Market trends that will shape 2008

Water treatment series

Over the last two years many parts of the continent have experienced problems with water quantity or quality. Click here to learn more about water quality treatment in this series, part of the Water Education Alliance for Horticulture initiative.

Monday, 24 December 2007

Over the past year I’ve read and written about dozens of issues affecting retailers. To kick off the new year, I’ve assembled a recap of some topics affecting retailers nationwide. Each of these concerns could have a big impact on how you do business in 2008.

This e-mail address is being protected from spam bots, you need JavaScript enabled to view it is assistant editor, Garden Center Magazine, and contributor to the Open Register and Project: Green Industry blogs.

Lackluster housing market will persist

Many analysts predict it will be mid-year before the housing market rebounds. Lackluster home sales have also had an effect on consumer confidence. Spending is down and customers are skittish.

The good news is a recession is probably not looming. Bloomberg News surveyed 71 economists last fall and found most agree that the slowdown will be significant and painful, but not result in a full-fledged recession. Sales of furniture, appliances and building materials will suffer the most, as fewer new homes are built.

Garden centers could use this situation to their advantage. Many homeowners looking to sell are biding their time, waiting for an up tick in the market. In the meantime, affordable projects that add value to homes will be appealing. Landscape improvements definitely fit the bill.

The Wall-Street Journal discussed the value of landscaping in an article last summer (“Selling houses by the yard,” Aug. 17, 2007). The story cites figures from the National Association of Realtors that showed nearly 20 percent of buyers consider landscaping to be a “very important” factor in their decision to buy a house.

Make the most of this trend by touting affordable, high-impact landscape packages. Vignette displays that group complementary trees, shrubs and perennials could also inspire homeowners to take on a new project.

Ethnic marketing efforts will expand

American consumers are becoming more diverse. According to the latest figures from the U.S. Census Bureau, 303 counties now have a population that is more than 50 percent minority. Denver County, Colo., and East Baton Rouge Parish, La., were the two largest counties to become “majority-minority” in 2006.

Marketers are trying to tap into these ethnic burgeoning markets. In 2011, the combined buying power of African-Americans, Asians and Native Americans will be $1.8 trillion -- nearly quadruple the 1990 level of $454 billion, according to a report from the Terry College of Business at the University of Georgia. The buying power of Hispanic Americans is expected to reach almost $1.2 trillion in 2011.

These numbers represent a huge opportunity for retailers. The question is, how do you reach these groups specifically with a limited advertising budget? Consider placing ads in small neighborhood newspapers that serve ethnic enclaves. Other strategies include making donations to community groups that serve minorities and participating in fairs and block parties.

Most importantly, garden centers must ensure they’re cultivating a welcome atmosphere. Consider bringing in someone to offer cultural sensitivity training to your staff. In areas with a high Hispanic population, having a Spanish-speaking employee who’s willing to translate can be a huge help.

Product stories come to the forefront

Widespread recalls of food and toys have consumers asking pointed questions about what they buy: Where were the products assembled? Where was the crop grown? What chemicals were used in the process?

Customers will be bringing this new mindset into garden centers. Garden pharmacy items will probably receive the most scrutiny. Customers will likely pore over labels and ask tougher questions. Inquiries will also be made about plants. Avid gardeners might express more interest in a grower’s pest control and cultivation practices.

Retailers could use this inquisitiveness to their advantage. Signage and sales pitches could play up the history of products. Tell customers that your annuals are produced by a family-owned business. Share that your rustic patio furniture is handmade in the United States. These stories help consumers develop an affinity for your products.

Cause marketing also ties into this trend. Consumers increasingly want to make a political or social statement with what they buy. If you’re stocking goods that donate proceeds to charity, make sure customers know about it. Consider adopting your own cause. Find a local organization to support through a special promotion or product selection.