Ian's Bits & Bobs: The Blog

IB_SucculentMules_Sunnyside

So, How Was It For You?

It’s been a busy summer of travel, conferences and clients making me remiss in the blogosphere, which makes now the perfect time to say: “So how was the garden retail business for you in 2017?”

I was guilty-as-charged in being distinctly bullish about prospects for a banner year this year. The economy is firing better for most (though not all) people than it has done for years. We see a soaring stock market, rising household income and talk of a $1000 cell phone. Landscapers and housing contractors are sold out for months (years in Utah, so I am told), while there is just enough inflation around to encourage some much-needed price raises. It should have been a banner year, just like 2016 should have been too. But neither year reached the expectations of retailers that I know. I see reports that one of the home centers is up 6% in sales across the board, but much of that was contractor-driven. Meanwhile plant and hard goods suppliers I know say it was “just so-so.”

Two steps up, two or more back

Most independent garden retailers saw a modest, 2-5%, rise in sales, but a smaller or flat traffic count with a compensating rise in Average Sale, just like the last 15 years. But rises in sales were largely due to the price rises that I (and others) urged retailers to adopt. Given the ever-rising costs of business some might even say they went backwards despite an increase in the top line sales. Yes it was a poor weather year for many, but there has always been weather – this is something else.

So I am officially declaring that for the first time in my lifetime, the DIY garden business hasn’t surged after a recession – and it’s not going to under the current model. There has been such a fundamental change in the consumer’s lifestyle and demographics since 1983, 1990 or 1999 that history is not a good guide here. What worked for the last 45 years isn’t working.

Let’s analyze before we strategize

But before we “de-construct,” as they say in trendy circles, let’s hear what happened from the trenches: your trenches. I have good data that shows the DIY sales leaders this year were such categories as indoor plants, (green and/or blooming), succulents, edibles, pottery, personal (think purses, jewelry, apparel etc) and self-indulgences (everything from big blousy hydrangeas to YETI). Meanwhile normal-sized “color” was flat and “woodies” were down significantly in DIY business (unless you have lots of new homes locally).

In other words, consumers decorated a lot… but didn’t dig much.

So, how was it for you? What were your category winners and losers? Did you see “decorating” as a major revenue stream and invest in it, or were your buyers still buying like it’s 1997?

I look forward to hearing from you as we “re-construct” the garden retail business together!

Sep 21, 2017 30 Comments
Sickles Outdoor Living

Raising Those Prices: The Follow Up!

If you are reading this, it must be raining or you just need some light relief, time is valuable for companies receiving 50% of the year’s sales in 10 weeks!  When I said the next blog would about quick-fix increases, little did I know that some of our blog readers would weigh in with such great examples. Thank you for sharing from the trenches:

1.       A Little Can Go A Long Way

For starters, think of easy small increases on big volumes. Adding 25 – 50 cents to something that sells thousands of units in a few weeks, like 3.5 inch vegetables or annuals yields significant extra margin dollars, without raising a flag to customers. Even though it requires extra labor hours to adjust the POS, the work is a good investment. Another advantage of this tactic is that most of these increases can be covered by simply changing the price on a shelf or bed-talker rather than individual item pricing. Just remember to keep those few Known Value items competitive!

2.       Affordable Luxury

Now, think of substantial increases on high ticket lines, which move slower but impact sales when they do. Identify specialty lines such as finished custom-planters, large individual specimen plants, “hot” or unique lines in your area. The things that consumers buy infrequently, such as patio furniture (hot after a recession lull), high-end-grills, upscale yard-art, statues (also hot this year), fountains (ditto), plus high-end or larger pottery: things that often have a value perception based on pride, ego, status or self-indulgence.

Larger increases of $25 to $100 on these less-frequent purchases in the $250 to $2500 range would certainly cover the cost of changing the price. Think of your “outdoor living” décor items that people have gone without for the last few years such as arbors, trellises, shade structures, lighting and benching. Specimen plants have higher value perception. Things like Japanese maples, multi-stemmed birch, flowering dogwoods, trellised fruit or larger trees for shade and privacy also fall into this category. Look at larger plant sizes in the more basic lines that tell a story such as “Hide the neighbors for $300” and sell the emotional benefit.

3.       Convenience Has a Value

A 3-gallon heirloom tomato showing fruit turning color is worth $40+ to many consumers. A pot of fresh, still-growing herbs is worth double those wilting bundles from who-knows-where in a grocery store. Pre-planted pots to “Grow Your Own Salsa” have a higher value-perception as do roses in gorgeous fragrant flower or ready-to-eat snap-peas on a mini-trellis – never mind what the landed price was!

