View: Jerry Montgomery On Big Box Retailing

View: Jerry Montgomery On Big Box Retailing

Marketing consultant Jerry Montgomery visited retailers this year during OFA Short Course in Columbus, Ohio. His mission: to determine what’s selling, who’s supplying and who understands retail marketing of plants the best among the three national retailers. Bell Nursery is clearly best, Montgomery found, and it has raised the bar higher for all growers serving big box stores.

In all, Montgomery visited eight Home Depots, five Lowe’s, four Wal-Marts, two Sam’s Clubs, one Meijer and a Costco. Here are his observations on Bell Nursery and its service with Home Depots:

Bell Nursery stocks the shelves of Home Depot with the highest quality plants you will see at any of the three national retailers. My definition of quality is plants that are the right size for the container they are grown in and the amount of color displayed on each plants. Sounds pretty simple, but you would not believe what we have seen this year in visits to almost 900 stores nationwide in 25 major markets.

There is no doubt Bell and its vendors produce plants with adequate spacing and provide the appropriate crop time to ensure what we now call the BELL WOW. It seems many producers have shortened the crop time and reduced the spacing in an attempt to increase the revenue per square foot and maximize the number of plants per distribution cart. Sadly, they have forgotten about consumer appeal, and many have incurred a higher discard rate that has more than offset the reduced cost of production.

When you pick up the Wall Street Journal and read a story about retailers, the first number quoted is usually same store sales. If same store sales increase, the stock moves up and if not, the stock moves down. Any vendor who assists a retailer and increases same store sales will garner an increased level of negotiating power that can be used to achieve the prices needed to help increase the retailer’s sales. The national retailers need vendors who can help them make money–not just low cost, but high sell through.

Bell stocks the shelves with plants that have the WOW effect, attracting consumers who ensure their planned and impulse purchases keep sales growing at Home Depot. However, that is only a part of the Bell Nursery story. It has taken the BELL WOW in products designed and combined with the best merchandising team in the industry. Some say they just don’t know how Bell can hire the large number of merchandisers and still make a profit. It would probably tell you they can’t make a profit without the current size of its merchandising staff.

Apparently, when great-looking products are combined with outstanding merchandising, the discard rates decline to a point where they make a large contribution to the costs of merchandising. When this happens, same-store sales rise while the importance of the vendor increases, giving the vendormore pricing power. Then, everybody makes money and you end up with a lot of happy consumers.


Retail Prices Columbus Metro

Item

Size
Home Depot
Lowe’s
Wal-Mart
Meijer
Basic Annuals 1204 x x x 4.98
Full Flat 1204 x x x 11.98
Seed Geraniums (8) 3.0″ x x 1.0 each 7.99
606 x 1.88* 1.50 x
608 2.98 x x x
8.0″ 5.99 4.98 3.00 6.99
T-18 x 14.79 x x
Wing Pack 4 plts x 10.98 x x
4.0″ 0.99 x 1.25 x
6.0″ 2.99 1.98 1.50 x
Premium Annuals 6.0″ 4.99 4.98 x x
4.5″ 3.87 3.87 3.50-4.46 3.99
4.0″ x x 1.98 x
NG Imp tray of (8) 4.0″ x x x 12.99
Cordyline 1G 9.97 x x x
Caladiums 6.0″ 7.99 x x 6.99
8.0″ x 7.98 x x
Geraniums 6.0″ x 7.76 4.00 6.99
Perennials 1G 5.97 4.98** 5.00 4.99
2 G 10.98 10.98 x x
8.0″ x 7.98 x x
3 G x 14.86 x x
Patio Pots 10.0″ 9.97 12.98 12.00 x
Caladiums 12.0″ 23.97 x 15.44-17.44 x
12.0″ 19.99 19.98 x x
Bushel 11.0″ x 12.76 x x
13.0″ x 24.90 13.00 x
14.0″ 26.88 x x x
6.0″ x 34.78 x x
Window Box 16.0″ x 12.98 x x
Color Bowl 10.0″ 9.97 6.98 x x
14.0″ 12.97 x x x
Hanging Baskets x x x x x
Basic 10.0″ 5.99 4.98 6.00 x
Premium 10.0″ x 10.98 x x
12.0″ 17.98 12.98 x x
Coco Fiber 12.0″ x 24.99 x x
Garden Club HB 12.0″ x 24.98 x x
Wave 6.0″ x 3.98 4.50 3.50
306 x x 5.0 x
8.0″ 7.99 x x x
Tidal Wave 8.0″ x 7.98 x x
Proven Winners 4.5″ 4.48 3.98 x 7.99
1 G 7.97 x x x
Vigoro 1 G 6.98 x x x
Weather Channel Pt 2.49 x x x
Vigoro 1 G 6.98 x x x
Sunpatiens 1 G 6.99 x x x
Steppable 306 x x x 14.99

* 50 percent off 606 packs

** 1 G perennials on sale at $3.33

Note: There were no outdoor garden plants at Costco or Sam’s Club in Columbus.

After visiting almost 900 retail stores in 25 cities across the country this year, it has become abundantly clear that the industry has to improve the quality of products as well as the maintenance at the point of purchase. Merchandising is clearly a competitive advantage for those who have learned how to manage a high-performance organization by selecting and training the right people–and then managing them in a way that creates value for the retailer and consumer.

Bell has set some really high standards relative to the marketing of green goods. So far, I’ve observed few others that are even in its league. If you look at what they do, it is not overly complicated; the brilliance is in the consistent execution that continually creates the BELL WOW in all of their served markets.

If, as an industry, we can provide products that are the right size, have great color appeal and ensure all products are well merchandised, sales would increase year over year. Forget about promotion orders or marketing boards and invest in great plants with great merchandising, and consumers will respond by leaving a higher share of their wallets in the green goods sector.

Jerry Montgomery is a marketing consultant. He can be reached at (407) 808-4077, (352) 873-7009 or [email protected].

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