The 80/20 Theory Approach To Inventory Selection Is Put To The Test At CAST 2015

Tim Runte of Calloway Gardens is a member of Greenhouse Grower’s Medal Of Excellence For Industry’s Choice Panel. Here, he shares how he determines which plants shown at this year’s California Spring Trials will make the cut at his retail stores.

For those of us that buy into the idea that 80 percent of our sales are made up from 20 percent of our inventory mix, being exposed to the wide selection of available plant options during the California Spring Trials can lead to some tough decisions and even sleepless nights on the road. Resources are often limited, making the careful call for where to invest your inventory dollars one of the most important decisions a retailer can make. On the other hand, those of us competing in a highly competitive industry as an independent garden center must consider one of our competitive advantages is product diversification or depth of selection.

I find it to be a very difficult and a very fine line to walk when it comes to deciding the number, the quantity and the dollars to invest in these “specialty” items. Do these products really have appeal to the IGC customer? Will they provide a financial return? Are they attractive to only us “plant geeks” or Master Gardeners, or are they simply refreshing to see in an industry that seems to be littered with an abundance of petunia varieties?

Many items at this year’s California Spring Trials will test the ROI model and the 80/20 Theory. Many will cause me to toss and turn over the next few weeks, trying to justify the investment in both time and money. Here are a few of the 20 percenters I will wrestle with this year.

 

 

 

Pelargonium cordifolium ‘Caroline’s Citrine’ (Cultivaris)
Gazania hybrid ‘Amber Ice’ (Cultivaris)
Fuchsia ‘Eruption’ (Cohen)
Helianthus ‘Double Whammy’ (Pacific Plug & Liner)
Rungia klossii – Mushroom Plant (Hishtil)
Artemisia ‘Cola Plant’ (Hishtil)
Lavandula ‘Meerlo’ (Sunset Western Garden Collection)
Cyclamen ‘Fleur en Vogue’ (Syngenta Flowers)
Ketchup ‘n’ Fries (Plug Connection)
Begonia ‘T Rex’ Series (Terra Nova Nurseries)
Verbena ‘Pompous Purple’ (EuroAmerican Propagators)
Bidens ‘Red Stripe’ (Suntory Flowers)
Basil ‘Balsamic Blooms’ (EuroAmerican Propagators)
Catharanthus ‘Soiree Double’ (Suntory Flowers)
Pea ‘Masterpiece’ (Burpee Home Gardens)
Celery ‘Peppermint Stick’ (Burpee Home Gardens)
Dipladenia ‘Vining Yellow’ (Ball Ingenuity)
Trifolium ‘Isabella’ (Ball Ingenuity)
Tradescantia fluminensis ‘Lilac’ (GroLink)
Gerbera Micro Series (Flori Line)

I would be remiss in not mentioning that my eye was not only caught by the more unusual, trendy, and maybe somewhat esoteric plants that represent 80 percent of my Item SKUs and only 20 percent of the sales. There were several plants that were easy to identify that fit into the category of potential ‘drivers’ or ‘home-runs’. These items will find their way to the top of the 20 percent of my Item SKUs that represent 80 percent of my sales. There will be no lost sleep on these plants; only visions of dollar signs during my well rested evenings.

Vinca ‘Valiant’ (Ball Horticulture)
Celosia ‘Dragon’s Breath’ (Sakata Seed)
Cyclamen ‘Perfetto’ (Syngenta Flowers)
Petunia ‘Night Sky’ (Ball Horticulture)

It is of course important to allocate space, time, resources, inventory dollars, marketing efforts and so on to your inventory based on the return each will provide. In a perfect situation, those items that make up 80 percent of your SKUs and only represent 20 percent of your sales would only take 20 percent of your resources. As an independent garden center retailer interested in creating differentiation, I find that a rather challenging but rewarding task.

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