K&W Greenery Crossing Generations

By: Lisa Duchene

From: IGC Retailer, November/December, 2012

 
K&W Greenery Crossing Generations
It’s the perfect pairing of perspectives - the first generation’s knack for giving boomers what they want and the next-generation’s know-how that is bringing young people through the door.

Every Saturday before Easter for the last 12 years, K&W Greenery has held a community event with kids’ games, a petting zoo, face painting and a Boy Scouts food tent at its Janesville, WI, store.
But this year was different. While K&W Co-owners Phyliss and Bill Williams have always believed in the tradition as a friendly introduction to young, prospective customers, their daughter Jordan Graffin, who is 34, disagrees and questions the benefits of the event to K&W’s bottom line.

“I like making money,” says Graffin. “I like to have product. I like to sell it, and I like to do it every day. To cut out an entire Saturday in the spring season so that people can come in for free and take over the greenhouse is a difficult pill to swallow.”

For the most part, Graffin says, she doesn’t interfere with business decisions. But this year she was adamant about nixing the Easter event.

“She does challenge us,” says Phyliss. “‘Don’t just do it, make it mean something.’“

So for the first time, K&W sold tickets at 25 cents per game, for a total of 4,000 tickets, making about $1,000 to cover costs. The event drew about 2,500 people, many of them young children and their 20-something parents. K&W also gained 100 more Facebook “likes” via a laptop set up during the event; participants received a free pansy in return.

The numbers pleased Phyliss yet failed to convince Graffin. Ticket proceeds don’t make up for a potential $10,000 in spring Saturday sales lost to a jammed parking lot and greenhouse, she says. But she’s conceding defeat - for now - and pledges to paint on a smile for next year’s Easter event. After all, K&W’s core customers, who are in their 40s and older, seem to like events.

“Maybe it’s a generational thing,” says Graffin. “I don’t go to events at other stores. I find them crowded and full of pomp and circumstance. I’d rather go to a store, be left alone and get things at a good price.”
Parents in their 20s are often stretching dollars, and you can’t expect them to be loyal, she says. “The hope is that they’ll come back and think of K&W,” says Graffin, “but we grew up with box stores. We’ve had Wal-Mart since we were born. We’re comfortable with box stores. We are not store-loyal at all. We don’t care if your store had a nice event. It’s all about price. It’s all about convenience, especially if you have younger kids.”

In this multigenerational operation, Graffin represents the voice of the 30-something customer, the demographic that has become IGC retailers’ “Holy Grail” and the code to crack. Her insights offer both clues to the future and challenges to the conventional wisdom that built operations like K&W.

The soft sell of community involvement and traditions like the Easter event and K&W’s Christmas open house, when Bill takes visitors’ picture on an antique sleigh, are important, Phyliss says: “We lose those things at our peril, I think, and we’re trying to keep them strong as long as we can afford to.”

Perfect Merger of Ideas
For 30 years, the business model for K&W has been relatively simple: Bill grows and Phyliss sells. Their partnership successfully took the company from a post-bankruptcy reorganization and fresh start in 1982 to sales of $3.3 million last year.

Thanks to record warm weather in March, sales for the first three months of 2012 were up about 50 percent. But then hot and dry weather took a toll, and year-to-date sales for January through June compared to 2011 had dropped slightly, less than 1 percent. The good news, Phyliss says, is that payroll costs dropped 4 percent, and the average sale rose $2. “So I guess we’re making the proverbial lemonade out of the bag of lemons the weather handed us,” she says.

Bill and Phyliss met at K&W in 1982 when she started working there. Bill, now 72, founded the company in 1972. “He was a grumpy boss, but I liked him anyway,” quips Phyliss, now 60. “It just felt right from the very first moment. It just has always been the perfect fit. It really has. I have the most amazingly blessed life.”

They’ve worked hard, and together raised five children. Bill’s son, Chris, 47, fills his father’s footsteps as the grower and runs K&W’s plant production operations. K&W grows more than 90 percent of its annuals and perennials. Phylisss’ son, Thad, is involved in some aspects of the operation, but, as yet, is undecided on a future ownership role.

Bill and Phyliss’ vision is for Chris and Graffin to become the future co-owners of K&W, although there is no set timeline to transfer ownership. In addition to overseeing plant production, Chris is involved in the overall safety and insurance issues of the company and works with designers to oversee the landscape installation business, which makes up about 15 percent of gross sales.

