Cultivate’20 Virtual was a new experience this year with a virtual trade show, online educational talks and a lot of discussion on how to keep moving the industry forward. On the following pages, you’ll find some highlights from the show. For our full coverage, visit the link here.
Green industry outlook
Consumer spending is going to be the driver to get the U.S. economy out of the current recession, according to Ken Fisher, CEO of AmericanHort. During the Cultivate’20 Virtual State of the Industry presentation, Fisher explained that this recession isn’t a financial recession — it’s a consumer recession.
“This is a recession that’s going to be impacted by stubborn unemployment,” he said. “We’re hopeful that employment will come back quickly. We’re hopeful that the stimulus dollars will work but there are no guarantees and so we need to understand we’re in a recession.”
As the spreading coronavirus has kept consumers at home, Fisher noted that the recession is as much psychological as it is economical.
“People have been cocooning. We look at anything that’s been consumer-driven at home — bicycles, landscaping, appliances — they’ve done very well,” he said.
Fisher estimated that there has been an increase of about 25%, but the future remains uncertain. While the economy was strong going into the pandemic and stimulus money will hopefully soften the blow, it’s important to keep an eye on housing starts, consumer spending, business spending, the election and a vaccine.
“We’ve been fortunate that with consumers staying at home, they bought our industry and what we want to be able to see is we were able to hold strong pricing, shrink was low because everything sold through and discounting was minor,” Fisher said. “We need to be careful about our cash and our capital and our spending but we’re hoping in 2021 we’ll recover and have a good year there.”
Looking toward the recovery, Fisher noted that for the last 50 years recessions have been fairly short-lived. Optimistically, these last 10 to 16 months before returning to normal levels of spending, he said.
The essential battle
Before COVID-19 hit, the industry entered the spring with high hopes, especially from a sales perspective, said Craig Regelbrugge, senior vice president, AmericanHort. Currently, the organization’s running estimate conveyed to USDA is in the window of $732 million to $1.2 billion in losses at the producer level.
Almost immediately after the pandemic started, AmericanHort went to work learning about the federal definitions as to what constitutes critical infrastructure and essential workers, but ultimately the decisions were made on the state, and sometimes local level.
“So we found ourselves fighting a lot of battles to make the case that all aspects of our industry should be considered essential and to the extent that they’re able to operate safely with an eye toward protecting employees and protecting customers that there should be ways to do so,” Regelbrugge said.
Thankfully, the industry won most of those battles and the supply chain continued to function.
“There were a few really difficult trouble spots – Pennsylvania and Michigan were examples where the battles raged longer and they were harder and the negative impacts on the industry were therefore greater,” he said.
For more, visit the link here.
— Kate Spirgen
MARKET INSIGHT, MILLENNIAL-STYLE
Millennials are one of the largest age groups in the United States. But who are they and how can you cater to them? Ryan McEnaney, a fifth-generation member of Bailey Nurseries who serves as the company’s public relations and communications specialist, shared insight with attendees, providing personal (he is a millennial himself) and research-driven data for retailers to tap into this market.
Don’t fight it
McEnaney shared that while the industry is finally getting a handle on the Generation Z demographic, it provides rich context to the millennial generation. According to the U.S. Census Bureau (from 2000 to July 2020), millennials make up about a quarter of the population at 82.22 million, and Gen Z makes up 86.40 million.
Millennials have been called “the connected generation” because they grew up with technology. From Nokia “bricks,” the invention of Facebook to now having the ability to game with friends across the country via Nintendo Switch, he says these new advancements brought direct interaction to the generation. Millennials are also the most diverse and educated generation of adults in U.S. history, according to data from Brookings Institution. Forty-four percent of millennials are a minority — since 1980, the white non-Hispanic group has shrunk from 78% to 56% in the 15- to 34-year-old age group.
