COVID-19
4/1/2020

Open Letter: COVID-19 Response

Sid Raisch

This is packed with current insights I hope will be useful and helpful to you. Please read it over and share. It’s a little long but timely information I chose to not break up.

We’re embracing this situation without denial, with eyes wide open to understand what’s going on, keeping up with emerging information, and looking to the future for possibilities as well as downsides to hedge against. This is a process that will take some time. Anything you read here, and likely anywhere, is timely but subject to being superseded with new information and could be incorrect by the time you read it. Stay tuned.

Should you have an observation or opinion to share please contact me directly. Direct communication is always the best. You can reach me many ways. The best is an email to Sid@HorticulturalAdvantage.com, followed by text or cell at (937) 302-0423.

PERSPECTIVE is Everything

This is not reason to panic, or to make reactive short-term decisions about long-term issues and opportunities. It is a time to make good solid prudent decisions.

Keep in mind that the restrictions are focused on flattening the demand peak so medical service capacity is not exceeded. It is to slow the spread of COVID-19, particularly to people who are high risk and would require medical care, especially hospitalization. As the demand peak is experienced at whatever level it happens, it will then quickly lower and then reach a “new normal” level which we won’t know until it arrives. At that point medical capacity will be available and restrictions may be lifted, however, the virus will continue to spread, and will continue to be deadly to high-risk people.

It is natural to push back on authority – as it has been said, small businesses are not called “independents” for nothing. Be sure to keep your independent spirit but read on for more perspective so your independent spirit is balanced with good solid decisions especially about limitations on business constraints that are well outside of your control.

Safety

Know that everything here is in perspective with the concerns of personal safety and slowing the spread of COVID-19. We emphasize this because it is a critical and urgent position with mid and long-term implications. Follow all CDC protocol and put the concerns of your associates and customers first. I am myself in the at-risk category being age 60 and having had heart surgery for Mitral Valve repair 18-months ago. I don’t want to be without medical care in an overwhelmed system any more than I want to see others suffer or die because people disregarded safety in the critical period causing the medical resources to be limited.

We are recommending contactless engagement between your associates, customers, and suppliers. Many garden centers have been successfully implementing Curbside Pickup, and Delivery options. If you do allow customers in your store, follow the protocols for social distancing that have been recommended. Contactless engagement can also include closing your business to the public.

What is Social Distancing?

The term social distancing will surely be included in our vocabulary going forward. It has become a part of the vernacular but has not been clearly defined as to exactly what it is. While it is not a definition provided by government regulation, here is the link to the Wikipedia definition with a section on Measures to be taken to ensure the social distance is achieved.

Flexibility

Flexibility is essential. It is still early in the spread of the virus in North America and we have no control and cannot know how or when government will implement measures that will affect business.

  • Find common ground (areas of agreement). Seek to understand and to be understood. Be respectful in your dealings with others even when the other person isn’t being respectful.

Patience and Rest

Patience is a virtue, especially when you’re running out of it. You have probably been running on adrenalin and have become somewhat fatigued. Still, there is so much to do and so many people depending on you for your leadership position in their lives. Be patient with yourself – you’re only human and can only do so much. Be patient with others – they may not be in the same boat as you are, but theirs is in the same water as yours is.

 Rally your patience in whatever form works for you – pray, take naps, talk with your therapist, pet your pet, breathe, knit, get outside and garden (what a concept), or whatever it is that calms you so you can cope better with this time of emotional stress.

Faith (not speaking of religion) is Foundational

We all have faith that a seed dropped on dirt will grow. Keep your faith strong by going to your source of it for comfort, wisdom, and encouragement. I am a person of faith and choose to believe this too shall pass.

If you’re involved in an organized faith community stay involved and cultivate those relationships (with safe distancing), but as with any other relationship, if the engagement starts to bring you down create some healthy boundary distance. Similarly if you’re involved in social media groups consider stepping away from those a while if they overwhelm you.

We can be confident that tomorrow the sun will rise, even if behind clouds, and as the clock advances we will see another day after tomorrow, and another after that. Spring is officially here, perennials are emerging, bulbs are blooming, and every day becomes more beautiful and awakens the Spring Fever in all of us.

Do You Have Enough Faith ... to Believe That Plants Are Essential?

I find that many in our industry struggle with their own belief about whether our products are essential to life. This belief is important for self-worth and self- preservation, but also for our ability to truly help others. Please take this seriously and work on your level of belief along with your team. Make sure everyone understands this very well.

Plants have been proven over and again to be essential for physical and mental well- being. Dr. Charlie Hall has assembled relevant research backing the claims for physical, mental, and financial health related to plants.