Phyliss and Graffin together handle nearly all advertising, marketing, merchandising and buying. The four function as principals of the company, and their perspectives span nearly four decades and two generations.

“It’s really become this perfect merger of generational perspectives that helps us hit it right,” says Phyliss. She and Graffin now handle buying duties, and have learned to appreciate each other’s taste and read on what the other’s generation and demographic will like and buy.

“Every once in a while, she’ll buy something I think she’s absolutely nuts on,” says Graffin, “and it will be a huge success. The same goes for me. We’re willing to take chances with each other. We’re willing to listen.”

For years, Phyliss has enjoyed how her tastes help her buy for K&W. She would imagine a housewares item in a new color, and it would soon turn up at Target in that color. But buying for 30-somethings is a different story altogether, though, and she’s had some missteps, she says.

For example, women in their 30s aren’t that into bold and bright colors, says Graffin. (Her theory is that they burned out on neon and bright colors as kids in the 1980s.) “My friends don’t wear bright colors,” she says. “We’re really beige people, and I think it translates outside.”

Take, for example, the metal stick figure, folk-arty girls with skirts painted in bright colors that Phyliss spotted and snatched up a few years ago. “I think they’re just awful,” says Graffin. “They sell to women her age all day long, but nobody my age is buying them unless they’re buying them for their mom.”

Graffin, on the other hand, scoops up any word art, particularly bold black-and-white, all-caps, in-your-face, funny sayings from Primitives by Kathy: “Color Outside the Lines,” “Bring Back Common Sense” and “What Happens in the Man Cave Stays in the Man Cave.” Dozens of the word boxes, in all sizes and sayings, are displayed on the wall right inside the main entrance, and K&W is constantly reordering them. “I love to laugh,” says Graffin. “It’s keeping life light and happy. Every time you make me laugh, I’m going to buy it. Who doesn’t need a laugh on their wall?”

Adding On ... And On
Phyliss will joke that the layout of the buildings and greenhouses comprising K&W’s 10-acre property is a bit backward and awkward, since it happened piecemeal through the years as need dictated and cash flow allowed.

But what the customer sees is a warm, lovely and comfortable space, and a collection of visually enticing displays in a well-organized, easy-to-navigate layout.

Customers walk from the main entrance through glass doors into a retail greenhouse and garden shop built by United Greenhouse Systems in Edgerton, WI. It is full of fun and decorative items like greeting cards and garden and word art and functional products like tools, seeds, hats and clogs. They immediately find a wall display of Griffan’s favorite word art, along with a whitewashed potting bench with a galvanized top, galvanized French country buckets with silk flower arrangements and a new line of greeting cards called “Trash Talk by Annie” that is doing very well, according to Garden Shop and Gift Shop Merchandise Manager Ruth Venable.

Pottery is popular, too, says Venable. The inside front wall is lined with a triple tier of glazed pots of multiple sizes in neutral colors like greens and browns and brights like kiwi green, lemon-green and poppy orange. Garden art is selling briskly, especially small solar-powered and battery-operated butterflies. “People love them,” says Venable. “We go through cases of them.”

A right turn from the garden shop leads to the birding department, where hummingbird feeders are strong sellers, then a display of Weber grills and the chemicals/fertilizer department. Straight ahead from the main entrance is the greenhouse department - the entire main building is a greenhouse - with 25,000 square feet packed full of annual color, vegetables and herbs.

To the left is a gift shop - a traditional building versus a greenhouse structure - with jewelry, scarves, home decor, a baby department and a wine-themed department. The entire gift shop has performed well since it was started a few years ago with a few lines of jewelry, says Venable.

In the annual greenhouse, an entire section is devoted to fairy gardening and miniatures. Think terrariums in metal and glass, and everything a fairy would need to feel welcome in the garden, like statuettes of fairies and mushrooms, tiny wishing wells, patio tables, twig furniture, picket fences, birdbaths, topiaries, arbors, bicycles and gazebos.

Fairy and miniature gardening has been going strong since K&W introduced it about a year and a half ago, says Dee Speaker, Retail Greenhouse and Perennial Manager. “People are fascinated by it,” she says. Customers are purchasing from this section for indoor, terrarium-style gardens as well as fairy sections in outdoor perennial beds.

