Ian's Bits & Bobs: The Blog

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Fall is for … Jingle Bells?

It was sunny, 85 degrees and Christmas was in the September air!

Those who know me will be the first to note that I am not exactly “Mr. Gift” (or Santa’s best helper,) so please know that this is NOT a strategic advisory to get into a big Christmas gift and décor category if you don’t already do that.  *(I also grew up in a culture that called the coming season “Christmas” and had a “holiday” in summer so forgive the odd dash of political incorrectness here.)

In the last few years several clients and local garden center (LGC) leaders have started selling Christmas merchandise in September, with “open house” kick-offs being brought forward into October.

This brings Christmas up against what the traditionalists would say was a classic gardening season as in the “fall is for planting” slogan of yester-year. Why, I asked, were they doing this? Didn’t they jeopardize a busy late Sept/October garden selling season? Did they lose significant fall and Halloween sales in the rush to get the glitter out? And what about alienating those loyal customers who shopped there precisely because they were NOT a corporate chain starting Christmas a few days after Labor Day? What about the “bah humbug” crowd who wanted nothing to do with that kind of creeping commercialism?

Well it turns out that some LGC owners, way smarter than me, had rationalized these very questions and decided to go ahead putting out their ‘holiday’ offer earlier than they used to, earlier than many of their own staff would have wanted. The results (this year anyway) have varied from a nice margin uptick to spectacular.  Hmmm!

The Reasoning

“Our fall planting used to be more than just replacing summer color with Mums and Kale. People bought lots of big ticket landscape products like trees and shrubs and we all know what happened to those lately. Fall is now about cheap decorating at best.”

“Halloween has lost its appeal to many of our customers, meanwhile it’s become a loss-leader  for every grocery store and gas station, so we had less and less customers looking  for it.” (Another nail in the fall coffin so to speak!)

“We already HAD the inventory, paid for and in storage, in some cases since July.  It was just a matter of rescheduling the set up and sales labor.”

“I am looking at the cost of doing business, making payroll, paying bills that are rising and a traffic count that was falling. But every day thousands of local consumers drive by, or Facebook each other; why not give them something to talk about?”

“The later we leave our open house the more we compete with our customers’ own busy lives. By Thanksgiving they all have their holiday décor picked out and we want them to buy it from us, so the earlier the better here”.  

“In this part of the country our fall is put away by November so some of our holiday customers never did see our beautiful outdoor plant material; now we get to show what we have”

“We have five chain retailers down the street discounting Christmas from the get-go; why not beat them to the punch and grab a few weeks of great margins?”

“As a third generation nurseryman I wasn’t thrilled, but this is a business and for now I love having the holiday money in the bank. If fall comes back for gardening, we can always change back again.” 

The Results (as of Nov 14)

One warm-climate local garden center I know had an early October open house (with no competition) and has been selling full-margin Christmas product for almost 6 weeks. Meanwhile, their gardening business continues as is and the place offers a dual-purpose visit for the consumer.

It could just be the year that consumers finally started spending again, but we know of several LGCs that have beaten all-time records for open house or first Christmas weekend sales volumes. Three more recorded new customer count records …  and no bah-humbugging!

Gross margins are also at levels not seen since before the recession. In a perverse way, the gloom in Washington DC seems to inspire some shoppers to treat themselves; for instance, buying a fully decorated tree as shown in the store.

A spike in Facebook and Pinterest mentions together with increased website traffic.

Early excitement from most staff (you know your bah-humbugger) happy to know they are working for a company that changes with the times.

The Final Word

As I said at the outset, this is NOT a recommendation to get into Christmas if you are not already in it (that is a subject for another day, another blog.) But if you ARE already invested and fall gardening has been flat for years, why not? This is a business decision about use of assets and paying bills. Just be prepared that you’ll be ready to kill the Christmas carol “musak” by early December…!

 

PHOTO CREDIT:  Roger’s Gardens, all lit up and selling … in October!

Nov 15, 2013 6 Comments
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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
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National Gardening Survey: A Roadmap to Opportunity

For three years now I have been privileged  to be asked to analyze and comment on the huge amount of data contained in the annual “National Gardening Survey” (available for sale from the National Gardening Association).  Now that the report is published I can share a few “ah-ha” data points to get you thinking (though this barely scratches the surface of the 260 page document!)