Finally: D.I.N. – Do It Now

Although it might seem too late to change this year, read Ron Vanderhoff’s comment on my last blog (March 28th 2017). Do not wait until the next receiving cycle to enact these new strategies – that could be a whole year away and business costs are rising daily. As product is received, inventoried and put into retail, ask yourself, “what could I get for this item?” Then ask yourself if the total extra cost of changing the price is more than made up by the extra dollars gained. If the answer is “Yes,” Do It Now!

In closing, if you click through the link up there, you’ll see that the interaction “in the comments section” is as valuable and thought-provoking as the original post! So we’d love to hear from you:  what is one item or category you have changed the price on this season, or one surprise you found as you started to investigate pricing?

Ka-ching!

photo credit: by Ian, taken at Sickles Market

Apr 17, 2017 8 Comments
LowesGreenhouse_2017_cropped LowesGreenhouse_2017

Reading The 2017 Tea Leaves

I took a few months off the blogging trail, so we didn’t distract our massive readership from the 2016 election! Then I waited a few more weeks to see what the election had done to the retail garden business and voilà, here we are now well into 2017.

Happy New Year

I do believe it will be a happy 2017 for the retail garden business and the supply chain that supports it. The business signs are quite positive, always allowing for the usual weather challenges and a (mild) cyclical recession predicted for 2018. The fourth quarter of 2016 ended very well once the consumer’s attention was re-focused after the election. Garden center teams or independent garden retailers I spoke to after Christmas said the last two months had been very strong in sales and the consumer’s attitude to spending. Average sale per customer was well up over the last few years and all operators I spoke to focused on the same observations (albeit anecdotal).

Simply put, the biggest, most expensive end of the range of almost everything, sold out first. It didn’t matter whether it was wreaths for the front door, “everlasting” Christmas trees or swag for the mantle, the most expensive selection sold out first. The $2000 everlasting tree sold before the $800 one, the new clever lighting set sold before the cheaper one designed five years ago and the biggest table-runners went first. Even the sadly “footballed” Poinsettias were elevated for a few weeks with the bigger pots and higher priced specimens selling out early.

It is at least 8 years since garden retailers told me that they sold out of cut trees by Dec 18th and no consumer seemed to want a plain, decorate-it-yourself wreath. They wanted them fully decorated and ready to shine. So the end of a dominant election, a record-high stock market and finally, rising household income, do seem to have combined to loosen the purse strings.

Spending Can Be Fun!

From the “Do It For Me” side of the aisle we saw a strong and increased ticket demand for “Christmas Porch Pots,” outdoor lighting, tree installation and interior decoration. All signs of a more relaxed consumer.

So, does this mean a fabulous year ahead as consumers spend like fools? I am not sure about that, remember that the media giveth and the media taketh away, but the signs are very good. Garden retailers can bet on a consumer who is much more open to persuasion than even two or three years ago.

“Your wage rise is my price rise”

Another factor in the mix is the national conversation about the increase in minimum wage either by legislation or just through simple market forces. What this means is that most customers know someone in their circle of family or friends who is getting a raise, so they should not be shocked to see prices increase as a consequence. As one garden center owner said, “For the first time in years, my customers are expecting me to raise my prices, so I am not going to disappoint them!”

What’s your price rise strategy?

So in the spirit of “Sharing is Caring”, who among you has added 4%, 8%, 10% or more to some lines (which lines?) you will be carrying? Most of our blog readers are not in competition with each other, so let’s hear what you are looking for in your price increases this year. Who’s going to start the bidding? Do I hear 5% to start please….?

Photo Credit: Ian Baldwin, taken inside the classy new expansion at Lowe’s Greenhouse and Florist (Chagrin Falls OH),

showing the owners’ confidence in the next few years!

Feb 15, 2017 10 Comments
HerbswithFish

Inspiring Summer Customers Without A Word Being Said

 

As temperatures climb and that manic spring customer flow slows to a trickle some days, it’s always tempting to take a deep breath, look at sales YTD compared with last year and relax… ”it’s over”. There used to be a day when that was somewhat true, retail garden companies (and many of their suppliers) could put a “Gone Fishing” sign on the door and literally, go fishing.

Of course that’s still the case if you are living entirely on seasonal pop-ups – good for you, tell me how you make it work!

But for the thousands of owners, managers and team-members who have been in overdrive for the past 12-16 weeks, the reality is that you can’t afford to take your foot off the pedal. The costs of being in business don’t take a summer break.

