An independent retailer who dismisses the box stores as a threat these days is in need of an awakening. Considering the strides the box stores have made in their garden centers the last few years, the Home Depots, Lowe’s and Walmarts in your area are as big a threat as ever to the health of the independent garden center channel.
Jason Parks, the operations manager at Parks Brothers Farm in Van Buren, Ark., is well aware of this growing threat to IGCs. As a Top 100 Grower and the largest greenhouse operation in Arkansas, Parks Brothers has built much of its business around independent garden centers in the South. Parks, therefore, is a big proponent of IGCs continuing to differentiate themselves from their big box competition.
We caught up with Parks recently to get his perspective on the health of the independents in his region and pick his brain about ideas IGCs should be implementing.
GG: What are your biggest concerns for the independent garden center channel right now?
JP: Our biggest concern for this past spring was the increased cost of delivery. We deliver on our own trucks using our own racks and drivers that we hire or from lease companies. This past spring we tapped out all the lease companies. The drivers who applied to drive don’t want to load and unload racks. In addition to that, diesel fuel was up $1 a gallon, and replacing a bob truck this year costs almost twice as much as it did six years ago for the same truck. For the next few years, we don’t expect to see any of that improve.
GG: As a grower who primarily serves IGCs, are you concerned the big box channel has gained ground or surpassed IGCs in areas like marketing, merchandising and product?
JP: Box stores have marketing departments–huge budgets compared to a single garden center–and people dedicated to securing exclusive products and programs for their stores. You aren’t comparing apples to apples. Some IGCs do a great job competing individually on store versus store level, and some don’t. IGCs, however, can reap the benefits of the marketing that the box stores do by offering alternative products (and in some cases superior varieties) and by letting the box store build the demand for the products. As we have seen, when the exclusive items become available to the IGCs, there is still a demand for them from the consumers.
The same goes for merchandising. The box stores have whole departments dedicated to researching and implementing the best merchandising practices. Again, there are IGCs who are great at this and some are not. A good way to learn is to see what the box stores or any national chain is doing with their merchandising and emulate it.
GG: Because the big box channel is gaining ground on IGCs in certain areas, what should independents be doing to further differentiate from the big box channel besides the things we usually hear like customer service?
JP: This is one of the reasons I am a grower and not an IGC owner. I don’t know if there is a good answer to that question but I have some suggestions: The first is to get involved in your state association. Second, get involved locally with your chamber of commerce and other networking groups. Third, focus on what you do best. Fourth, look into joining forces with local complementary businesses. Last, and the one that I feel is most important: work more closely with your suppliers.
GG: The big box channel has been very aggressive over the last couple years capturing new products and programs that really elevate their place in the market. How can IGCs counteract this?
JP: For a breeder with a new plant introduction, the opportunity to have a national chain promote their product is hard to resist. Again, I think the IGCs can benefit from this, but it will be several years after the introduction. I believe the only thing IGCs can do in the meantime is promote alternatives to the exclusives.
At this time there is no way IGCs can offer breeders the same opportunity. In the past, when breeders have introduced items exclusive to IGCs, the end result has not been very impressive. This could be due to the items themselves or it could be due to the marketing power that is supporting the exclusive item. I tend to think it has to do with the latter.
On a similar note, I have been talking to some folks about ideas on how IGCs can counteract the box stores aggressive marketing. While the solution will be complicated, we have definitely come up with some outside the box ideas that could work if we can work out all those pesky details.
GG: It is an independent garden center’s responsibility, first and foremost, to ensure their own well being. But how responsible are the growers serving IGCs for the independent channel’s well being?
JP: That is a loaded question. From the grower’s side, how loyal has the IGC been to them? Has the garden center done a good job communicating their needs to their growers in time for the grower to be able to make any necessary production changes?
This goes along with my last suggestion. I think healthy growers and IGCs have to have good working relationships and work closely together. I think the growers and IGCs are simultaneously responsible for the independent channel’s well being.
GG: The IGCs in your region, the South, are somewhat unique compared to IGCs in the rest of the United States. How would you characterize the health of the IGCs in your area and, if you’re willing, throughout the U.S.?
JP: Southern IGCs are unique due to many reasons. They are fighters and survivors who deal with hail storms, floods, tornadoes and hurricanes on a yearly (and sometimes daily) basis. Often times they go head to head with at least one box store and sometimes two per town and not only survive but thrive. They are mostly overlooked by the industry (with a few exceptions). Despite all of that, they are still there selling their plants with a smile on their face.
I’m not saying IGCs in other parts of the country have it easier. All IGCs face the same challenges at the end of the day, but I am biased because I think the southern IGCs may have it a little tougher due to per capita incomes, the population densities in the south and the popularity of box stores.
GG: Spring was one of the worst in recent years in a number of regions throughout the U.S. How was spring in your area and what kind of consumer behavior did you see?
JP: Locally spring was great until the middle of April when we had two weeks of rain. One day it rained about 12 inches in 24 hours just 50 miles north of us. After that were the tornados. None were here local but they did affect several of our markets. There was a small increase in sales in mid-May that was short lived. Once it got hot, everything pretty much stopped for us.
The most noticeable consumer trend was the continued interest in growing their own vegetables and herbs.