With any market disruption, there will be winners and losers, and during this pandemic, we all know who the winners have been – online retailers.
According to research from NatWest and Retail Economics, online retail sales in the UK saw the equivalent of 5 years of growth in just 12 months, with sales from internet shopping accounting for 28 percent of all retail spend in 2020! This is up 19 percent on the previous year. One might of course understand why the retail giant Amazon has prospered, but thankfully online retailers in our industry have also done well, with Horticulture Week reporting that online gardening sales rose a staggering 222.5 percent in 2020. Clearly, however, it will be very difficult to maintain such phenomenal growth in sales, and as lockdown eases one might expect many online shoppers to revert to visiting garden centers again. We may find though that they are part of a rise in ROBO shoppers – those people that research offline but buy online - so if online shopping in the gardening industry is here to stay, what are the implications for professional growers and other suppliers of products to the garden retail sector?
In a sense, the internet has democratized business. Virtually anyone can now set up an online store and during the pandemic, we have seen just this happening. Professional growers, nervous that sales to retailers might disappear responded by going direct to the consumer with their own online offer. The danger in this is that one might be taking away business from one’s own bricks-and-mortar garden center customers. In order then for a grower to avoid damaging their supplier relationship with a garden center owner, they could consider creating a completely separate retail brand from their professional brand, one with a different name and a different feel to the website. The key however with any diversification into online, is to ensure that it doesn’t distract from the core activity of being a professional grower. That should always take priority in terms of importance and resources.
It is also important to remember that online stores can be expensive to manage and require constant labor input if they are to be successful. To under promise and over deliver is absolutely key. Considering this perhaps the greatest opportunity is to provide retailers with a drop-ship service rather than to create one’s own online store. This, if done efficiently can be very profitable. After all, companies that provide services to internet retailers often tend to be the ones making the most money – take for example companies such as World Pay.
Then we have the issue of data. One of the benefits of online retailing is the huge amount of sales data available. This, if used correctly can be used to predict demand, identify trends in sales, and of course identify unprofitable products. Perhaps then, there is a need for this data to be available to professional growers so that they can then grow crops based on accurate and detailed retail sales data.
Professional growers have an additional opportunity to help online retailers of plants to increase sales. Providing the online seller with great images, ‘how to’ videos, interesting text, cultural tips, and growing advice will of course ensure that plants sold online have the best opportunity of attracting sales. In essence, it’s all about everyone in the online supply chain working together to maximize sales as well as to ensure that the customer experience is first class. If the customer has a good experience of buying online and the plants they buy perform well in the garden they will surely be back time and again.
ICL Group