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Retail commandment: Love thy regular customers

Here's a great piece from the Wall Street Journal: In tough times, businessess coddle their regulars.

Money is tight in my household--just like it is for so many others. I know that I'm far more likely to spend my hard-earned dollars at a place that appreciates my business and treats me like one of the family.

What are you doing at your garden center to keep the loyalty of regular customers? Are you using data gleaned from loyalty card programs to create special events? Let us know by leaving a comment below.

--Sarah

Pent-up demand could lead to shopping frenzy

The recession has caused consumers to postpone many large purchases. This pent-up demand could play a crucial role in emerging from the economic downturn,USA Today reported. Economists say the longer people pull back, the more likely it is they’ll spend even more when their confidence in the economy returns. Analysts, however, differ in their opinions on when the shopping fever will actually hit.

-- Sarah

How badly does ‘upscale’ suffer in a tight economy?

Just a few short months ago you could find dozens of articles eviscerating McDonald’s and Walmart for their inability to reach today’s savvy, upscale consumers. Things sure can change in a manner of weeks. The recession has hit everyone hard, and we’ve done a complete 180. Now consumers are gravitating to no frills, low-cost venues. Earlier today, McDonald’s reported sales rose 5.1% in May.

I wonder…in this economic environment, does the low-key, mom-and-pop garden center have an edge over more polished, upscale garden centers? Do low-cost perceptions influence where consumers buy plants? What are you seeing in your part of the world? Leave us a comment below.

-- Sarah

Consumer confidence continues to rise

Despite rising unemployment rates, customer confidence is on the rise, according to an executive briefing from Bigresearch. Nearly one in three (31.2%) consumers is confident/very confident in chances for a strong economy over the next six months, rising five points from April (26.0%), nearly 12 points from a year ago (19.5%) and the highest reading since January 2008 (33.5%).

While retail sales continued to fall in April, the months ahead might pique summer spending interests, as practicality has declined in May: 47.4% contend they’ve become more practical/realistic when spending, compared to 51.6% in April. Consumers are also easing back on prioritizing needs over wants. While the majority (56.9%) continues to maintain a needs-based bent when buying, this has declined 2+ points from April (59.5%).

Still, consumers remain more focused on the necessities compared to a year ago (50.7%), a sign that shoppers may only cautiously wade back into the spending pool.

-- Sarah

‘Frugal fatigue’ begins to set in

Shoppers—tired of pinching pennies—are beginning to treat themselves again, according to a report on MSNBC. A stock-market rally and income tax refunds are prompting more people to splurge a little. Consumer spending grew by 2.2 percent in the first quarter of the year, the government said in late April, the biggest gain in two years. Gallup, which interviews about 1,000 people daily, points to spending stabilizing since February, after a precipitous drop since last summer.

-- Sarah

Decadence is like, so passé

Consumers are getting aboard the “back to basics” train—if a study from the Pew Research Center is any indication. Check out this article: “Luxury or Necessity? The Public Makes a U-Turn.”

The findings show that Americans are closely scrutinizing needs and wants. More people are putting appliances like microwaves and dishwashers in the “luxury” category. That was eye-opening to me. Times have got to be tough if time-starved Americans are putting these labor-saving devices on the “nice to have, but not necessary” list.

The report offers what could be good news for garden retailers. Two popular belt-tightening measures could have more consumers heading to your store. According to the report, 21% of those surveyed made plans to start a vegetable garden and 20% started doing yard work they used to pay for.

-- Sarah

Gardening—It’s all about the accessories?

One thing I’m discovering about rookie gardeners: They love gadgets, gizmos and accessories. Plants, it seems, exist only to justify the purchase of the items named above.

A good friend of mine is starting a vegetable container garden on her patio. And of course she tapped me for advice. I was on the phone with her for 45 minutes last week as she described her latest “garden” purchases: gloves, hand tools, three giant glazed pots, a drip watering system, potting soil, a trellis and fertilizer.

“That’s great!” I said. “Everything you need to get started. So, what are you going to grow?”

“I don’t know,” she said. “I haven’t thought about it yet.”

Oy vey. Meanwhile I’ve got my cilantro and jalapenos planted in cracked terra-cotta pots partially sunk into the ground to keep soil from spilling out of the bottom. And I’m using the same old hand-cultivator that my husband had to weld back together last year. Clearly, for me, it’s all about the plants.

But I guess my friend’s penchant for gadgets is good news for the garden center she shops at. She has easily spent more than $300 in the past few weeks. Someone is reaping decent margins from her shopping forays.

