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Does Ukraine have Garden Centres? - John Stanley
- 15 March 2017
This question has been asked of me a number of times over the last few weeks. In early March I was invited to Ukraine to work with garden centres and present a workshop to the industry. This was my first visit to the country and new experience for me.
Ukraine is one of the largest countries in Europe, but a country that has had a sad history over recent years. Before the “crisis” the retail garden sector was worth around $120 million, after the crisis the industry is estimated to be around $20 million, although there is green shoots and growth is coming back as the country hopefully settles into more peaceful future.
This is a small garden industry, although there are 44 million living in Ukraine, only 0.5% are looked on as rich which gives you 22,000 people who could be interested in gardens and no middle class.
As a result, there are around 100 wholesale nurseries,47 garden centres, and 1,000 landscapers. These landscapers, as you would expect, range from very professional designers to a guy with a Lada and a wheelbarrow.
As in most countries, work in the industry is seeing a large amount of change.
Alas, most independent garden retailers are seeing a decline in sales whilst the newly launched Home Improvement stores are developing and growing the garden market.
Lessons Learned in the Ukraine.
The enjoyment of working around the world is that you are always picking up new ideas, different ways of how the trade works and these make you question what is happening overall in the industry. A visit to Ukraine is no different.
- The industry has shrunk for a number of reasons, but many growers have a strange way of doing business. Around 30% of growers supply plants to independent garden centres in the normal way. The season ends in November and garden centres shut down. These 30% of nurseries take back the plants from the garden centre and pay the garden centre for the plants they have not sold and resell them the next year at the same price. One result of this g has been some retailers not promoting the plants in the way they should as they know they will get paid come what may and the growers have been finding the model has not been viable. Luckily more growers are now realizing this is not a profitable model moving forward and are changing the way they do business.
Box stores are starting to develop in the country. - Ladies day is the big day. March 8th is Ladies Day and I am told 40% of flowering plants and cut flowers are sold on this day. I visited the Home Improvement stores on the lead up to Ladies Day and they were busy and their garden centres were full of colour. Alas, the independent garden centres I visited were mostly closed as they do not open until two weeks after Ladies Day. When I asked why, I was told that garden centres should focus on shrubs, not impulse flowering plants. This is missing a huge opportunity. Consumers tend to continue to shop at their first destination of the year as long as they have had a great experience and as a result, this is why the home improvement stores are seeing growth.
The bath. Ladies day is big in Ukraine and an opportunity for garden centres to show some flair in the display. - One message to me was following the leader. Roshen is a Ukranian confectionary company that sells high quality, high price sweets and chocolates, the stores are like the Disney of confectionary. These stores highlight that if you create the experience the consumer will want to visit your store and purchase. Many independent garden centres in this country still have the approach that you grow the plant, place it on the ground in a sales yard and the customer will buy. Ukrainian customer like other customers want an experience, they have less disposable income, but they will still spend on the experience.
Chocolates and indoor plants displayed together to create an added sale
The consumer in Ukraine has changed. Research in 2014 indicated that they were mainly impulsed buyers in store. The same research organisation looked at the consumer in 2016 and found they were spending more time thinking about the purchase, watching YouTube videos and comparing prices on the internet whilst looking for better quality at a better price.
The Ukraine may have a small market, but progressive independent garden centres still have an opportunity to make a difference whilst the traditional retailers are losing market share.
John Stanley is a Conference Speaker and Consultant. In 2012 he was awarded the WA Small Business exporter of the Year. He works in 35 countries and is one of the world sorts after retail and small business presenters. His new conference presentation looks at the new consumer and how that affects your business. Follow John on Facebook John-Stanley -Associates or contact him at john@johnstanley.com.au
