Crash! The 2015 National Gardening Survey Returns Us to Reality
An edited version of this story was originally published August 10, 2015 at Today’s Garden Center, the edited / published version can be downloaded HERE, or you can read this slightly-more-candid / pre-edited version, and share your comments below:
There Is a New Elephant in the Room!
When I first saw last year’s National Gardening Survey (NGS) results from the 2013 gardening year, I was wary of the massive jump (18%) in total DIY garden spending or 21% rise in spending per household, as that did not reflect what we were hearing from our clients out in the retail trenches. So this year’s survey, showing a drop of 23% in total spending and 24% less per household, comes as a leveler. No behavior survey is perfect so we expect ups and downs, but we now have data from the same questions for over 30 years and the overall trend is pretty disheartening.
In reality the previous year’s numbers were an anomaly and this year’s report just shows garden spending returning to the doldrums of 2010 to 2012. (Well below 2008.) Now that’s disheartening.
Any Good News?
Yes. Despite all the distractions available, householders are still “gardening”, though I suspect fewer consumers now use that word. Participation in gardening has been statistically flat for the last 5 years with around 70 per cent of all homes doing something. That is still eighty four million homes, a market many industries would love to have, but we used to be the nation’s sunny spot. Remember, less than 20 years ago, we were America’s “favorite outdoor pastime” with Martha Stewart hauling in great armloads of perennials and 4-5 gardening magazines at the supermarket checkout?
Well that “good thing” has changed to a so-so thing for many. You can almost hear them saying “If I have time and can figure out what to do – is there a good gardening app?”
The dilemma we face is that, despite all the competition for their time and money, householders continue to do something in the garden, but are spending less and less money doing it. Even as household spending picks up again after the recession, garden spending has not. Has competition reduced unit prices? Are consumers still buying the same number of products as 6 years ago? I don’t think so. If anything, with the exception of warehouse clubs, the price-driving “big box stores” have increased prices lately. Similarly the Local Garden Centers (LGCs) we know have steadily increased prices and all our clients show an increased average sale per customer (but maybe not from garden products).
Category High Lights and Low Lights
Fortunately, the shining star of the last 5 years – Food Gardening – has held its own and is clearly here to stay. This is the only activity that has steadily increased its share of garden spending since 2005. Everything else has had highs and lows.
Some individual products have done well despite the spending malaise. Cyclical spending such as machinery, as well as “maintenance” tasks like Insect Control rise and fall with need. Yearly spending to keep the property looking tidy such as Lawn Care and Flower Gardening have just declined at the same rate as everything else, but there has been no growth in any of these categories in the last ten years. The survey does not allow for more modern “color” planting using flowering shrubs, grasses and perennials instead of annuals, so this activity probably continues to rise, which is great news given the higher ticket and extra tie-in products!
“Age Shall Not Wither Them”
It comes as no surprise that over 55 year olds are the biggest spenders of the age groups. This was not always the case. The 55+ group’s spending share averaged 37% from 2003 to 2008 it rose to 44% in the 2009 recession and has now reached the highest ever recorded – a staggering 51% in 2014. So the Lawn and Garden market is even more dependent on the Baby Boomers, just as they adapt to retirement, fixed incomes and health care issues.
At the other end of the spectrum, the recent surge in gardening by the youngest group in the survey, the 18-34 year olds, seems to have faded. Could it be they were tempted to try it and weren’t thrilled with the process or end result?
On Average, Things Are Not Even “Average”
Gardening is clearly not capturing the consumers’ imagination and dollars like it used to do. But because one year’s data is always suspect, we took a look at two sets of data, averaging results from 2009 to 2014 and comparing them with similar averages from 2001 to 2008.
The average household spending from 2001 to 2008 was $435, but from 2009 to 2014 it was $359. This explains why many LGCs (even the best) are still not seeing their sales top those of 2006 or 2007. It also validates the move by the sharper operators into other categories, departments and services as they see core gardening products stagnate.
Remember the NGS asks householders about garden spending irrespective of where they shopped. So if the whole retail sale is down and the national chains are increasing their share of a shrinking pie, it puts even more pressure on the LGC channel.
Unlike other recoveries after recessions, garden spending is not expanding as the economy improves.
