Group Structures for Independent Garden Centres

Independent garden centres find business success more difficult to achieve these days. Garden retail is a highly competitive environment

Difficulties include:

• Competing with big box stores for sales
• Competing with big box stores for supply
• Achieving marketing cut through
• Lack of marketing expertise and resources
• Lack of financial expertise and resources
• Achieving operational efficiencies

For large destination garden centres with a turnover greater than 3M turnover these difficulties can be mitigated, but they still remain.
Garden centres between 600K and 3M turnover are the ones most likely to benefit from joining a Group. Garden centres below this can benefit, but only if basic group costs are kept to an affordable level.

The three main types of Group structure:

1. Branded members cooperative
2. Independent members cooperative
3. Franchise

In theory the one most likely to be unsuccessful is in fact one of the most successful. The Garden Independents Network (GIN Group) in New Zealand is a non-branded independent members cooperative.

• Members of this group trade under their own individual names
• Prospective members must be of a high standard before acceptance
• Prospective members must be creditworthy
• Members must supply figures for KPI reporting and benchmarking
• Attendance at the three meetings per year is mandatory
• Participation in marketing initiatives is encouraged but optional
• Supporting group buying is encouraged but optional
• An elected board approve initiatives and proposals 
• All members receive the full ‘Making it Happen’ mentoring programme from Garden Retail Success Ltd – Regular visits and appraisals, business plan, monthly KPI reports, as much contact by email and phone as they wish and mentoring sessions by Skype

The group has SUPPORT as a basic foundation of philosophy. Another basic tenet was to make sure all members clearly wanted to be amongst the BEST garden retailers in New Zealand with a clear POINT OF DIFFERENCE that is a tangible CUSTOMER BENEFIT.

Once the foundation was in place, sales grew rapidly for group members through word of mouth. Some members have gained significant market share even where there is strong competition from Big Box Stores

Recipe for growth:

• Marketing initiatives with support material are developed collectively and implemented individually.
• The group has developed a product brand name which is used for a number of exclusive key products to underpin the ‘point of difference’.

• Group buying started slowly but has grown naturally and easily to meet the needs of the marketing strategy under pinned by very successful retail management 

• Member success is measured by an index across 10 Key Performance Indicators.
• Scheduled meetings three times a year to network, support, learn and develop group initiatives

The group started in 2006 with 10 members doing a combined turnover of $7.8 m. There are now 13 members doing a combined turnover of $17m. During this time all members have had sales growth with one achieving 250% sales growth. Bottom line profitability increase has been even greater than sales.

The key to success that made it all happen is Garden Retail Success Ltd. Starting from day one in 2006, GRS have been consultants to the GIN Board and to members. 

Garden Retail Success services to GIN Group (on behalf of members) –

• Developed Group Strategy
• Provide the MAKING IT HAPPEN mentoring programme to all members
• Carry out KPI monitoring / reporting plus benchmarking
• Provide a set of 8 Garden Retail Manuals
• Develop initiatives – signage, marketing, group brand products, product information
• Attend all GIN meetings
• Attend and advise at Board meetings

To fund the Group and the support from Garden Retail Success, GIN members opted for a scaled membership fee based on turnover which ranges from approximately 0.4% to 0.8% of sales. In addition there is a small income from a levy on exclusive products, some of which are also sold through other independent garden centres.

In nine years not one member has chosen to leave the group. Members say the reason the GIN Group is so successful is because they focus on being the best garden retailers. This could not be achieved without an emphasis on networking and providing member support through Garden Retail Success.