If you think an 8-year-old, 20-acre operation is not a “big grower,” just take a look at Hampshire, Ill.-based Hamp-shire Farms. In the company’s brief history, it has become Home Depot’s number-one perennial vendor in the Midwest’s major markets, developed a strong brand that boasts consumer recognition and mastered the pay by scan transition…all of this while working with a crop that can be much less cooperative than bedding plants.
Tammy Burdzinski, Hampshire’s vice president of sales and marketing, recently sat down with GPN’s Big Grower to discuss how the company has achieved so much success in such a short time, the ever-shifting mass-market customer and what she thinks are the benefits of pay by scan.
Color growers often think perennials are much easier to work with because you ship when plants come into bloom, without having to schedule successive plantings of the same crop. Burdzinski begs to differ. While Hampshire may not be forcing many varieties (a few Asiatics and hostas are heated to come in early), there are promotional timeframes that must be met: If the retailer features aquilegia in a mid-April ad, you had better have the plants in the store, warned Burdzinski.
In this respect Hampshire Farms thinks and acts more like a color grower than a “traditional” perennial farm. In fact, each shipment that leaves Hampshire Farms includes something in color. “We can’t have the whole assortment of all 600 varieties we grow all the time,” explained Burdzinski. “So we’ve kind of trained our customers that the selection is going to change all the time, so get it when you see it in bloom. Come back next week, there will be something new.”
Burdzinski feels that, like other green goods, much of the perennial business is based on impulse. Perennials compete with annuals, Ipods or other “luxury” items for the consumer’s attention. “It’s all disposable income,” said Burdzinski. “Our job is to educate the customers so our numbers continue to go up.”
It seems this formula is proving successful for Hampshire. The company continues to comp same store sales year after year, showing strong growth regardless of market trends.
The cornerstone of Hampshire’s success is the company’s tagging program. The 3-tier program features different tags, pot colors and plant material. This system allows for multiple price points and easily differentiates each pricing level.
The basic program is in a terra-cotta-colored pot with the basic Hampshire Farms tag. The basic program is essentially unbranded and uses standard varieties — a wide assortment of plants customers have been growing for years. Blue Ribbon perennials are in a maroon pot that feature an oversized tag that looks like the kind of ribbon given out to first-place winners at a county fair. The plants included in the Blue Ribbon program are unique or new varieties of standard perennials. Retail for plants in the standard program are $3.33 for a 1-qt., $5.99 for a 1-gal. Á and $12.96 for a 2-gal. container. Retail for plants in the Blue Ribbon program are $8.99 for a 1-gal. and $16.96 for a 2-gal.
Started in spring 2006, the highest price point is called Passionate Perennials. These 1- and 2-gal. perennials are grown in purple pots and feature an oversized tag with a metal keepsake plant stake. Passionates are usually specialty plants that are not typically seen at mass-market stores. The Passionate program retails for $14.96 for 1-gal. pots and $34.96 for 2-gal. pots.
Though a small part of total production, the Passionate program has brought Hampshire some striking successes. Burdzinski related an example: “We did about 200 2-gal. new, unique delphiniums, which probably means 10 stores got 20 plants. That was what plant merchandisers called self unloaders because the customers unloaded them off the rack; the merchandisers never touched them. A customer called a little while later to see if we had any more of them. I ended up making a special shipment to her store — 24 plants at $35 apiece, now that’s passionate!”
Sorting It All Out
With three programs and multiple price points per program, Hampshire Farms has to work hard to keep customers from being confused. Merchandisers use signage and aisle violators, but mostly they rely on precise displays: Plants are grouped in one area by brand; in another by crop, with secondary divisions by brand; and in another area by promotional item, again with secondary divisions by brand. Burdzinski said merchandising is the lifeblood of a successful store presentation, and “we have an unbelievable team out there.”
Burdzinski warns her merchandisers about what she calls sign pollution. “You don’t need more than one sign every 8 ft.,” explained Burdzinski. “The customer can see that. When you go into any store — any big box or any garden center — you see all these different brands, and I’m afraid we’re confusing the consumer. I think in our efforts to come to market with new things one of our biggest challenges is just to keep it simple and clean. We are required to have a lot of signs and bench tape and tags, and it can get busy. You kind of lose the plants.”
Assured that Hampshire’s own brand is important because it keeps posting strong numbers, Burdzinski worries nonetheless that consumers will be intimidated when they walk into garden centers. “Maybe sorting through all the brands is so frustrating they’re just giving up,” she wondered. “I don’t know what to do about it, except to say that it worries me. I know we’re going to market correctly, but we have to make sure this is a fun, easy shopping experience.”
Working Pay By Scan
Burdzinski is not simply a proponent of pay by scan; “I absolutely love it,” she exclaimed. Having worked under the system for two years, Burdzinski argues pay by scan gives Hampshire a lot more ownership in its product and control of its destiny. “It is forcing us to be better in every way,” she added.
