Groundswell | September 2020

It’s time garden centres switch on to omni-channel retail

By Adrian Parsons, Helix Australia and 160 Acres Group

With consumer shopping habits changing and customers increasingly choosing to shop online, now is the time for garden centres to switch on to omni-channel retail.

Retail marketing strategies have gone through significant change over the last 10 years as retailers across a range of categories clamour to ensure they have a strong online offer for their customers. Traditionally, Australian garden centres have focussed on delivering a compulsive in-store shopping experience. This has typically taken the form of stocking a wide range of quality plants, strong roadside signage and point-of-sale merchandising backed up by expert staff ready to provide advice and suggestions to the home gardener. The addition of cafes to garden centres has also been a successful strategy to lift revenues whilst providing a more enjoyable shopping experience for the consumer and inviting them to stay a little longer.

Whilst this broad generic marketing approach has held our industry in good stead for many years, now is the time for Australian retail garden centres to market their businesses online with professional and competitive online purchase options.

An omni-channel retail strategy is an approach to sales and marketing that provides customers with a fully-integrated shopping experience by uniting user experiences from brick-and-mortar to mobile-browsing and everything in between.

The Australian online shopping industry has grown dramatically over the past five years. Rapid growth in internet and broadband penetration and consumer acceptance of electronic commerce as a viable and safe alternative to traditional instore retailing have aided online shopping.

The National Australian Bank (NAB) online retail sales index April 2020 reported that that year Australians spent $34.27 billion on online retail, a figure that represents 10.4% of the total retail trade and significantly a 19.5% increase on the previous year.

Between March and May 2020 IBISWorld analysts reported an increase in online engagement across categories such as family lifestyle, personal care and nutrition and home and garden. Online search spikes for plants were up by 26% as more people aimed to improve their homes.

The data suggests our industry’s core products, plants, seedlings, soil and pots, are ranking highly in online searches. It’s up to us to provide online purchase platforms that attract and convert customers into strong revenue sources for our nurseries.

Trevor Cochrane, Managing Director of Guru Productions Pty Ltd, said their Garden Gurus television programme has seen a massive increase in web-based enquiries over the last six months. “In 2017 we had only 37 requests or links to on-line retailers that feature on our show. However, in the first six months of 2020 we have had over 200,000 enquiries to our online advertisers featuring plants and garden related products”.

It would be folly for our industry to think that signage, stock and expert staff alone will ensure consumers get in their cars and visit our business to solve their plant needs. Especially in this unique moment, a time where people are increasingly nervous to leave their homes unless they have to.

Big box retailers such as Bunnings were initially slow to embrace an omni-channel marketing approach but are making up ground quickly with their online presence.

Online shopping giants Amazon entered the Australian market three years ago and is slowly taking up a significant portion of the market. Financial accounts filed with the Australian Securities and Investment Commission show Amazon’s Australian online store almost doubled its revenue from $292 million in 2018 to $562 million in 2019.

Australia Post, which last year began trading from the southern hemisphere’s largest parcel facility in Goodman’s Redbank Motorway Estate, anticipates online shopping to account for 16 to 18 per cent of all retail in 2025.

An American survey conducted by Big Commerce showcased the fact that millennials (ages 24-39) and Gen-X’ers (ages 41 to 55) prefer to search for products and purchase them online, rather than doing so in a physical store. These combined generational profiles account for 10 million Australians or 42 per cent of our population. We can safely assume this age demographic would constitute a very high percentage of our industry’s potential consumers.

Tim Sansom, Manager of Communications and Horticulture at Plants Management Australia believes strong inventory control systems are crucial when developing an effective online offer, to avoid disappointed clients, refunds and credits.

“Delivery rates need to be well investigated with some standardisation of products to help estimate of costs and garden centres need to be aware Australian consumers are increasingly conditioned to expect free shipping. Light and small items are a good place to start an online offer with ‘click and collect’ offers creating opportunities for add on purchases”.

Sansom suggests Australia garden centres should review overseas online plant retailers; Wayside Gardens, Bakker.com and Springhill Nursery, as well as local company Plants in a Box, to see how they execute online plant retailing.

A quick survey of leading garden centres in Australia revealed the current online offer is very limited. Of the 30 garden centres surveyed; 20 in Victoria, 10 in New South Wales and 10 in South Australia, only three had a reasonable online range with professional images, an easy to use shopping platform and check-out cart. Some of the garden centres offered the option of an online gift card but the majority of retailers provided no opportunity for consumers to shop and order plants and garden products online.

Whilst that’s a frightening statistic, it’s also an exciting opportunity for Australian garden centres to play catch up and give the customer what it wants. The initial investment and risk can be minimised by using off the shelf web platforms such as Shopify, Squarespace and 3dcart. Tapping into the photo database of your growers or leading Australian plant breeders could also fast track assembly of a shopping cart of plants for sale. Alternatively, customising your own web shop could provide a more unique offer, albeit at a significantly increased cost

Failure to give consumers what they want may lead to forward thinking competitors taking your custom, both the instore and the online consumer. As the old adage goes, the customer is always right, and they are telling us they want to shop online.

About the author

Adrian Parsons, Managing Director Helix Australia and 160 Acres Group – a consulting company specialising in sales marketing advice for the horticultural industry.helix.com.au | 160acres.com.au