What to do When a Big Box
Store Moves to Town
Marketing Strategies
Lawrence S. Martin & Dr. Robin G. Brumfield
National Farm Management Conference
Rochester, Minnesota
June 12-14, 2007
A Tale of Two Cities....
Both Have:
A New Big Box
Two Established
Greenhouse/Nurseries
A Tale of Two Cities…….
Two years after Home Depot comes to town.....
 One grower goes
 The other grower?
A Tale of Two Cities…….
How?????
Why???
Marketing Trends:
How are greenhouses
(wholesale and/or retail)
coping with
changing customer preferences
while at the same time
competing with and/or profitably
selling to the Big Boxes?
Marketing Trends:
Our work is meant to help growers formulate
their own:
Strategies
Concepts
Ideas
...to not only SURVIVE; but, to THRIVE in the
current, competitive market.
Materials and Methods:
Marketing Strategies
 Visited over 80 growers
 Collected data on:
 Maintaining market
share
 Promotional plans &
programs
 Product mix
 Value added
 Agri-entertainment
 Advertising
 Pricing policies
 Demographics
 Market channels
Objective #1
Determine how
the Green
Industry is
responding to
current trends
& changing
customer
preferences.
Objective #2
What can
producers
learn from
our
research
results?
Objective #3
How can
they
incorporate
these
results into
their
existing
marketing
programs?
Marketing Trends:
The Big Boxes
FACT: The Big
Boxes are here
to stay!
Big Boxes:
Help or Hindrance?
Big Boxes are
Price Setters &
Push Prices
Down
Contributing to or
causing…………
Shake-Outs:
elimination or
winnowing out
of some
competing
businesses as
a result of
intense
competition.
Contributing to or
causing…………
Bankruptcies:
A bankrupt
business is one
which has been
legally declared
financially
insolvent.
Contributing to or
causing…………
Consolidation:
The merger of two
or more
commercial
interests or
corporations.
Big Boxes’ low prices
are sometimes BELOW
break-even costs.
Marketing Trends:
When a Big Box store moves
into town most
reactive/resulting strategies
boiled down to:
 “Snooze & Loose”
or
 “Change & Prosper.”
Marketing Trends:
Producers who:
Changed or modified their long
established marketing histories
not only stayed/remained solvent
but increased their sales in the
shadow of the Big Boxes.
Tale of Two Independents:
“Snooze & Loose” or “Change & Prosper”
Qualified as “Easy Prey” for Big Boxes”
 A typical Main St. Merchant doing
“business as usual” for one or more
generations.
 Invested little profits back into business
 Complacent. Store Fronts neglected.
 Cracked Sidewalks. Litter in the gutters.
 Parking Meters answer to limited parking.
Tale of Two Independents:
“Snooze & Loose”
 Half-hearted Promotions. Short Hours.
 Layout, Lighting, displays, & merchandizing
virtually unchanged since construction.
 Poor or non-existent signage. Slow to catch-on
to new trends and/or follow the customer’s
changing needs and preferences.
 Business generally still good enough to allow
owners to earn a good living.
Bankrupt Frank’s Nursery
Former Frank’s Nursery to sell at but 40 of
its former garden centers.
The Troy, Michigan company began as a
roadside fruit stand in 1949.
At the time of Frank’s first Chapter ll
petition it had 257 stores in 15 states.
Bankrupt Frank’s Nursery
 Reorganized
under its 2nd
Chapter 11 in 2
years.
 Will attempt to
develop 40
parcels of land
former garden
centers.
Frank’s could not compete
In a market where customers patronize:
 Upscale local greenhouse and garden
centers with better quality.
Or
 Big Box Stores who pandered cheaper
prices.
 A sad end for Frank’s.
Frank’s Closed it’s Doors
Lesson learned:
Frank’s retail operations had
neither the cheapest prices nor
the best quality product: a
death sentence in today’s
competitive Marketplace.
Marketing Trends:
 The Big Boxes have forced producers
to re-think their marketing strategies.
 Successful producers are competing
by:
 Knowing their costs
 Developing a niche.
 Making lemonade out of lemons.
 Listening carefully to what the
customer wants.
 Adding value/service.
 Making buying an experience.
Frank’s Closed Doors
Re-opended in Allentown, PA
Make Lemonade out of Lemons:
Frank’s retail garden center in Allentown, PA
was purchased by Dan Schantz Greenhouses.
Dan Schantz (owner/operator of a local
established and very successful garden
center) added the his former competitor’s
Allentown facility to his nursery business.
In the same garden center where Frank’s
withered on the vine, Dan Schantz increased
his annual sales by 30%.
