OK, so we have had a lot of family stuff these past few weeks – plus I’ve been in the home office working with my head down, so clearly I’m not spending enough time out in real world, because I just drove past the local gas station and a gallon of gas cost $3.79.
It had been about $3.25 last I remembered, so first I said a really bad word, because I was surprised and shocked. Then I had to laugh at myself for being an idiot. Of course we will see $4-and-up gas this summer. I’ve clearly spent too much time sleeping in my cave in Florida — old Rip van Winkle would be chuckling at me.
I knew that oil passed $120 a barrel. I knew all about sub-prime and the bursting of the residential housing bubble. I could tell ya’ about it in great detail — what the Fed has done/is planning. I read the paper and listen to the biz press. But gas at those prices is — just wrong.
Then I thought about what I’ve seen at retail this spring, in terms of how we, as a group of consumer product marketers (we used to be growers), are dealing with helping consumers cope.
This past spring, I saw a lot of nice plants at retail. I saw some spiffy new genetics, a few more organic packages and products, some nicer, bigger tags and few better signs. But thinking back on this spring, I really did not see anything that addresses today’s issue of less dollars in the pocketbook.
Here is how my small brain is working:
1) Consumers have less money in their pocketbooks. Consumer confidence is at record lows, the press is ga-ga (technical word) over the housing crisis, Washington is dazed and confused and sending us all a small check and gas and milk are at record highs.
2) Consumers will shop less. They will make fewer trips to the store as it is too expensive to fill that tank.
3) Consumers will slow down on some items that are perceived to be "luxuries" — i.e. Starbucks coffee is losing some momentum to Dunkin’ Donuts and new McDonald’s coffee. In some ways, being frugal is the new chic.
We make bedding plants, which you have to go to the store to buy and drive back, preferably in a jumbo sized SUV. No Amazon.com free freight here.
Bedding plants are seldom on a shopping list, so they may be forgotten with fewer trips to stores. Just in case the above is not bad enough, many/most consumers think of bedding pants and flowers as a luxury item.
Hmm … that may explain some of 2008 and might alter a wee bit of thinking as you plan 2009.
With all that as background, what can we do about it? Well, let’s look at packaging. In the past many years, we have seen a shift to fewer packs and more 4-inch and larger pots — a solid push at "premium" annuals. I wonder if consumers who are making fewer trips to Starbucks will shift the package in which they buy flowers. (On a related note, a few weeks ago, Starbucks did introduce its new, less expensive coffee — hmmm). Color me silly, but if the economic trends flow all the way down to our products, would this not be a time to rethink more "value packaging"? How about those handle-packs that scream out, "Buy 5 and get 6th one free." Or "24 plants for more coverage than a regular flat" — or words to that effect.
If we are suddenly buying more in bulk from Sam’s Club or Costco to save some trips and money on paper towels and toilet tissue, why wouldn’t we behave the same way with plants? And I was serious about the handle screaming out a sales message. It might need some wordsmithing and a graphic designer, but I think your handle-pack handle should be printed with that value message — make it easy for me to find that jumbo package of paper towels.
Way back in the good old days of say, 2005 or 2006, we would have scoffed at that idea. Packs are dead, pots are in. It was all about the consumer being too busy. We need to offer larger plants that are easier to grow. It is all about decorating, you male idiot, give her what she needs. Heck, I know half my columns were on that vein, and darn it, in that era of, "Look how much our house is worth" and "Sure, we can refinance at low rates," that trend was real.
While I still agree "she" is still too busy, and "she" really is a decorator, not a gardener, I am not convinced that a shopper who is driving through Mickey D’s for a small regular coffee rather than getting her Starbucks soy latte is spending her shrinking disposable dollars for that fab new nemesia in a 4-inch or quart pot. I really believe that for many consumers that flat/handle pack/value pack/box-o-plants is looking more attractive.
I am not suggesting it is just about selling the regular stuff more cheaply. That is one approach to an under-pressure consumer, but it is not the only choice. She still is too busy, she still needs help understanding our products — but how do you make the presentation look like it is a better deal? Those who can rethink package and price may have a success. There is a lot of room between a 4-inch specialty annual at $2.79 and a six-pack of marigolds at a buck. Make her feel like she is getting a great blend of high-quality plants in a less expensive package per unit. Done right, there is margin and dollars for growers and retailers.
Kill your 4-inch program? Nope. Shift all to packs based on a now last-year (spring 2008) observation? Nope. But maybe, just maybe, the product mix you bring to market in 2009 will have a few additions that fit the beleaguered consumer.
So questions to ask yourself, your retailers and, gosh forbid, your consumers about this past spring:
Are you seeing a shift from higher-priced retails to lower-priced value retails, counter to what many have seen the past three to five years?
Is the ratio of potted premium product correct for 2009, or is there room on the retail bench for more value-priced items?
Is there potential for packages with more units per square foot of bench space, the plant equivalent of those large 24 rolls of paper towels at Sam’s – be they packs or shuttle trays, handle packs or, gosh forbid, a new and fun retail package?