By Andrew Hind
By Andrew Hind
Everybody, it seems, has gotten into the Christmas décor market in
recent years. Department stores, the traditional sellers of festive
ornaments and decorations, have been joined by competitors in the form
of hardware stores, home wares and décor retailers, and others.
Providing an affordable and unique selection
Everybody, it seems, has gotten into the Christmas décor market in recent years. Department stores, the traditional sellers of festive ornaments and decorations, have been joined by competitors in the form of hardware stores, home wares and décor retailers, and others. The reason is simple: holiday décor is a highly lucrative market.
Add garden centres to the list of businesses that have joined this trade over the past decade or two. Entering the Christmas decoration arena is natural for garden centres, a logical extension of the Christmas tree, poinsettias and live greens trade. It’s also vital if a garden centre is to evolve into a true four-season operation.
But because the Christmas décor trade is so competitive, delving into it means difficult questions must be asked and answered. How high can you go with seasonal décor items before you price yourself beyond your customer demographics? How do you determine what items to buy in order to carry you through the Christmas season?
I’ve seen my share of garden centres that failed to answer these questions correctly and suffered as a result. One that sticks out in my mind is a large, profitable centre nearby that really strives to take advantage of the holiday season. The amount of unique and attractive items they bring in each year is dizzying and the effort put into transforming the store into a winter wonderland is truly inspiring. Every year the centre dedicates an entire wall, probably forty feet in length, stocked floor to ceiling with Department 56 ornamental village buildings. The problem is the product clearly isn’t moving: the same yellowed and tired looking boxes are brought out every year, only to be packed up again come January.
It’s obvious the garden centre has priced themselves out of the market with Christmas-themed buildings that begin at $100 and go as high as $300. They literally have thousands of dollars, perhaps tens of thousands, in stock that just doesn’t move. That’s lost opportunity and it demonstrates how important it is to accurately predict what your customers will be comfortable buying.
The first thing to realize is that those customers who want a bargain will shop elsewhere, at stores such as Walmart or Zellers. Accept the fact you can’t compete with these stores on the lower price point items and those people who want such items aren’t your target audience. Don’t fret the loss of bows, cheap plastic nativities, or bulk tree balls; you’d have to sell in volume beyond most garden centres to make an appreciable profit with these items.
Instead, focus on the reality that most people who shop at garden centres want something unique and high-quality and they both know and accept they’ll pay more for it. “Here at Wellington Garden Centre when we are considering just what giftware to bring in for the holiday season, or any time for that matter, we always factor in our overall marketing mandate. Product must fit in our overall theme and quality standards our customers have come to expect,” explains Elizabeth Comeau,
communication director of this Edmonton-based operation known for its selection of unique décor item. “As far as price-point, we try to carry a wide price range, something for everyone. That said, due to our wonderful store environment, uniqueness and product quality, our clientele probably have a higher than average price threshold.”
As Comeau suggests, knowing your customers is vital to determining what items to stock. You can use statistics (readily available at municipal offices, Chambers of Commerce, and in newspapers) such as average household income and housing prices in your area to track the relative affluence of your community and therefore reason what you can afford to offer them. Such numbers fluctuate over time, of course, as communities’ fortunes rise and fall for any number of reasons, so you may want to
revisit them every few years.
Colin Atter, owner of Calgary’s Plantation Garden Centre, in operation since 2002, has his own means of determining what sells in his location. “I track sales from previous years by variety as well as which product sold out the quickest, and this will aid me in the ordering process for the next season,” he says. “With our limited space I must find product that will turn over quickly and produce the most dollars for the space they are taking up so I would tend to focus on the higher end product that is totally unique and the customer would not find elsewhere.”
Modern shoppers are better educated about product options than ever before, thanks in large part to the vast amount of information at their disposal in the form of the Internet and the media. As a result, garden centres must be acutely aware of comparable pricing within the range of products they carry and be sensitive to those issues when setting their own price point.
When setting price points, it’s important to not be constrained by convention. For example, an item that traditionally sells for $49.99, would probably be far more attractive at $44.99. Why not try it? This modest discount will set you apart from the competition and you’ll likely sell the item in such volume so as to offset the loss per-item. It’s all about optics; customers love any hint of a bargain.
Determining whether you are comfortable making such a cut in certain competitive or high-profile items should be made before purchasing and should be a part of your seasonal marketing plan. It’s a precarious balancing act. You need to make a profit to stay in business, but you also want to make sure you are giving shoppers a fair price.
“At our garden centre we have a pricing strategy that would be considered mid-end for the most part, however, with respect to certain categories we prefer high end,”
explains Atter. “When it comes to ornaments I tend to try to keep them to the $9.99 to $12.99 price range with a few lower-end mixed in as well. I have an overall budget in mind when purchasing ornament and decorating giftware. Also, we stock up on regular garden-related products as they are often purchased as gifts and can be used again in the spring.”
As important to determining what to buy is how much to buy. The anecdote I gave earlier about the garden centre with the expensive Christmas village buildings illustrates how overbuying can affect a business.
“The amount of stock we bring in for the season depends on a few things, such as whether it is seasonally related and therefore time sensitive. If it’s product that we can re-work and present again in the spring, we tend to stock more,” says Comeau. “Also, we tend to order early in the season, watch for customer reaction, and re-order if needed in an attempt as to not have too much overstock at season end.”
In general, any ornaments or decorations over $100 should be purchased sparingly. That said, really high price point items are useful to help create drama, inspire people and compel them to consider the options. Also, don’t overlook exciting and unique impulse buys in the $20-$40 range to be displayed in high traffic areas and near check-outs.
The most important thing is to listen to your customers. They’ll tell you, through their purchasing habits if not their words, how much they’re willing to pay for holiday gift items. If you heed them, you can carve a niché in the competitive yet rewarding Christmas marketplace.