Having merchandisers on site who can affect inventory allows Hampshire to get the right amount and type of product to each store. And since Hampshire still owns the product, the decision to stock during slow times or clear a store of old product is left to the grower and not the store. Burdzinski believes this keeps fresh product in the stores at all times and attracts customers to the store; she also feels it would not be possible without pay by scan.
“This spring I had 36,000 extra Asiatic lilies that had to go in two days or they would be blown,” said Burdzinski. “If we were not on pay by scan, somebody would have had to take a risk, and they would never have given me a purchase order for 36,000 Asiatic lilies in one weekend. This way,” Burdzinski added, “we took the risk, sent the product in and had an 86-percent sell through. So it’s a great thing that we can drive our own destiny.”
Preparation Pays Off
Part of the reason pay by scan has gone relatively smoothly for Hampshire is the work the company has put into its systems in the years leading up to implementation. Hampshire hired merchandisers, learned its stores, devised care regimes and, most importantly, invested heavily in computer systems.
“We started hearing about EDI [electonic data interchange] about three years ago,” Burdzinski said. “So we started getting ready. We all knew pay by scan was coming; it wasn’t a surprise.” For Hampshire, the preparations included “huge investments” in software and systems including things like customized reports that the EDI feeds into to give rankings, weeks of supply and markdowns, and hook ups so merchandisers can put markdowns into the systems.
Burdzinski, an 8-year veteran of Home Depot and the live goods buyer who opened the Midwest market, believes information and preparation are part of the Home Depot model. “I think I have a little closer perspective on it than other suppliers,” said Burdzinski, “but I don’t think that’s an advantage. We are all given the same tools. I think the ultimate goal is to increase your sales, drive new business and win new customers. The vendors who are supplying Home Depot today have a real clear understanding of the mission. If you prepare for it, great; if you don’t, you’re going to lose.”
Hampshire Farms At A Glance
Owner: Frank Mariani, Mariani Enterprises
Location: Hampshire, Ill.
Size: 20 acres of production
Employees: 320 at peak (200 on the property and 120 merchandisers in stores)
Sales Area: Approximately seven Midwestern states
Biggest Customers: Home Depot and Costco
While Hampshire Farms has only been in business for about eight years, Tammy Burdzinski, vice president of sales and marketing, has been working with mass merchants for more than 20. During that time, she has learned quite a few lessons about being successful and keeping customers happy.
Pay Attention To Detail. “I’ve watched other vendors in the industry lose attention to detail and let their guards down. Especially with the whole pay by scan thing, you can’t do that. It can be a runaway train if you let it.”
Don’t Be Afraid Of “New.” “We’re not afraid to try things. New plants like kniphofia, crocosmia or hardy hibiscus. We’re not afraid to switch up a program or put in a $35 2-gal. container. We’re willing to take risks, so I think that helps us be successful.”
Focus On Revenue Generators. “One lesson I learned a long time ago working at Depot is it’s all about dollars per square foot, dollars per square foot, turn, turn, turn. The garden centers aren’t getting any bigger, so you need to figure out how to make more money. Every plant has to work; it has to sell. You can’t afford for things to sit there and not sell, and if you can sell a $35 plant or a $9 plant instead of a $2, then you’re much better…more dollars per square foot.”
Watch Your Product Mix. “I guess one of my ah-ha moments was last fall when I went out on the dock. It was the 10th of September, and all I saw was pink and purple. The racks were full of flowers, but they weren’t fall colors. Those would have been the most perfect racks you would want to ship in April and May.”
Hampshire’s Savvy Surfers
Even though having a Web site is often considered standard operating procedure, many businesses seem unsure of the return they get from their sites. Hampshire Farms is not one of those businesses.
The Web site (www.hampshirefarms.com ) regularly attracts 9,000+ visitors per month during peak season and boasts almost 250,000 visitors since its inception in 1998. Promoted exclusively through plant tags and signs, Hampshire’s Web site includes information on other Hampshire varieties, care instructions for all Hampshire plants and contact information for additional questions.
Tammy Burdzinski, Hampshire’s vice president of marketing and sales, said customers really seem to appreciate the opportunity to speak with a company representative. “I would guess we receive 20-30 questions per week,” said Burdzinski, “with people asking things like, ‘My sedum fell over,’ or ‘Do I plant it outside or will this live inside?’ It’s amazing the Web site questions we get from customers. I have customers E-mailing us asking if we ship to New York. It is amazing.”
What the company has learned:
- Customers use the Web site more during the week than on the weekend, with a spike on Monday.
- Site traffic trails off as the season winds down.
- Your Web site can drive traffic to your retail partner’s Web sites.
- Web sites are an important component of a successful consumer-marketing program.