The role of collaboration in building a sustainable Nursery & Garden Industry

The Nursery and Garden Industry is a diverse network of businesses of all sizes that compete for market share in the production, retail and allied sectors of the industry. This articles aims to identify some emerging areas of opportunity for business both small and large within the nursery and garden industry (NGI).

Partnerships

Increasingly, large publicly listed companies are engaging in communities as a means of demonstrating their social and environmental responsibilities which is driven by increasing internal (employees) and external (shareholders) pressures. Partnerships as a form of community involvement have been studied by many in the academic arena and have found that they can have the following returns to a business.
1. Brand differentiation
2. Enhanced brand/image and maintained community trust
3. Enhanced community reputation
4. Improved employee recruitment
5. Employee morale and retention
6. Enhanced government/community relationships
7. Improved competitive context
8. and the ability to reach new customer segments

Many of the above benefits relate to the sustainable management of a businesses risk with regard to reputation and subsequent consumer market share.

In identifying and characterising current community partnerships, which in the NGI often are at a philanthropic level where there is simply an exchange of money, the following Cross Sector Collaboration Continuum (Austin 2000) may be utilised:

Philanthropic – There is a level of altruistic motive and limited or no strategic value. i.e. donations. An example of this includes simply giving to a local charity in any form as a one off donation.

Transactional – Relationship increases beyond basic philanthropy, and may involve a particular project that demonstrates community involvement. An example of this may be support via fundraising initiatives.

Integrative – Embedded relationships with motives from both parties being strategic alliance. Value alignment between missions of the non profit and the business also exists in the activities that are undertaken. An example of this is an ongoing relationship spanning multiple years.

Collaboration

The act of working together and the outcomes that may be the result of a joint relationship has been studied and theorised in detail. If we take a step back and look at human nature for a moment, a theorist called Howard Rheingold stated that ‘biology is war in which only the fiercest survive. Businesses and nations succeed only by defeating, destroying and dominating competition.’ While this is historically true, the argument exists that through collaboration of complex interdependencies, the issue of competition may be somewhat diminished.
Another theorist (Rowland 2009) looked to the makeup of businesses stating that the ‘entity [business] exhibits behaviours that emerge from the complex interactions of subsystems or individuals…[and] the emergent entity is more than the sum of its parts.’ This analogy would suggest that there is a collective of working parts (the employees) which work together to attain greater power for a given outcome.

This may also be applied to the culmination of multiple businesses at an industry macro level. Therefore, it may be said that businesses that come together in the form of a partnership may together be stronger, producing greater outcomes than when one is operating in its own individual context. Without taking this too literally, let me explain what this might look like, and the importance of specialisation.

Specialisation

A mutually beneficial collaborative relationship will only ever be such if the values of each business are aligned to one another. It is inevitable in our industry that each of our driving goals is to sell more of our own garden related product.

Specialisation can play an important role in this process. Businesses that are experts in their area are those that hold a level of credibility and subsequently have a reputation of producing a quality product that ultimately fetches a premium price. If two such specialised businesses were to collaborate together to leverage resources from one another (i.e. they are non-competitive and yet complimentary products), you may see:

• Streamlined stock ranges which causes a reduction in your production costs (simpler systems, reduced pest and diseases - monocultures while at an uneducated level can be riskier, they are easier to manage).
• Improved supply chain management resulting again in reduced costs for delivery and sales runs.
• Improved operating systems and a streamlined process of production.
• Greater product offering to the retailer, greater marketing power and reduced sales costs.

Comparative Advantage

This notion of an increasing amount of collaborative relationships based upon specialisation needs one other significant factor to succeed – Innovation. It takes just one mind to have an idea, but it takes a collaborative set of minds to exchange ideas that will have resulting impact. This was outlined by a presentation by British author Matt Ridley titled ‘When Ideas Have Sex’. Ridley draws on a concept called Comparative Advantage which refers to the ability of a party (an individual, a firm, or a country) to produce a particular good or service at a lower opportunity cost than another party. The following demonstrates this concept in the context of the Nursery and Garden Industry:

Production Nursery Owner Jim takes:
4 hours to pot 1000 pansies
3 hours to pot 1000 chillies

Production Nursery Owner Ken takes:
1 hour to pot 1000 pansies
2 hours to pot 1000 chillies

Ken doesn’t really need Jim because his level of productivity is much greater already. However, if they decided to collaborate and trade their stock then:

If Ken pots 2000 chillies (2 hours), and Jim pots 2000 (8 hours) pansies and then they trade, they will each have saved an hour of work. The more that they collaborate together and act out such exchanges the more efficient they will become in their area of specialisation, reducing costs on both sides. The mutual gains from trade will therefore grow.

