Garden Retail 2012: Observations In Baltimore

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The weather was perfect for shopping and gardening in Baltimore on May 12 and 13, 2012, with temperatures in the 60s during the mornings and hitting in the low 80s by afternoon with very low humidity. Shoppers were out in full force and the store traffic was really heavy. Finally, after several cold, wet weekends, the Baltimore market has opened and what timing: Mother’s Day weekend.

Home Depot

These garden centers are clearly some of the best, if not the best, in the country for Home Depot. There are few competitive stores in the same league. Here is what we observed that makes these stores so outstanding.

The number-one reason is the quality of people in this vendor’s merchandising team. I have never seen merchandisers that are seemingly as consumed by their jobs and who work so hard to keep the displays organized, watered and very shoppable

We had the occasion to talk to a number of the merchandisers and were really impressed with the professionalism of the regional and district managers. They are some of the best and brightest and are committed to make Home Depot a destination consumers will return to. They are all good leaders and they lead by example and are so supportive of their people while still making them very accountable. There were so many people in the field over the weekend for the Home Depot vendor Bell Nursery we were able to talk to many of them and get some great insights about how they operate

The elements that separate this merchandising group from the competition are:
• They know the importance of the end caps. Consequently, the merchandisers make the best use of them of anyone in the country.
• The merchandisers, as well as the mangers, are very engaged with the Home Depot store personnel from the Store Manger to the hourly people in the garden center.
• The merchandisers know how to display color. You always see the higher volume items like the 6-inch basics ($3.33) displayed in a striped format that gives the tables a far more compelling look.
• You rarely see anybody watering during high-traffic periods. There is no more of a turn-off to a consumer than having to push a shopping cart over a hose.
• I would venture to say that 95 to 98 percent of the price signs are accurate and in place – again probably the highest in the country.
• The merchandisers really interact well with the consumer. We noticed a number of instances when the merchandisers advised consumers and they walked away very happy.
• The outside aprons are like billboards and if they are not well merchandised, sales velocity will be impeded. At the Baltimore Home Depots the aprons are high impact, clean and well signed. Really impressive.
• Of all the areas we visited in the past, there are no cleaner stores than these in the Baltimore market.
• Home Depot in this market has really outstanding outside corrals that are clean, neat and well organized, including the best use of carts for merchandising that actually are shoppable, unlike many retailers.
• On product side the vendor ships more colorful annuals and perennials than the competition. We observed more colorful annual displays than normally seen in the independent garden centers.
• Some of the SKUs that really caught my attention relative to displaying WOW color included: New Guinea impatiens, especially the 11-inch baskets; without a doubt the best 4.5-inch and 6-inch geraniums I have seen anywhere in the country; the best 6-inch annuals you can find anywhere; and the quart premium annual Vigoro SKU is loaded with more colorful premium items than others.
• Another crucial area that was very noticeable at Home Depot were the number of trucks replenishing the inventory on Sunday after a seemingly monster day on Saturday. That same degree of replenishment was not noticeable at other garden centers. The Home Depot stores always seemed to have full shelves throughout this important weekend

Metrolina Greenhouses is known as the top Lowe’s supplier, but when I compared stores in this market Home Depot is clearly the market leader in the Baltimore market.

I was a little surprised Home Depot did not have any alternative vegetable programs as all the goods were 100-percent Bonnie Plants. That is a terrific program, but the consumer has no alternative like a generic offering. Depot could do well with 1-gallon vegetables in the $4.00 price range just positioned as another consumer choice. Couple that with 3-inch or 4-inch vegetables and herbs in the $1.25 to $1.50 range and you have a great generic alternative to the branded product that sells a 4-inch for $2.98 and 1-gallon for $5.98.

There is also a huge opportunity in a vegetable line positioned for patio gardening. According to the National Gardening Association, more than 50% of the consumers who vegetable garden participate in patio gardening. There are some great varieties bred especially for this market.

Lowe’s

Metrolina Greenhouses ship really good product but their merchandising is outsourced to a third party by Lowe’s so their stores a have no similarity to what we observed in Charlotte and other areas of the south. The aprons are dull, drab and unimpressive. The end caps at Lowe’s, particularly inside the garden center have so little impact compared to Home Depot.

One of the things that looks very interesting is the patio vegetable program developed by Metrolina to give the consumer another choice. It seems to be moving well, especially the program they call “The Color Of The Pot Tells How Hot” a 12-inch patio pepper plant in four different colored pots indicating the level of heat.

Overall these stores are not in the same league as Home Depot – just another validation of how world-class merchandising creates a very sustainable competitive advantage.

Walmart

We saw a huge selection of sizes and price points, almost to the point of confusion for the consumer. This was not nearly as impressive as other areas we visited this spring.

Costco

Costco had a small number of outdoor garden items, but for the most part they featured more shrubs and roses with the best price on 3-gallon Knock Out this season, retailing at $13.99. They displayed the item in a paper sleeve to make it easier for the consumer to handle the thorny rose bush.

It seemed as though the annual SKUs were really good upon arrival but many had been in the store far too long. Consequently there was some deterioration in flowers and foliage.

Some highlights included:
• 14-inch patio combo $29.99
• 12-inch coco fiber hanging basket $16.00
• 10-inch Sun Parasol trellis $24.99
• 8-pack 4.5-inch geraniums $19.99
• 3-gallon Knock Out $13.99
• 6-inch orchid ceramic container $19.99

In the cut flower category, no one has the value Costco provides with huge numbers of bouquets in shopping carts dwarfing anything they did in outdoor garden. They had a featured arrangement for Mother’s Day in a glass container for $49.99 – a terrific value.

Sam’s Club

They seem to be far more aggressive in this area. Three of the four stores visited had large outdoor displays in the parking lots using wood pallets for tables. The initial quality seemed fairly good but some of the material was going downhill, especially things like hydrangeas that require a lot of irrigation. The other issue was there were limited choices, with most items offering one or two versions.

Highlights included:
• 14-inch square patio pot $20.98
• 12-inch patio combo $13.98
• 12-inch square hanging basket $17.98
• premium 10-inch hanging basket $8.98
• Flat of 6 606 packs $7.98
• 3-gallon Knock Out $16.98

Summary

In the Baltimore market, Home Depot clearly dominates with garden centers that have great merchandise and unmatched merchandising. The real story here is that Bell committed to doing things right by recruiting and investing in high-performance, passionate people that are driven to do whatever it takes to satisfy Home Depot and the consumer. In my view this is one of the best partnerships in the industry.

Jerry Montgomery (mrplug@cfl.rr.com) is a veteran of the floriculture industry who has worked for distributor companies, breeders and large growers with a focus on sales and marketing. As an industry consultant, Montgomery works for large growers, distributors and breeder/producers. His focus is to understand the market dynamics from breeder to consumer through intense retail travel, visiting about 2,700 stores since 2008.

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