Magazine Article | December 1, 2002

'Tis The Season To Sell Garden Center POS

More than 12,000 independent garden centers are thriving and in need of POS (point of sale) technology. Should you consider this market?

Business Solutions, December 2002
Written by: Matt Pillar
A Real Need For Transaction Speed

Because the garden center industry is a seasonal business, the pace of operations can be quite intense during peak landscaping months. It's not uncommon for independently owned garden centers, with only one to a handful of POS (point of sale) stations, to see lines 20 customers deep during the spring planting and fall cleanup seasons. It's during these times that the pain of slow electronic payment transaction processing hurts badly.

"This industry is fast-paced and intense for a short period of time. There are four to six core weekends where sales must be maximized, so quick transactions and reliable software are essential," says Waine Rodrigues, president of VAR POS Solutions, LLC (Baltimore). Unfortunately, most independent garden centers are also limited by a dial-up Internet connection by which they process electronic payments. Achieving transaction speed without the convenience of a high-speed Internet connection becomes a primary challenge for the VAR.

Using a typical 56 K modem, Rodrigues' customers achieve initial dial-up authorization speeds of 7 seconds and successive, open-line authorizations of 2 to 4 seconds. The speed is facilitated by X-Charge credit card processing software from CAM Commerce (Fountain Valley, CA). Aside from quick dial-up credit card processing, X-Charge supports check authorization platforms and can process batch transactions both automatically at designated times or manually multiple times per day. Small garden centers benefit from the software's ability to run multiple POS stations from one telephone line. VARs benefit by getting a percentage of the processing fees, which could add up to a few thousand dollars in low-overhead revenue per year. "Once installed, this is a hands-off system for a VAR," says Rodrigues.

X-Charge is designed for Windows and can be used with stand-alone credit card processing terminals or integrated with complete POS applications. Mail and telephone orders are also supported by the software's built in AVS (address verification system) that helps merchants reduce fraudulent charges.



Garden Centers Need Wireless, Cost Slows Adoption

The acceptance of wireless POS (point of sale) technology in garden centers is only slowed by price point, says Waine Rodrigues, president of VAR POS Solutions, LLC (Baltimore). "This technology provides clear advantages to garden centers," he says. "The layout of these stores is often spread out, and the seasonal nature of the business causes the layout to change from month to month."

A garden center with a mobile POS station makes the purchase of hot-selling seasonal items easier for its customers. Putting a register in a high-traffic area near oft-purchased items during holidays and peak landscaping seasons can have a dramatic effect on sales. The challenge is for a VAR to convince his customer that mobile payment processing devices will offer quick payback as they are used for line busting, increasing sales, and assisted shopping. Another approach is to consider the expense a store incurs by moving hard-wired POS stations around the center. In some cases, wireless solutions are justified when compared to the cost of disrupting the business to run cables and move the stations around.

Unfortunately, most independent garden centers haven't been willing to accept the cost burden of a WLAN (wireless LAN), which could cost in excess of $1,000. This figure doesn't include the thousands of dollars in new hardware it might cost for many to go wire-free. To date, Rodrigues estimates that only 5% of his customers have done so, and the motivation for most of them was the preservation of the historical architecture that houses their stores. But the addit

Until recently, an independent garden center owner shopping for a POS (point of sale) application didn't have much to get excited about. Like a consumer shopping for a leaf rake, the purchasing decision was hampered by a lack of choice. Beyond a curved handle here or a foam grip there, leaf rakes all pretty much look (and work) the same. So it was with POS software. Unless a garden center owner could find a VAR willing to customize software to meet the vertical's needs, the retailer was stuck with a vanilla system. And while garden centers haven't been inundated with vertical-specific POS solutions yet, it's no longer such a chore for them to find POS VARs and software vendors who can serve them. Considering that upwards of 80% of independently owned garden centers have yet to adopt computerized POS systems (let alone vertical-specific ones), you might consider approaching the garden center market. But you'd better act quickly, because the selling season is now.

Garden Centers Are Ready To Buy POS Systems
VARs looking for a vertical primed for POS need look no further than the garden center. According to Bruce Butterfield, market research director at the National Gardening Association (NGA) (Burlington, VT), consumers spent $37.7 billion on their lawns and gardens in 2001, up 13% from 2000. Waine Rodrigues, president of specialty retail technology provider POS Solutions, LLC (Baltimore) attributes this trend to what he calls a "nesting" phenomenon. "People are investing in their homes, their landscaping, and their local communities. This is having a tremendously positive effect on individually owned garden centers," he says.

Indeed, the NGA reports that 39 million households purchased lawn and garden products at retail garden centers in 2001. While the so-called big box retailers (e.g. Lowe's, Home Depot) still have more consumer market share (79 million households in 2001), the 12,000-store strong small garden centers are where the market opportunity lies for VARs. According to Rodrigues, only 5% to 10% of these stores have modern (i.e. computerized) POS systems. Between the modest hardware and software investment required and the booming business these shops are doing, the time to move on garden centers is now.

