Green Real Estate: Keeping Green Products on the Shelf
By Matthew Philip • May 6th, 2008 • Category: Business, Products and Shopping
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If you haven’t already noticed, more and more of your favorite local, corporately owned stores are carrying an increasing number of “green” products made by various green manufacturers. Everyone from Home Depot and Pick ‘n Save to Walgreen’s and Bed, Bath, and Beyond has jumped on the horse that chains like Whole Foods have been riding for years.
Now this is obviously good news for everyone minus your indie friend who buys green products as part of their yearning for all things “underground.” Sorry, now everyone and their mom will be sporting Method and Seventh Generation products in their kitchens, bathrooms, and laundry rooms. But seriously, this is obviously a great sign for all the loyal environmentalists out there, the new environmentalists, not to mention the environment. Now your favorite products are available in an ever-increasing number of convenient locations.
What do I mean by “Green Real Estate”? I think it’s important for us to understand what happens when a chain like Jewel-Osco, Target, or any other major corporate chain retailer picks up a new line of products and how our spending patterns influence their decisions in the future.
Lets try to get through this quickly: many major chain retailers make product line decisions at the corporate level for all stores across the chain. Working for the retailer, a team of buyers (think, “focus group” setting) listen to presentations given by various companies all promoting their products and competing for shelf space and national exposure.
In the case of more environmentally friendly products, a team of green product presenters likely enter the room and discuss all of the recent trends and statistics pointing to the general public’s increasing interest and desire for more earth-friendly products. After a thorough and compelling sales pitch, the buyers decide whether or not to adopt the new line and ultimately return to our green producers with a proposal: “we will carry your line but you have to pay us to do so.”
This is what’s commonly known as a “slotting fee.” Something the grocery industry specifically has used for years, a slotting fee is nothing more than paying a flat, maybe monthly fee to the retailer for the shelf space to be occupied by the new product - like shelf space real estate. Ultimately, this is a way for a retailer (with significant bargaining power) to limit their risk when introducing new or untested products. Even if the product doesn’t sell, they still made some money.
So why do we care? Well, hopefully it creates a sense of urgency in us to convert to as many of these products as quickly as possible, and maybe tell some friends to do the same! You see, when the Home Depot picks up Seventh Generation products, they are going out on a limb and saying “Ok Seventh Gen, we’re believing that there will be some demand for the these “green” products but we’ll see…” If we don’t start changing over, it’s possible and probable that these brands will start disappearing from major chain store shelves just as fast as they appeared.
So when you see these products in your favorite store, rejoice! but realize that the battle is not yet over. If you want them to still be there in a year or two or ten, you’ve got to buy them! Your friends and family have to buy them as well. Their friends and their families must buy them! Tell your fellow greenks and greenits to pony up and buy some green products! *steps down from soapbox*
Remember, we’re at a crossroads where corporate mega-chains are trying out new products, waiting to see if “green” is anything more than just the next passing fad. They’re going to sell the products that bring in customers and make them money. Putting your dollars where your environmental mouth is can be as important as recycling that water bottle.
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Matthew Philip is relatively new to the "green" scene but comes to us with a strong business background. He brings a very pragmatic approach to many environmental issues and offers unique common-sense tips for "greening" one's life.
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I found your blog on MSN Search. Nice writing. I will check back to read more.
Eric Hundin
Nice writing style. Looking forward to reading more from you.
Chris Moran