4/29/2016
Inventory Control Series: Creating the Master Plan
Katie Elzer-Peters
2016 is the year of inventory control in Green Profit—tracking, calculating, planning, and, now, merchandising. Specifically, marrying the merchandising plan with the buying plan. Objective No. 1? Move the most product at the highest price.
You’re smack in the middle of your busiest season, so now is the time you’re just dying to open your inventory spreadsheets and start making notes, right? Susan Bachman West, Vice President of Perishable Merchandising and Floral Design for Bachman’s in Minnesota, says, “It's so chaotic in the spring, but the best time to plan for next year is right after you lived it. Then you don’t have to guess, ‘Did we have too many or not enough?’”
Before Market Planning
“Good planning is essential,” Susan says. “You don’t want to purchase too much and be over-inventoried in the end of the season. Before we would ever go on a buying trip we pull numbers so that we have a relative idea of the number of SKUs we want to put in each area, the dollar value we expect to turn, and if we own any inventory that would transfer to the area.”
If you don’t have that kind of data, now is the time to start gathering it. At least look through old invoices and note what sold at full price and what had to be marked down, so you don’t repeat previous mistakes.
Sid Raisch, consultant and President of Horticultural Advantage, emphasizes that product mix planning must be customized to the individual location. “Trends and color are important things to consider, but buying the right amount of product for the right amount of space available and for the expected traffic is more important than the trends.”
He cautions against fixtures pre-loaded with product. “They’ll sell about half of the merchandise—what people want—and then are left with the other half. After a few years, a garden center can end up with what I call the ‘garage sale’ look.”
He continues, “If you didn't sell the stuff you got last year, get rid of the rest of it because customers already told you they don't want it. Start fresh and stick closely to the things that did sell before. Figure out what the patterns are.”
That means dig out those records you’ve been keeping, which will help you decide how much of what to buy and where to put it. Here’s where to start:
Categories to Review
Yearly Featured Repeaters: These are things like Easter lilies and poinsettias that you know you stock every year. You should have data on how many of which types you’ve sold for several years running. Put those on the map first.
If you happen to create a unique category that grows year-over-year, for goodness sake, pay attention and enlarge it! Allisonville Nursery has a repeater category called ‘Grab and Go,’ which is made of pre-selected combinations available already planted in finished containers, planted in drop-ins for people that have containers or available as plants in 6-packs for people who want to plant their own containers.
Jacques Schindler, the Greengoods Buyer, says, “We’ve already planned our templates for this program for the year. Based on previous seasons’ growth, in 2016 we’re tripling the number of plants we order for the ‘Grab and Go’ program.”
Those plants are tallied up, categorized and purchased separately from annuals and perennials merchandised in bulk on nursery benches. “It’s a huge part of our merchandise planning,” says Jacques. Customers will purchase spring, summer and fall container mixes from this category area.
High Turnover/ In-Season Repeaters: “Herbs are a good bet,” says Sid, “Because customers will come back multiple times in a season to buy them.” Like it or not, Fairy Garden items are high turnover and repeat-purchase products. He says, “The number one reason people will come back is to buy what they saw last time.” These are the “sure bet” items guaranteed to bring in cash.
Repeaters with a Twist: Maybe there was a particular hardgood item that proved to be popular, but is a one-and-done purchase. (Outdoor lighting, fountains, furniture and large containers are good examples.) Try to figure out what made that product so successful. Was it a new color/style or how it was merchandised? Think of ways to replicate that success with something new.
“We try very hard to tell a story with the product lines in our home décor sections,” says Jacques. “We coordinate color themes, or we might have a masculine theme or a barbecue theme. We want the guest to look at something and be able to envision where it will fit in their home.”
Trending: Trends play a part in where you display items and what you buy. “Our broad categories are displayed in a systematic form. For instance, you need to choose some sort of organization—color, plant type—that is easy for the customer to understand,” says Susan. “From there, we pull out trending merchandise and feature it. Edibles have been trending, so we’ve moved that display to more prominent locations so people can more easily find them. We might do the same thing with a new petunia on an endcap.” They know to increase the numbers of featured plants and note it on the planning diagrams and spreadsheets.
To Market, To Market!
Sid says, “When you go to the buying show, you should have a notebook/binder with a layout of the sales floor for each period—if you’re buying for each season—that shows where the fixtures are. Buy for each one of those spaces.”
Susan adds to that: “When we are at market, we take lots of pictures to get the visual concept of how this is all going to come together. It helps on the execution side, when the product comes in. You can see how the merchandise plan from a piece of paper is translated to a visual display.”
Everyone cautioned against getting swept away by the showrooms. “Sometimes we buy right there, but usually we try to get lots of ideas and come home and try to actually match orders with dollar figures we’ve allocated,” Susan says.
“If you get to the show and you haven’t gone through past invoices, you can get captivated by the ideal lighting and displays—not to mention the wholesale prices,” says Sid. “You’ll be looking at something saying, ‘I know people would buy it! I’d buy it!’”
GP
Katie Elzer-Peters is a garden writer and owner of The Garden of Words, LLC, a marketing and PR firm handing mostly green-industry clients. Contact her at Katie@thegardenofwords.com or at www.thegardenofwords.com.