In my conference presentations, I often talk about the fact that what the customer perceives is in their mind truth and that is what retailers and suppliers need to work on. The same is true of retailers’ perceptions of the industry and their consumers. In February 2009 at the Australian National Nursery & Garden Industry Conference, I had a unique opportunity to find out what the Australian industry really thinks about itself and its customers. At the conference, I facilitated a session for the Nursery Industry Association where we carried out a survey with the conference audience to obtain their views on their industry.
We used an Audience Response System software programme called ‘TurningPoint’ which enabled the speaker to receive instantaneous feedback from the audience. A basic version of this technology has become commonplace on television game shows such as ‘Who Wants to Be a Millionaire’ where the contestant ‘asks the audience’. The result is instant collective results from the audience displayed on the screen.
My audience consisted of the top 250 garden centre retailers, growers and horticultural suppliers in Australia. It was made up of 31 per cent growers, 31 per cent retailers, 16 per cent suppliers and the remainder were advisors to the horticultural industry. The gender basis of the room was 35 per cent women and 65 per cent men. 45 per cent of the room were in the Jones Generation age group profile, the 35 to 55 year olds.
What do you think of the industry?
The first question I asked was how effective the audience felt the industry was at communicating along the supply chain line, from propagator, through retailer and to the consumer.
0 per cent thought the industry was excellent
31 per cent thought the industry was good
53 per cent thought the industry was average
16 per cent thought the industry was poor
This indicates that when it comes to getting the message across the supply chain the audience generally considered the industry to be weaker than is desirable and indicated it is an area that needs to be addressed as an industry.
What do retailers look on as the main weaknesses in the supply chain and what do growers think are the weaknesses with retailers? This is often a strongly debated issue in the industry. The results come out as follows:
What is the biggest criticism of retailers?
44 per cent growers expect retailers to buy from availability lists without seeing the plant.
38 per cent stock arrives too late in the week for the retailer to build effective displays for the weekend.
38 per cent plant quality fluctuates.
31 per cent growers do not understand the complexities of retailing their products.
This indicates a major challenge and opportunity for growers. The availability list resistance probably occurs because of a lack of confidence and trust, since quality fluctuation also comes up as a major concern.
And the growers concerns were:
43per cent retailers are not loyal to suppliers.
40 per cent retailers do not give enough forward notice of their requirements.
27 per cent displays do not do justice to the plants supplied.
Again the big issue is the supply chain management that needs to be addressed. I am sure an open forum on supply chain management would help to start resolving some of these issues.
How well do you understand the industry?
We all get involved in our little piece of the supply chain and often do not appreciate the full picture.
When growers were asked what was the their stock turn targets for their product in a retail situation, 47 per cent said they know the target, but 89 per cent said they had no idea what their product would generate a square metre in the retail area. This is a major concern, in other industries the manufacture would have a clear strategy on how they would they expect their product to perform in the retail arena.
When it comes to retailers, 44 per cent felt they understood the manufacturing or growing process and 55 per cent knew the cost of manufacturing. Retailers believe they know the manufacturing side better than the manufacturing side knows the retailing side of the journey to the consumer. This may be because many retailers started as growers in the industry.
Do you understand the consumer?
Having obtained a cross section of views on how delegates from both sides of the industry understood each other, we then moved on to consumers and how well the industry understands the ultimate consumer.
To get a more precise understanding of industry views, I split the consumer market into the generational groups that are often used in marketing of lifestyle products.
The 15 to 25 year old market.
15 to 25 year olds will be the major customers of the future. They will buy now what I call trinket plants. In Italy, I came across growers using glitter or sparkle paint on African Violets to grow sales with considerable success in this particular market niche.
How well do you understand this market when it comes to green products?
38 per cent believe they have no understanding of the market sector.
49 per cent said they knew them well
13 per cent believe they know them very well
Interestingly enough, no retailers in the room believed they knew this market sector very well, but 86% of suppliers believed they knew the market well.
The manufacturers believed they knew the market, but the retailers did not. This was a surprise to me, either there is a bottleneck in the supply chain at a retail level, or the suppliers and manufactures are out of touch with the market on this issue. I am sure this will be debated in the weeks and months to come.
Generation X are the lifestyle consumers between 25 and 35 who are definitely within the market for nursery industry products and can be some of the highest spenders. The research shows they are the last to feel the pinch when a recession hits the pocket.
13 per cent believe they do not understand the market sector.
56 per cent believe they know this market well.
31 per cent believe they know it very well.
Again retailers in the room felt they did not know the Generation X sector very well and suppliers felt they knew it well.
It became clear when I analysed the results that growers and retailers had completely different views on the market. Retailers stated they did not understand the younger market, while growers and suppliers were saying they did and that the retailer was holding the industry back when it came to these two segments of the market.
People in the age group of 35 to 55 years
When it came to this age group there was agreement across the industry
29 per cent of the room believed they knew Jones Generation consumers well
71 per cent believed they knew them very well
As an industry there was comfortable selling to the Jones Generation age bracket and belief across the industry that the Jones Generation was being served well.
Baby boomers: consumers in the age group of 55 to 65 years
This is the market sector that created a buzz in the industry in the 1980’s and 1990’s but now these 55 to 65 year old consumers are moving on to other activities and maintaining their gardens.
4 per cent responded they did not know this segment well
33 per cent believes they know them well
63 per cent believed they knew them very well
No real surprises here; the horticultural industry has grown up with this market sector. As a result it is to be expected that the industry would understand the motivations of this age group.
The Greying tigers: above 65
The final market group are the greying tigers, those above 65 years old.
11 per cent of delegates thought they did not understand this group
48 per cent believed they knew them well
41 per cent believed they knew them very well
My overall observation is that the horticultural industry understands the motivational needs and wants of the older consumers better than the younger market. Yet, the younger market is where the future for the industry is and where the money is being spent. The industry needs to concentrate on marketing to the younger generations; the challenge is that the industry has conflicting ideas on how well the industry knows this market.
What will drive the industry over the next 12 months?
One of the key questions is what the industry drivers will be over the next twelve months.
76 per cent of the audience believe it will be the “cocooning” customer.
24 per cent believe it will be climate change issues
What did surprise me was that 66 per cent of the audience believed that the use of plastic containers in our industry would not be an issue in the consumers mind over the next twelve months.
Those are the thoughts of one group within the horticultural industry in Australia. After the session, a number of people approached me and said they did not agree with the findings. I can accept that, it was a confidential polling of the industry which, I hope, will start debate on the main issues that need to be addressed. It was a group of Australians, do other nations within the horticultural industry feel the same way, I do not know. To my knowledge, this is the first time this type of research has been carried out within the horticultural industry. The only thing I can stress is perception is truth and this is the truth that came out of one session.
During coming months I will be analysing the figures and adding comment to the debate.
I would like to acknowledge the involvement of the Nursery & Garden Industry Association of Australian in helping to develop this research of the horticultural industry.