Can Your Solution Serve The Market?
While the reporting and automation capabilities of your base software product might wow some garden centers "as is," don't expect to retain long-term clients with the same old tricks. Garden centers need customization at the POS, particularly in the inventory department, to accommodate their multifaceted businesses. "No doubt, the move to an automated, computerized system alone will result in labor savings and better accuracy, which translates to a higher operating margin," says Rodrigues. But to truly serve its garden center clientele, a VAR must be prepared to offer vertical-specific features. An integrated inventory control mechanism that spans the company's sales channels is one. "Most independent garden centers mix retail lawn and garden supply with a landscape design and architecture business and also offer contractor sales," says Rodrigues. This essentially makes Rodrigues' average client somewhat of a multichannel retailer, which demands an integrated inventory control system. "A centralized inventory system is imperative when each arm of the business pulls from the same stock." In other words, if 30 juniper trees are pulled by a landscape contractor from the store's stock of 50, the retail arm of the business must know instantly that it only has 20 left to sell. There is no time to cross-check records and update separate inventory databases. Real-time reporting capabilities offered by a centralized inventory database also arm the landscape designer with a valuable sales tool. "While landscape architects want to please their customers, they also want to sell the inventory they have onhand at the garden center. If the shop is overstocked with junipers, for instance, the architect might push the junipers a little harder as an element of his design, versus a plant the shop is low on," says Rodrigues. Reporting from a centralized database gives designers and sales staffs access to real-time inventory data.

Customize Bar Codes, Discounts, Receipts
If you want to help a garden center get a tighter grip on its sales revenue, give it bar codes. According to Rodrigues, bar codes shouldn't be a hard sell. "Independent garden centers have seen the advantages of bar coding product at the big box home centers, and they are following suit," he says. That's why Rodrigues offers POS systems that read most bar codes, and software that can create them, too. "We sell Cognitive's [Golden, CO] Blaster Advantage and Sato's [Charlotte, NC] CT400 bar code printers, which allow us to print custom adhesive and tree tag bar codes on paper for indoor use and vinyl for outdoor use," says Rodrigues.

Because they reduce operator error, bar codes are an important link in the transaction chain. In many independent garden centers, merchandise that is not bar-coded directly must be looked up in a binder at the cashier's station, where bar codes accompany product images. Not only is this time consuming, it leaves plenty of room for the cashier to make a mistake, be it by misidentifying a plant or scanning the wrong item. "Products that look very similar may have very different prices, so properly labeling them directly with bar codes can increase transaction and inventory accuracy," says Rodrigues.

Garden center POS software must accommodate quantity or "ladder" discounts as well. Rarely does a garden center sell one shrub or one bag of mulch. Purchases are often made in quantity. Therefore, 1 bag of mulch might cost $3.99, 10 bags $3.89, 20 bags $3.79, and so on. "Our software recognizes volumes of the same bar code and credits discounts automatically. No successive scanning or quantity button keystroke is necessary," says Rodrigues.

Another feature POS Solutions offers garden centers is a six-line digital notepad associated with each SKU (stock keeping unit). When inventory is received at the store, clerks entering the SKUs into the inventory system via PC are prompted to enter product care or complementary merchandise information. Then, when a SKU is recognized by the POS software during a transaction, the notepad feature allows those six lines of product-specific information to be printed on the customer's receipt.

Selling By The Seasons
In this seasonal business, timing is everything. Understanding the seasons is crucial to a VAR's success at selling to the garden center market. "This industry is fast-paced and intense for a short period of time," Rodrigues says. His company serves some 300 garden centers, and his average sales cycle on those deals is about three months. Typically, a center owner will look to install new systems in the first quarter of the calendar year, January through March. Garden center shows, where Rodrigues has drummed up most of his business, are usually held in January, when there is no growing season or holiday rush and businesses are planning for the coming growing season. Trying to sell systems to garden center owners in the spring and early summer is a waste of a VAR's time, as these are the four to six core weeks when the centers' sales must be maximized. "We've made system enhancements in July and early August," says Rodrigues, "But the spring and fall seasons are busy for these businesses. They have no time to do anything but sell, sell, sell." Rodrigues bolsters his sales calls by advertising in industry publications, such as Growers Magazine.

While the garden center's selling season cools off with the weather, a center owner's business doesn't stop. "Don't think you'll have all winter to sell systems," he warns. "Outside the selling season, the center owners and general managers you're trying to reach are very busy forecasting, creating buying plans, and ordering product for next season." Once a VAR establishes a garden center installation, the center's non-selling season is also the only chance he gets to maintain equipment, perform system upgrades, and service the customer with consultation. "This is the only time a garden center concentrates on things besides its own customers, so you've got to make the most of it," he says. That means just about the time you finish your holiday shopping, a garden center owner may be shopping for you.