Benchmarks: Get Ready For POS To Shake Things Up Again
Editor’s Note: Over the next several months, this column will feature a roundtable of viewpoints from various team members with vested interest in and experience with Greenhouse Grower and the horticulture market.
It’s no coincidence that the era of just-in-time ordering (JIT) became a standard for our industry at the same time retailers embraced POS systems.
The ability to understand exactly which plants a retailer has in stock at any given time was transformative. With POS, a retailer could check her computer after a busy Friday morning to see how many Endless Summer hydrangeas were still in stock, and if it looked like she would run out well before the weekend was over, she could arrange for a last minute delivery from her local nursery.
POS allowed retailers to reduce their financial risk. But when retailers first started using JIT shipping, it irritated the grower side of the industry. Used to having a full season’s worth of orders placed in late fall and winter, growers now had to speculate on which crops would be in demand. On the plus side, fewer retailers defaulted on big orders they couldn’t sell through, but uncertainty ruled the industry for a few years before everyone adjusted.
Likewise, pay-by-scan grew out of the level of tracking that POS made possible.
After the one-two-three punch of pay-by-scan, JIT and the economic crisis, growers have been hoping for an extended period of calm.
It’s a hope that will likely remain unfulfilled.
POS Is Finally Reaching Annuals
You would think that any wide-scale changes POS Systems would make on our industry would be quieting down. Instead, the opposite will happen over the next few years.
Here’s why: most retailers, not just mass merchants, are finally beginning to track every single plant variety they sell. Most smaller retailers, and even several large regional chains, would track annuals by pot size. And that’s it. Not by color, not by genus and certainly not by variety.
Think about that. An average garden center makes between 65 to 80 percent of its gross sales from plants. Annuals is easily the largest plant category, bringing in 32 percent of gross sales on their own, according to the most recent Today’s Garden Center State Of The Industry survey.
If annuals are finally being tracked, change will inevitably follow.
There are several things I can see happening as a result — eCommerce for plants taking off; a shift in how annuals are ordered; and color fads cycling even faster.
The development I’m rooting for most, though, is that retailers will finally stop allowing pot size to determine an annual’s value rather than the plant. One-price-fits-all was convenient, but no longer.
The thing about predicting how this one change will affect the industry, however, is that so many people are participating and acting on it that forecasting is an educated guess at best. All we know for sure is that there will be a big shift of some sort.
There’s time to prepare. We are only in the very early stages of this transformation. I can name on one hand the number of retailers who are tracking their annuals by variety. But I also know of a several who are converting to variety-level tracking genus by genus.
Exciting times lie ahead for us. I, for one, think the changes will be mostly positive.