Mailorder Gardening Association Garden Buyers Survey Spring 2006

1. Mailorder Gardening Association Garden Buyers Survey Spring 2006 Results and Conclusions Black Dog Direct July 19, 2006

2. Survey Design: Goals & Strategy • To conduct primary research of active mailorder garden product buyers to provide current insights for use by MGA member companies. • A postal survey was employed to ensure inclusion of buyers who are not online. A telephone survey was ruled out due to high cost. • The survey was intentionally simple and limited to five questions in an effort to encourage response. • Survey timing was designed to capture the most recent selling season’s data for incorporation into spring 2007 activities.

3. Survey Design: Implementation • Responses were gathered via brightly colored postcards distributed to current season buyers. • Cartons containing 5,000 cards were shipped to each participating company last fall. • Postcards were inserted into buyer shipments from Dec. 2005 through May 15, 2006. All 5,000 cards, or as many as possible, were distributed by each participating company during that window. • Respondents did not need to affix postage; the cards were postage paid. • Cards were returned to, and results were hand tabulated by, Black Dog Direct, Denver, CO.

4. Survey: Aggregate Results • 30 MGA member companies participated. • This was the largest primary, consumer-contact research project the MGA has conducted to date. • 150,000 postcards were printed and 136,550 were distributed. • A total of 9,945 postcards were completed and returned by buyers. • Calculations for response were figured based on the number of respondents for each individual question. (Some respondents filled out only a portion of the questions.)

5. Aggregate Results(cont.) • An overall response rate of 7.3% was achieved, with significant variations by company. This is higher than was anticipated and supports good, reliable data. • The highest responding customer base returned 15% of the surveys distributed, the lowest returned 2.3%. • Response rates by product line were as follows: • Seed companies (8) = 9.9% • Plant companies (12) = 5.2% • Bulb companies (3) = 6.1% • Hardgoods, equipment & supplies (7) = 8.5%

6. Aggregate Results(cont.) • Possible contributing factors to high response rates: • A large number of repeat buyers; people who feel connected to the company • Older, retired customers who have more time to participate • Customers whose shipments arrived early in the season when being outdoors didn’t compete for their free time • Positive overall feelings towards the company by customers

7. Aggregate Results(cont.) • Possible contributing factors to low response rates: • Low levels of repeat buyership due to limited or one-time purchase product lines • Younger customers who are busy with careers, families, etc. • Lots of other paperwork in the package, making postcards easy to miss • Customers who received shipments when outdoor activities competed for their time • Customers who don’t feel positively about the company’s service and/or products

8. Responses: Question #1 • Question asks respondents to rank (1 through 5, with 1 being the most important) those factors that influence their purchase decision. • This chart shows respondents’ 1st choice.

9. Question #1: Responses • When asked to rank the number one factor influencing purchase decisions, one third (33%) of overall buyers chose “Company Reputation/Past Experience with Company”. • Web-only shoppers chose this as their most important factor only 28% of the time. This may reflect the inclusion of online-only companies that haven’t been in business as long as most others. • The second most popular response to this question was “Product Description” and a quarter (25%) of respondents selected this factor.

10. Question #1: Responses (cont.) • Only 15% of total respondents ranked “Product Price” as the number one factor influencing purchase decisions. Web-only shoppers were somewhat more price sensitive, with 20% ranking this as their first choice. • Overall, 14% ranked “Product Picture” as the number one factor. When buyers were segmented by order channel, Web-only shoppers ranked images as their first choice 16% of the time and Postal Mail/Fax buyers chose this as the most important factor just 13% of the time.

11. Responses: Question #1 • Question asks respondents to rank (1 through 5, with 1 being the most important) those factors that influence their purchase decision. • This chart shows respondents’ choices with 1st and 2nd combined.