“But My GC Peers Are Doing Well Now”
Yes. The surviving independents who weathered the recession are looking forward to some good years. The operative word is “surviving”. Think how many LGCs and greenhouses are no longer in business in your area or on your contact list. Did all that business go to the big guys? Obviously not. The NGS tracks spending at all retail outlets, not just LGCs, in 16 activities from Lawn Care to Water Gardening. Results show flat to declining purchases over the last 10 years in everything but “Food Gardening”, irrespective of where they shopped. So most LGCs “growth” is probably from categories outside the NGS scope such as gift/décor, patio/outdoor living, food, apparel, Christmas, installation and so on. A good P.O.S. project might be to compare core garden department sales and customer count, before and since 2009.
What IS Going On?
The NGS data shows:
Total garden spending peaked at $39.6 billion in 2002
Spending per household peaked at $466 also in 2002
Participation peaked at 91 million households in 2005
If ever there were three statistics that called for “Re-Inventing Garden Retail”, these are they, yet we have clung on to the same model hoping for a better economy, more housing starts, improved weather, new politicians or whatever. The garden retail model has worked so successfully for decades; consumers driving to a store (when they are open) and in their spare time(!) being told what to do and buy, then going home and hoping for success. This is clearly not the way forward.
Now think about how the consumer’s “spare time” has changed. In 2002 there was very little (if any) broadband internet, on-line shopping or streaming video. In 2005 there were NO smart phones(!), while Netflix mailed DVDs, Google was a start-up desktop search engine and Facebook was for Ivy League students!
Think of the burgeoning choices consumer now have to spend their discretionary time and money – most of it involving staring at a phone, tablet, computer or a TV.
The new Elephant in the gardening room might be “screen time”, estimated to be at least 12 hours per day for the average American adult.
So Is the Glass Still Half Full?
Absolutely. Americans like gardens, they just don’t like “gardening.”
How did that happen? The world seems to have defined gardening as hot, messy work that involves commitment, knowledge and some mysterious intuition, not to mention the expense and risk of failure? Hmmm, that sounds like cooking too! How did they manage to make cooking so exciting and desirable?
We have allowed others to define our image which, as any politician will tell you, is not a good strategy. But despite this image, eighty four million households are gardening, with probably a few million more wishing for the end result.
We have to change the image. We need to talk about at-home entertaining or home grown veggies, family time with nature, kid’s projects, saving Monarchs, relaxation and escape, or pride in property enhancement and style. We should take nothing for granted and look at everything as an opportunity.
If you are looking to retire in 5-10 years, why care? You will probably be OK as an owner, though employees might not be thrilled with the strategy.
But if you are building a saleable asset or a business for the next generations, the time to start changing is overdue. No one (least of all a consultant!) truly knows the future, but leveraging your skills and reputation into a garden-success-resource center or “village,” based on a wide range of services seems attractive. These might include conventional retail, with design-build indoors and out, at-home maintenance, garden-coaching plus mobile everything including real-time diagnostic services. There will obviously be great niches in up-scale life and outdoor living centers or gourmet food and cooking/brewing centers. I see a strong niche in all-natural, organic/local, environmental activities or decorating/party planning or a complete do-everything-for-me center. There are opportunities in agro-tourism, apparel, weddings, cafes, community centers and whatever your local market can relate to.
The timing is perfect now that “local” is in vogue as consumers turn back to their communities. Meanwhile most LGCs have under-used land and buildings, empty seasons, talented teams, under leveraged borrowing capacity and a safe, strong balance sheet.
But as the National Gardening Survey has shown for ten years now, there is no time to waste. Ladies and Gentlemen, start your engines….!
What can you DO? Some Calls to Action from the 2015 NGS:
Food Gardening Solution Centers: Food gardening is the only garden category with consistent growth since 2008 but the plant portion of that spend is a small part of the total spend. LGC must get into the “Food Gardening” business not just the “Food plant” business and become the go-to retailer for every aspect from irrigation to raised beds (“Raised Bed” soil was a big seller at Home Depot this year) to canning supplies. All backed by how-to classes on You Tube and tasting/cook-off events. Celebrate your local-ness with local food how-to knowledge!
Drive Traffic: After 10 years of declining customer count, the immediate strategy for most LGCs should be to drive more traffic using a combination of competitively priced, driver-item products and categories that extend the season such as apparel, food, bird, homebrew, indoor gardening and so on.
