Softwood lumber has been considered traditionally as commodity. Subsequently brand names and trademarks were of subordinate value and competition was based on price. Recently, retailers have grown substantially and are forcing their suppliers to improve the production and delivery of products. As retailers are getting more diverse and powerful, suppliers are forced to adapt to the retailers’ service requirements. The new situation also brings opportunities for the sawmills to develop their competitive advantage. The retail industry is continuously changing, and in order for sawmills to develop and offer what retailers are asking for, it is necessary that they understand and interpret retailers’ requirements correctly. One way for sawmills to be successful is to develop accurate service elements and to use the service elements as a segmentation base in order to structure their customer base. This study shows that retailers place considerable emphasis on delivery and value-added logistical services. It generates three hypotheses concerning the following potential retail segments; turnover, category, and customer base.