It’s crucial to focus on the generational cultural gap between post-millennials and pre-millennial generations. America is changing, and it’s important for businesses to communicate with this age group to understand the future of consumer shopping, cultural practices, politics and more. The next five to 10 years will be crucial for marketers and strategic planners, he said.
While the millennial economic impact doesn’t have an immediate effect on the market, focus on the long-term benefits of this demographic.
“For right now, how we communicate and how we engage with millennials is going to have a dramatic impact on our businesses in the next five to 10 years and their influence, again, on Gen Z is so important,” McEnaney said.
He suggested audience members check out the book “Spend Shift: How the Post-Crisis Values Revolution Is Changing the Way We Buy, Sell, and Live” by John Gerzema. According to Gerzema, U.S. millennials have over $1 trillion in consumer spending. However, that doesn’t mean businesses should abandon their current baby boomer and Gen X customers. Instead, they must take the opportunity to use a blended marketing approach.
“Millennial gardeners don’t like to be called ‘gardeners’ because they don’t feel like they are. It’s our job to help and provide them with tips to be successful in their landscape. If they’re not, they’re not going to come back again,” McEnaney said.
For more, visit the link here.— Julianne Mobilian
THE CADENCE OF CUSTOMER DEVELOPMENT
At Cultivate’20 Virtual, Jourdan Cole, Maria Zampini and Katie Elzer-Peters shared how IGCs can improve customer expectations by focusing on three phases of the customer journey. Their session provided audience members with various tips to strengthen and build their customer base. “Customer development sets customers up for success, whether that’s food security or stress relief, and it ensures that you will have repeat visits from customers,” Elzer-Peters said.
Jourdan Cole, marketing and communications manager at Mt. Cuba Center, shared how IGCs can drive new and existing customers through social media channels.
“Continuing on social media is key to your brand’s success during this time. Whether it’s news or products, people are looking to find it online,” Cole said. “And this digital transition is not going away. Social distancing and shelter in place laws have people looking for new ways to connect.”
She noted that while many physical doors have been closed (and reopened) since the pandemic started, the doors to social media are always open, and provides digital markers ample opportunity to get creative while connecting online. She broke it down in three steps: listen, plan and speak.
The more connected IGCs are with their communities, the more growth opportunities their business will have. IGCs must first determine where they want to listen and consider demographics.
Next, IGCs must determine who they want to listen to. Cole suggested community leaders, such as school principals, artists and leaders of cultural organizations on social media. Their posts will keep IGCs in the know about local events and community updates, and they also open the door to partnership opportunities. She also recommended using hashtags, which allows businesses to dive deep into trends and get a pulse on the larger market conversation. This way, IGCs can give their audiences what they need before they even ask for it, Cole said.
Next, plan. IGCs must figure out where to post their message. To do this, they should choose one or two platforms to prioritize. Here’s where the majority of the audience is:
- Facebook skews older (50+ audience), but many of the 20+ demographic is also on Instagram, which is popular among the 20-35 demographic
- Twitter skews toward the 35+ crowd and should be used for quick news pieces
- Pinterest is a good choice for IGCs that have a lot of quality product shots or DIYs that they want to emphasize.
- TikTok or Snapchat will reach the youngest audience, which will have spending power in the near future.
Retailers should appoint one or two designated social media workers and have one person in charge of all platforms, or one person per platform for consistency.
Finally, IGCs must figure out their voice. IGCs should be relatable with their audience, but never offensive, she said.
Have the social media manager create an editorial calendar of social media posts and think about any changes happening at the IGC. Then, they should pair that with the three communication points.
For example: What’s new in your store? Do you have new safety procedures? How are things different when customers are shopping now?
Cole suggested that retailers use an empathetic voice, online and in store.
“Having this empathetic voice will help to make the lives of your customers a little brighter and it will help to create long term loyalty. You have to remember, everyone is trying to do their best right now, and they’re balancing their personal lives at the same time,” Cole said.
For more, visit the link here.
— Julianne Mobilian