Making Gifts Work For You
Gifts can help sustain a garden center business during slower, off-peak times, but retailers must first meet the unique challenges a gift department can bring.
June 8, 2010
The gift department and the lawn and garden sections of the garden center are like night and day. At least, they should be.
“The gift business may not be for everybody – it’s a tricky business,” says Paul Bachman, president of the Bachman’s family-owned chain of stores in Minneapolis. “Eighty percent of what you sell, you were probably selling the year before in the garden center.
“If you aren’t coming up with 80 percent new items and making them sell (in the gift department), it probably looks tired and is hurting more than helping.”
Depending on the type of gift product, some items move much faster and require as much, if not more, attention than the products in the rest of the store. A point-of-sale system can be an easy way to watch products that are moving – and equally as important – products that are not.
For gifts to do the job of creating revenue during off-peak times and keeping foot traffic steady in the garden center, they must be fresh, fun, well-merchandised, priced appropriately and cater to the store’s specific customer clientele.
“In our tough economic times, I see retailers focusing their merchandise mix on unique and special product designs, offering accessible price points, telling thematic merchandising stories and offering fun promotions,” says Beth Lorentz, vice president of marketing at Midwest-CBK, a gift product supplier. “In addition, they are highlighting their gift assortments both in-store and online.”
Pricing & Margin
Some products in the gift department can have a higher margin, which makes up for some of the underperformers. For example, Mary Ann Day, gift buyer at Nicholson-Hardie Nursery & Garden Center in Dallas, Texas, looks for what she calls “blind items” that are unique to her store for additional margin. On the rest she strives for 60 percent, since she does a lot of business in branded products.
Items like scarves, jewelry or specialty containers can get a stronger markup, she explains. But Day doesn’t like to make decisions without seeing the product firsthand.
“That’s why I have to look at it – I can’t order it from a catalog. I can determine just from looking at it what the retail is going to be,” she says, adding that often times she finds unique products at AmericasMart’s Gift & Home Furnishings Show in Atlanta, as well as the Dallas Market Center.
Bachman has several buyers that travel to the gift shows, as well, and many times they ask for exclusivity in their city, particularly if they are placing a large order. A good buyer, too, will know what their customers are looking for and can buy accordingly.
At Bachman’s, they look at reports for sell through. “If we get 100 percent sell-through in the first 30 to 60 days, we consider it a hot item and keep rebuying it and bringing it in,” Bachman says. “We continue to watch that item and ride the wave as long as we can.”
Mark Down & Move On
Some items are dogs, though, and won’t move until they hit the clearance rack. There are bound to be some bad buys, but if it’s not moving within two weeks or a month, it gets the markdown, Day says. Sometimes she’ll take the product out of the box or remerchandise it to give it a second wind – and customers a second look. “If I’ve had to go back again and look at it, then it’s marked down,” she adds.
Bachman cautions that not all products turn quickly, though, just by their nature. Home decor, especially furniture and decorative accents, tend to turn much more slowly as they are a higher price point. He is looking for turns within six to 12 months on furniture, versus weeks or a few months on smaller items.
The All-Important Price Point
For many gift retailers, the magic price point is $20 or less. That price point gives an item added “value,” especially in the current economy.
“While people love to give gifts, they are being very price conscious,” says Anne Secoy, vice president of research and development at Ohio Wholesale, a company that specializes in a variety of home decor and giftware products. “(They are) typically not spending more than $20, so quality becomes very important when choosing merchandise, as well as keeping the price points low.”
Bachman says $20 is also the magic price point for his stores, and under $30 is another good threshold for spending. Once the price reaches more than $50, it’s unusual if product turns quickly.
However, higher price points serve another purpose in the gift department setting. It sets some products apart and can give the shop an upscale feel. For example, Kathleen Chefas owns the Wild Pansy Gift Shoppe at Gethsemane Garden Center in downtown Chicago. She adds unique, one-of-a-kind items to the inventory mix for the ambiance.
“There’s something about carrying things like that to put people in a mindset that there are other treasures,” she says. “It sets the tone for the shop. You have to have special things in the shop.”
The eco-friendly movement has made its way to gifts, along with every other type of product. Dan Gelinas, a designer at Bobbo, Inc., says creating gifting products out of items like renewable resources and decorating with non-toxic paint can go a long way to filling that niche.
Retailers offering special services in the gift department is another trend. Examples include giftwrapping and providing gift boxes and bags to make the garden center a one-stop-shop for the complete gift, as well as offering promotions and fun events to create more gift-buying business.
Gift and home decor items are another way customers can rejuvenate their homes, while staying in for their staycation. “People are staying home more to save money and, in turn, are buying items to spruce up their homes,” Secoy says. “Picture frames, sentimental and inspirational sayings on signs, and functional items like dinner plates, mugs and candle holders are all items that can brighten up a home but won’t break their budgets.”