Which Products Are Hot Now
Thanks to the State Of The Industry Survey, we have the scoop on which products are selling, and which ones retailers are dumping.
Originally published in Today’s Gardening Center July 16, 2012
Eavesdrop on any group of garden retailers, and within five minutes you’ll hear them comparing notes about which products are doing well and which ones are tanking.
With the State Of The Industry Survey, we were able to make those comparisons on a national level.
The results hold some surprises and reassuringly confirm the strength of plant sales.
What’s New In Plants?
This year’s survey asked retailers which product lines they added to their inventory in the past year and in the past five years. Here are the top trends gleaned from the responses:
Miniature gardens (fairy gardening)
Indoor plants and maintenance
Edibles and vegetable seeds
Trees and shrubs
A lesson to learn this year is never to write off a plant category. It wasn’t long ago that seeds, trees, shrubs and indoor plants were also-ran in the plant lineup at a garden center.
Today, these plant categories are performing strongly. First, more retailers reported that their sales in these categories increased this past year than those saying the categories decreased or remained flat for them.
Another sign of strength was seen in how much shrubs and trees contribute to stores’ gross sales; shrubs and trees ranked second and fourth respectively.
Shrubs, especially, are a welcome comeback. Retailers report that in dollar volume, they outperform perennials and are second only to annuals. After years of too many shrubs on the market, retailers and nursery growers are all relieved.
More good news in plants is that the categories that contribute most to gross sales saw the strongest sales increases.
Not surprisingly, annuals are the power player. On average, annuals account for slightly more than a quarter of gross sales at garden centers, and 60 percent of garden centers saw increased sales this spring (compared to 12.8 percent who saw decreased sales in annuals).
Edibles had the strongest increase in sales, with 77 percent reporting edibles surged for them (compared to the measly 2 percent that had decreases). But to keep that in perspective, edibles accounts for 5 percent of gross sales. That makes it the sixth strongest product category out of 21 offered in the survey. But it trails annuals, shrubs, perennials and trees.
Plants Less Important To Some Retailers
On average, plants make up 64 percent of total sales for retailers. But that average does not reflect reality very well. How much to plant contributed to a store’s gross sales ranged widely from store to store.
For the most part, there was a classic bell curve, starting with 6.1 percent saying 41 to 50 percent of their sales come from plants, then peaking with 24.5 percent in the 60 to 70 percent mark, then easing back down to 12.3 percent in the 90 to 100 percent bracket.
Then there is the odd surge of retailers, 20.4 percent to be exact, that say only 30 to 40 percent of their sales stem from plants.
Intrigued, I decided to look at the survey results with only this group’s responses. At first glance, there’s not much that’s different. They come from all over the country, and spring is the most important season of the year.
But one point of departure shows up with which product categories contribute to gross sales.
Like the full list of retailers, this plant-light group says that shrubs and annuals are the top two contributors to gross margin. But the next most important product category for them is holiday and seasonal products, ranking ahead of perennials. After perennials come pottery, followed by edibles, which is in turn is followed by the gift and home accents. The full list, in contrast, has plant categories in the top four, with holiday ranking fifth.
This group shows that one out of five garden retailers have diversified their product range successfully.
Which Products Are Struggling?
When asked about which product categories were dropped from their inventory in 2012, and in the past five years, plant groups again led the list.
Given that plants are the core of garden retail, it’s not a surprise that the most volatility in which products perform better or worse comes from green goods.
So which ones, specifically, did retailers say they were abandoning?
Bulbs were the most cited product to be dropped. The list of dropped plants is more scattered after that, although there are a few formerly hot trends that are fading. For example, bamboo and aquatic plants featured prominently in the dropped products.
So did old-fashioned forms of gardening that younger generations have not yet embraced, illustrated by hybrid tea roses and bare-root trees and shrubs making the list.
A few retailers said they also dropped fruit trees, which bucks the edibles trend. Another product category with an intriguing contrast was annuals. Some retailers said they dropped flats, while others mentioned adding larger annuals to their mix in the past five years.
The Sad Tale Of Bulbs
Let’s return to the No.1 dropped product in this year’s survey, bulbs.
Not only did bulbs lead this list, it came in first in another negative list: it contributes the least to gross sales out of all 21 product categories offered in the survey.
On average, stores say bulbs contribute only 0.5 percent to their gross sales. That means categories like birding and water gardening out-earn bulbs.
And the story worsens for bulbs. It was the only one of the 21 products were decreased sales was the most common answer (out of increased sales, decreased, flat and do not carry).