A potting station is front and center in the retail greenhouse, adding a bit of demonstration and theater. “On our busy weekends, we have someone at our potting station at all times, just making things up for ourselves or doing customer orders. It brings people in,” says Speaker.

From the annual greenhouse, a left turn takes customers to the tropicals section, where they find a fish pond - “the No. 1 attraction for children,” says Speaker. Behind the annual greenhouse is a production greenhouse. To the right is a section of perennial displays called the “perennial sales court,” which opens to the outdoor nursery sales lot. An even bigger, and covered, display of perennials is found behind the perennial sales court.

K&W grows about 600 to 700 varieties of perennials and works to stay on top of the newest varieties of popular plants like coneflowers, hosta and coral bells. Daylilies and Asiatic lilies are also popular.
Highlights of the nursery section, according to Nursery Manager Kyle Aurit, are fruit trees and fruit-bearing shrubs like blueberries and grapes. Roses are making a comeback, too. Larger shade trees like sugar maples and specialties like ginkgo also do well.

The rest of the buildings are dedicated to production and support, and fit together like puzzle pieces between the retail sections and the railroad tracks forming the property’s rear boundary. They include a warehouse and repair shop, sections for perennial and nursery overstock and more than 30,000 square feet of production greenhouses. There is no more room for expansion.

Everyone Loves Plants ... and a Deal
In 1972, Bill was a banker who had been raised on a farm and liked growing plants. He had a backyard greenhouse and grow lights in the basement. When he had no more space for African violets, he brought them into work. “People would want them, so I’d sell them off my desk,” he says. That year, he bought 3 acres of property with the idea of creating a growing business. A friend bought an adjacent 7 acres that Bill later acquired.

For the first 10 years of the business, Bill says, they tried to do too many things, became overextended and could not sustain an 18-month road construction closure and simultaneous closure of a local General Motors manufacturing plant. K&W filed for bankruptcy in 1982. “When Phyliss and I first met and got married, we had absolutely nothing. We were dead broke,” says Bill. “We just reorganized. We worked ourselves through that in less than the allotted time, about a year or two, and just got things going better. We decided we can’t do everything for everybody, so we just did what we did the best between the two of us. I grew things, and she sold them.”

Now that Chris is the primary grower at the main retail site, Bill has cut back. But he still works most days and grows trees, roses, grasses, small fruits, some perennials and some tomatoes and peppers at the 1.5-acre farm with a 13,000-square-foot greenhouse.

“Everybody here is a plant geek,” says Bill. “It’s a fun part of the job, really.”

Chris says, “To take something from a small starter plant and create something beautiful for our customers to take home - it gives you a sense of satisfaction when you can turn out a giant geranium like this that people can’t wait to take home,” he says, pointing to a 12-inch geranium, one of K&W’s signature items.

Hanging baskets are another K&W signature offering. Chris and his staff plant 5,000 hanging baskets at three different times and in 120 different plant combinations. Best sellers are bright colors like red, orange and yellow or purple and yellow. At Christmastime, K&W is known for painted poinsettias, a white poinsettia dyed in different colors and designs. Each year, the garden center sells about 100 painted poinsettias at $25.99 and about 3,500 in 6.5-inch pots at $16.99.

The advantages of growing most plant stock in-house include controlling the number of plant varieties, the plant quality and the timing of inventory, says Chris. Growing in-house helps K&W differentiate from big box stores, and offers the excitement of new varieties and introductions.

Margins are also better, says Chris.

That, of course, ties in with price - an important factor to all customers, particularly those in their 20s and 30s, says Graffin.

“I think all independent garden centers are perceived as expensive,” she says. “We don’t have ‘mart’ attached to our name. For a group of people who have grown up in the Wal-Mart era, anything that’s not a box store is expensive, and we know it. For the couple of things we beat them on, they’re not going to shop around.”

To answer this challenge, a couple of years ago, Graffin pushed for a coupon promotion program. K&W started offering coupons in a local direct-mail pamphlet called Coupons and More for deep discounts and buy-one-get-one-free offers. “We get more traction out of those coupons than just about any advertising we do,” she says. “I think they like having that piece of paper in their hands, and that piece of paper is proof when they walk in the door that this is what they’re going to buy and how much they’ll get charged. It breaks down those walls.”

This spring, K&W offered a coupon for a 99-cent tomato plant and a $1.99 4-inch perennial. The coupons are always for K&W-grown plants, so cost and inventory are controlled.