12. Question #1: Responses(cont.) • For those who didn’t select “Product Description” as their first choice, 25% sited it as their second choice. • Product Cost was the second choice for 22% of buyers surveyed. • Write-in answers included: • Uniqueness of product • Inability to buy products locally • Individual need for specific items • Product quality (not sure how is determined if not by prior experience, product description or photo, etc.)

13. Responses: Question #1 • Question asks respondents to rank (1 through 5, with 1 being the most important) those factors that influence their purchase decision. • This chart shows respondents’ choices with 1st, 2nd and 3rd combined.

14. Question #1: Conclusions • Gardening consumers place the highest level of importance on trust when they make purchase decisions. Company reputation and individuals’ prior experiences weigh heavily in future buying decisions. • While product pictures are important, detailed descriptions are even more so. Respondents requested information such as: scientific names, growing zones and cultural information, as well as special needs attributes such as drought hardiness and deer resistance.

15. Question #1: Conclusions (cont.) • Web-only shoppers weigh images a few percentage point more heavily than do their off-line counterparts. Online picture size, clarity and color are marketing variables that will drive sales for this group. • Product price and delivery price, together, account for the top factor for 18% of buyers. Many people noted that they compare the sum of these two with competitors’ options. As you review your price position in the marketplace, look at this with and without your shipping costs. • When comparing the total of respondents’ top three factors Product Description rules.

16. Responses: Question #2 • This question asks respondents what type of gardening they do. • Most respondents engage in a variety of activities so the percentages sum to more than 100%.

17. Question #2: Responses • Flower gardening is the most popular activity among survey respondents, with 89% participating. • Vegetable gardening ranks a close second with 77% choosing this activity. Many people noted that they grow “a few” or “tomatoes only”. • Container gardening is an activity enjoyed by 71% of respondents or almost 3 out of every 4. • More than half (53%) of those surveyed grow herbs.

18. Question #2: Conclusions • Only a small percentage of respondents (7%) concentrate on a single type of gardening. Most grow a variety of plants in several types of settings. • Two thirds (67%) of flower gardeners, the largest group in our survey, do at least some gardening in containers. These people are good candidates for sales of useful and/or decorative related items: pots, soils, fertilizers, watering devices, brackets, hanging basket hardware, container feet/casters, trellises and other supports, etc.

19. Question #2: Conclusions (cont.) • More than half (53%) of responding vegetable gardeners plant in containers. Consider illustrating vegetables – and not just tomatoes - growing in large pots, troughs, window boxes and even hanging baskets. Good candidates for photos include richly hued leafy greens, decorative peppers, radishes, bush cucumbers/squash/beans, scallions, and anything else that’s colorful. Use your imagination and help your customers envision new possibilities.

20. Question #2: Conclusions (cont.) • Among our survey respondents, half (50%) of the flower gardeners and almost half (46%) of the vegetable gardeners grow herbs. Encourage experimentation by photographing: • Garden mixtures that include bright flowers and beautifully shaded/textured herbs • Bouquets of cut flowers mixed with colorful herb stems • Vegetable plots with herb borders or center medallions • Salads with purple chive blossoms, brilliant blue borage stars, chartreuse dill foliage or flower heads, etc. • Borrowed ideas from gardening magazines; shoot images that have a romantic feel or are enhanced by early day/ sunset/other mood-evoking lighting, dew or raindrops, etc. We sell product that fall more into the “want” than “need” category, so play to your customers’ emotions.

21. Responses: Question #3 • This question asks respondents what product guarantee they expect suppliers to provide. • Respondents were required to choose just one answer.

22. Question #3: Responses • A little more than a quarter (27%) of respondents expect products that will sprout and grow through the first season. • Just under a quarter (22%) believe that suppliers should provide a 12 month guarantee with a replacement option. • 19% of those surveyed simply expect that the goods shipped will be the variety and size originally described. • A lifetime guarantee with either a refund or replacement is expected by 16% of respondents. This applies to both green goods and hardgoods.

