Petitti's Passion Powers its Expansion

By: Lisa Duchene

From: IGC Retailer, Best of Show Issue, 2013

 
Petitti's Passion Powers its Expansion
Passionate leadership and time-tested systems are what give this IGC visionary its edge. They’re among the many forward-leading practices for profit that make Petitti Garden Centers this year’s IGC Retailer of the Year. Now, Angelo and AJ Petitti sit down with IGC Retailer to share their strategies for success.                                       
- Jeff Morey, Publisher  

IGC Retailer of the Year Petitti Garden Centers’ success is the result of years of calculated investments in employees and top-notch facilities. It’s an approach that has grown the family business to nine locations in Greater Cleveland, and the momentum shows no signs of slowing: Petitti Garden Centers is now eyeing its 10th location.

Visionary Angelo Petitti founded the company as a landscape service operated out of a garage in Oakwood Village, OH. He built his first garden center in 1975 on the same site, where it continues as a flagship store beside Petitti’s corporate office.

Angelo’s son, AJ, Vice President, grew up in the business and has built on Angelo’s philosophy and foundation with retail, technology and human resources expertise. The independent retail business is thriving, thanks to Petitti’s stake in high-tech systems, in-house production, valued employees and ever-more-sophisticated marketing and merchandising.

Their story is a result of some trial and error, like many American dreams, but through it all, this father and son team have developed a winning relationship and business in the process. Our conversation with Angelo and AJ began with what’s next on their horizon.

What can you tell us about a 10th store?

AJ: We’re looking at a new store, and that’s all I want to say. We haven’t signed the lease, yet.

Okay, let’s talk about what you see for IGCs overall, then. What’s your take on the boxes’ ramped-up marketing and merchandising targeting Gen X / Gen Y gardeners?

AJ: It’s been effective. As Gen X / Gen Y gardeners become more sophisticated, and they buy their homes and become a bit older, their desires change. They want a more complete selection, so I think they’re going to have a very strong presence in the market, as they do now.

Angelo: The Home Depot and Lowe’s are doing a better job with that because Gen X / Gen Y consumers already shop in those stores for a lot of other things. Ever since the growers took ownership of the product in the box stores, the game has changed. Now there’s a maintenance program. They’re also using a lot of technology to know exactly what to put in there that day so they don’t over-cram the store.

AJ: Long-term, IGCs are going to have a place. You just have to be very good at what you do. They’re not going to put up with shopping in a dirty store, with dirty floors and poorly trained staff. It has to be clean and well-maintained. It has to have very high-quality product, regardless of where you are on the price-value spectrum.

Angelo: Customers have to know what you represent so when they go to your store, they know what to expect. Our customers come to Petitti’s and expect a great selection, they expect -

AJ: Knowledgeable people.

Angelo: Very knowledgeable people.

AJ: And good customer service.

Angelo: You have to deliver the experience you promised them. That’s one area that a lot of the independents are failing at, by not putting all their efforts into creating a positive experience. Sometimes, they’re too conscious about pricing versus investing and creating that experience for customers so they come back.

What do you suggest?  

Angelo: You have to form a true partnership between yourself and the supplier of your product, and the grower has to feel very confident of the partnership with you. It’s something you work at constantly, and that’s how you win.

You’re big sellers of brands like Scotts. How do you position your stores against the boxes on pricing?

AJ: On a lot of the product, you’re making your margin; some of the material, you’re not. You have to be sharp on the highly visible items, but they also sell themselves. Those gross-margin dollars work both ways. And they’ve been phenomenal partners, in terms of store support.

What do you each see as the top challenges facing IGCs?

Angelo: The market is shrinking. There’s no doubt about it. The challenge is finding your position in the marketplace and communicating that to your customers in a way they understand.

What do you think AJ?

AJ: I agree with that. I think second is profitability.

Angelo: Yeah, industry profitability has been very poor, which creates other issues: the re-investment capability and trouble attracting the next generation.

What can the industry as a whole be doing better?

Angelo: For a long time, independent garden centers have not invested very heavily in their businesses. We have always invested very heavily. That’s how we’ve grown.

What should IGCs be investing in?

Angelo: Facilities. Employees.

AJ: That’s your No. 1 asset.

Angelo: You need top-notch employees to create a top-notch experience for your customers.

Which garden centers are well-positioned?

Angelo: If they’re still talking about yesterday, how things were, how things have changed, instead of talking about what they’re going to do for tomorrow. ...  [Angelo shakes his head] ... When they spend time talking about yesterday, it’s over.

