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New Year - New Challenges

Published: 23 Jan, 2009

Every New Year brings with it a new set of hopes and aspirations. And rightly so. We all need to have goals and dreams to work towards.

Often, the New Year brings with it a new set of challenges and obstacles to be faced and overcome. If we are to listen to the pundits we will hear that this is not going to be an easy year. The economic situation will at best stabilize, if not worsen. Job losses and unemployment are set to rise. Credit and money supply will be squeezed.

So, is it all gloom and doom?  Well, to a large degree that depends on us and the attitude and approach we take to our businesses. I know of several new garden centres that are opening this year. Their owners are certainly taking a positive approach.

A positive approach is not only commendable, but essential in any business if it is going to survive, and thrive. But is a positive attitude alone enough? We cannot just rest on our Laurels (or on any of the other plants we sell!). I keep hearing in my head that old cliché about what the tough do when the going gets tough!

So, the first step on the ladder to surviving and thriving in 2009 must be a positive attitude.

Step two has to be a plan. A strategy. How are we going to survive and thrive? What are we going to do? Don’t just think about it in terms of this year, but take a look into the future – where do we want this business to be in five years time?, how will we achieve this?, will we be ready for the good times when they roll around again?

What sorts of things should we be looking at? – product range and mix, pricing strategy and market position (top end, value , or discount), service levels, our strengths and weaknesses and how to capitalize or overcome these, our unique points of difference – what are we best at, why will customers come to us?, - how will we market ourselves – promotions and advertising. These are all important aspects of the Business Plan.

What is called for is a sharper focus on our business. Let’s not just think about cutting back. Let’s focus on how we can do better. Another old cliché comes to mind – work smarter, not harder. It’s about making sure we prioritise to ensure every activity in the business is adding to its success. As well known New Zealand yachtsman Sir Peter Blake used to say “Will it make the boat go faster?”

So, on a more practical level, what are the types of things we can do?Make sure you have plenty of point of sale signage, with a clear, simple, easy to read message, and a value price.

I have spoken before about fashions and trends. One that has evolved out of this economic downturn is the huge growth in the Edible – Grow Your Own movement. This has a lot of life left in it yet. How have you capitalized on it? Do you have an “Edibles” department, display gardens, ‘How-To’ leaflets on growing food crops, staff trained and competent to give advice; do you give talks and demonstrations?

This new interest has brought a wave of new or beginner gardeners. These customers will have little knowledge and will therefore be seeking advice and simplicity from their purchase experience. Is now the time to cut staff and staff training?

 Take a look at your stock levels. How much old or slow moving product do you have? How much money is tied up in slow moving stock while you’re paying over draft interest rates? Clear out this stock, even if it means selling some at cost, and use this money to pay off overdraft debt, or re-invest in fast moving saleable stock that will generate a profit. Having a sale also increases your customers’ perception of your store as a value offer.

Focus more on your core lines of plants and green goods, and associated dry products – these turn over faster and generate income and profit. Invest less in high ticket, slow moving, luxury items such as furniture and gifts.
Be prudent in any pre-season, pre-pay, bulk deals being offered by suppliers. Remember, they will be hurting too and looking to off-load product. It is not your job to be a warehouse. The money invested in that stock could be tied up for months with only a small gain in margin to be made.
Have a schedule of events taking place throughout the year. This will get customers back again and again.

Set up a value added (not discount) loyalty scheme and communicate weekly to your customer data base via email.

In many ways 2009 could be an exciting year for garden retailers. It will force us to take a fresh and detailed look at our businesses, and encourage us to do things differently and better. That will be good for us not only this year, but into the future as well.

 - John Russell

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