Damian Luiten Garden Inspirations Group Melbourne February 28, 2011

Garden Inspirations Group, Melbourne, February 2011 Types of Garden Centre Owner

Garden Inspirations Group, Melbourne, February 2011 Types of Garden Centre Owner… The Grower Passionate about plants. Has made their garden centre a community asset because of their knowledge and passion.

Garden Inspirations Group, Melbourne, February 2011 Types of Garden Centre Owner The Artist Lots of inspiring designs. Their garden centre is an established part of the community because it is a fashion statement.

Garden Inspirations Group, Melbourne, February 2011 Types of Garden Centre Owner The Marketer A newer breed of garden centre owner. Socially engineers their communities to treasure the garden centre as a community asset.

Garden Inspirations Group, Melbourne, February 2011 Types of Garden Centre Owner The Mechanic The garden centre year is repeatable, predictable, plan-able. Provides a gardening supermarket to their community.

Garden Inspirations Group, Melbourne, February Keys To Tomorrow’s Viable Garden Centre 1.Only stock good quality products. 2.Know and use your KPIs. 3.Inspire Your Customers. 4.Manage your inventory. 5.Use your customer database as your gold-mine. 6.Use disruptive pricing to build loyalty. 7.Pick hero products your competitors can’t touch. 8.Accentuate your local ownership - Touch your local community.

Garden Inspirations Group, Melbourne, February Keys To Tomorrow’s Viable Garden Centre 1.Only Stock good quality products. 2.Know and Use your KPIs. 3.Inspire Your Customers. 4.Manage your inventory. 5.Use your customer database as your gold-mine. 6.Use disruptive pricing to build loyalty. 7.Pick hero products your competitors can’t touch. 8.Accentuate your local ownership - Touch your local community.

Garden Inspirations Group, Melbourne, February 2011 Know Your Key Performance Indicators (KPIs)

Garden Inspirations Group, Melbourne, February 2011 Know Your KPIs … Shop Floor KPIs Items Sold Total Revenue Customer Count Door Count

Garden Inspirations Group, Melbourne, February 2011 TotalCount Melton South, Victoria 3338 totalcount.com.au $319 incl. freight & gst

Garden Inspirations Group, Melbourne, February 2011 Know Your KPIs Conversion Rate Customer Count Door Count Basket Size Basket Value Items Sold Customer Count Revenue Customer Count

Garden Inspirations Group, Melbourne, February 2011

Advertise To Improve.. Visitor count, customer count, basket size and value Leave Brand Advertising for the big guys..

Garden Inspirations Group, Melbourne, February 2011

Know Your KPIs … Back Office KPIs Gross MarginEarnings per m 2 GMROI Stock Turns

Garden Inspirations Group, Melbourne, February 2011 Discounting Policy Don’t discount cash Add value to their experience Claw something back

Garden Inspirations Group, Melbourne, February 2011 KPI’s Big Payback … Up 24 % Up 2.6 % Up 7% Up 15% Up 13 % Up 15% Up 13% 1 item6 $ ,000 92,400 1%44% 210, $5.00 $ 300,000 $ 1,130 2,700m $ 1,495,000 1%49% $ 3,050,000 calcBasket Size4 calc PM calc PM calc PM calc PM calc PM Basket Value6 Items Sold5 Transactions3 Conversion Rate2 Visitors1 Stock Turns14 GMROI13 Inventory average12 Revenue psm11 Retail Space10 Gross Margin $9 Gross Margin8 Revenue7 5 $ ,000 90,000 43% 210, $4.33 $ 300,000 $ 1,000 2,700m $ 1,300,000 48% $ 2,700,000

Garden Inspirations Group, Melbourne, February 2011 Manage Your Inventory Your most important task as a Retailer!

Garden Inspirations Group, Melbourne, February 2011 x 3x 5 Inventory Management example… ( ) = ?

Garden Inspirations Group, Melbourne, February 2011 Inventory Management example… = ? (6 x 5) - 6

Garden Inspirations Group, Melbourne, February 2011 Inventory management is based on a four-part equation: Inventory Management Sales - Beginning Stock + Ending Stock =Purchases =36 ?

Garden Inspirations Group, Melbourne, February 2011 Targeted Ending Stock Depends on Your Turnover Rate Inventory Management E.g.. If you always want to keep 2 months of stock (6 turns), then 2 months of sales is your Ending Stock figure.

Garden Inspirations Group, Melbourne, February 2011 Planning for Grevillea Sales…. Inventory Management Sales - Beginning Stock + Ending Stock =Purchases = mth+1mth

Garden Inspirations Group, Melbourne, February 2011 Stock Management’s Big Payback …

Garden Inspirations Group, Melbourne, February 2011 A New Pricing Strategy Use Pricing to Compete and Build Loyalty

Garden Inspirations Group, Melbourne, February 2011 Traditional Pricing Strategies: HI-LO - high shelf prices and low-margin promotional items. EDLP - Everyday Low Prices with no promotional pricing. PUF - Profit Up Front pricing, where qualified customers pay for the privilege of buying items at bedrock prices with extremely low margins.

Garden Inspirations Group, Melbourne, February 2011 Access Pricing … Key Features Access Pricing significantly differentiates prices on basic items between regular customers and occasional shoppers in an open, transparent way all year round

Garden Inspirations Group, Melbourne, February 2011 Access Pricing… Example 1.Members are issued a card. 2.Reward cardholders with 10 points per dollar spent in store. 3.Set pricing transparently – specifying how many points are required to attract crazy pricing. 4.Ensure items selected are highly visible, and cover a selection across the entire garden centre.

Garden Inspirations Group, Melbourne, February 2011 Access Pricing… Example

Garden Inspirations Group, Melbourne, February 2011 Access Pricing… Benefits 1.Successfully counter the price gap perception. give your regular customers distinct, real, tangible, and memorable value which, in turn, changes the price gap perception between you and the Big Boxes. 2.Put golden handcuffs on your best customers. provide an attractive incentive to your lower spending customers to aggregate their spending with you.

Garden Inspirations Group, Melbourne, February 2011 Access Pricing… Benefits 3.Provide rewards based upon customer spending. Give disproportionate value to the heavier spenders, those who provide the bulk of your profits. 4.Differentiate. From both the big boxes and all your other competitors.

Garden Inspirations Group, Melbourne, February 2011 Access Pricing…summary Access Pricing cuts to the essence of rewards: It changes peoples behaviour Customers are segmented according to what they contribute to the business. And then rewarded accordingly.

Garden Inspirations Group, Melbourne, February 2011 Wrap Up

Thank You Enjoy the after-match refreshments! Damian Luiten