By Michael Lascelle
By Michael Lascelle
We have all heard that old business complaint that “the competition is
killing me.” But have you ever asked yourself just who is this
competition and how are they specifically hurting your livelihood?
We have all heard that old business complaint that “the competition is killing me.” But have you ever asked yourself just who is this competition and how are they specifically hurting your livelihood? It is a valid question and one that most business owners will have to address very carefully in the coming years.
By way of example, retail garden centre profits are being increasingly undermined by seasonal plant sales being offered at supermarkets, box stores, hardware chains and temporary corner lot nurseries. Their sales tactics may vary from price-cutting to convenience shopping, but the net results are the same, fewer people are spending their “plant dollars” at your garden centre.
This is where it might be helpful to carefully examine each of these potential competitors and assess just how they are affecting your business. In doing so, you might discover that you have a few more allies in the current market wars, and you should also be able to develop a marketing plant to counteract the erosion of profits. So here are some descriptions of the retail horticulture competition that I experienced in the lower mainland of British Columbia. While I am sure that the dynamic is different for every region in Canada, I think we can still learn something from this limited observation.
Most supermarkets stock large blocks of seasonal flowering plants right near the entrance so their customers have to pass by them on the way in and out. For the most part, they utilize the principle of temptation with constantly changing displays, such as primulas and forced bulbs in early spring, poinsettias at Christmas, and cut flower bouquets on Valentine’s Day.
While it is certainly convenient for people to pick-up a few flowers while grocery shopping, it also means that that temptation factor has been fulfilled, and these same people are less likely to want to visit their local garden centre. Many supermarkets also offer points or rewards on all purchases, including plants, providing an additional incentive to buy them there.
The limitations of shopping for garden goods at a supermarket are fewer varieties of plant materials on hand, a lack of customer service and plant stock that is often poorly maintained.
Florists have been around as long as garden centres and in many areas, pre-existed them. Like garden centres, many independent florists have experienced competition from discount “direct from grower” store fronts, which offered a limited selection of cut flowers and pre-made bouquets.
Locally, these discount operations have all but disappeared, much in part to a lack of selection and customer service. These two factors are the cornerstones of maintaining a regular clientele, which in turn, keeps independent operators in the black. As far as I am concerned, florists are not really detrimental competition (even to those nurseries with floral departments), because people in need of the services of a florist tend to go there, while garden centres usually pick up on the impulse sales of cut flowers.
Having a good two-way relationship is a great opportunity for garden centres and florists alike to work together to maintain local market share and curtail the dominance of national box stores and grocery chains.
Temporary ‘Corner Lot’ Nurseries
They pop-up every May 1st, just like clockwork, suddenly occupying vacant gas stations, strip mall parking facilities and empty lots. Apparently, all you need to sell plants is a rented space, a business licence and a few signs.
These seasonal nurseries are often set up by out-of-town wholesale growers, who parachute into multiple communities in order to skim some of the lucrative summer flower sales. Essentially, they get to reap the profits from the peak spring period and then they just pack up and leave, taking those profits with them. They provide no full-time employment, generate no taxes for local infrastructure and contribute little, if anything, to the community.
The best approach here is to contact city hall and see if they will restrict this unethical practice or at the very least, make sure that they have to adhere to the same bylaws as you do in regards to adequate parking, signage limitations, and safe vehicle access.
Landscape Supply Stores
Landscape supply stores specialize in hard materials (i.e. pavers, wall blocks, natural stone) and bulk sales of various mulches or soils; essentially everything you need to build a landscape. If you were to compare their inventory to that of an average garden centre, I think you would find very little overlap. Granted, most garden centres sell bagged mulch, lava rock, soil and manures but those in urban areas usually have limited space or are restricted with bylaws preventing bulk sales.
Landscape supply stores are also experiencing stiff competition from box stores, so any alliance you can form with them will help keep your customers local and discourage those trips to the larger chain stores.
Locally, we have a working agreement with the nearby landscape supplier; people in need of plants are referred to our garden centre, while we in turn direct clients in need of hard or bulk materials back to the landscape supply store. This system works well for both of us, and more importantly, our customers appreciate the courtesy of a referral to a local business.
Box stores are high-volume general retailers, or more traditional hardware and building supply centres, which are designed to draw customers from surrounding communities with their low prices and broad product range.
Their plant prices are substantially lower than most garden centres, averaging 20-50 per cent less. That said the plant selection, size and quality are almost always below what most would consider being “garden centre grade.” So well stocked nurseries with adequate advertising and good customer service should not be adversely affected in regards to plant sales. I also take note of which plant lines (or brands) are being sold there and generally avoid stocking them so no direct comparisons can be made, except for the quality and size of the actual plant.
Where box stores seem to be gaining momentum is with bagged commodities (fertilizers, soil, peat moss, lime), garden tools and landscape supplies (pavers, wall stones, etc.), or items which can be purchased in large volumes and be stored for long periods of time. Here, independent retailers should look to alternative brands or perhaps consider joining a buying co-op or nursery group. This way you can take advantage of the volume purchasing power and sell a distinct product line, as many nursery groups have their own branding.
Other Garden Centres
I am a great believer in healthy competition, meaning that as long as there are not too many garden centres within a given area, there are enough profits for everyone to prosper. Too often, garden centres are so busy bad-mouthing each other that their customer service suffers (remember, your customers are there to buy product, not hear you complain). We should be showing a little more professional respect for each other, even if we are competing for market share.
However, if you would really like to know how the average person perceives your “official” competition, then just ask one of your customers. I find that most of our clientele shop at all the local garden centres and they are more than willing to provide a candid opinion of their experiences (both positive and negative) at the other places of business.
Flea Markets and Corner Stores
Corner stores generally restrict their horticulture sales to cut flowers and seasonal potted plants designed to attract impulse sales. The scale is usually not large enough to have a negative impact on nursery sales and gardeners tend to avoid large purchases at such establishments.
On the other hand, flea markets are increasingly gaining some of the seasonal market share of plant sales. While most of the vendors are small growers looking to sell direct to public, the more alarming trend is that a few large greenhouse operations are using flea markets as a place to sell their excess stock very cheaply.
The last time I went to visit a local flea market, I was amazed at the variety of plant material available which included: perennials, hanging baskets, roses, shrubs, cut flowers, trees, annuals and passion flowers. Thankfully, these markets are usually only open for one or two days a week, and plants are not consistently available so shopping for specifics is difficult at best.
Well, that concludes my candid look at what I consider to be the local competition, although I am sure I have missed a few of the smaller venues. Now it is up to you to get out and have a good look at what your competition is selling and for what price, with an eye towards keeping local residents interested in your garden centre.