23. Question #3: Responses (Cont.) • This question prompted a number of write-in and combination answers including: • Plant guarantees of 15 months so gardeners can really determine if perennial plants grow the second spring • Options for refund or replacement in every situation • Some buyers expect no guarantees: • If seeds/plants don’t grow they assume responsibility • If seeds/plants don’t grow they will take future business elsewhere

24. Question #3: Conclusions • Buyers’ guarantee expectations span the full range; from the most basic - goods as advertised and plants that grow - to lifetime. Look carefully at the feedback from your customers and review if, and how, you might choose to address their desires. • Providing a 15 month guarantee for perennials might offer businesses a competitive advantage without incurring significant additional cost.

25. Responses: Question #4 • This question asks respondents what they expect for order and customer service coverage. • Respondents could only choose one option.

26. Question #4: Responses • The largest portion of respondents (40%) are satisfied with standard business hours for order and customer service assistance. • About a quarter (28%) expect at least some Saturday and Sunday coverage. A number of survey participants wrote in that standard weekdays plus partial day Saturday hours are sufficient; staffing on Sunday is not necessary. • Approximately one in five respondents (21%) prefer 24 hour telephone and email coverage, but for many extended email service, but not telephone, is sufficient.

27. Question #4: Conclusions • To satisfy the lion’s share of customers (75+%), businesses should consider customer service/order staffing for regular workdays plus a partial day on Saturday and email-only coverage for early to mid evenings during busy seasons. • After hours email coverage can often be handled by a very small staff (1 person) working from home. This approach contains costs and does not require business facilities to be open at night. • Customers expect responses to email queries within 24 hours. Faster response time is better. Slow/no response is sure to anger customers. (There were lots of write-in notes to that effect.)

28. Responses: Question #5 • This question asks respondents what channel they used to place their order. • Respondents could only choose one option.

29. Question #5: Responses • One third of survey respondents (33%) ordered via postal mail or fax, another third (34%) via telephone, and the final third were split between those who shopped and ordered online (14%) and those who shopped the catalog and then place their order online (18%). • This question was added primarily to facilitate data slicing by order channel so questions like “Do web-only shopper have different behaviors/expectations than other types of shoppers?” could be answered. Where significant, order channel variances have been noted.

30. Summary: Recommended Actions • Review the survey data from your own customers to see where opportunities exist to serve better. Make it easy for buyers to choose to purchase from you. • Recognize that older customers must be replaced as they eventually stop gardening. Younger buyers may have different behaviors and preferences. Plan now for that now by seeking products that make gardening easier for busy and less knowledgeable enthusiasts: • Low maintenance containers • Easy use watering systems • Small space garden options – compact plants, cut and come again varieties, vertical growing arrangements, etc.

31. Summary: Recommended Actions (cont.) • Consider what would be required to offer weekday plus Saturday customer service and order hours for next spring: • Be there when your current customers need you • Court new customers who have different service needs • Look at the ways you present products in your catalog and online. Are there opportunities to: • Improve tired, lifeless photography • Tailor your product imagery to the type of gardening your customers do • Include more complete product information • Show combinations of flowers and herbs, flowers and vegetables, vegetables and herbs, etc. • Use photos to create a desire for products

32. Summary: Recommended Actions (cont.) • Review your current guarantee wording; align it with what you actually do and what your customers expect. Make sure you aren’t leaving money on the table by understating current actions (and failing to reap the full benefit of these) or by falling short of customer expectations. Naturally, there needs to be a costs/benefit balance. • Consider the survey response rate achieved by your company. If it is low, recognize that this could be a flag that your customers are not content or don’t feel much connection/loyalty. Investigate possible reasons and corrective actions. Seek customer feedback.

33. Summary: Recommended Actions (cont.) • If your company’s response rate is high, review current practices with an eye towards determining what has influenced this. Guard against making policy changes that will alienate buyers. • Share the results of this survey with your staff. They can’t respond to what they don’t know.

34. Questions? • Survey set up • Reading aggregate and individual company results • Conclusions • Other