Go Mobile: Many younger consumers are interested in gardening but are very dependent on their mobile device. LGCs MUST invest in making their website and marketing methods “mobile friendly”. Generation Y is trending towards smaller independent retailers but only if they can find and use them on a mobile device!
Know Your Numbers: Analyze category trends (unit sales, dollar volume and customer count if possible) since 2006, just where IS the growth? Is it in gardening or all those other categories?
Look in the Mirror: Take a long hard, unemotional, objective look at your company’s image. Does it still look, feel (smell?) and operate like a 1995 GC? Profitable means more than just pretty!
Be the Answer Place (for New Gardeners): Take a clear strategic look at what it will take to become the local community “One-stop, first-time garden/landscape success center, including “Do It For Me”. (Editor’s note: you probably aren’t as friendly and approachable as you think you are!)
*As a reminder the NGS is an on-line survey by Harris Interactive of a statistically representative sample of householders, drawn from a data base of 7 million households. The survey was carried out early in 2015 about a householder’s participation in and spending on gardening in 2014. The data is compiled into a 260+ page report, (available from The National Gardening Association). The NGS’s 30+ year’s history, gives us a huge database of consumer participation and spending.
treyAug 20, 2015 at 8:45 pm
Nice post Ian. I remember the heady days of 2002 to 2005. Plants couldn’t be grown fast enough, and homes we’re made of money (equity lines). We made lot’s of money and grew fat (literally, the heaviest I have ever been.) I don’t miss it. The future of horticultural business will be a more sustainable model. I feel better and more excited about what horticulture can offer than in many many years. Don’t give up on the younger generations. They are having a hard time finding their place in the scheme of things, but they will eventually. Many love the garden and growing things. If you’re still in business after all we have been through, you’re doing great!
Ian BaldwinAug 21, 2015 at 1:28 pm
Trey, hello again and thanks for your note. Yes those ’02-05 days seem unsustainable now looking back, what were we thinking? I agree with you about younger generations seeking to find where they fit, though more likely it is the industry seeking to find how to connect. As I heard a very sharp person say recently, “I want our company to be where the customers are shopping” (i.e. on-line and on the move). That might be a better ROI than trying to convince them to move to where we are. Thanks for your time.
Jim Atlantic Gdn CtrAug 21, 2015 at 4:10 am
From 1991 until 2005 we had no Home Depot and our nearest Lowes arrived in 2008. These two began taking our local market share by using lawn and garden as a lost leader reducing our sales by 50% in the next 5 years. They bring 2 truck loads of color per week into each location; that is approx. $ 60,000 of retail goods minimum. I am lucky to spend $ 20,000 weekly on color as compared to 10 years ago when I spent $ 60,000 because I had no boxes with garden depts. It is hard to be aggressive with no line of credit; we had a $ 500,000 LOC until the bubble burst in 2008. Now it is all COD. Times are certainly different as your article states and we all need to pay attention in order to stay in business; but most of the best plants in fancy pots are not available from my suppliers. Most of my customers come to us after checking out the boxes first. Jim Crowell
Ian BaldwinAug 21, 2015 at 1:47 pm
Thanks for sharing. Your company had more challenges than most other regions in the USA with the economy, the improved Home Center plant quality locally and the demographic changes. In the long term though I believe that the LGC’s role could become that of a garden-success resource that low or no-service retailers will find it hard to compete with.
If the industry allows the consumer to believe that gardening is merely simple, quick color-decoration or a few veggies every spring with no long term design foundation or property-value adding component, it is going to be a long hard road. The LGC, with it’s knowledge, local/community reputation and passion for the end-result should be driving this away from a race to the bottom of a commodity market!
Thanks again for sharing your side of things.
Eileen NelsonAug 21, 2015 at 6:39 am
Thanks for a very thought-provoking article – passing it on in my newsletter.
Ian BaldwinAug 21, 2015 at 1:48 pm
Thanks Eileen, share away! Have a great Wisconsin Fall too!
Jim SullivanAug 21, 2015 at 10:44 am
Thanks Ian. Great insight. I am passing this on to my Distributor Sales Team. I think it important that the vendors also adjust their sales strategy to become true partners with an owner/ buyer. This will take all of us to turn it around.
