How Garden Centres can thrive in 2025 with better data analysis
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Looking back at 2024, garden centres are reflecting on a year of mixed results and rising costs. Despite a positive increase in sales compared to the previous year, the real growth for most garden centres remains muted, with year-on-year sales growth hovering around 6%.
Several external factors, including volatile weather, increased wage levels, higher insurance costs, and continued inflation, have contributed to lower margins.
Reducing costs to improve profit margins can damage sales
Entering 2025, garden centres must find innovative ways to boost sales and protect their bottom line.
Traditional methods of attracting more customers through differentiated products or improved customer service have not significantly increased the topline and have added to pressure on margins. With extra sales hard to find, many businesses are looking at reducing costs to improve profit margins.
However, excessive cost-cutting can damage the customer experience and impact sales.
Changing the way businesses are run
The solution lies in changing the way businesses are run by leveraging the power of data in the information age. Garden centres should invest in finding better ways to operate, increase the average spend, and improve margins from sales.
If garden centres have an EPOS (Electronic Point of Sale) system or a customer loyalty scheme, they already possess valuable information that can be used to boost profits and sales.
Key questions
To effectively analyse their data, garden centres should consider several key questions:
- What draws loyal customers back to their garden centre?
- Is their product mix effective and efficient?
- Which product lines should be highlighted for the best return?
- Which products / services are price sensitive and would increase total gross profit if discounted and which products could bear a price increase?
Garden centre chains like Blue Diamond and British Garden Centres have shown above-average performance by leveraging their data effectively. These centres take a very analytical and data-driven approach in running their operations, resulting in consistent growth both organically and through acquisitions.
An analytical approach involves institutionalizing a data-driven decision-making system, understanding customers thoroughly, learning about their changing buying preferences, knowing their perception about us, predicting their future buying behaviour, and taking prescriptive actions to improve sales.
The question now is whether garden centres will continue with traditional methods or adopt a more analytical approach to ensure their future profitability and survival.
The Veravizion Approach
Retail businesses turn to Veravizion when facing margin pressures and low sales. Veravizion uses customer and sales analytics, leveraging EPOS data, customer information, loyalty cards, and marketing data to drive data-informed decisions.
The process involves three steps:
- Customer insights: Analyzing customer behaviour, identifying loyal and fringe customers, understanding their purchase patterns and preferences, and assessing product performance.
- Sales prediction: Creating predictive models to determine key factors impacting sales.
- Actionable recommendations: Prescribing strategies to improve profits through increased sales and reduced costs.
Our goal is to help clients establish a data-driven system that fosters sustainable competitive advantage and profitability.
The author is a management consultant passionate about helping organisations achieve their business objectives using data analytics. He is the Founder of Veravizion, and an MBA from the University of Oxford, UK.