The Nursery and Garden Industry has immense opportunity for improved supply chain logistics, competitive advantage, specialisation and innovation. The result of this over the coming years will be a self sustaining, organically comprised system of interlinked relationships providingg mutual benefit to all and subsequent industry growth.

Case Study: Far Plants UK

Farplants is said to be the UK’s largest wholesale supplier for garden plants to the horticultural retail market. Farplants has a turnover of £16 million annually (2008), with a significant proportion of this being generated in Spring.

The organisation is essentially a cooperative (not for profit) of independent companies set up in 1978 and comprising of 7 production nurseries spanning across 13 different production sites (110 acres of mixed facilities). The growers have a board of their own by which they purchase common materials such as pots and media as one sole group, and not independent companies. Farplants works on behalf of the nurseries to carry out three main tasks – Sales, Marketing and Distribution.

The foundation of this working dynamic collaboration of relationships is that of trust amongst each primary stakeholder. Trust plays a key role at Farplants with specific regard to stock management. Each business produces specialised lines that compliment the Far Plants product mix. This product mix is negotiated through round table discussions with a supportive connotation of assisting one another for the greater benefit. With 25 different sites, there is the ability to grow a very wide range of plants that fill the market year round. Additionally, with the majority of stock produced on contract, the relationship and trust between producers and retailers is also significant.
Essentially the producers do what they do best, and that is grow plants while the Farplants organisation does the rest.

References:

1 - Austin, J., 2000, ‘Strategic collaboration between nonprofits and businesses’, Nonprofit and Voluntary Sector Quarterly, 29 (supplement)

2 - http://www.ted.com/

Further Watching:

Effective Merchandising

anthonycurnow.com
In the last issue of Groundswell, we touched on a number of store design elements and principles which can aid in maximising profit. Following on from this, effective merchandising is the fastest, easiest and most cost effective means of increasing your average dollar per spend and overall sales. In a recent trip around the state with John Russell of Brett & Associates, NGIV members/non-members from retail, production and allied trade learnt about some key effective merchandising principle and practices.

John began by outlining the three ways which customers make a decision to buy:
1 – Planned Purchase – 10-15%
2 – Personal Selling – 5-15%
3 – Merchandising – 80-90%
This clearly demonstrates the importance of effectively merchandising stock in store.

Merchandising Techniques

The following techniques were detailed in the workshops, and can be utilised to maximize visibility and appeal:

1. Block product by colour. The more product you have (particularly popular products), the greater the impact and likelihood of multiple sales.
2. Vertically colour block products rather than horizontally, as this increases shop ability and is more likely to attract the customers eye.
3. The area between waist and eye level is where customers pay most attention. This demonstrates the importance of having stock at least at waist height, and placing the products you wish to turnover in this zone.
4. Multi-face products on shelving – this is most effective in the sundries category, where having multiple facings of popular products such as weed killers, general fertilizers or potting media can further increase and encourage sales of those lines.
5. Keep cross merchandised displays simple. As John said – “You’ve either got a plant display with a pot highlighting the plants or a pot display with a plant highlighting the pot”. Use props sparingly to add interest and attract attention.
6. Cross merchandise in uneven numbers and follow the same principles that apply to designing a garden. Think about whether you are producing a symmetric or asymmetric display.
7. Display by end use. This means putting the plant into context for the customer by producing small courtyard like displays. Always feature the products used in the display en masse nearby, so that people don’t feel uncomfortable having to pick apart a display.

A practical example for applying these principles - Select three different plants of contrasting colour, texture, form but with similar growing conditions and display these separately on benches with a single prop to tie the products together. You need to take the guess work out of the customers buying decisions.

A great display at Grevillea Nursery (Werribee). Signage demonstrates the features and benefits of the plant. The large advanced specimen also attributes to the display, showing customers what they are buying into.

Vertical blocking and multiple facing products in the sudries department at Faggs Mitre 10 Geelong.

Signage Techniques

The other most important element to effective merchandising is clear and concise signage, as this will increase sales rather than having staff push face to face sales – they produce a high return for little investment. John suggests A4 signage utilises the following principles:

1. All signage should be uniform and include your branding and logo towards the bottom as you are not selling your brand as they are already in your store, but rather reminding them of where they are shopping.
2. If there is just one thing to remember when it comes to developing signage which sells product for you, it is:
Feature then Benefit
3. The feature of the product refers to the characteristics of the product which will appeal to the customer. The benefit however refers to what the characteristic will do for the customer. For example, a Photinia ‘Red Robin’ means nothing to the customer. The features are new red foliage, responds to pruning and drought tolerant. The benefits are that Photinia ‘Red Robin’ is fast growing, a good hedging plant and is a low water user.
4. Generally, customers want to know:
a. What can I use it for/where can I use it?
b. Why should I buy it (benefits, reasons to buy)?
c. How much does it cost?
5. Prices printed in red have a psychological reaction that sends a perception of value, even if the item is not on sale.