Ian BaldwinAug 21, 2015 at 1:56 pm
Jim, Thanks for your kind comments. I am glad to hear that your distribution team will also see this as the changes we are seeing effect the whole supply chain. Retailers (and landscapers) sometimes forget they are just the sharp end of a $70+ billion industry! Thanks again for your support.
Scott CulbrethAug 27, 2015 at 12:16 pm
Great article! Like many, I have seen the changes in the industry since the mid 80’s. I remember in the mid 90’s to early 2000’s when we were “cool” at the cocktail parties, because we were in the garden industry and everyone seemed interested in planting or enhancing their new homes landscape. Times sure have changed since then, and your article and statistics prove this out. I keep looking for ways to help my customers increase the foot traffic into their stores. I look forward to the dialogue this article will generate with in the industry!
Ian BaldwinAug 27, 2015 at 1:59 pm
Scott, how nice to see your name on here!
Happy, if dimming(!), memories of working with you and all the great Wight’s team in those golden years you mention.
Yes how things have changed; we don’t even have a Loooville type of forum anymore for growers to network with retailers, landscapers and suppliers! The supply chain is very fragmented now. Sad but real.
The Local Garden Centers you call on have a golden opportunity to become the one-stop, local garden-success resource (needs a better title than that mouthful!) but to win this means substantial change. Which means accepting that the existing model is broken – which too many still don’t accept! As you know, the independent hardware business went through this 15 years ago and the survivors who have adapted are doing very well, even though they compete with the Home Centers on every category, not just Lawn and Garden. That’s the model to follow! Hope to see you again on the road, thanks for your perceptive comments, take care.
Warren QuinnAug 27, 2015 at 3:22 pm
The opportunity for LGCs is in marketing plant functions to non-gardeners. Not plants, but their functions. Customer service is not proving how much the LGC staff knows about plants, especially to people who don’t really care about plants (“gardeners” likely know more anyway), but finding out what function the customer needs to be served by plants. Then choose the plants for them, send off to yoga class or soccer practice without touching the plants, and deliver and plant the products. Move inventory turns as a result of a service focus. Use the Apple Store model and keep the inventory someplace else . . .
Ian BaldwinAug 28, 2015 at 12:10 pm
Warren, good to hear from you again, hope all is well!
I agree to some extent with your Apple store model as a DIFM model and that is the basis of landscape contracting of course. Many traditional contractors don’t seem to want or have the skills to do the smaller “decoration” jobs though. Maybe they need separate small job planting/fluffing crews with a different skills set.
Not every consumer is going to go DIFM so I still feel there is a huge opportunity for garden retailing D.I.Y if it done correctly. Like you say it must be based on end-result not process in a sales environment that ensures first-time success for the customer. Future LGCs may become garden resource centers, part DIY, part DIFM and all customer options in between, all on one site, with demonstration gardens and all the services offered. Hey come to think of it, isn’t that where the industry started about 50 years ago??!! we are going full circle but with a mobile on-line component as well – exciting times!
Amanda Sizer BarrettAug 28, 2015 at 12:52 am
Ian, I enjoyed reading your perceptive and thought provoking article. Best wishes from the other side of the pond! Amanda
Ian BaldwinAug 28, 2015 at 12:27 pm
Amanda, how nice to hear from you trans-Pond! I hope you are well and the UK industry is thriving again after some tough years. Lisa and I really miss those heady days of our tours and GLEE….. we had about 730 people in 16 years on that England Tour and, amazingly, they all made it back home (we think!)
The GC channel has undergone a major shakedown here since 2008 but I truly believe the survivors will thrive if they adapt to be the local how-to succeed center (centre?) and widen their assortment/offer though probably not to the extent that the UK centres have spread their categories. Thanks again for your note, keep in touch, especially if you come out west.
Nick HeymingOct 5, 2015 at 6:58 pm
Great article. I’m actually building the gardening app that you mentioned. Our goal is to get people out and growing in their own or community gardens, and we’re using the most engaging pieces of social media use and video gaming to get them there.
We’re also creating a place in our game for local merchants, such as hardware stores and nurseries, as well as tool and supply producers. We hope to grow the whole market by incorporating creative expression, community service, and citizen science into the game.
Would love to share more as we develop!
Julie BoudreauJan 26, 2016 at 12:59 pm
One of the best analyses I had read in month. Thanks Ian!