Ian's Bits & Bobs: The Blog

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Anticipating Common Questions: A Real Win-Win

In the last posting, I talked about retail being theater and how we are all players on the stage. Garden retailers have a challenge to help their customers succeed the first time. I call it a “challenge” because so many garden shoppers lack knowledge and confidence, they fear failure.  I say “the first time” because with so many alternative uses of their time and money, consumers are in no mood to spend a lifetime mastering what we sometimes take for granted.

Garden retailers have an opportunity to build loyalty and trust in the customer’s mind when they come to your store, buy what you suggest, do what you say, succeed beyond their expectations and love you for it. The newer garden customers want the end result they see on TV or on social media, but without the trial and error they saw absorbing their parents’ lives.

Few homeowners want a concrete lawn and plastic flowers and are increasingly paying others to “Do It For Me,” (or Do Some of It For Me), because they don’t know what to do and don’t see the value in a 5-10 year learning curve.

That’s where garden retail teams come in, even if you are only one small step ahead of that customer approaching you as you look up and smile.

Even though you may not feel confident, you probably know more than you think and a lot more than many customers. It is a matter of confidence. Confidence to greet, engage, listen, validate and then decide if their question is something you can handle – no guessing or making it up – or something you should ask a veteran team member for help on (and give you a chance to learn for the next shopper).

What Do I Need To Know This Week?

But we can spend years in gardening and still not know everything, so how does a newer employee stand a chance? Owners and managers need to focus on the few specific questions that the customer might ask each week (a technique we call “The Year’s Top 50 questions”). The 80:20 principle applies here! Right now you can predict the top 10 questions from customers this week; “Can we plant tomatoes yet?”, “When do I feed my lawn?”, “Should I prune shrubs that have flowered?” and so on. Much of this information has a short window, few ask about crab grass control In June.

Predicting this week’s main questions, addressing the problems and projects that drive customers to your store, encourages team members to engage customers, rather than putting all the load on the shoulders of a few “experts.” It also shows employees that they are not expected to carry a whole year’s information at any moment, making them more self-confident, while passing off the deeper or oddball requests to the veterans. The customers get the impression (it IS theater after all) that ALL the team knows its stuff and trusts their words more – probably increasing the average ticket in the process.

Implementation

Weekly meetings should outline the expected questions, “retiring” some and introducing others as the season progresses. Daily huddles or one-on-one coaching will prepare even the most nervous “newby” (assuming they were a correct hire in the first place) to help a customer succeed. Each week employees are encouraged to add new sure-bets to the list such as “Don’t you have Impatiens anymore?”.

Some managers add the top 5 questions of the week to the daily calendar or scheduling log-on, some use PK or Product Knowledge training to emphasize customers’ top projects or requests. Others make it the core of their morning huddle; “We have frost forecast all week, let’s talk about our crop covers”.

Help me “Like” Shopping Your Store

However they are conveyed, sharing a few focused questions with the team can be a major win-win, giving much needed self-confidence to employees, trustworthy answers to the shopper and a higher rate of success for the homeowner. What’s not to like?

Coming up next time: Listening!

Apr 17, 2014 6 Comments
daffodil2_MF_Djb78

It’s OK Not to Know the Answers

Ah spring; the daffodils, the greening lawns, the plum blossom. And of course there is also the Bobcat that now won’t start, new truck drivers who don’t know your “before 10am” policy, the phones that didn’t re-charge overnight and the customers: oh yes, “them”!

Every year (like an ice-storm in Atlanta), spring seems to arrive as if it was a surprise to many. Garden retailers take in more on the first busy Friday than in the previous 4 weeks. By 11am on Saturday, you have already beaten the sales for the entire month of January. Yet employees are unprepared for the stress, hired and thrown in the deep-end (or allowed to continue set-up “task” jobs even as the parking lot is bulging).  The next ten weeks should pay a year’s bills; this is intense stuff and not for the fainthearted! Nor for the shy or the task-obsessed; the next few weeks are about people, specifically, customers.

After many years of walking retail garden businesses I am still amazed how easy it is to be ignored by the people on payroll that day. I don’t mean to suggest these people are lazy or disinterested; they are often busy, even overwhelmed, with a task list from their leaders, but somewhere in the training, orientation and mentoring, a crucial behavior becomes lost.

Mantra

So even with all the caveats about hiring earlier, selecting for character and training for knowledge and so on, here’s the Baldwin spring mantra for the next few weeks:

                It’s OK not to know

but it’s not OK to avoid customers because you may not know…

So, look up, catch eye contact, smile, welcome your wages coming your way. Engage with a non-invasive “Good morning! Sunshine (or warmth/cloud/rain) at last(!)”, and then pause to ‘read’ the customer’s  response. That’s all it takes, literally!

