May 2023

Beyond the brick and mortar: A race for revenue and relevance By John Kennedy

In Simon Sinek’s book “Start With Why,” he addresses the “Law of Diffusion of Innovation.” It’s a fancy way of saying there is a wide range of decision-making for IGCs who want to leap into the future or lag into the past.

The independent garden center industry is at a crossroads. With the owners of the 1980s and ‘90s looking to retire, and the new generation of family members or progressive younger owners looking to revolutionize the industry, the next five years of transition will be fascinating and fun to say the least.

A trend of non-horticulture employees and owners now entering the industry is juxtaposed with the seasoned veterans of growers, garden centers, and green industry professionals, creating a perfect storm of opportunity and organizational upgrades that are quickly accelerating the industry forward.

What is holding the industry back? One simple phrase: fear of change. 

The younger generation, as well as the influx of those outside the industry entering the space, have a fair amount of knowledge and experience with change and will be fearless in approaching the possible innovations of today. I believe the young leaders of today will transform the industry of tomorrow … today!

3 Types of Innovators

Back to my opening sentence and the “Law of Diffusion of Innovation” — Sinek says there are a few folks who are willing to take the risk and be fearless in leading the way. They are the innovators of any industry and pave the roadways of tomorrow.

The percentage of “fearless” innovators is roughly 3%. 

The next cohort of innovators is the “early adopters” and they number around 13%. They are the ones who see the vision of the innovators first, are willing to embrace game-changing ideas quickly and are poised to be well ahead of the curve when innovation becomes more normalized. They are closest to the spigot of opportunity and willing to tolerate the glitches and pinch points to get to the glory sooner than most.

Next up are the “early majority” (34%), followed by the “late majority,” who finally see what others have seen for a while (34%), and finally the “laggards,” who join at the very end of a movement and often are characterized as “late to the game” (17%). In essence, they miss the new opportunities, as the innovators have already moved on to the next iteration of ideas. They are always playing catch-up, behind the curve and stuck in the mud of mediocrity.

Almost 20 years ago when I was first invited to present at the ANLA Management Clinic, I remember being advised by an association executive with some interesting insight: “The green industry is good at being first … at being third.” (Read that again!) Those were their exact words, and I never forgot them.

At first, I thought it was a tough assessment of the industry; however, after 20 years of strategic planning, speaking and consulting, there was seasoned wisdom to their blunt belief.

The Economy of Today

That brings us to today, with the post-COVID bump, an uncertain economic horizon, a transition from one generation to another and a migration of new industry leaders from both within and outside of the industry.

Today also brings a new level of expectations from our clients and customers. COVID was the catalyst of the type of change necessary to meet your customers at their level of expectation and engagement — and not just your level of service and experience. COVID catapulted us from one economy into the next nearly overnight.

Back in the earlier days of many industries, including horticulture, the economy in which most competed was the “price economy.” Cars, cameras, houses, hydrangeas — whatever you were selling was usually measured and purchased by the consumer based upon pricing. This mindset set up a race to the bottom and continued for decades.

Then, consumer needs changed in the late 1980s and ‘90s, the economy began to flourish, and folks not only started to demand a better level of service, but were willing to pay more for it.

This became known as the “experience economy,” where service and experience preempted pricing, and a new level of engagement with your consumers evolved. It’s what I have been promoting now for over 25 years — create a culture of customer experience (not just service) where every employee is aligned to the mission and vision of exceeding the expectations of your client base. Loyalty programs, customer appreciation days, improved facilities, better products, focused marketing and associate training provided the new evolution of the IGC.

Five-star service standards, attraction and retention of top talent, core values, the great game of business, teamwork, financial literacy, leadership development, and employee engagement also became the “new now” of building your world-class service team — and continues even today.

One by one, IGCs, growers, nurseries and landscape professionals began to adapt and change to what many others had been doing for a while — competing on experience and not on price! And then COVID came.