Following on from the presentation by John, attendees to the workshop had the opportunity to actively merchandise stock at the garden centres hosting the workshops. This process was similar to a cook off on Master Chef – the energy and competitive streak in us all came through, spurring the implementation of their newly found skills in re-merchandising stock. A few examples of the outcomes of this process can be seen here.

Johns Suggested Props

- Umbrellas
- Pots and ornaments
- Painted pots or boxes
- Wooden tubs
- Wooden wheelbarrows
- Trellis
- Driftwood
- Sawn tree rounds or blocks
- Rocks
- Bricks and pavers
- Pebbles shell and bark
- Pine cones
- Fruit and vege - real & artificial
- Silk and crepe paper flowers
- Hessian- good colours now
- Cane baskets
- Coloured plastic pots
- Coloured watering cans
- Candles - chunky
- Ribbons
- Coloured paper
- Balloons
- Toy figures - scarecrow
- Florist boxes
- Archways
- Scarecrows
- Carts
- Old bicycle
- Old car
- Carts
- Wheels
- Gates
- Old tools
- Old boat
- Letterbox
- Birdcage
- Old boots
- Telephone box
- Mannequin
- Gazebo
- Flower cart
- Wooden crates
- Straw bales
- Bucket & spade
- Sunhat or bonnet
- Painted mural
- Corrugated iron
- Old cauldrons, water cans, tea pots, baking dishes etc.
- Mock patio ,verandah, front entrance etc.
- Hired costumes for theme promotions

Johns Suggested Merchandising Solutions

- cottage
- tropical
- woodland
- mediteranean
- Japanese
- formal
- native
- shade
- hot & dry
- seaside
- autumn tints
- winter
- spring
- summer
- patio
- Containers
- front doors
- structure plants
- climbers
- easy care
- herbs
- the edible garden
- kids garden
- bird scaping
- screens
- ground covers
- fragrant
- flowers for picking
- rockery
- water gardens

Maximising Profit with Smart Store Design

anthonycurnow.com
First Impressions

First impressions really are everything. If your business is overcrowded and untidy on entry, it is likely that the customer will not even pass through this clutter to reach ‘the good bits’ of your store. Ensuring your overall housekeeping is of a high standard (raked paths, no weeds, stock is maintained at high quality) will portray an image to the customer, which immediately affects the perception on price. It’s like the difference between going to Myer or a discount variety shop – what the customer expects is different in each experience. The better presented the store the more likely the garden centre will be able to fetch a fair price for their stock. Additionally, you can influence a customers’ mood with your overall livery or theme. This is all about consistent branding throughout every aspect of a customers interaction with your business – from catalogue to face to face sales.

Lintons Garden & Home have introduced seasonal themes such as the Summer ‘Burst Into Life’ livery. This has tied in well with the colours of seasonal stock lines and created an experience for the customer that exhibits professionalism and encourages spending.

The entrance may be referred to as the welcoming zone and it needs to have the effect of calming the customer and setting the scene for the experience which is to unfold as they explore your business. It should be well defined in its traffic flow and open enough so that customers feel welcome to come and go at their own leisure. Ideally there will always be a friendly staff person in sight of this area to greet and farewell customers – this has the added bonus of awareness and will reduce the likelihood of theft.

Layout Considerations & Category Management

Balance and Symmetry – people respond positively to symmetrical things, hence our love of formal gardens. People are also naturally inclined to turn left. With this in mind, designing your entrance and exit points is incredibly important as a means of making sure there are few ‘dead spots’ in the entrance area to your store.

Accessibility - Overall, a successful layout is one which encourages spending by guiding customers through every category of the business. In doing so, stock needs to be merchandised to encourage sales by simply making it accessible. Stock that is difficult to access will not sell, so be aware that cramming plants into a bench will have a negative effect on sales.

Gardenworld are increasingly cross merchandising their indoor house plant range and associated products to increase the chance of an add-on sale, while maintaining the accessibility of their products to the customer.

Making Use of Dead Spots and Hot Spots – A dead spot can be utilized by placing either a high selling item which customers will seek out, or alternatively using them for low turnover specialty items such as hanging baskets and wire products. Hot spots on the other hand are made to be used and abused, capitalizing on areas which customers are almost given to buy from. These are key areas throughout your nursery which your customers regularly pass by.
Additionally, locating seasonal hard good lines (fertilizers in Spring) nearby the register can be a simple way of increasing your dollar per spend by having staff up sell these goods. This does not have to be a hard sell, as the tills are a highly impulsive area in themselves and often the item will sell itself.

