit from the “stay at home” trends. By July of 2020, our lead times were extending to the point where it was concerning.

    Market Edge:  After the initial volatility, how did the market evolve during the remainder of 2020?

    PF: In the second half of 2020, the demand went through the roof for all categories and order sizes. By September, we had little or no inventory and we were beginning to disappoint our customers, as our service proposition relied on 60 days of inventory. At the same time, we experienced significant raw material cost increases and were still providing pricing that was good for up to 30-60 days. Raw material price increases weren’t the only factor threatening our margins. Transportation, labor, and covid safety costs were all increasing.

    Market Edge:  The strategic challenges were pretty stark. What decisions did you make?                                             

    PF:  The first decision was to go to a monthly product quantity commitment and implement new customer allocation procedures. Our goal was to serve our customers reliably and with predictability. We believed our customers would benefit from the greatly improved delivery performance with a focus on increased reliability of their “A” products.  Simultaneously, we rationalized our range to further improve productivity and supply assurance. To protect our margins, Sales and Marketing agreed to a new pricing strategy and began implementing price increases to meet the increased costs. If we were able to provide data, our customers were very supportive.

    Market Edge: As 2020 ended, what was the forward perspective for 2021?

    PF: We reset our business. We went from over 50,000 SKUs to less than 10,000! We asked our customers to cancel their open orders for stock shipments and implemented the new “proactive” supply system at the agreed monthly volumes approach. All of this delivered an improved customer experience for the start of the 2021 season. We focused on our top customer partners and began an “over communication strategy” and our trucks started shipping like clockwork in January.

    Market Edge:  How were execution and results in 2021?

    PF:  As our service performance improved, we invested in building our brand. Too many customers and consumers considered fencing a commodity. We proved that superior service and customer experience created valuable differentiation throughout the value chain, so we invested in building the Barrette Outdoor Living brand and established premium positioning with customers and consumers. As revenue was significantly above pre-pandemic levels with improved margins, it was the perfect time to develop value in our brand through distribution.

    Market Edge:  As we approach the peak season for ‘22, do you expect similar performance as ’21?

    PF:  The challenge for 2022 was that we would still be primarily “made to order”, but with successful allocation planning, we would be more reliable to our customers with more efficient production. In addition to our newly repositioned brand, we were able to create segment-specific offers such as our subscription model, allowing our best customers to sign up for delivery of regular shipment quantities. Also, we were able to turn on some of the products that were rationalized (to our priority segments). And, we’ve implemented pragmatic marketing tactics to improve brand awareness (e.g., branding on overwrap). Going into Q2 we even started to see our efficiencies create available capacity which will allow us to return to our full product portfolio earlier than expected. We expect similar organic growth and profitability in ’22 and are looking at acquisitions that will complement our range and where we can leverage our strategic marketing capability.

    Interested in improving your strategic marketing capability? Reach out to a Market Edge consultant below: 

    X