Now that the consumer has found, bought and planted what they need (hopefully), we have to sell them what they might like. And given the summer temperatures and competing activities, we have to make the shopping experience as enjoyable and successful as possible.

Traditionally that has meant a customer finding an employee who, by a series of questions and answers, narrows down what they think best suits the customer’s situation.  This assumption is now seriously challenged by such developments as on-line research before customers leave home (over 60% for L&G shopping) and You-Tube videos on their tablets as they walk the aisle.  Let’s not forget the other reality – the cost and availability of knowledgeable labor. 

Hand-Holding May Not Be “Full-Service” Anymore

The full-service Local Garden Center channel is still far too dependent on knowledgeable employees. Even if you can find and hire them to hand-hold every customer, shoppers today are used to (and sometimes more comfortable with) “discovery” on their own. With on-line research increasingly common there is a lot less need to start every conversation from scratch. Customers just want to know if they are interpreting things correctly for their own situation. The retail center becomes a validation center.

Customers who have spent time researching their project, product, size, brand or budget, need much less “discovery” conversation with employees. What they need is guidance, validation, assurance and confidence-building.  Merchandising can do much of that too. Garden shopping is changing from an assisted treasure hunt to a focused project. The mantra might be “Research on-line, validate in store.”

Silent Selling Can Be Compelling

So, if you are able to take some time off and tour some of your peers or your competition, see what you can find in the way of exciting, persuasive merchandising or “Silent Selling” with a compelling value-proposition. Take lots of pictures (if allowed of course) and build a training session around them because exciting, persuasive value propositions are still hard to find. But that’s what shoppers want right now. A simple clear vision of the end result, the products, the how-to “recipe” and the price of the project (or the cost of not doing it!).

Despite all the “merchandising training” and the digital media now available it’s hard to find merchandising that inspires summer spending in this way – without a word being said. 

See what you find out there and let us know in the comments section below. Happy value-propositioning!

Photo by Ian in an English Garden Center 2008

 

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Reading the Mid-Spring Tea Leaves

For garden retailers in the warmer climate zones, the week after Mother’s Day is slowing down, over the peak, saying “now we have to work harder for it.” In most colder climates, Mother’s Day sales were down (this year at least), in some places seriously so, as May swapped weather with March. But in both climates it’s no time to relax (May everywhere pays wages for weeks ahead). It IS time though to read some mid-spring tea leaves in case you are staring at that still-massive inventory number….

What’s selling?

Succulents, succulents, and oh did I mention succulents? Any shape, color, size and style are flying off the shelf this year, and if you were smart enough to invest in added-value versions in planters and arrangements – even better. Aligned with that, I see all things naturelle with wood, stone and moss in those added-value lines. Small, simple and intense – which may reflect the influence of TV and other media on the under 35’s, with their minimalist homes and no-clutter styles. Surprisingly then is the strong demand for garden art and deco, maybe that’s the Boomers getting their own back. Another significant tea-leaf, off-the-charts demand for “Do It For Me” tree and shrub planting suggests that despite TV news and politicians, a lot of Americans feel good about spending the money on things they no longer want to do.

What’s not?

The DIFM surge might also be causing the fall in tree and shrub sales after a great year last year, but poor weather is also a factor. The earthy stone/wood trend above might also be the cause of reports that finally, after 20 years, sales of high color, high gloss, large ceramic pottery, is flattening out. Garden décor is hot but in a matte-finished, earthy or rusty way it seems.

Unsurprisingly, independents are reporting a drop in “hard goods” or garden supplies especially in controls or “chemicals” (as us old lags still call them). I think householders are using less in total anyway and most independents have lost the battle with the home centers for various reasons, the biggest of which is the (incorrect) perception that every single product on every single shelf must have a 50%+ gross margin. In fact, the home centers have used that victory to now present themselves as the one-stop shop for hard goods AND green goods, but that’s another blog for another day.

Serious tea-leaf analysis needed!

I talked to an owner who was questioning the strategy of his “chemical” category after he pulled a POS report (yes in mid-May!) showing that the 202 items sold in the “Insecticide” sub-class took 68 Stock Keeping Units (SKUs). Think about that: after the busiest weekend of the year, each SKU had only averaged 2.9 sold (out of, presumably, a case of 12). As he said, he was amazed at the sheer volume of SKUs to generate moderate sales. Food for thought and a validation for a comment from Jim Sullivan on my last post.

So, sharing is caring … leave a comment letting us know:  what are your mid-May surprises?

Photo Credit: Upscale, “stone” succulent arrangements made in-house at The Greenery (Taken by Ian)

May 13, 2016 12 Comments