Innovation at the Speed of COVID

The industry was forced to innovate. Curbside pickup, touchless technology (QR codes), e-commerce and online ordering all became par for the course as a “change by crisis” model of innovation emerged. And with $13.8 billion of e-commerce sales occurring during bad weather days — especially notable for our industry which relies so heavily upon weather — e-commerce can be such a great chance to drive revenue in the rain.

However, many industries outside of the green industry had already adopted these methods many years before.

The Cheesecake Factory embraced curbside pickup over a decade ago. Starbucks and Chick-fil-A have had mobile ordering for years, and Amazon has dominated the online ordering space for quite some time now.

Even the trucking and shipping industries standardized containers where every ship and every truck could carry the exact same-sized container. It was an international, industry-wide endeavor that revolutionized both freight and efficiency decades ago.

They were either innovators, early adopters or the early majority, and those methods of engaging their customers and capturing market share and revenue have brought us into the third economy: “the convenience economy.”

Uber, Instacart, Grubhub, mobile apps and online ordering are now front and center in consumers’ minds and are quickly becoming the basic expectations of your IGC and green business.

So again, we are at a point of inflection in our industry. Do we continue to be the late majority to this new convenience economy, or do we adapt to the new accelerated pace of change? Only you can decide — or maybe your customers will decide for you. Either way, it’s happening sooner or later.

Thinking Outside Store Limits

Enter the concept of sales beyond the brick and mortar, where you are able to quickly adapt, meet your customers and employees at their level of engagement, and become the 3% innovators or 13% early adopters and lead the industry into the future where the blend of price, experience and convenience drives a compelling value proposition.

The Garden Center Group Fall Event in 2021 introduced Your GroupSpace, an internal intranet platform providing digital solutions to the day-to-day operations of busy IGCs in North America.

From human resources and operations to training and team communication and engagement, the platform has simplified the workplace, saved hours a week in manual activities, and has become the sole location for operational excellence and organizational efficiencies to early adopters of this innovative solution. (Currently more than 25 IGCs are using www.yourgroupspace.com)

Proven Winners is an early adopter and partner in the effort to educate and inform IGCs about effective marketing, horticulture knowledge and brand awareness — all inside Your GroupSpace. Jessica DeGraaf and her talented team are leading the way into the future of connecting the consumer, the IGC, and the grower through the supply and demand chain.

An emerging industry leader originally from outside of the IGC space, Ben Pecnik, vice president of Louisiana Nursery in Baton Rouge, Louisiana, and his team have embraced Your GroupSpace and are now combining both the experience and convenience economies. They adopted the “Garden on the Geaux” app and are committed to saying “yes” to every customer inquiry.

This affords the plant pros to drive sales opportunities into either comparable substitutions or special orders from growers. A simple “Just Say Yes!” culture has been created to capture every dollar and every delivery. Geaux Team Geaux!

Saying “no” adds up to scores of thousands of dollars of unrealized revenue that you can never get back, as well as your customers going to your competition to see if they will say “yes!” (Spoiler: They probably will!)

From this customized intranet platform, IGCs can now be connected to their growers and vendors to facilitate the process of online/e-commerce ordering from the innovators and early adopters of this concept.

One of those innovators is Everde Growers. Pecnik and his buying team can digitally connect to David Kirby, Everde Growers’ executive vice president, and his sales team led by Meredith McLeod to not only place special orders for rooted material that are not currently on property, but can also have the “endless aisle” concept and have consumers order online through their e-commerce platform and have it delivered to one of their three garden center locations on the next delivery.

“Our customers are increasingly migrating to the use of technology and have definitely entered the convenience economy,” Kirby says. “Providing a solution for them to do their ordering and communicating with our team 24/7 is a great value proposition for Everde Growers.

“This becomes a game-changer for a revenue stream beyond the brick and mortar and will afford a chance for growers and nurseries to have another pipeline to move their inventory beyond the normal channels of the last 50 years.”

The Endless Aisle

An additional opportunity for sales beyond the brick and mortar is being led by two other industry innovators to the convenience economy, Willoway Nurseries and Prides Corner Farms (members of the charter growers of SynRG LLC), where the endless aisle concept can not only be delivered to the IGC, but can also be drop-shipped straight to the consumer’s home.

