We talked a couple of days ago about, “The Day Your Supplier Sells Direct to The Customer”. It was about the inevitability that some of our suppliers will sell direct to the public, rather than using the traditional sales chain of wholesale, to retail, to the customer.
Four Winds Nursery is a great example of a company that has decided to sell direct to the customer, as well as the box stores, and the smaller indie garden centers. Four Winds grows and sells mostly citrus trees and have been around longer than I can remember. They we’re at one time a indie garden shop supplier, then the headed into the box stores, and now they will sell directly to the end user!
The online section of their web page offers foil gift wrapping. They ship to most of the country, and also have “Citrus Zester” you can pick up in the kitchen department. What a great gift idea for friends or relatives back east. A dwarf lime tree for their mojitos! Spend over $120 and you even get a 10% discount. Wait, don’t people want to drive over to your store, possibly find that citrus tree, and then figure out how to ship to their relatives? You think they will be happy to hear you say “we don’t ship”? What a hassle when all they have to do is “click” buy and ship at The Four Winds Online Store.
There are only so many suppliers of citrus trees, so the trees that Four Winds ships would have been the same trees in your nursery! What a win for the customer, and Four Winds.
Welcome to the future of garden retail.
Does that customer buy all their gardening goods from you? Some customers do, but I think the majority buy some of their gardening supplies from you, but also spread their gardening dollar around to other businesses.
When a customer shops at Whole Foods in Folsom they walk right past the “garden center” to enter the door. The garden center is some racks with vegetable and flower starts on them. These are not sad looking little starts, but organically grown starts produced by a small local grower. That small grower use to just sell to independent garden centers. Reality set in and they got the gig with Whole Foods. The soils are organic and produced by a small operation putting quality at the forefront. So easy to buy a few vegetable starts, pick up some potting soil, and head home with the groceries. There is no, “can I get these plants healthier or cheaper anywhere else?” You can’t.
That same person heads home and sees that tomatoes need fertilizer on a regular basis. They didn’t call your garden shop, but looked it up online. Guess what? The place they looked it up online also sells the appropriate organic fertilizer. Why wonder all the way to the garden shop to buy fertilizer when all the information and products are a click away, and two days from delivery? Click, and now the fertilizing needs of the tomatoes will be met.
Something is eating the tomato plants. Let’s search “tomato plants chewed” and see what comes up. Ah, ah! Tomato horn worms can be picked off by hand, or you can spray organic BT on the plants. Low and behold the BT can be shipped overnight express from the very place that provided the information and advice. How cool and convenient.
About that garden center the customer never visits. No, they really don’t want to have to go there. It’s always crowded, smells like pesticides, and the people working there seem too busy to help you. Besides, you don’t want to feel stupid by asking stupid questions. Your intelligent and know how to use The Internet to find out just about anything. Frankly, if you never have to visit that Home Depot garden center again, that would be fine by you.
Where do you and your small independent garden center fit into this picture?
The day the vendor you have bought from for so many years starts selling direct to the public, what will you do? Don’t think it will happen? Remember all those wholesale nurseries that promised to only sell to Independent Garden Centers. They are now selling to the box stores, and not looking back.
The problem for the box stores? As these vendors get squeezed on costs, shipping, and everything else by the chains they will become less profitable. The market for their garden products continues to shrink. The need for much of the stuff sold is diminishing as the public continues to turn away from much of ornamental gardening. Please don’t mis-undestand. There will always be people looking for these products, but not in the quantities needed to maintain the status quo as it stands today.
Business these days need to cut out as many middle-men as possible to maintain and grow profits. Who is a middle man? Lot’s of box stores, garden centers, re-wholesale operations, sales people, and more. If you don’t manufacturer or grow the stuff yourself, your a middleman. How can you stay viable in this environment? I hope to discuss some of the options here, but the first step is accept that businesses will very quickly realize that many wholesale operations will find dealing direct with the customer may be on way to stay viable.
It appears the British are concerned because, “research has suggested that many teenagers believe careers in the sector (horticulture) are for those who have failed academically.” According to The BBC, “72% of horticulture firms cannot find skilled workers, with teens viewing the job as ‘unskilled’”.
A hopeful sign was the last paragraph from the article. According to a spokesman for the Department for Environment, Food and Rural Affairs, ”through our ‘Future of Farming Initiative’ we are working with the industry to help more talented, entrepreneurial young people build careers across the agriculture sector, including horticulture.”
Just wording it , “The Future of Farming” is a good start. We need to show that horticulture also includes the future of what we eat. Then the young people will show more interest. They are not necessarily interested in ornamental horticulture as much their parents we’re. If the younger generation can understand that by becoming involved in horticulture they can change the world, then they might show interest. If they think horticulture is only about the perennial beds, foundation shrubs, or lawn care, we won’t get the interest.
Get them hooked on the food side of horticulture, then the ornamental side may show more promise to them. And forget about initiatives that are government supported. That will just bog the whole thing down. The trade needs to see what’s happening, and make the changes necessary themselves. Then you’ll attract the type of new horticulturists we so desperately need going into the future.