Food Security is a Balance Between Urgent and Essential

If there’s a threat of no food for the next few meals, there is urgency to secure whatever food is readily available. The food we have available for the foreseeable future is in jeopardy of being consumed without adequate resources to replace it. Offsetting the consumption of current food supply with future supply from home gardening will buffer the supply chain. We can help people grow basic essential food items such as sprouts in very short order, as well as longer term produce such as beans and potatoes and spinach and squash.

FOOD ESSENTIAL Positioning

As you may know, some states and localities have restricted business activity with specific exemptions, but not clearly provisioning for our industry. The Garden Center Group released a suggested letter regarding that has been effective in obtaining exemption as a FOOD ESSENTIAL business in in some areas. The letter is to be personalized by the senders which are suggested to be owners, employees and others concerned with keeping garden centers open, and promptly sent to policy makers and influencers in their locality, county, region, state, and at the national level.

We are hopeful this type of exemption will become the standard going forward in other states, but more importantly in YOUR local markets. While it is broad and general enough that you might fit into the guideline, it is also not specific enough to ensure you will. We should not take for granted that anyone else will fight this battle. Government and Big Agribusiness see only large-scale food production.

FOOD FUTURE ESSENTIAL Marketing Communications

Mount a positive and defensible positioning and communications strategy. In individual client discussions over the past week, I've been discussing shifting ALL marketing communications to FOOD FUTURE ESSENTIAL orientation. The purpose of this is to POSITION you correctly as an ESSENTIAL operation, garnering the emotional SUPPORT of your customers and others for this cause, so that they get the feeling that they’d be an absolute fool to shut down your business because it is FOOD FUTURE ESSENTIAL.

Focus on this one position is important—it is core to the issue and is clear and concise. This focus is suggested to avoid confusion and distraction that will happen if you also promote other non-related inventory such as handbags, or even garden related but non-essential items such as patio furniture.

Why are we Food Future Essential?

  • Home production of food plants is a buffer to the national food supply. If there were to be interruption to the import of food from other parts of the world, or even from California, the food security of our nature would become jeopardized. This includes fresh and processed food – frozen, canned, dried, and otherwise. Food processed from soybeans and corn could become the only option for many. Do you want corn and soybean based manufactured food products to become your only choice?
  • Food Related Supplies: The seed starting and growing supply part of the business is typically early, but this year may extend that season. Consider your supply chain and whether you may want to bring in more vegetable seed and related supplies. In the average garden center vegetables, herbs, and seed are a small part of the business, but this could prove to be both of foundational importance as well as PIVOTAL to getting people in your stores who will buy what they really want in other categories. Retail growers may want to increase production of vegetable plants, and retailers should be talking with your growers about their ability to supply you more vegetable plants.

Marketing Messages

Again, the recommendation is to focus on food and food related topics, include answers to the timeless questions; “is it time to ?" among many others you hear throughout the season every year. Announcements of the arrival and availability of products would also be of consumer interest, and public service, as long as you’re careful that it doesn’t sound purely promotional – like you’re just another company trying to sell me stuff I don’t really need. (It is very possible to have seriously high demand for seed and vegetable plants. Be watchful for the need to limit quantity of purchase.)

More important than what you sell, is the fact that you have something of even greater value to the public than plants and the products to grow them with. As you know, the know-how required to grow food producing plants is ESSENTIAL. Most of you have EXPERTISE with growing food producing plants that the folks at the hardware box stores, groceries, drug stores, and all the other ankle-biter competitors don’t have.

Remember to identify the beginners and lead them to beginner level plants and practices.

Once the FOOD FUTURE ESSENTIAL message is cemented, and the urgent situation is passed, we will begin pushing for messaging to shift to the other physical and mental health benefits of plants.

Marketing Media

You will be tempted to cut your marketing efforts. Counterintuitively, this is a time to instead, double-down and take advantage of the vacuum left by others who cut their effort. It’s easy to stand out when you stand out alone.

 Your marketing messages may be planned and committed for specific media. Consider shifting a major part of your messaging to plants that produce food. Consistency of message between media will help it “cut through the clutter” of all other advertising and will help substantiate your food future essential position. In other words, you want your customer to get consistent messages in your email, social media, direct mail, etc.

Social Distancing—Contactless Curbside Pickup and Delivery

The point of restrictions is to create a social distancing to slow the spread of COVID-19 to keep it within reasonable ability for the medical community to handle it well. Be sure you’re sensitive to this and honor the spirit of it as well as the intent and legal restrictions.

