Business as Usual: It Just Ain’t Gonna Cut it Anymore! By Stan Pohmer

Hang on to your hats, ladies and gentlemen, the ride is about to get wild and wooly!

Though I’ve heard a few (very few!) people say that spring 2002 was a decent season for horticulture sales, the majority of growers and retailers I’ve spoken with were disappointed–by a long shot. Pre-season hopes were high, and rightfully so. The post 9/11 consumer sentiment, emotions and attitudes, with people planning to stay closer to home, increasing and improving family and life values, all pointed towards a very favorable view of horticulture products because we could help satisfy their pent-up needs and desires. And most of the economists were indicating that we were coming out of the recession and peoples? lives would start stabilizing and consumer spending would increase, especially on product categories like ours.

But our high expectations were shattered! Consumer confidence plummeted, and Mother Nature rained (or didn’t rain) on our parade. There’s been no closure to the threat of terrorism. Confidence in big business is virtually nonexistent due to the shenanigans of the Enrons, Worldcoms, Qwests, Kmarts and, yes, even the darling of the floral industry, Martha Stewart, has had her tiara tarnished. People lost jobs, their planned retirement savings, their kids’ college education funds, and uncertainty over future employment was high on many peoples’ minds. The stock market has crashed, leaving many with net worth reduced by 30 percent and more, with no clear indication about when or how quickly it might recover.

And let’s not forget the impact of the weather on our sales (and profits), something most of the other consumer category choices didn’t have to deal with. We saw drought, monsoons and combinations of both even in the same market and region! In some markets we went from winter to summer and skipped right over spring. The only bright spot in our weather dilemma was that most growers and retailers held prices long enough into what season we had to avoid a total bottom-line bloodbath.

Optimism amid the pessimism

Despite all of the problems we endured in spring 2002, the talk in the industry about the future has been pretty upbeat. At the Ohio Short Course in July, the attitudes of the growers and retailers were actually pretty positive, as they were at the SNA show in August. But, then again, people in the L&G and floriculture industries are, by their nature, eternal optimists. Some were saying that spring 2003 will be a normal year; but can someone please elucidate me on what a normal year in this industry is? I’ve been involved in our industry for over 20 years and there’s no such animal as normal anymore!

The third and fourth quarters of 2002 are viewed by many economists and fortune tellers as being the precursor of things to expect in the first and second quarters of 2003, the time periods most important to the L&G industry; and right now things don’t look too chili red hot. Some financial gurus are talking about a “double-dip” recession, meaning that recovery is a ways off. Others, based on the recent alarming drop in consumer confidence reported by historically accurate studies like the Conference Board’s Consumer Confidence Index and the University of Michigan, are predicting poor sales for the important back-to-school period; historically, poor BTS sales are an early indicator of poor Christmas selling-season sales.

It’s said that consumer spending will slow as they increase their savings both as a general precautionary measure and to help them reach their retirement goals; even after things start to recover, it’s still likely that consumers will continue to save more, resulting in slower rates of growth in consumer spending for at least the next year or so. And remember, too, that consumer spending accounts for two thirds of the Gross Domestic Product spending, so this lack of growth could have a major impact on the economic turnaround.

Anyone remember a program a few years ago called “Scared Straight”? It targeted kids whose behavior was leading them down the road to ruination, kids who were looking a life of crime and prison right smack dab in the eye. They took these kids into prisons and had the prisoners scare the hell out of them, showing them what life had in store for them unless they changed their ways, and changed for the better, quickly. In many cases, this radical shock therapy worked and kids’ futures were saved.

Maybe the challenging season we just went through and the questionable prognosis for spring 2003 will be our own “Scared Straight” forcing us to see that business as usual just ain’t gonna cut it.

Change your approach

For the past 10 years or so, our industry has been blessed with good sales growth. We have a product that the consumer genuinely enjoys. With the expansion of the mass market, plants and flowers are more convenient to purchase and have experienced tremendous increases in availability and visibility. And sales of our products have been seen as, if not recession-proof, then at least recession-resistant. But the days of “if we grow it/if we stock it, they will come” are quickly coming to a close. Maybe we were more lucky than right, serendipitously having the right product at the right moment in time.

I’m a firm believer that it’s truly possible to make your own luck; this is what we, as an industry, will need to do to survive 2003 and beyond. We must provide the consumer with compelling reasons to use and enjoy plants, not just seeing who can sell them the cheapest; price alone will not grow consumption of the products we produce. We must tap into the fundamental emotional, sociological, psychological and physiological benefits plants and flowers provide. We must focus on providing success, satisfaction and enjoyment to the consumers, both during the purchase experience and in their home and yard. We must show the consumer how to creatively use plants and flowers in new ways, demonstrating the endless possibilities. We must move away from a production and operations mentality to a marketing and consumer-centric mindset and approach.

Our products can make a difference in peoples’ lives. In these times of financial and emotional uncertainty, consumers need something that can make them feel better about themselves and their future. We have a unique opportunity to help make a positive difference for others and help ourselves at the same time, but it’s going to require some major changes in the way we do business.

One thing’s for certain: Business as usual just ain’t gonna cut it anymore.

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Stan Pohmer

Stan Pohmer is president of Pohmer Consulting Group, Minnetonka, Minn. He can be reached by phone at (952) 545-7943 or E-mail at [email protected]

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