Been there, done that

I have been there. At 18 I remember lifting, carrying and digging my way through spring, keeping my head down and my eyes on the job, praying that customers would not approach me and ask me a question I was sure I would not be able to answer. “The boss knows everything, ask him,” I thought. “This is my first spring, how would I know when to plant sweet peas? I am just filling the tables with them; please, oh please don’t walk over here…”

Obviously, the more product knowledge and experience they have, the more confident the retail employee will be and the greater chance the customer has of being engaged by a smiling face, instead of looking at busy people with their heads-down. But retail is theater and is all about self-confidence. If you don’t like that moment on “thin ice,” don’t volunteer to go on-stage.

Fair Game

No one knows everything and never will. This industry and its products are evolving so quickly even the veterans have a hard time keeping up to date with PK (Product Knowledge). But employees in garden retail cannot let their own lack of knowledge govern their behavior towards paying customers, who don’t know or care if the employee has been there two days or twenty years. Anyone in uniform is fair game.

If this frightens you, retailing may not be a good fit for you.  If it encourages you, congratulations and welcome to a great industry! The day will be much more fun and the customers much happier if you look “open for business.” Spending your time avoiding customers’ eyes can add up to a long long day!

So for now, I wish you a “heads up and happy spring!”

Stay tuned here at Ian’s Bits & Bobs for the next installment: Anticipating the Customer’s Questions.

Mar 28, 2014 14 Comments
PensivePolarBear_Cropped Pensive Polar Bear

The Polarization Continues

In the week of a “Polar Vortex” it’s appropriate to report that the polarization of the USA retail Lawn and Garden business continued in 2013; a better year for some and one to forget for many others.

Ups and Downs

In garden retail it was an early, strong spring in the west, average in the south, a late to no-spring elsewhere, a decent to good summer, a stronger fall than 2012 (which didn’t mean much) and a lackluster Nov-Dec for most.

One easy to spot trend from 2013 was a national culture of looking for a discount on everything – a legacy of 5 years recession and not going away any time soon.

General bricks and mortar retailers had a big Christmas set-back according to Shoppertrack which reported a sales gain of 2.7% but a stunning drop in traffic (i.e customer count decline of 14.6% compared with Nov/Dec 2012.) That number takes some processing: one in seven shoppers from 2012 didn’t show up a year later?  Wow. Was 2013 the year that on-line shopping noticeably hurt traditional retailers?

Talking of market changes, 2013 was also a year with a big uptick in the number of garden retailers getting serious with Social Media marketing presence, though few as yet have started mobile commerce.

In the garden center channel, two large, long established local icons closed their doors, Waterloo in PA and Linders in MN, (at least one of which confirmed another 2013 reality; big banks no longer want this business … hmmm!)

In the lawn and garden industry before the recession, we would have rationalized 2013 by talking of a “good year to catch our breath”, but now we have to rationalize five years of flat L&G sales set against ever-rising costs.

So, the first question should be; did fewer people show up or did they just spend less per visit? With 115 million households generalizing is tricky, but our local garden center (LGC) reports show flat to small (1-3%) decline in customer or transaction count (again) with a good increase (3-5%) in average spend that in some cases compensated (but in some it didn’t.)

Many LGCs we know had decent overall sales increases of 2% to 8%. A couple of stand-outs reported increases in the high teens, while others’ sales finally climbed back to 2007 levels, through a combination of selective price increases, selective price-slashing to drive traffic and a better offer in personal, gift, accents, décor and food. As in previous years, the more dependent a garden retailer was on foundation and woody plants the more difficult it was to find sales growth. Decorating and food gardening continue to be the trends that drive retail lawn and garden.

Consumables

It’s been clear for a while that bird, pet, personal and food categories can ensure regular traffic from loyal customers but in 2013 these non-garden categories really helped business as conventional gardening stalled (again) and other bigger retailers (including Amazon) got more competitive in both price AND quality with core L&G items. I also know more than one male owner who discovered to his delight that jewelry is a consumable to many of his customers; “Amazing, they just keep buying more of that stuff?” (Absolutely!)

In 2013 success was by department (and mostly those that were non-garden) rather than store-wide.