In the good news category:

• Household participation (now 85 million households) in gardening is up 2% over 2011;

• Participation in all but one category increased (“Pet & Bird” stayed flat);

• Food Gardening increased for the 6th straight year and is now a lot bigger than “Flower Gardening” in spending power;

• The biggest rise in spending by demographic group was in 18-34 year old males (this might even qualify as GREAT news!)

But here’s the (still) bad news:

Average annual spending per Household is down $4 to a miserly $347 (less than they spend on pizza in a year.)

Overall, the three year trend towards decorating, small-project fixing and food gardening continues with little sign yet of capital-intensive full scale DIY landscaping. So while homeowners are increasingly more willing to get out and garden than they were 3-4 years ago, they are still not spending like we all want them to.  Gardening has an image of hard work, time consuming and risky-at-best to many consumers, although they seem to want to give it a cautious “go”.

“Woe is us! Consumers just don’t get it, they’d rather blow their money on clothing and reality TV, what’s wrong with them?”

Is it the Weather? Not on a national scale: there’s always weather somewhere.

The Economy? Yes, a little (…but remember that pizza number!)

Is it Time and Lifestyle? Yes – a lot:  and there’s the rub.

In the battle for consumer’s time/attention/money, the lawn & garden industry is competing against some of the best marketers on the planet — from movies on demand to electronics — most of whom have invested in making a compelling “Value Proposition” to the consumer to buy their stuff even in the midst of tighter financial times. In the meantime, too many L&G decision makers are still telling themselves, “oh, we’ll be fine when housing comes back and the economy picks up”.

(Will we? Or will we have already lost our customers’ attention to other pastimes?)

In reality L&G has so many emotional benefits to offer our customers: from increasing a home’s value to healthier food or outdoor time as a family. We know it — but we have simply not made a compelling case. Decision makers in all stages of the L&G chain simply MUST put more effort into getting this message across to consumers.

If you’re in the business of selling lawn & garden products to the American consumer, the insights in the National Garden Survey can be invaluable in helping you focus on areas of growth and opportunity (like those 18-34 year old males!) If you don’t have time right this moment to read the 250++ page report, here’s one of the critical core messages to get you started this season:

It’s time to build a compelling value proposition to communicate to your customers:

  • Figure out the cost per week of DIY lawn care vs. services who will ‘do it for you’
  • Tell them the cost-benefit of what a spiffy front yard does to home values … in order to sell them a “5 seasons of containers” program, tree installation, or DIY landscape design service.
  • Price-compare the pricey packets of fresh herbs or lettuces in the grocery store vs. a plant that can be harvested all season.
  • Hook their emotions about the taste of their first home-grown tomato, or the joy of seeing a child entranced by a humming bird.
  • Clearly demonstrate that your products can solve their problems:  a soft and safe lawn for kids to play on or a plant that won’t get eaten by deer (as shown in the clever signage in the header captured at Sickles Market in NJ).

It’s important to remember that customers don’t already know everything that we do about the ways that gardening can improve their life, but they do seem increasingly ready to listen:   It’s time for us to clearly communicate that value … and then GO MAKE THE SALE!

 

May 28, 2013 8 Comments
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Connecting the Consumers’ Gardening Dots

I have been analyzing and commenting on the National Gardening Survey for the last two years and in 2012 I also dug deep into their tri-annual “What Gardeners Think” (WGT) study too. Whereas the annual National Gardening Survey asks consumers WHAT they do and spend in the garden, WGT seeks out the “WHY”. In this excellent survey we can see consumers’ attitudes, likes and dislikes about the activity and the industry that supplies it.

Since this survey came out, several questions and their answers have stuck in my mind as I travel around to visit garden retailers, so I thought I would write a short blog on several of these topics over the next few weeks. It might be worth you walking your stores with these consumer likes and dislikes at your “Top of Mind.”

A question that continues to resonate with me simply asks consumers for their biggest garden challenges, here are the top few answers in priority:

  • 1. Weeds
  • 2. Soil conditions
  • 3. Insects
  • 4 Too little water or rainfall
  • 5. Animal pests

The National Gardening Association told me that the top three challenges above have not changed since the survey began. So if the consumer still feels the same challenges, yet garden spending continues to decline, does that mean the L&G industry has not “made the sale” to America? I think it does.