During time of ordered closure of retail stores, if you are not exempt from the restrictions and choose to continue doing business, closing to customer access is an approach that you could consider, and may be best for your situation. Creating a larger open-air shopping experience is another approach. Opening outdoor checkout stations and requesting contactless payment is yet another measure many companies are adopting. Restrictions on the number of people allowed in retail stores at any one time have been made in some localities with as few as 4, 10, or 50 being allowed in at a time. This would depend on factors such as the size of your facility. Many companies have put in measures to assure the recommended space between people – associates and customers is attained.

Contactless payment is preferred by many consumers because it eliminates the need to sanitize touchpads, pens, stylus, etc. and cash is problematic as well. A problem with cards and many payment systems like Apple Pay that use them, is the cost of the transaction. Consider setting up a Venmo account, or similar for lowest cost payment. You’ll figure out the accounting.

Many of you do not have capacity for delivery to the scale and speed that you will need. This is something to work on soon as the ability or desire for consumers to leave their homes may indicate.

High-Impact Customer Relationships

Handling the high volume of peak season customers will be challenging with social distancing procedures. Look for ways to generate these transactions earlier by using the information you may have in your POS system.

What would happen if we deal with customers one to one rather than hoping they come again in our 10-12-week glory days? We’ve been lazily dependent on a peak spring and “good weather” all along, teetering on the edge of this phenomena and incrementally improving on it. Is it time to shift to a true customer centric relationship where we anticipate their regular purchases? Many garden centers know who their customers are, what they buy, and when they buy it, and have the opportunity locked up in the data to serve them in a new way – a better way for both them and ourselves. Just ask them.

Financial Response

Everything has financial implications and putting this at the end doesn’t minimize its critical importance, in fact it is meant to be an endcap to launch into the financial outcome – ramifications, opportunities. The Garden Center Group is planning a series of recorded video conferences discussing these items over the coming week.

  • Inventory – Reduction, delay and cancellation of incoming orders is a distinct possibility, if not an eminent concern. Evaluate the effect of a clear decision that doesn’t yield enough margin volume to pay your wages and operating expenses. The risk of bringing in product that you may have trouble selling may create an equally difficult situation. Consider the effect on your supply partners and talk with them about any other options.
  • Staffing – Managing payroll expense to a percentage of sales is the goal. (in addition to the considerations in the Seawright & Associates document on managing HR considerations). Are you able to reduce staffing until you’re able to bring them back to preserve cash? Start by asking for volunteers for unpaid leave.
  • Operating Expenses – Managing operating expense to a percentage of sale is the goal. Fixed expenses are not always untouchable. Talk with those lenders about options. Reduce variable expenses as much as possible.
  • Revenue – Revenue focus often slips when expense cutting is essential. Make sure someone is focused primarily on revenue opportunities, and others understand that saving money is often at odds with creating revenue. The balance must be achieved.
  • Discounting – What discounting? Discounting is a fool’s paradise. Focus on creating value and achieving it. Remember that a 25% discount means you must sell 2 times the volume to earn the same margin dollars. A discount represents real dollars that you will not receive.

Given the costs of wages and marketing to handle goods (whether discounted or not), it is almost always best to hold the Perceived Value Price, and bring in less product—or if it is already there, give away or throw away the excess quantity in a way that doesn’t erode long-term value.

When you’re tempted to throw a discount or coupon or other margin and value eroding expense at an opportunity, think longer about how you can create value instead. Usually in about 10 minutes you can come up with a value-adding plan.

Will People Have Money to Spend and What Will They Do with it?

I saved this for last. Some people will have less money to spend than they’re accustomed to having, and this will mean they’ll adjust and will buy at a subsistence level or near it. Not to be cruel, but those people will not be our customers at least for a while. Other people are financially secure and will continue to spend from their assets or income. Remember that low prices and discounts are often given to customers who would have paid full value price without question. Can you afford to give those customers a discount?

The folks who still have disposable income are up for grabs. The primary issue is in how they will choose to spend their money. As we observed in the Great Recession, people with the highest incomes pulled in spending and diverted the money into savings. With that statement, you’ll see why it is essential that our products and services be viewed as being more essential than optional and certainly more than a luxury. The effort may not seem as easy but can be as easy as thinking further, and much more profitable.

Carpe Diem: Seize the Day—Look at This as Day One of Your Future

Reprioritize and focus the efforts of your team for the best opportunity to secure your future.

Again, we’re suggesting the FOOD ESSENTIAL positioning focus first. Once we get this underway, we’ll work on the psychological and emotional benefits of plants.


Best regards,

Sid Raisch
Sid@HorticulturalAdvantage.com
Text and Cell (937) 302-0423

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