As you’ve grown quickly and added new stores, what have you learned?

Angelo: Everything in our stores has systems. When we opened Strongsville in 2001, our first new store, it was a disaster because we had no systems.

AJ: But we learned a lot.

Angelo: I would never open up a store if it wasn’t ready January 1, so that you have 90 days to get your staff up to speed and really tweak it. The Strongsville store was ready April 1 and we opened April 6 or 7, and we were nowhere near ready. When we opened Avon, it didn’t even feel like we opened a new store - and it’s a huge store - because all the systems were in place. We were ready January 1, and we opened March 1. There was no stress. You really want to make sure you plan that out.

AJ: Really, the most important part of opening a new store is the hiring and staffing. Starting off with the right team is the difference between success and failure.

A decade ago, you expanded beyond traditional garden center to lifestyle retailer. What do consumers want in the lifestyle arena?

AJ: They’re looking for decoration. Our customers want to make their outdoor spaces a lot more enjoyable and turn them into as much of a 365-day-a-year room as they can in Cleveland. We’re offering ideas to make it easier for them.

What have you been working on behind the scenes?

AJ: There’s a huge focus on preparing, training and making our existing employees better. We’re working toward getting our new employees up to speed, and comfortable and familiar as quickly as possible. We worked with Kathryn Dager from Profitivity, and that made a big difference.

Also, inventory control has been one of our primary focuses. You really cannot afford to have non-performing inventory.

How are you working to control inventory?

AJ: We’ve upgraded the POS from Retail Pro to Epicor. On the growing side, we use SBI and it’s tied in with Epicor, so the information flows between the two.

This year, we reduced our Scotts inventory by about $300,000 - that’s on $2 million. It’s helping us get more efficient at turning over and carrying less over - on the retail side and on the growing side.

So upgrading the POS was critical?

AJ: It’s not just upgrading it, it’s using it. There’s a difference. In-season, you can track your sales by sell-through - sales against the inventory and what you have left.

Angelo: If something doesn’t look right, our Inventory Director, Marie Shymske, will make the call and get on it until all the answers come and it’s rectified.

Today, if you’re operating without a POS, I don’t see how you can be very effective in your buying, your trends, your speed to get customers through the stores. How could we be ready for tomorrow without having all that data? We would have a disaster.

What else is new?

AJ: We’re constantly re-examining how we’re packaging our product and going to market with it.

Angelo: We’re 100 percent self-contained from a standpoint of production. So that gives us the opportunity to look at packaging. Different sizes, different colors, different shapes. The containers are definitely the fastest-growing segment of the color part of the business.

AJ: Color Your Garden is a great example. Before 2012, we had no 8-inch program at all. We took brightly colored pots and matched them with brightly colored flowers in the larger size, in a nice package, and sold it for $12.99.

Since we last spoke in 2010, you’ve opened your 90,000-square-foot Mentor location. How have you been able to stick to your retail principles within the smaller size?

AJ: We had to be a lot more disciplined. We’d have a harder time operating out of that space without the systems we have.

Angelo: In a big store, we might have five pieces of one item; over there, you may only have two. If they don’t have something they need, they know they can just go into the system and either get it transferred to the store or delivered to the customer.

What is the glue that holds all of these locations together?

AJ: The branding. The customer service. Layouts are pretty consistent across the stores. Our Brand Manager, Deb DeNunzio, does a phenomenal job, and one of her primary focuses is maintaining signage and placement consistency across the stores. You know you are walking into Petitti Garden Centers.

What is the key component to your branding?

Angelo: It’s not one thing. Branding is a focus that takes a long time to establish. We’ve always invested heavily in marketing, especially in the last 15-20 years. Branding is being part of the community. It’s the way you present the merchandise, the way your store is presented and the way your people are presented.

Moving into product categories - where do you see growth?

AJ: Back in nursery, as the home market continues to get better, you’re going to see landscaping and trees and shrubs start to rebound. Hardgoods are strong. Annuals remain strong. Patio, outdoor living remains strong.

What are you tracking in your stores now?

AJ: I’m looking at the numbers against comp. We’re at $67,000 today [just before noon the Wednesday after Mother’s Day]. We’re up against pace. We track our store sales stack ranking, by department and class. One of the benefits of having multiple stores is that we can benchmark ourselves - what’s winning, what’s losing. You’re making good decisions based on the information you’re getting.

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