Bricks & Clicks - Smith Hawkin

Company Background

"Smith & Hawken is the premier authority in outdoor living, dedicated to providing products distinguished by authenticity, style and above all, fine craftsmanship" (Smith & Hawken, 2007). The channels used by Smith & Hawken include catalog, retail, and the internet. Dave Smith and Paul Hawken started in 1979 as a mail order company, providing a means for the consumer to obtain high-quality garden tools. In 1982, Smith & Hawken's first retail location opened in Mill Valley, California. Today their products are sold at 61 retail stores located in 23 states and through its catalog, Internet site and select high-end independent garden centers (Lee, 2006).

The Scotts Miracle-Gro Company acquired Smith & Hawken back in late 2004. With the infusion of new capital, resources, and business strategies have resulted in some significant changes for Smith and Hawken's division. Three new redesigned stores opened in 2006, and a fourth scheduled to open in spring 2007. These new "Renaissance"-style stores showcase an expanded retail space featuring more lifestyle product lines; displayed in natural settings, unlike the sterile metal shelves and concrete floors of the big box retail chains.

Another undertaking introduced in 2006 was a partnership between Target and Smith & Hawken. This joint venture allows Target to sell an exclusive Smith & Hawken's product line in their 1400 plus stores. In addition, to the retail redesign, the catalog and web site were redone. The changes were made to enhance the consumer's experience by providing product tips and better image options to look at the products.

Smith & Hawken's top three competitors are other up-scale multi-channel marketers: Brookstone, Williams Sonoma, and big box retailer Home Depot (Hoover, 2007). Smith & Hawken's key differentiator is the gold standard of its products in the outdoor living marketplace. By providing access to high quality products and unique shopping experiences that differ from its competitors, Smith & Hawken gain a competitive edge in the marketplace.

Four Business Dimensions of Brick and Click Integration

Gulati and Garino (2000) "recommend examining the four business dimensions--brand, management, operations and equity--and determining the degree of integration that makes sense with each" (p. 113). The analysis of the four dimensions will reveal whether Smith & Hawken has implemented the best integration of the clicks-and-mortar strategies.

When you ask an expert gardener, "Where could you buy a Burgon & Ball Trowel? The answer would be at Smith & Hawken's. Smith & Hawken's brand is defined as well-known, with almost 30 years of experience. They are a highly respected marketer in the garden/outdoor living marketplace. Customers shop on Smith & Hawken's web site because they have an immediate connection to the brand, know the site is reputable, and trust the company. By leveraging brand to its advantage, Smith and Hawken has been able to cross sell between its channels. Consumers can view the products in the catalog and then buy from the website or the closest retail store. By giving the consumer options where and how to purchase, Smith & Hawken has integrated the different channels into a brand focused strategy not a channel competition.

The management at Smith & Hawken is experienced in multi-channel marketing strategies. The company started in catalog business and quickly moved into the retail arena. So their team has the knowledge, expertise and experience unique to their marketplace. Smith & Hawken business strategies are aligned between the channels and yet highlight what is same and different between each market. Smith & Hawken's management has incorporated new objectives into their strategic vision as a result of becoming a division of Scotts Miracle-Gro Company, a leading edge supplier and marketer lawn and garden products.

Full integration of operations makes sense when there are distribution and information systems in place to handle ordering from online orders. If operational systems are not all ready in place, a partnership with current online vendors might have been a less costly solution. Since Smith and Hawken's catalog channel already used the operational systems necessary to fulfill orders from the website, having a partner did not make sense. The cost saving of not having to hire or partner with another vendor was substantial. Other benefits of integration of operational systems include creating a database of customer purchase history, tracking customers purchase behaviors, getting to know your customers and finally generating cross sell opportunities.

As of the latest financial numbers released; online sales account for 20%, catalog revenue represent another 15%, and retail dollars make up the final 65% of the total Smith & Hawken $145 million sales (Tierney, 2006). Full integration of the equity produced, has allowed for Smith & Hawken to realize the whole benefit of the sales from the online market.

Recommendation

Currently, Smith & Hawken has achieved full integration of their retail, catalog and online strategies. The positive attributes from the four business dimensions--brand, management, operations, and equity--have directed Smith & Hawken down the path to where they are today. Consumers' trust in the Smith & Hawken's brand helped launch the success of the web site. The management knew how to utilize successfully multi-channel marketing before adding the web site as another way to reach the consumer. The necessary marketing, distribution and information systems did not need to be designed from scratch. These operational systems were already in place and were expanded upon to support the