Granted, Amazon and thousands of other retailers have been doing this for quite some time, as have some other industry-leading innovators in the landscape space, so naturally, connecting a group of like-minded, forward-thinking IGCs was just a matter of time.

“I believe it is imperative that the green industry is ready to meet the challenge of changing customer expectations that has been accelerated by the influx of a welcomed new wave of plant customers at retail over the last couple of years,” says Mark Sellew, president of Prides Corner Farms. “As a grower and a trusted resource provider for our retail customers, Prides Corner must be able to lead, support and, above all, provide solutions for our independent garden center customers. Helping provide the pathway and the service needed to satisfy the needs of the new green consumer, whether they are looking to buy in store or virtually from that IGC’s website, is a challenge that we are unblinkingly focused on and wholeheartedly embrace.”

Tom Demaline, president of Willoway Nurseries, says, “To stay relevant in today’s marketplace, we need to provide e-commerce options that support the local IGC and fulfill the needs of the ever-changing consumer.” 

COVID created a “forced innovation” mindset for many, but only a few innovators and early adopters are now leading the way into the future. It’s time to join the movement and the momentum today!

Building a Digital Bridge

Order management ecosystem OrderEase built a digital bridge to connect IGCs to growers and vendors. Created by a former IGC owner in Canada who experienced the frustrating challenges of the retailer relationships between the IGC and their growers and vendors, CEO Warren Patterson saw the future of what’s possible, embraced “magical thinking,” and built a revolutionary solution to offer an integrated commerce connector between IGC retailers, growers/vendors and consumers.

“As an independent garden center owner, I knew I needed to connect our point-of-sale system and web store to our vendors through technology to not only increase our efficiency, but also our bottom line — allowing us to better serve our customers and stay competitive in the market,” Patterson says.

Lastly, a missing link to this digital bridge between the IGC and the growers/vendors are the point-of-sale (POS) companies that serve the IGC community. There are innovators, early adopters and early majority systems that are already integrated into this digital commerce connector — CounterPoint/NCR and Alice POS, to name a few. Other known brands are at risk of becoming the late majority and will be in a race for relevance in the not-too-distant future.

Recurring Revenue Models

Karen Van Duyvendyk from Dutch Growers in Regina, Saskatchewan, Canada, has a unique idea called “A Touch of Dutch.” It is a monthly subscription model customers can sign up for and, for a monthly fee, have a beautifully curated gift box of items sent to their home. This sets up a monthly revenue stream beyond the brick and mortar and also provides a chance for inventory reduction of items that have not moved.

Another recurring revenue idea beyond the brick and mortar is a monthly subscription for shipping food and/or products for birds, dogs and pets to customers — the recession-proof CATegory that creates a convenient way to have their food auto-shipped.

You can even model the same idea for kids and seeds if you’d like, or a bi-monthly “Prune and Swoon” program that is a concierge-level service to spruce up patio and porch plants. Tell them, ‘Subscribe and we will come by with fillers, thrillers and spillers to make your porch swing!’”

Setting up a subscription model of recurring revenue is a perfect way to extend your season, fill the valleys, keep revenue flowing beyond the brick and mortar, and offer all three economies in one simple program: price, experience and convenience.

Being First

Each of the businesses named in this article are truly innovating and changing the industry right before our eyes. They see the future, they see the opportunity as innovators and early adopters, and they are willing to make the investment of time and talent and take the risk to launch the green industry into the future of sales beyond the brick and mortar.

These fearless leaders and innovators will pave the road for all IGCs and growers of the future and should be commended for their vision and volition.

So, there are two questions left to ask:

1. Which of the previously described change agents are you? Are you an innovator, early adopter, early majority, late majority or laggard to the IGC/green Industry space?
2. How might we collectively change the industry of the future quicker than history has afforded. Are you going to settle for being “first at being third, or accelerate to become first at being first?”

Time will tell, and we are happy to be aligned with the leaders looking into the “windshield of the future,” and we are inviting the “rearview mirror of the past” folks to join us on the race to revenue and relevance. The future is as close as you make it — let’s make it today, together.