Finding creative ways to address the younger generation’s perceptions about pricing will continue to be a challenge in the coming years as Chris and Graffin move into ownership roles, as will finding ways to expand production capacity since the operation uses every square inch of the existing property. Also awaiting them? A decision about the traditional Easter event. But, not quite yet, as the timing has yet to be determined since Phyliss and Bill have no firm timing in mind on exiting the business. Graffin says, “Mom and I work so closely together and do so much together, I don’t know that either one of us wants to quit doing that yet.”

igc retailer vital stats

Business Summary
Business Founded  1972
Annual Gross Sales  $3.3 million
Ppercentage Retail  85%
Percentage Landscape Design  15%
Customer Count - up or down?  Down 6%
Average Sales Trend  Flat, 2011 vs. 2010; Up 50% YTD 2012 vs. 2011, as of April
Average Sale Per Customer  $43.32
Inventory Turns per year  6.3

Local Market
Customer radius, in miles  15 miles
Number of people in radius  175,000
Number of garden centers in radius  3
Number of big box stores that sell L&G in radius  6

Estimated Space Allocation
Total Retail  3 acres
Outdoor Sales  2 acres
Indoor Sales  1 acre
Retail Greenhouse  United Greenhouse Systems, 25,000 square feet
Landscape Staging  2 acres
Storage Warehouse  2,400 square feet
Total Production Area  55,000 square feet
Display Gardens  1 acre
Number of Parking Spaces  120

Hours of Operation
Mon - Fri, 9 a.m. - 5:30 p.m.; Sat, 9 a.m. - 5 p.m.; Sun, 10 a.m. - 4 p.m.
Peak  Mon - Fri, 8 a.m. - 8 p.m.; Sat, 8 a.m. - 6 p.m.; Sun, 10 a.m. - 5 p.m.
Winter  Mon - Fri, 9 a.m. - 5:30 p.m.; Sat, 9 a.m. - 5 p.m.; Sun, 10 a.m. - 4 p.m.

Employees
Full-time  Off season - 14, Peak season - 50
Part-time  Peak season - 30
Department Managers  9
Office staff  2

Payment & Registers
Credit Cards  75%   Check  15%   Cash  10%
Number of Registers in Peak Season  6
Number of Registers Year Round  2
POS System in use  Activant Eagle

Industry Associations/Group Affiliations
ANLA, GCA, Home & Garden Showplace, OFA

Monthly Sales Percentages
Jan 1%
Feb 2%
Mar 3%
Apr 8%
May 34%
June 19%
July 8%
Aug 6%
Sept 6%
Oct 4%
Nov 5%
Dec 4%

Product Category Breakout
Green Goods 55%
Landscape Design & Install 15%
Gifts/Pottery 8%
Tolls, Bagged Goods, Seed 6%
Chemicals 5%
Accessories 5%
Trim-a-Tree 3%
Bulk Mulch 3%

Advertising Expenditures: 3-4% of total sales
Radio (including online streaming gateways) 50%
Local Internet TV, Cable TV 30%
Newspaper 10%
Website & Social Media 10%

K&W’s Phyliss Williams: ‘GCA Contacts & Tours Fast-Forward All Our Efforts and Ideas’

So many ideas are generated from Garden Centers of America (GCA) through K&W Greenery’s annual membership, it’s a challenge deciding which ones to implement, says Owner Phyliss Williams. “When you see another member who’s taken an idea and put it into practice, you can look at it and talk to them about it. Then, you can decide whether that idea would be good for you to pursue,” she says.

K&W joined GCA about five years ago, when Williams was asked to be on the board. Prior to that, the garden center had not participated in the group’s programs. “It was amazing when we first joined, and it’s still amazing,” says Williams, who currently serves on the GCA Leadership Council. “At the time, I thought, ‘Oh my gosh, we should have done this years ago!’ It was a huge revelation. The contacts we make with other members and the tours fast-forward all of our efforts and ideas.”

In fact, those contacts will help the next generation leadership at K&W, Williams says: “Our kids already have a strong network of people in our industry through GCA. It really will help a lot.”

For those thinking about joining GCA, Williams says, “Don’t put it off. Don’t wait and think, ‘Maybe next year,’ because every day you don’t have that connection is a day you’re not moving forward as effectively as you could.”

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