Then there’s me—armed with my frequent buyer’s card and coupon for $5 off a $25 purchase. (And you can guarantee I’m going to find a way to use it.) A garden center scavenger—on the hunt for volume buys and no-fuss annuals that won’t have to be replaced for months.

Makes me wonder…who would you consider to be the better customer? Or is this a case of picking the lesser of two evils?

-- Sarah

Retail betrayal

I almost bought a hanging basket of petunias at Lowe’s. Almost.

The husband and I made a run to the store yesterday to get some new mini-blinds and a bulb for our large outdoor porch light. And there, right out front, was a display of some surprisingly gorgeous 6-inch hanging baskets. And boy, was the price nice—around $12.

I pulled down a basket of purple petunias and admired it. “You like it?” the husband asked. “Go ahead and get it. It’s not expensive.”

And I almost did. I’ll tell you honestly, the only thing that made me put it back is the knowledge that I’d be a heck of a hypocrite if I made that impulse purchase. Considering what I do for a living, I consciously try to restrict all my plant purchases to independent garden centers.

But, of course, most consumers don’t have ties like that. Many, I daresay, would pluck up that nicely priced hanging basket without a second thought.

How do you feel about that?

Some retailers I’ve talked with over the years would expect it. They sigh and shrug. They know impulse and convenience frequently trump allegiance to independent retailers. Other store owners feel a level of betrayal when their customer’s dollars go to the big boxes.

Where do you fall on this spectrum?

-- Sarah

Is consumer malaise subsiding?

A couple of somewhat-hopeful reports about retail sales were released this week.

National Retail Federation reported that retail sales beat expectations two months in a row. According to NRF, retail industry sales for February (which exclude automobiles, gas stations and restaurants) rose 0.6 percent seasonally adjusted from January and decreased 5.0 percent unadjusted over last year. Retail industry sales for January were revised up from 0.5 percent growth to 1.4 percent seasonally adjusted month-to-month.

February retail sales released by the U.S. Commerce Department show total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) decreased 12.3 percent unadjusted year-over-year and 0.1 percent seasonally adjusted month-to-month.

“While we are seeing some growth in consumer spending, it remains to be seen whether this trend will continue,” said Rosalind Wells, NRF chief economist. “Given the state of the economy, NRF is still expecting year-over-year sales declines through the first half of the year with a slight turnaround at the end of 2009.”

In other news, the Deloitte Consumer Spending Index rose in February, once again driven by strong growth in real wages and a decline in energy prices. The Index—which takes into account tax burden, initial unemployment claims, real wages and real home prices—increased to 1.53 percent, from an upwardly revised gain of 1.27 percent a month ago.

“Despite increasing purchasing power, consumers are still generally holding back. They do, however, seem to be breaking out of their winter doldrums by cautiously spending on items like spring clothing and certain electronics,” said Stacy Janiak, vice chairman and U.S. retail leader, Deloitte LLP. “Understanding that consumers are spending selectively, retailers should consider sharpening the connections with their customers—not just to drive traffic today but to build deep customer loyalty for the future.”

-- Sarah

Don’t leave water-gardening customers hanging

Paula Biles is a writer/photographer specializing in aquatic plants. She is also co-author of “The Lotus” and former executive director of the International Waterlily & Water Gardening Society. Biles wrote the feature in the February issue of Garden Center Magazine focusing on new aquatic plants. Today she discusses how to keep water-gardening customers happy, even if “hot new plants” aren’t readily available.

Most pond owners don’t care about botanical names. They want reliable aquatics that will do well in their ponds. Yes, they may like something new or distinctive, but unless they are plant geeks, chances are good they won’t remember botanical names. The average water gardener is focused on results, not on names.

So, when gardeners read about new varieties, they need your expertise to recommend which ones will actually thrive and which ones won’t. Even more important, they need you to suggest better alternatives for their ponds. The worst thing your garden center staff can do is say, “I’m very sorry, but that’s too new for us to carry.”

Educate your staff about characteristics (pros and cons) of the latest and greatest aquatics, especially the ones that are appropriate for your zone. Also make sure staff can suggest other plants with similar qualities. Don’t let shoppers be teased by a pretty magazine photo but have to walk out empty-handed and frustrated with your garden center.

When handled with foresight, your garden center’s response to new varieties can make you shine. Knowledgeable centers can rise above box and online stores by knowing what is available. Staff can recommend new plants that will work for your customers and direct them away from any new aquatics that won’t thrive in their situations. Your garden center can build relationships with pond owners that the competition cannot match.

-- Paula Biles