Forward-thinking garden centers are dedicated space to "outdoor room" types of displays. These setups are similar to what you might see in a Pottery Barn store, for example, where products and furniture are combined to create a sort of sample room. In this vein, some garden centers are setting up displays with garden furniture and garden décor and plants mixed together to create a complete outdoors room effect. The related question is:

"Sometimes we simply get caught with too much product or things that don't sell as we expected. I know what to do with plants that haven't sold, but what suggestions do you have about hard goods and gifts?"

This is a very broad topic that is hard to answer in a concise manner. Because the actual execution of any suggestions you decide to implement will vary widely depending upon your particular situation, I've listed some guiding principles for you to consider. This discussion does not include the buying of product with the intention of putting it on sale as part of a marketing plan.

First, let me make a couple general comments about inventory levels.

1. If you are in an overstocked position, you are not alone. Every nursery and garden center has in the past, is now or will be in an overstocked position in the future. The same applies to buying "dogs" that don't sell and become an issue regardless of quantity. Being in these situations on occasion is simply part of the retailing landscape.
   
   
2. However, while sudden changes in the buying habits and power of your customers can result in an overstocked condition, most times the situation arises because a merchandise buying plan (most commonly known as an Open-To-Buy (OTB)) is not used or followed. Because cost of goods is the biggest retail expense item the use of an OTB is the single most important financial tool. An OTB, synchronized with sales expectations, will tell you how much more to buy when sales are more than expected, and most importantly, suggest how much to slow down buying when sales are not what you expected.
   
   

Regardless of how you got into a general, product category or specific product overstocked position, here are some principles to consider when putting products on sale.

1. At least three things should be done before reducing the price:
   
   a) Remerchandise the product within the store. Move it up, down, left, right, across the store — just move it. Simply moving the product will make it look different and, perhaps, new to customers.
   
   b) Suggestive sell the product by having your staff mention it specifically when appropriate. Giving the sales staff a "spiff" (financial incentive) doesn't hurt either.
   
   c) Raise the visibility of the product by including it in a display along with other products.
   
   
2. Your first discount is your best discount. Once you have decided it isn't selling as it should and you've gone through the three steps above, knock the price down to a level that will move the product. Reducing the price incrementally rarely keeps up with the actual and perceived depreciation in value. And remember, the customer doesn't care what your cost is; all they care about is the perceived value of the product as represented by the new, lower price. When determining the sale price don't be hemmed in by the original cost. What's important now is getting rid of the product and taking the revenue generated and investing it in new products that you believe will sell better.
   
   
3. Don't be sentimental. You may have thought the slow-selling product was the best item you have seen in decades, but if the customer by not buying it thinks otherwise, they're right and you're wrong and you should take steps to get rid of it.
   
   
4. When planning a sale include some products from every department to mitigate the circumstance of a customer feeling that you don't have anything of interest to them on sale.
   
   
5. The two "WOW" factors are price and product. Surprising the customer with the low price and/or putting a product that is rarely discounted on sale will grab the customer's attention.
   
   
6. Percentage off has the strongest marketing impact. Dollars off is the easiest for the customer to understand. In general, we recommend using percentage off for marketing and the placement of the actual discounted price on the product itself.
   
   
7. Limit the duration of the sale to create a sense of urgency.
   
   
8. Put sale items toward the back of the store, with ample signage guiding the customers to this area, and surround the sale items with full price products. It is not unusual during sales to sell two dollars of regularly priced products for every one dollar of sale items sold.
   
   
9. Sales are an overworked selling device so be judicious in frequency.
   
   
10. Don't wait until the bitter end (end of season, after a holiday) to put products on sale. With point #8 above in mind, put a product that isn't selling as expected on sale during heavy foot-traffic periods.
    
    
11. Keep a record of results. Plan vs. actual. What percentage of transactions included a sale item? What percentage of transactions included a sale and a full-price item? What was the cost of marketing?
    
    

We have kept the size of our product categories, relative to each other, about the same for years. What process should we go through to determine when to expand, contract or possibly eliminate product categories?

The first step is to make sure you know where you are right now. How have the characteristics of your customers changed over a given period? What do your customers buy now compared to time periods in the past? Which products and departments are your best sellers in terms of sales, units, turnover, margin? Which are your poorest sellers? Which departments are the best and worst sellers by square or linear or cubic measurements? What do reports and articles in Nursery Retailer and other periodicals indicate are the best sellers in other nurseries and garden centers and how do they compare to your experience?

Very often just answering the questions above will start to provide clues to product category expansion, contraction or elimination questions. To this databank of factual information should be added your observations and goals.

Where can ideas for possible changes come from?

• Regional gift shows.
  
  
• The competition including direct competitors, nurseries out of your trade area and other types of stores that sell similar products.
  
  
• Customer questions and comments can also offer hints about their interests and what they have seen elsewhere.
  
  
• Reputable reps.
  
  
• The consistent representation of products in consumer catalogs. Generally, catalog publishers are very careful about how they use their limited printed pages. If a product is consistently featured it is a good indication that it is selling well.
  
  
• Online auction activity is another source of information.
  
  

Finally, as you consider changes evaluate the impact the changes will have on your store.

• How will the customers perceive the change? Will it be an acceptable new direction? Will the change continue to meet their current needs? How much disappointment, and there will be some, will there be?
  
  
• Will the change cause any image confusion? Sometimes major changes confuse the customer and they begin to wonder if the basic merchandising focus of the store is changing.
  
  
• Objective factors to consider include impact on revenue, margins and dollars per square foot. How will turnover be affected — will it be an efficient change? Will the change alter the pricing of the bulk of your products? Do you have the space to do it "right"? Do you have the financial resources to make a "statement", market the change and train the staff? Do you have the fixtures to merchandise the new product categories or will there be an additional expense for fixturing?
  
  

 
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