Polar Winds

Polarization is being driven by operators who recognize that gardening is still stalled but bills keep mounting up. Why have so many garden centers not invested in other product and activities to help keep the lights burning? Many of them have thousands of cars passing every day, a heated, dry indoor space, bathrooms, paved parking, year round retail teams and a great local “name”, so why not?  Maybe they never needed to before 2009, but the stakes are just too high now to risk everything on a few perfect weekends. So the more innovative LGCs are finding ways to win more business out of their community and spread the risk.  At least two cold climate LGCs I know adapted their greenhouses for weekly Farmers Markets  –  why not?

Poles Apart

Can we finally stop judging a year’s results by trends in sales volume? What about margin dollar trends, “Gap” dollar trends, bottom line trends? Because that’s what the “good-getting-better” operators talk about more and more – another 2013 trend.

Which leads to my final observation from 2013: another polarization continues quietly, and this might be the most significant. I think 2013 was the year that the range of profitability (from negative cashflow to stellar performers) widened even further. The good are getting better quicker than the less good, who are still wondering what’s going on. Some independents have excellent bottom lines while others hang on waiting for things to turn around. Survival of the smartest is at work in the independent channel!

But the watering can is still half full. Millions of households have a life outside of their own work. The DOW is in record territory, planes, concerts and theme parks are full. People are spending where they see the benefits. No one wants a concrete lawn and plastic flowers: business is there, 2014 is the year to figure out how to get more of it!

(photo credit: SDR and Co. via Morguefile)
Jan 14, 2014 18 Comments
KnockOut_Petitti

Tales from The Trenches: “Price First, Then We’ll Talk About Everything Else” – Consumer 2013

Recently I was walking a garden center, looking at selection, pricing, silent selling, etc. to get a feel for their market position when a price stopped me in my tracks. I had an earlier “uh oh” feeling on seeing a basic 2 gallon ‘Knock Out’ Rose at $29.99 … and then a smallish 1 gallon Juniper ‘Blue Rug’ at $14.99 gave me the “oh dear” reflex. This was NOT a one-off, more I’d say the continuing default setting of most Local Garden Centers (LGCs).

Exposed!

After 5 years of recession, with every national retailer in the country using prices to drive traffic; with mobile smartphones able to access comparison websites on all manner of goods and services, why do so many owners still not get the message about selective mark-ups and pricing? The 1990’s position of “we need to make 50+% on every item” is being painfully exposed by this grinding recession.

Why do buyers persist in thinking that their store is a “special case” to the consumer, who will continue to pay more (often a lot more) for a known product because they are local and offer superior service?

When are owners (this has to be driven down from the top) going to connect the 12 years of declining customer count in the LGC channel with the public’s perceived image of “beautiful, knowledgeable but EXPENSIVE”?

When the economic tide was coming in from 1995 to 2007 and all boats were rising, few noticed the steady decline in customer count. Most companies more than made up for it with a rise in consumer average spend, and some owners were actually relieved that price-driven shoppers stayed away.

That was then and this is now

Price-driven shopping has become the norm. People at all levels of affluence boast about going to Costco. Social networks buzz with deals and offers. We have consumers of all earnings levels looking for bargains and, critically, judging an entire company’s image on the prices of the relatively few “Known Value” (KV) lines – like a ‘Knock Out’ rose.

The known value (KV) effect has been around for years, yet LGC owners and teams still apply department or category-wide mark ups to achieve the high Gross Margin they think they must get on everything. That makes a few things (the KV lines) way over-priced to the shopper while leaving dollars on the table with other less known or unique lines. Selective, volume-based, seasonally sensitive mark-ups have been the norm for years in grocery stores; when did you ever see all apples the same price, or a year-round price on Coke?

LGC owners’ peers in the family-owned local hardware store business have long since figured out how to compete on price-perception with the big box home centers.  Think about it: everything the hardware stores carry such as paint, electrical and plumbing – not just lawn and garden – is in a home center!

These hardware stores use competitively priced national brands to drive traffic, unlike many LGCs who shun them. Hardware stores might lower Gross Margin to 20% on a few carefully selected KV lines and get 60% on specialty, unique and local lines. Some hardware stores use 72 hour prices to further promote their competitiveness; others choose just one size of a certain product to get down and dirty with. Some use their marketing budget to “subsidize” the lost margin dollars on a deep price offer for a weekend special. And guess what? The hardware channel has (comparatively) had a very good recession – if there is such a thing!

Time for Action

So, as we hear about another large multi-generation LGC closing down, I think it is time for leaders in the LGC industry to wake up and smell the POS reports. Identify 20-40 Known Value SKUs (out of 5,000 to 45,000!) that create a price-perception to the consumer, reduce prices, budget for it and shout about it – loud! After 50 years of being seen as “pricey” this change in strategy might take several years to pay off, but now is the time to start showing your market that you are sensitive to their budget struggles.