Merchandising Like Products – You all know what cross-merchandising is, but what is most important is ensuring that what is contained in a cross-merchandised display is relevant. With this in mind, there are particular strategies you can employ to create an effective display. One such method is merchandising 3 different plants together, all of varying attribute – foliage, flowering and structural for example, and most importantly the three plants should all have the same cultural requirements. In incorporating other hard good lines, similarly don’t confuse the customer by placing too much in a display – keep it simple and effective.

Capitalise on Top Sellers – It is a general rule that seedlings should be located at the back of the garden centre as this encourages customers to walk through your store to reach this high turnover category. Regularly reviewing what is selling and what isn’t can guide you in category placement. Native plants for example should also be located towards the back of your outdoor sales area as these too currently contribute to a significant amount of sales for many garden centres. Potted Colour is another category, similar to that of perennial lines which generally have a shorter shelf life and are impulse driven. They must be sold as quickly as possibly before quality deterioration forces discounting which impacts on sales by diminishing margin. Placement of such lines may be between the entrance and a high turnover item like seedlings. There is a reason why milk is located in the back corner of the largest of supermarkets – you pass literally thousands of items along the journey, increasing the likelihood of an impulse purchase. Don’t be afraid to move an entire category and change your whole store should you feel that it will improve the overall movement of customers through the store for the benefit of increased sales.

Category Splitting – Placing the same product in more than one location in store confuses the customer. For example, a recent trip to my local automotive store saw me seeking out some window cleaner. All cleaning products (window and tyre cleaners) were merchandised according to their brand and not use, meaning that novices like myself could not easily compare like with like.

There are always some exceptions to the rule - In most garden centres I visit, all fertilizers, chemicals and herbicides are grouped accordingly. However, with increasing environmental awareness comes a need to have environmentally friendly products highlighted as a first option.

Reducing Theft - Increase visibility by having open lines of sight and reducing blind spots throughout your garden centre. Additionally, ensure you safeguard your entrance and exit to the garden centre by locking the till and having staff working in the area at all times.

Finally, with regard to layout, the best practical step you can make is having an operational map of your store which allows you to clearly understand customer movement. In doing so, for those of you who capture categorical data, this gives you the prime opportunity to actively promote particular products which are known in previous years to be big sellers, and actively push the sales of these lines sky high based upon sound financial categorical analysis.

Colour Associations

Emotions are undoubtedly a driving force behind sales, and the use of colour can significantly encourage this. We all use red and white or red and black on sales signage as red is the most effective colour for attracting people’s attention.

With this in mind, impulsive purchase are said to occur when reds and oranges are used in store, as they are hot colours and cause the heart to run a little quicker than normal. Within the same colour spectrum, yellow similarly induces emotive feelings of optimism as it is said that the brain releases more serotonin when around yellows.

Colour preference is influenced by our standard of living; brighter bolder colours appear to attract those on a lower income, whilst those targeting higher income brackets should use more subtle colours and shades.

When it comes to branding, we all know the Golden Arches or the white tick or the red cola can. These Associations are psychologically recognized within the consumers mind and are engrained from a very early age. Generations have grown up with some of the largest corporate brands and it is their simplicity that needs to be recognized, in both their design and use of colour.

Should you believe that your overall image is impacting on sales, perhaps consider enlisting the services of a colour consultant to guide you.


Macdonalds Plants Plus Nursery utilized a colour consultant when designing their small giftware area.

Are You Making it Difficult for the Customer? A Few Final Points

Lighting - Lighting has huge benefit in indoor settings particularly, which are often dark and cold in their appearance. Lighting can have a warming effect, encouraging customers to linger and shop while also highlighting various stock lines.

Handwritten Signage – This is a pet peeve of mine and also for your customer. It reflects negatively on your overall brand and may in fact cause a decrease in sales. It’s often painful to read, unclear in its purpose and much of the time would benefit from being discarded and letting the plant sell itself.

Signage at Gisborne Nursery is simple but very effective, with no hand written signs in sight. Stock is also well spaced with labels all facing the front making it easily shopped.

Crowded Layout – Inaccessibility of stock has already been mentioned, and overall having paths not suitably wide will also decrease sales. If you can’t get a trolley (or wheelchair) through every part of your store, you might as well close your doors until you can.

Lack of Shopping Aids – Not having sufficient baskets and trolleys for customers to assist themselves in shopping can have a serious negative effect on your average dollar per spend. Offering customers a trolley or basket will encourage them to fill them, rather than walking to the counter and exiting once their hands are full.

Keep the Staff Informed

Lastly, as always, your staff need to understand the decisions you make with regard to design and layout so that they are not constantly changing things that may negatively impact on sales unknowingly. Listen to your staffs ideas and educate each other in the effort of moving forward for the betterment of your business.


References:

http://www.precisionintermedia.com/color.html
http://retail.about.com/od/storedesign/tp/store_donts.htm