Despite numerous pretty and strong emotional “end-result” ads on TV (e.g for Scotts lawn food), we see pallets of weed killer and lawn food, mountains of soil amendments and gallons of insecticide sold purely on price at retail. Pile it high and watch it fly –  to those who know what to do, how to do it and what price to expect.

To the other millions of poor souls who are intimidated by or ignorant of our products – good luck! (It’s like me plucking up the courage to go into an electronics store for a new cell phone).

There is rarely a word in garden retail about the emotional outcome, such as the status or pride of a perfect lawn, the joy of pretty flowers in great soil or the taste of a worm-free tomato.  After a hundred years of selling lawn food why has no one come up with a retail sales line like “The Perfect Lawn for only “x” cents a square foot per month”?

Why are insect and other controls stacked together on the retail “Wall of Death” instead of being bundled into projects for the weekend or solutions that talk directly to the consumers’ fears or challenges?  Got kids and pets – try all these remedies over here. Stressed for time but want fresh veggies? – invest in this bundle and all you have to do is pick, wash and eat!

The American consumer has shown in this recession that they will continue to spend selectively on items or experiences that have connected with their emotions (purses, jewelry, cruises) by saving money on items or tasks that show little obvious emotional value. So they search for savings on A to self-indulge on B.

On which side of the perceived-value fence do you want to be?

Feb 20, 2013 7 Comments
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Branded!

After working on and with garden retailers through at least 7 Presidents and several Popes I feel as qualified as the next man to weigh in on the current branding issue. Do I think garden retailers should be their own brand? Yes. Do I agree that they should not carry brands consumers can find elsewhere. No. Do you think independent garden retailers should carry their own brands? Yes and No. Huh?

First you have to define what goes into the brand memory of a consumer or their reaction to brand exposure. Branding is way more than a slogan or logo, service experience or after-sale reputation. It is all those things and more. Branding is the effort to create and hold a positive, value-based image in the consumer’s mind. So it encompasses any and all contacts with the product, the company, even the message itself. A measure of brand value is the retained impression. So EVERYTHING impacts the brand value, from the employee’s body piercings to the amount of tomatoes produced by that “heaviest cropper”.

Brand Value for Independent Garden Retailers

The brand value for most independent garden retailers is the shopping experience and the after-sale success with the product or service. Sure the retailer can go to private label in hard goods and/or annuals but if that complicates the shopping experience or reduces the end result, the brand gets a negative score in the consumer’s mind – period.

Independents are proud of their reputation, experience and information for good reason. But the end result is what matters to the consumer and they trust the retailer to be on their side in that quest. If that means carrying brands the consumer is familiar with and have confidence in, then so be it. To not carry a national brand seen on TV that morning confuses even the best customer who might think “If it’s the only name in gardening I know, why don’t they carry it?”

National Brands Can Make the Shopping Experience Better for Some

I had a spirited discussion with a manager a couple of years ago when I asked why he didn’t carry ‘Round Up’. He explained that they had an independent-only brand with the same ingredients and gave a higher Gross Margin percent, adding that they serve all their customers and tell them it is the same as Round Up only better.

To me, this makes as much sense as a grocery store not carrying Coke or Pepsi. How much more business could they do if they switched that employee from justifying their short-sighted policy, to selling to those consumers who genuinely needed help to spend real money? Way more dollars on the bottom line than they’d lose on a few bottles of herbicide.

National brands can be self-service: making the shopping experience better for those get-in-and-out-quickly customers, as well as for those too nervous to engage in conversation and go somewhere that they know carries the brand. (And there are indications that younger generations, having done their research on-line before they arrive in the store, don’t want to be “served” anyway.)

The Bottom Line

So, do I think retailers should have their own brands where feasible? Yes, but a 2 (not 3, 4, or 5!) brand strategy covers all the bases; the confidence and self-service of known names plus the differentiation of your own “image”. But remember that the memory of the shopping experience and after-sales success IS the brand image for most retailers. The experience and end-result is the lasting value, not the name on the label.

(photo credit: mr_write)

Jul 28, 2012 6 Comments

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