Plant Availability: Bridging The Grower-Retailer Gap
How can growers and retailers work together to solve the push and pull of live goods orders when the needs of each group are so different? Here are a few ideas for making it work.
March 6, 2012
Availability of live goods is a moving target. It means growers have to know what retailers will request at any point though the short gardening season and be able to deliver while consumer demand is still strong.
Of course, growers would like all live goods orders to be booked well in advance, while many retailers are moving to a lean inventory model ooking to buy on a just-in-time basis.
When it comes down to it, serving the consumer is what will make both growers and retailers successful. So how are growers and retailers working together to make the right inventory available at the right time?
The Consumer Is A Step Ahead Of You
Between the internet and consumer gardening magazines, it’s easier than ever for consumers to get a peek up the supply chain, into the plant breeders’ gameplan for the future. Many times, customers come looking for plants that haven’t been tested or aren’t right for the region, says Jason Parks of grower-retailer Parks Brothers Farm. And it wreaks havoc on what consumers are expecting to see at retail.
“It’s always a crapshoot on whether the grower will have what the garden center needs to supply and what the consumer has asked for because the plants were advertised to the consumer first,” he says.
So how can growers and retailers stay ahead of the information game? Consumer success really boils down to plants that are successful, Parks says growers and garden centers need to pay attention to trials in their regions and, one step beyond that, garden centers should supply locally or regionally grown plants.
Having a voice and being considered an expert can counter what gardeners hear from other sources. Growers who supply a local region can help their retail customers achieve this goal.
If growers and retailers worked more like the fashion industry, setting well-defined trends rather than trying to follow them, customers would always be able to find the inventory they’re looking for, Parks says.
Having a prebooked plan in place gives retailers the opportunity to build a mindful advertising and marketing campaign around live goods that are ordered, says Glenn Andersen of Nordic Plants.
“We often create unique packaging ideas for our customers and have found that offering selling tools such as mannequin plants or poster boards really helps sell plants,” he says. Collaborating on packaging, point of purchase materials, merchandising and display ideas with retailers can give growers an edge.
“The real challenge is coming up with strong new ideas each year to keep the excitement going,” Andersen says.
How To Determine What You Grow
Growers are using a few different approaches to determine what to grow and how to sell to make their products attractive to retailers, while protecting themselves against being stuck holding inventory.
To make prebooking more enticing to retailers, Nordic Plants offers a booking price that is below availability pricing, usually in the 5 to 15 percent range, Andersen says. And booked orders are always honored before availability orders.
The grower also builds in a bit of leeway on delivery date, offering flexibility to both grower and retailer.
“If it is a week 18 booking, the plants can ship either week 17, 18 or 19,” Andersen says. “Either the retailer can move it one week or we can if the crop is ready early or is delayed. For the retailer, if it has rained all week they can hold off taking product for an extra week. But it has to ship the following week if plants are ready.”
Anderson adds that if Nordic Plants doesn’t have the order ready to ship one week later, the retailer has the option to cancel the order. This flexibility is helpful to both the grower and its retail customers.
“It is important to set some parameters but always keep in mind that it must work for the customer or they won’t reorder,” he says. To encourage prebooking, new programs are always offered as booking programs first, and Nordic tries to differentiate booked items between different retail buying groups, keeping some exclusivity between them and a unique look for retailers.
The Numbers Don’t Lie
Parks Brothers Farm still grows a lot on spec, and the operation determines production based on historical sales. Parks Brothers also accounts for a percentage increase based on factors like the economy and expected growth or loss of market share. Once those numbers are calculated, booked orders are added on top of spec.
Working predominately with independent garden centers, Parks says there isn’t much choice but to grow on spec.
Ideally, though, he says growers and retailers should share planning and risk, truly working together and counting on each other.
“When the relationships reach that level, then the growers and retailers can begin to plan and execute promotions, share in the marketing and work together to build demand,” he says. “There are huge opportunities for custom programs and promotions that retailers could be doing if they work with their suppliers.”
In addition to numbers that growers have, retailers’ point of sale (POS) systems could be another tool growers use to help the retailer make accurate prebooking orders and for growers to get an idea of what to grow on spec. Reports from POS systems (or whatever format sales information is recorded) are a gold mine of content for retailers and could be for growers, as well. Growers can help retailers interpret the data and use it to plan for the next season.
Tough On Inventory
With a nickname like the serial inventory slasher, you might think of Gail Vanik and her Four Seasons Garden Center as a retailer that follows a just-in-time model, but that couldn’t be further from the truth.
Vanik says she got tough on inventory in 2011, reducing inventory and ordering a minimal amount during the season. How has her ordering been so accurate? Through careful analysis of POS data, which can drill down to how many of each size container were sold by month, week, day or even hour. This type of analysis changed Four Seasons’product mix.
At the end of the 2010 season, Four Seasons held $15,000 in perennial inventory. Since using POS data to decide what to keep in stock, Four Seasons only held $1,000 in perennials inventory at the end of the 2011 season. Using this model, Vanik is able to place 90 to 95 percent of her live goods orders in October, only ordering about 5 percent as backup during the season. While Four Seasons is a grower/retailer, Vanik says retailers could probably prebook most, if not all, orders in October if they needed to.
It’s the power of POS data, which reveals some assumptions Four Seasons was making were actually inaccurate.
“We always thought we sold more tomatoes in 2 1/2 inch pots than six packs, but no, we saw we needed to change what we were growing,” Vanik says. “We had the same perception for 12-inch baskets versus 10-inch baskets.”
How About Talking Directly To Consumers?
Without a doubt, if retailers could pick the sure bet — which plant would be sure to sell—prebooking orders would be easy. It’s impossible to know for sure what will sell, but retailers who are more connected with their customers have a better shot at it.
Besides crunching the numbers, Vanik says she also offers samples that she receives from breeders to her best customers to trial at home. “It’s the only way to really find out what home performance will be,” she says.
While Parks says communicating with retailers through social media hasn’t been a great success, it seems to work with consumers.
“This past spring, I could post a picture of a particular basket or plant on our Facebook page on Friday and that plant would sell all weekend long,” he says. “When I was doing a morning news gardening segment, every plant I talked about sold that weekend. All we have to do is show them the plants and tell them how to succeed, and the consumer buys the plants.”
Sara Tambascio is senior online editor of Greenhouse Grower. You can eMail her at firstname.lastname@example.org or follower her on Twitter @Sara_GG_TGC.