It’s becoming increasingly simple to buy everything online, and although live plants have been a partial exception to this rule, that may be changing.
Online plant sales form a rapidly developing segment of the market, with retail giants like Amazon looking to deliver in-demand plant varieties to customers across the country. GIE Media’s Horticulture Group talked to Sid Raisch, CEO of online plant retailer Bower & Branch and industry consultant, about the current and expected direction of plant sales on the web as a business model.
Q: How would you describe the current state of online plant sales?
A: These are pioneer days for selling plants online as compared to selling say, books online. What that means to us is much different than what it meant to pioneers of the West. The acceleration of acceptance of buying online is underway and is on a steep trajectory as mainstream sellers are reaching mass media. The biggest trend of online buying is happening on mobile devices multiple times each day with food, and the adoption rate is growing faster than smart phone sales. People already have the device to buy online in the palm of their hand and now they have a reason to use it to buy practical stuff – like lunch at their favorite place and to pick it up or have it delivered. Try Dominos, Starbucks, Panera, McDonald’s and the list goes on and it’s growing fast. Yes, plants are different, but consumers who want to buy stuff online is not the problem.
Q: What are your thoughts on e-commerce giants like Amazon expanding into plant sales?
A: This is underway in a serious manner. They have a team working on signing up growers and brands and they’re doing it. The problem isn’t that they can’t deliver, or that people aren’t ready to buy. They need the sellers, and they’re working hard to sign them up. Many think they won’t succeed because plants are different. I get that, but once you understand how they think and how they work, the game changes. Amazon Services already bought one of the “Uber of” companies that mows lawns [companies that use a mobile app to send landscapers directly to users’ homes]. Amazon will be selling, delivering and planting every plant that can be sold to every buyer for it and it won’t take long. Amazon’s mission has always been to sell everything to everybody, including services and stuff that doesn’t ship. Amazon Local will be the platform where you buy merchandise and services from other local independent businesses from the Amazon website, which is picked up in the local store or delivered or installed by them or others. Amazon was never about the books – that was only the point of entry.
Q: What are the pros and cons of a wholesale grower using Amazon as a sales outlet?
A: We won’t know some of this until after it actually happens. I’ll cover what I see as the biggest opportunity and the biggest potential negative impact. Let’s start with the downside.
One of the problems we already have with growers who sell retail is that they sell too cheaply. While it seems logical that growers who retail would make more money, the numbers from our industry have never supported this. The attitude that the grower can charge more than wholesale and they can sell cheaper because they grow it does not play out well because there are additional costs of retail that have to be paid, and if you sell retail you deserve to make a profit on both the growing and the retailing. Otherwise the grower is cheating themselves, plus they are interfering with the retail market pricing. This has already been a plague on our industry and selling cheaper than retail on the internet will only exacerbate this. It is not cheaper to sell on the internet so much as it is more convenient for customers to buy from the internet. It is only cheaper when sellers fail to ask for a price that supports their business and unfortunately, just like with brick and mortar, too many sellers sell too cheaply on the internet just because they think they can.
On the positive side, more consumers will be able to access our industry’s products on their terms. Whether that product is on Amazon, Jet, Craig’s List, eBay, or direct from the retail growers’ website, if it is accessible when the consumer wants to buy and they can find out about it, more plants will be purchased. The way the consumer wants to buy is shifting rapidly. BOPUS (Buy Online Pick Up in Store) is becoming mainstream and a large percent of those orders are being placed after retail stores are closed for the day and before they open the next morning. It’s actually a very old concept moving from buying by phone and having something delivered, but now the internet can assist, making it easy with automated processes.
Q: Some independent garden centers are either already involved or are considering getting involved with online plant sales. How does this affect the horticulture supply chain?
A: The ability to sell stuff online has come down in cost, but the time required is more expensive. The local garden center with a website can sell online, but we feel strongly that they will need a larger network and greater capabilities to do it well and sustainably. And to keep current business going while investing and building online capability – it’s a crash course. That’s why we feel the Bower & Branch network is essential for both retailers and growers to thrive in the future and is the best opportunity to take back the 83 percent of plant sales that box stores have garnered. Fighting for the 17 percent that independents get is not the scale we can be satisfied with.
Q: Any final thoughts on where online plant retail is going?
A: Yes, fasten your seatbelts. Learn fast. Make lots of mistakes as fast as you can. Let go of the past mistakes, the wrong lessons that were learned, and quit resting in that bed of laurels of the past because they are turning to compost.Zappos, the online shoe company, now owned by Amazon, is famous for attentive and thorough service. They are simply better at it than 99 percent of brick and mortar independent businesses in any category, and they’re getting better by using predictive analytics and artificial intelligence integrated with human systems. This is all doable and is becoming cost-effective and much more profitable. I believe brick and mortar retailing is a viable long-term strategy, but not by itself in many instances. The multiple front (omni-channel) opportunity means adding to that the clicks to bricks for in-store pickup, and online value-added “Uber of” types of services to deliver and install.
With Bower & Branch, we’re experimenting with extreme services to supplement those of member garden centers. Our online chat is used by both consumers and member garden retailers to assist in making choices and getting purchases made, delivered, installed – whatever it takes. We’ve done FaceTime walk-arounds with consumers to help them decide where to plant and what to plant. Those efforts don’t always scale up to a big operation, but we see that the market demands them and we’re aligning plans and resources to provide plants in the way consumers want to buy, with high levels of consumer engagement on a consistent basis.