14 November 2008

Editorial: Ho! Ho! Ho! This Green Giant is laughing all the way to the bank

Here's an editorial I wrote for a supplement to Home Channel News this week.

Home Depot is emerging as a leader in the environmental movement -- not as a crusader, but as a money-maker. And with the right strategy, vendors can make money selling green products to Home Depot customers, too.

On the operations side, Home Depot is using green initiatives to cut costs. Installing LEDs and new HVAC systems, Home Depot has cut energy consumption in its stores by 12 percent. The company has joined the Coalition for Responsible Transportation, pledging ito implement clean truck technologies. Measures such as these are putting more dollars on the bottom line.

And the company's Eco Options program, in which environmentally friendly products get singled out for promotion and labelling, is putting more on the top line. In its first year, sales of Eco Options products totalled more than $2 billion. As reported in the Atlanta Journal-Constitution, one of Home Depot's few sales bright spots has been in basic maintenance supplies, especially environmentally friendly products. With more than 3,000 Eco Options products -- and with vendors doing their best to get their own products into the program -- Home Depot is positioning itself to last out the downturn.

But how do you sell your green product into Home Depot?

Jim Weaver, operations manager for BioLet USA, told me that getting his product -- composting toilets -- into the biggest box was "such a long process." But his persistence has paid off, and his story offers some insights for others trying to sell green products to Big Orange.

Biolet first approached Home Depot in the late ’90s, but the company wasn't ready for the product. Composting toilets were then too unknown. The eco-friendly system uses no water and needs to be emptied every two months under normal daily usage.

"It's an unusual product. Most people had not heard about it," said Weaver.

But by 2002, Home Depot called back -- the company was interested. Even then, it took five years -- including a successful test in Alaska -- to really roll out the product. Eventually Depot set up a drop-ship program, added the toilets to catalogs and the Web site, and now is adding them to charts of products in the plumbing aisles in stores.

Weaver said that getting into the Eco Options program was tough too -- because the toilets did not fit into any existing categories. Not energy efficient, not low-flush but no-flush, yet among the greenest products in the catalog.

"They did not know what to do with us, so eventually they created a category for us," said Weaver.
He has a few suggestions for vendors trying to sell green into Home Depot. "Be persistant. Remember they change buyers frequently. A buyer down the road may say yes. Get a track record on your product. Show you can sell through other venues. It is real hard to come in with a brand new product."

MaxLite's new "Faux Can" is another green product that's selling in Home Depot. The product is a fixture that looks like a recessed light but which uses a 25-watt CFL bulb to mimic a 75-watt traditional fixture, according to inventor and MaxLite vp David Shiller.

Getting into Home Depot took a contact and the right pitch, according to Shiller. "Our vp for consumer sales had previously worked for Cooper Lighting. He and I had a meeting with the recessed lighting buyer at Home Depot and showed him the product and reviewed the value proposition. In short, we convinced the buyer it was new, different and worth a test."

Home Depot put the lights into the Eco Options program, but the vendors didn't push that in the sell. "Eco-Options was not discussed," said Shiller, "but Energy Star, utility rebate programs and California Title 24 (the California building energy code) were discussed as drivers and target markets."

But with so many vendors seeing the green light, how do you stand out? I do suggest that greenwashing your product will not work. Being able to recycle the box your product came in is not enough. Reports say that some paint brush makers are touting their plastic handle brushes -- because they don’t use wood. But the wood-handle brush makers are proud that their handles are not made from plastic, a petrochemical. Those "approaches" are not going to work. But bring a true green product to Home Depot, one that stands out in the market and really offers environmental value, and with persistance, you might get somewhere.

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