The greatest challenge garden centers face is the declining size of the next generation, as well as the enormous debt the next generation is responsible for. The New York Times had this article concerning the student debt the next generation is amassing. Imagine coming out of college owing 150,000 USD and trying to find work in one of the worst job markets in decades. These are the people who are going to buy houses and shop at the local garden center?
Not only is the next generation in debt, and facing an awful job market, but there are just fewer of this generation to replace the boomer generation who is retiring. If the garden center trade is waiting for economic recovery to take place and get back to the way things we’re, it’s going to be waiting a long time. There are just too many garden centers, home stores, box stores, and wholesale suppliers selling plants for the market. Further shrinkage of the trade is inevitable.
I know most in our trade are tired of hearing about how the next generation doesn’t want to garden like their parents did. I imagine it’s because we just don’t know what to do. I was talking to a friend who is a wine maker, and that industry is looking at the same thing. They are not buying or drinking wine like their parents did. There is way too much acreage in this State of California growing grapes for the need. How many of these young people can afford $20 USD on wine? How many just don’t drink wine? That trade is shrinking just like the garden center trade.
The younger generation is interested in growing food to eat, and some of the same gardening their parents did. There just isn’t enough of them with homes and steady jobs to support the trade. I expect to see the results of this trend first in Europe where the youth unemployment is skyrocketing. It’s already begun and those of us who wish to stay in this trade will have to figure out how to service a shrinking demographic who’s interests are different than the generations who helped build the trade.
The only certainty is a smaller and poorer demographic will be our next generation of customers. What can be done to survive and prosper in this environment? I think the future is very bright for those who can figure out which path to take. There will just be a lot fewer of us on that path.
Sometimes the stuff we already sell is cool and unusual to those who don’t know we sell them. Take these 4′tall cedar stakes which we’re featured in a blog I follow called, “Cool Tools”. Here is what the author say’s about these “cool tools”.” I used to buy tomato cages — open-ended, circular wire cages—to secure the plants — but they were never strong enough once the tomato plants got taller than 4 feet. The cages would slowly collapse, taking the plants with them, which was worse than if I hadn’t used anything. Last summer I happened upon a simple, yet effective device to keep the tomato jungle under control: the cedar stake.”
Did you hear that? The amazing cool tool known a 4′ cedar stake. “Cedar stakes come in various lengths and can be found at any home-improvement or garden store. They are inexpensive, especially compared to tomato cages. I bought 6-foot stakes, one for each plant, and some stretchy vinyl tie that expands with the growth of plants.” Wow!
The author mentions that you can buy them at home improvement stores and “garden stores” (notice we are not called “garden centers” any more). At the end of the post Amazon is mentioned as a place to by these amazing stakes at “12 4-foot stakes, $25″
I found the post interesting since we in the garden center, I mean “garden shop” business, would likely never have looked at the lowly plant stake the way our potential customers might. We see them as a obvious choice when staking tomatoes while our potential customers see them as an amazing new way to hold up their vegetable plants.
We need to look at our businesses in a whole new light. Not the light of years of horticultural experience, but the eyes of potential new customers where everything about gardening is magical and full of fantastic devices to make gardening more successful Sometimes those fantastic new new devices and ways of doing things are just something we forgot about in our efforts to keep abreast of “whats new”.
Looks like Bay Area nursery chain “SummerWinds” is looking to occupy the now shuttered Target Garden Center locations. According to todaysgardencenter.com, “The first store, which opened in Albany, Calif., in early March, is on schedule to succeed.” Sure beats being on schedule to fail.
SummerWinds is leasing the locations with the entrance into Target being closed. Target is the landlord leasing out the space to SummerWinds. “Target will still have a seasonal department that will carry gardening goods during certain times of the year. The primary overlap would be fertilizers and controls. SummerWinds is emphasizing its organic lines to avoid any overlap.”
Here is where I think a mistake is being made on SummerWinds part. According to Leo Goria, who is heading up the Target project, “SummerWinds is using a different pricing strategy with this store than it does with its current stores, to the point that if the Target store turns into multiple stores, it will create a new division for SummerWinds. ‘The profit margin for this store is just over 40 percent,’ Goria says. ‘The initial margin at a traditional location is more than 50 percent.’ How does that play out in prices? A common perennial in a quart pot is normally $4.99 at a traditional location; at the Target store, it is $3.99.’”
Why the different pricing strategy? Are Target shoppers unable to afford the $1.00 more for a quality plant? Once you start to segregate your shoppers based on perceived ability to pay you have started down the rabbit hole of diminishing profits. It’s almost like they are saying, “Target shoppers can’t or won’t afford plants unless they pay a 40% markup instead of a 50% markup?”
I like the idea of leasing the space out, but why price your stuff differently than your garden center stores? What happens when people walk in and ask that the same plant they saw at your SummerWinds Garden Shop be marked down like the same plant they saw at Target?