Perception is truth

May 25, 2009
Written by John Stanley
In February 2009 at the Australian National Nursery & Garden Industry Conference, I had an unique opportunity to find out what the Australian industry really thinks about itself and its customers.  At the conference, I facilitated a session for the Association where we carried out a survey with the conference audience to obtain their views on the industry. We used an Audience Response System software program called TurningPoint which enables a speaker to receive instantaneous feedback from the audience.  A basic version of this technology has become commonplace on television game shows such as “Who Wants to Be a Millionaire "where the contestant 'asks the audience'”. The result is instant collective results from the audience displayed on the screen.

My audience consisted of the top 250 retailers, growers and supplies in Australia. It was made up of 31% growers, 31% retailers, 16% suppliers and the remainder were advisors to the industry.  The gender basis of the room was 35% women and 65% men. 45% of the room were in the Jones Generation age group profile, the 35 to 55 year olds.

What do we think of our Industry?
The first question I asked was how effective the audience felt we were as an industry at communicating along the supply chain line, from propagator through to retailer and the consumer.
  • 0%   thought we were excellent
  • 31% thought we were good
  • 53% thought we were average
  • 16% thought we were poor
This indicates that when it comes to getting the message across along the supply chain the audience generally considered the industry to be weaker than is desirable and indicated it is an area that needs to be addressed as an industry.

What do retailers look on as the main weaknesses in the supply chain and what do growers think are the weaknesses with retailers?   This is often a strongly debated issue in the industry. 

The results come out as follows:
What is the biggest criticism of retailers?
  • 44% Growers expect retailers to buy from availability lists without seeing the plant
  • 38% Stock arrives too late in the week for the retailer to build effective displays for the weekend
  • 38% Plant quality fluctuates
  • 31% Growers do not understand the complexities of retailing their products
This indicates a major challenge and opportunity for growers.  The Availability list resistance probably occurs because of a lack of confidence and trust, since quality fluctuation also comes up as a major concern.

And the growers concerns were:
  • 43% Retailers are not loyal to suppliers
  • 40% Retailers do not give enough forward notice of their requirements
  • 27% Displays do not do justice to the plants supplied
Again the big issue is the supply chain management that needs to be addressed.  I am sure an open forum on supply chain management would help to start resolving some of these issues.

How well do you understand the industry?

We all get involved in our little piece of the supply chain and often do not appreciate the full picture.

When growers were asked what was the their stock turn targets for their product in a retail situation, 47% said they know the target, but 89% said they had no idea what their product would generate a square metre in the retail area. This is a major concern, in other industries the manufacture would have a clear strategy on how they would expect their product to perform in the retail arena.

When it comes to retailers, 44% felt they understood the manufacturing or growing process and 55% knew the cost of manufacturing.  Retailers believe they know the manufacturing side better than the manufacturing side knows the retailing side of the journey to the consumer. This may be because many retailers started as growers in the industry.
Do we understand our consumer?

Having obtained a cross section of views on how delegates from both sides of the industry understood the other, we then moved onto consumers and how well the industry understands the ultimate consumer.

To get a more precise understanding of industry views, I split the consumer market into the generational groups that are often used in marketing of lifestyle products.

Generation Y
The 15 to 25 year old market.
These guys will be our customers of the future.  They will buy what I call trinket plants now.  In Italy I came across growers using glitter or sparkle paint on African Violets  to grow sales with considerable success in this particular market niche.

How well do we understand this market when it comes to green products?

  • 38% believe they have no understanding
  • 49 % said they knew them well
  • 13% believe they know them very well
Interestingly enough no retailers in the room believed they knew this market very well, but 86% of suppliers believed they knew the market well.
The manufacturers believed they knew the market, but the retailers did not.  This was a surprise to me, either there is a bottleneck in the supply chain at a retail level, or the suppliers and manufactures are out of touch with the market on this issue. I am sure this will be debated in the weeks and months to come.

Generation X

Generation X are the lifestyle consumers between 25 and 35 who are definitely within the market for nursery industry products and can be some of the highest spenders. The research shows they are the last to feel the pinch when a recession hits the pocket.
  • 13% believe they do not understand the market
  • 56% believe they know this market well
  • 31% believe they know it very well
Again retailers in the room felt they did not know the Generation X sector very well and suppliers felt they knew it well.

It became clear when I analysed the results that growers and retailers had completely different views on the market.  Retailers stated they did not understand the younger market, while growers and suppliers were saying they did and that the retailer was holding the industry back when it came to these two segments of the market.

The Jones Generation  - 35 to 55 year old age group
When it came to this age group there was agreement across the industry
  • 29% of the room believed they knew Jones Generation consumers well
  • 71% believed they knew them very well
As an industry there was comfort selling to the Jones Generation age bracket and belief across the industry that the Jones Generation was being served well.

The Baby Boomers
This is the market sector that created a buzz in the industry in the 80’s and 90’s but now these 55 to 65 year olds are moving onto other activities and maintaining their gardens.
  • 4% responded they did not know this segment well
  • 33% believes they know them well
  • 63% believed they knew them very well
  • No real surprises here; the industry has grown up with this market sector.  As a result it is to be expected that the industry would understand the motivations of this age group.

The Greying Tigers
  • The final market group are the greying tigers, those above 65 years old.
  • 11% of delegates thought they did not understand this group
  • 48% believed they knew them well
  • 41% believed they knew them very well
My overall observation is, that the industry understands the motivational needs and wants of the older consumers better than the younger market.  Yet, the younger market is where the future is and where the money is being spent.  The industry needs to concentrate on marketing to the younger generations, the challenge is that the industry has conflicting ideas on how well the industry knows this market.

What will drive the Industry over the next 12 months?
One of the key questions is what the industry drivers will be over the next twelve months.
  • 76% of the audience believe it will be the “cocooning” customer
  • 24% believe it will be climate change issues
What did surprise me was that 66% of the audience believed that the use of plastic containers in our industry would not be an issue in the consumers mind over the next twelve months.

Those are the thoughts of one group in Australia. After the session, a number of people approached me and said they did not agree with the findings. I can accept that, it was a confidential polling of the industry which, I hope, will start debate on the main issues that need to be addressed. It was a group of Australians, do other nations within the horticultural industry feel the same way, I do not know. To my knowledge, this is the first time this type of research has been carried out within our industry. The only thing I can stress is perception is truth and this is the truth that came out of one session.

During coming months I will be analysing the figures and adding comment to the debate.
I would like to acknowledge the involvement of the Nursery & Garden Industry Association of Australian in helping to develop this research of the industry.

John Stanley is a horticultural retail business coach, speaker and author of “Just About Everything a Retail Manager Needs to Know”.  Stanley helps with store layout, merchandising strategies, generational marketing and branding. 
Visit www.johnstanley.cc , e-mail This e-mail address is being protected from spambots. You need JavaScript enabled to view it   for information.

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