Organic Vs. Conventional Controls And Fertilizers
An interesting story emerged in the fertilizer and control results. When asked whether sales increased, decreased or remained flat, retailers reported much stronger sales increases for organic fertilizer and controls compared to their traditional counterparts. A full 60 percent of retailers say organic fertilizer sales increased, with only 10 percent reporting decreases.
In contrast, only 25 percent report their traditional fertilizer sales increased (16 percent saw decreased sales).
A similar story emerges with controls. Forty-seven percent of retailers say organic control sales increased, compared to 23 percent who say the same for conventional controls. In fact, the most common response to this question for traditional controls and fertilizers was that sales were flat, whereas increased sales was a strong leader for organic controls and fertilizers.
Sounds like organics is the place to be, number wise. But not so fast. When asked about how much each category contributes to gross sales, the story changes.
Conventional fertilizer accounts for 2.36 percent of gross sales. Organic fertilizer, 1.76 percent. Similarly, traditional controls make up 1.36 percent of gross sales, while organic controls can claim only 0.71 percent.
Are These Products Justly Undersold?
Out of the list of 21 product categories, six had the dubious distinction of being the least likely to be stocked at a garden center, meaning that more retailers check the “do not carry” option than those that checked “sales increased,” “sales decreased” or “sales were flat.”
Furniture and Patio (59.6 percent do not carry)
Water Gardening (51.1 percent)
Sod/Grass Seed (38.3 percent)
Gifts/Home Accent (35.4 percent)
Birding and Wildlife (31.3 percent)
Garden Art (29.8 percent)
In conversations I had with retailers in early spring, three of these categories, however, were specifically credited for how well early sales performed — furniture; sod and grass seed; and garden art.
The furniture and garden art, along with trees, were big-ticket items that customers were wanting to buy again in spring 2012.
And early mild weather stirred up weekend warriors to get out and take care of the lawn, making sod and grass seed vital to several garden center’s 2012 success. So why do so few retailers carry these products?
The most common reason I’m given about why garden retailers do not carry as much lawn care is big box competition. Many independents have decided to cede the category to them.
That may be a mistake. Just about everyone who owns a home has a lawn to take care of (well, with the exception of those of you in the Southwest).
Yes, some consumers will choose to go to a mass merchant for the prices, but why force your customers to go?
White Oak Garden Center in Cincinnati is one retailer who has not abandoned this niche to Home Depot. This year, it saw a 30 percent increase over its previous record March sales and an 80 percent increase over 2011.
“It literally couldn’t have been better,” general manager Tom Hilgeman says. “We’re not competing with mass merchants with the same products or the same quality,” he said. “We’ve stressed this about ourselves for so long, customers turned to us.”
Fruit Basket Flowerland in Grand Rapids, Mich., also had strong sales in lawn care, owner Rick Vuyst says. His March sales were up 84 percent.
Is It Time For A Furniture Comeback?
Garden retailers who have stayed in furniture saw customers tired of pinching pennies and ready to replace patio sets.
Bucks Country Gardens in Doylestown, Pa., was more than $100,000 above its strongest March on record and nearly double its 2011 March sales. Bucks Country Garden’s Tom Hebel says the increase came mostly from big-ticket items rather than a sharp increase in customer traffic. His two strong March categories were trees and furniture.
So why do so many retailers shy away from furniture?
In past years, better quality garden furniture had a certain reputation among independent garden center retailers. Minimum orders were enormous, orders had to be placed very early and often a certain amount of square footage was required before a retailer would be able to buy the furniture.
Just as that model was changing, garden centers began favoring just-in-time delivery strategies, and retailers abandoned furniture in droves.
Furniture companies have learned their lessons, however. Minimum orders are much lower and it’s almost unheard of to require a minimum of display space. One retailer says that his supplier sends him display furniture for free and orders are placed based on the displays.
“We are relatively new to this sector and came in during the middle of the recession,” says Craig Smith, director of sales at Highwood USA, which makes furniture and other outdoor items from synthetic wood. “We have seen the cold, hard reality.”
Another shift in the industry has made a big difference. In order to keep costs down, mass merchants’ vendors have shifted to manufacturing furniture overseas. Many mid-level and high-end casual furniture manufacturers are still in the U.S., which makes shipments faster and special orders easier.
“Retailers don’t have to buy in the container loads,” says Terri Lee Rogers, vice president of sales and marketing at O.W. Lee, one of these American-based companies. “Our reorders are easier, and you can special order our products easily. Customers want their cushions the way they want them, so we have a lot of special order options. “
Smith echoes Rogers thoughts about how important it is to Highwood USA’s success to be able to ship easily. “We ship 99 percent UPS. Our products are designed to ship easily and need less shelf space. And we have a minimum order of one item. We have to be reactive to what retailers need.”