My mantra is “get it where you can and give it back where you have to.”

I firmly believe that local garden centers have a great future as a resource for a consumer that is garden-success challenged. However, as the number of LGCs falls monthly, consumers are frightened away by a few KV prices before the company even gets a chance to show their relevance. So it’s time to copy our cousins in the hardware industry: get customers in the door with prices and retain them with service and success!

Americans are very generous to local causes and charities, but pretty unsupportive to the plight of a  local retailer. Unless you can achieve cult status (like Apple), it’s time to embrace and promote a KV strategy – or register as a non-profit!

Photo Credit:  a smart Known Value pricing strategy as seen at Petitti Garden Centers (OH)
Oct 16, 2013 21 Comments
Business Closed

Don’t Bank on These Guys for Help!

You may have heard about someone going out of business lately, shook your head and said “That’s a shame” and continued with your day. After five years of recession, consumer fatigue, stalled housing and increasing competition, we all knew a shake out was inevitable.

Most people assume that failing companies are badly run, saddled with debt and just not up to life in today’s retail fast lane. And there is some of that, no question –  owners unwilling or unable to change their strategies and operations. When the national lawn and garden market shrinks 20+% since 2007 and the sales of trees and shrubs drop by 46% in 4 years (National Gardening Survey), retail decisionmakers had better be nimble … or else!

But sadly, there is more to it:  garden centers that are making money go out of businesses too. We know of two (over 100 successful years between them) who are currently scrambling to stay in business despite positive cash flow, increasing customer count and on-time bill paying.

The reason? National brand banks are turning away from their traditional role of credit-line supporter. Maybe there was a bankers’ convention about the dangers of “exposure” to small family-held garden retailers. Maybe being awash in cash, large banks have decided they can afford to drop these relatively small accounts – they probably never were very profitable with low bonus opportunities for the top cats anyway.

Let’s Blame the Fed

We know an owner who was excitedly taken on-board with an aggressive pitch and very competitive terms by a national bank in 2007. The bank won all his business, loans, merchant fees and credit line effectively tying up all their collateral against long term construction loans. Now he is told that the yearly rubber-stamp for a winter credit line (always paid back on time in spring) has been refused and their application sent to the bank’s own “Graveyard”.

There, bean counters who know nothing about their customer, will declare the business too risky according to their formula. Even more galling is a bank tendency to blame this on the Federal government’s post 2008 lending guidelines. The retailer said to me, “Didn’t I – the taxpayer – just bail them out? This is what I get in return!”

After many years of providing local employment, creating wealth and running many millions of dollars in sales through the bank year after year it’s over; but you can’t fight it. Today’s reality is to learn and move on.

A “DUH!” Moment

This retailer was told that as their company didn’t make a profit last year, they couldn’t have a credit line. Well, DUH! It is a privately held company, of course they didn’t show a Net Profit on their Profit and Loss statement! But if the bank was interested enough (obviously not) to do an EBITDA calculation from the same documents and spend about 15 minutes on the phone with the owner (as I did), they would see that there was plenty of Net Cash Flow (a much more accurate measure) generated last year.

The kicker is that with the national bank holding the retailer’s collateral, no other bank will give them a credit line either. So, like others we know, this retailer is now schlepping his business around town to see how community-minded these local banks really are. The owners are cheered by the attitudes of managers they are now “interviewing” for the privilege of being their customer, so they feel safe, at least until that local bank gets amalgamated into another national “brand” with lush ads and silly mileage cards.

No names mentioned here (to protect our own Net Cash Flow!) but that same national brand name comes up a lot these days in this discussion. Clearly as they grew from regional retail and community bank to international investment and commercial banking giant, they forgot to read their own “Visions and Values” (I am being kind), or are simply dumping the small businesses that once were their life blood.

The Moral of the Story

The moral, if that word fits in a banking story, is to find a bank who knows that your business matters to them financially. Remember, your weekend cash flow is their source of loan money next week! Now is the time to be a bigger fish in a much smaller pond. Be prepared with true Net Cash Flow documents, not just your own P&L or tax docs. Find a bank (still one that is insured and tested by the Feds preferably!) with a few branches in town, where the decision maker might even know your store. Most cities do still have a few banks living by their original values without visions of grandeur. (Who knows, the manager might just show up for that seminar on herbs!)

If you’re not ready to hang out that “Closed” sign for good, your banker needs to be an ally for you, not an adversary. It’s time for you to practice what you preach to your own customers: SHOP LOCAL. 

photo credit:  Michael S. Richter via Morguefile
Sep 4, 2013 8 Comments