Frank’s Closed Doors
Re-opended in Allentown, PA
Both nurseries operated in the shadow of Home
Depot (less than ½ mile away)!
Dan sells retail/wholesale in his greenhouse/nursery
and has managed to wholesale to his Home Depot
neighbor!!
Dan’s antidotal response to his successful
conversion of the former bankrupt Frank’s Garden
Center? How was he able to make lemonade from
lemons?
“Marketing is everything; and, everything is
marketing!!”
Frank’s Closed Doors
Re-opended in Allentown, PA
Where Frank’s marketing plan could not
compete, Dan Schantz thrived, expanded, and
filled the void created by the Frank Bankruptcy.
in a changing marketplace where customers
patronized:
 Upscale local greenhouse and garden
centers that boasted better quality.
 Or migrated to the Big Box Stores who
pandered cheaper prices.
 A sad end for Frank’s became a success
story for Dan Schantz Greenhouses.
Competing Against the Big
Boxes
 What Can You
Do?......... to Stay Alive,
Compete, Thrive?
 Do what the big boys
can’t do:
 Sharpen your sales
skills and your sales
staff
 Are your sales people
courteous, engaging,
knowledgeable,
energetic and helpful?
Marketing Trends:





The Best Offense is a Good Defense
A leaning curve
A re-evaluation of the market
Recognize the Consumer Driven Market
Listen to the customer
A “return to the basics”
Competing against the Big
Boxes
 Review the Basics……
 Educate your buyers about your:





Quality
Value
Service
Convenience
Selection (relative to
the competitor’s)
Shift from producer to
consumer driven market
 Business Hours
that customer’s
need:
 Nights
 Weekends
 Thursday nights.
 Make shopping an
experience.
Shift from producer to
consumer driven market
 Pre-Packaged and/or
Free Potting Stations
 First Popular with
Apartment/Condo
Customers
 Now finds its way
onto the front/rear
porches of Suburban
“Mc-Mansions”
ENTERTAINMENT/ EVENT
SHOPPING
 Retail/Wholesale
customers want a
shopping
experience.
 “Spring Open
Houses” are as
much
entertainment as
markets for your
products.
Bill and Meg Bitter
 In one of the wealthiest counties in New Jersey.
 On a country road not heavily traveled.
 Hired a concert violinist and served caviar and
exotic foods for their Spring Open House (an
annual social event in his community)…..and a
huge success.
 The local church sold food avoiding the needs
for food/health certs. No one minded paying
for the food as proceeds went to the church.
 A Win-Win for all.
ENTERTAINMENT/ EVENT
SHOPPING
 Corn mazes pickyour-own
pumpkins, cider,
apples, and the like.
 Halloween is the
2nd-largest
decorating holiday.
 55.8% celebrate
Halloween.
 Spending an
average of $40+
ENTERTAINMENT/ EVENT
SHOPPING: OTHER IDEAS
 “Chili cook-off” or a
neighborhood women’s
bake sale where proceeds
go to the local church
and/or charity.
 Petting zoos are in vogue.
 Kube Pak and Yoder Bros.
have “field days” &
“educational seminars” for
wholesale customers in
New Jersey.
The Big Boxes have made us rethink our marketing strategies
 Develop your niche.
 Do what you do best.
 Listen carefully to what your
customer wants.
 Don’t reinvent the wheel.
 Get back to basics.
 Exploit your comparative advantage.
What’s happening Now? Take
from the Past,
Add to the Future
 Try to “Wow” your customers with ideas and
concepts that portray your products in “new”
ways.
 Go back to traditional, familiar, themes and faces…
even nostalgia.
 Hollywood continually remakes smash hits of
yesteryear.
 If the formula works…it’s just good business and
common sense to re-use or recycle it.
 It makes sense to go with something tried and
tested.
The Bottom Line:
 Marketing that employs nostalgic
sentiments may induce Baby Boomers to
give you a second look.
 Sparked by “warm and fuzzy” - products, things,
experiences that include friends and family.
 Boomers are flush with cash and influential.
 Boomers encourage their kids to use their favorite
brands,……a whole new and impressionable
generation getting to know, like, and gravitate to
the same spending habits of their parents.
Contact Information
Dr. Robin G. Brumfield
Professor and Extension Specialist
Rutgers University
55 Dudley Road
New Brunswick, NJ 08901-8520
Phone: 732-932-9171 ext. 253
E-mail: Brumfield@aesop.rutgers.edu
Home page: http://aesop.rutgers.edu/~farmmgmt
Thanks to USDA CSREES for research funding.