It’s the Economy!

Q What advice can you offer independent retailers to help us stay afloat in this volatile economy?

News has been all over the map about the state of the economy, making it hard to know where “solid ground” might be. And while it would be nice to think that one silver bullet would solve it all, it may be time to draw on a set of time-tested principles that have served retail owners well through the highs and the lows of previous times. Here are a few guideposts I’m relying on.

People Still Love Their Gardens

There is a solid core of Americans who feel that gardening is “very important” to their lives. Obviously, I’m a member of that crowd and can’t imagine a spring without planting a new rose, adding some perennials and annuals, or putting out a large number of tomatoes. I’d rather spend my last dollar on a plant than almost anything else. Evidence shows that many people feel the same, and they aren’t going to evaporate into thin air. In fact, recent surveys point to an increase in spending in some areas, such as vegetable gardening (see the related story on page 50).

According to the results of a 2007 National Gardening Association survey, in which nearly 25 million households participated, there was an increase of 22 percent in money spent on vegetable gardening compared to the previous year. Total money spent was about $1.4 billion. It makes sense that as grocery prices increase and interest in locally produced food is on the rise, people would look to home-grown vegetables as a practical and cost-effective solution. That trend, coupled with more people looking for ways to go green and save money by staying home, means there are real opportunities for you to get your slice of the gardening revenue pie.

Don’t Forget the 80/20 Rule

This idea is also known as Pareto’s Law and is credited to Vilfredo Pareto, an Italian economist and political sociologist who developed the theory. He believed that, in general, 80 percent of output comes from 20 percent of input. So what does that mean for landscape and garden center retailers? It means that it might be worth your while to take a look at your books and determine whether this rule holds true for you. Identify your top customers and see whether they are responsible for 80 percent of your revenue. If so, those are the people that you need to hold on to. Develop a strategy for keeping them with you. Talk to them; find out what they need, and listen to their concerns. Let them know what you can do for them. Offer helpful solutions, give them “priority status” and offer them special discounts, and invite them to a customer-appreciation event. Most of all, be sure to let them know that you value their business.

Consumers Recognize Quality and Value

When budgets are tight and people need to squeeze each dollar until it squeals, help them know you’re on their side. Provide information so they can easily see your products and services are worth their hard-earned dollars. Run ads, put up signs in your store and hold workshops pointing out the value in buying from you. People are getting all kinds of advice on how to budget, shop smarter and do more with less. When customers see you as someone who understands what they are going through and can provide them with some real money-saving ideas, they are more likely to turn to you for their gardening needs and return as loyal customers.

Motivation Is Key

When things are slow and the economic news isn’t the brightest spot in the day, it’s easy to fall into the doomsday buzz and let it affect the way you portray yourself and treat your employees. Some retailers have used various incentives to encourage their employees to stay positive and keep after sales: Staff contests for selling the most items over a certain dollar level, the biggest one-time sale in a week, or most improved sales figures from one week to the next are ways to offer employees incentives to keep working hard. Rewards could be time off, flexible scheduling or bonuses.

Stay Connected and Keep Up

When times get tough, the tough stick together. Whether you’ve just started in the business or have several years under your belt, most retailers would agree that it’s always a good idea to stay loyal to the vendors who have been good to you. As we all know, strong businesses are built on solid relationships. This is true not only on the customer side but with your suppliers as well. It often works to your advantage in the long run to support those who have provided you with good service, much like you want your valued customers to stick with you. And along the same lines, try expanding your network of friends by joining associations and keeping in touch with your peers online. There are plenty of garden forums and e-newsletters packed with ideas and sources of information to help your business stay strong in shaky economic times.