Lancaster Farms has never sold a plant to a big box store, and owner and CEO Art Parkerson says they never will. But that isn’t enough for the Suffolk, Va.-based wholesale nursery. He and Lancaster Farms’ president and general manager Chris Brown developed a strategy to eliminate box stores from their customers’ thought process entirely.
It’s called DropStop, and it was spurred by three contributing factors. Five years ago, Parkerson and Brown were concerned that their landscape contractor market was moving further from them. They were feeling pressure to open a landscape distribution center closer to their customers in Virginia Beach, or risk losing them to the convenience of the big boxes. But they did not want the fixed costs associated with a new operation. Second, orders were getting smaller. If a landscaper only needed five plants, they would buy those five plants from Home Depot rather than paying for delivery from the nursery.
“Instead of getting a smaller piece of the pie when the pie shrank, you got no piece of the pie,” Parkerson says.
Third, the nursery’s customers always wanted delivery at the job site at 6 or 7 a.m. But if you have 10 customers and three drivers, it stands to reason that they’re not all going to get that plant material at the same time.
When Parkerson and Brown began brainstorming ways to fix these issues, they kept coming back to a central concept: if they could find a central location and schedule regular, dependable deliveries, they could create a service that could make everyone happy.
Customers call or go online to place their order by noon the previous day. The order is assembled on a rolling rack at the nursery, and tagged with the customer’s name. A truck takes the plants to the Virginia Beach or Williamsburg DropStop location, where customers come to pick them up between 7 and 9 a.m.
“We create a path that our potential customers can come to us with ease,” Brown says. “That’s why they go to a box. They find that driving to Suffolk from Virginia Beach or Newport News is an inconvenience. It’s more convenient to go somewhere else. We can take that burnout, that overwhelming ‘How do I get to Lancaster Farms?’ well, you get to them by calling them on the telephone or going online.”
Parkerson says the keys to making it work are picking the right location, having enough customers in that area that do work regularly, and having the inventory to back it up.
Brown and Parkerson picked the two locations based on market feedback. These were the areas in which customers were asking them to open a brick and mortar store. The locations themselves are a Landscape Supply store and a Comfort Inn. They don’t sign any contracts; it’s a barter system. The supply store wants interaction with Lancaster Farms’ customers. The hotel owner needs plants, and the nursery needs a nice, wide open area to set up the DropStop pick up area.
Consistency breeds trust
Landscape contractors juggle a lot, and Lancaster Farms discovered through trial and error that it was best to schedule the drops once a week or every day. If you don’t have enough business to justify a Monday through Friday drop, establishing one day a week will allow your customers to plan their week around it. Dependability is paramount. Brown says it’s important to set parameters and stick with them. If a customer is running late and calls to ask if the truck can stay until 9:30 a.m., the answer is no.
On the other hand, customers need to know you will reliably be available in that two-hour window.
“Even if there’s no order, we want the truck to go,” Parkerson says. “I want an empty truck there. If I had bought a brick and mortar store, it would be open whether there were customers or not. Basically we have a two-hour ‘open for business,’ and we need to be there, even if there’s not a single order.”
Ideally, the Lancaster Farms crew wants big orders. They want a full trailer parked at their DropStop locations. But the most exciting moment for Parkerson was the day he received an order for one light bulb. Lancaster Farms sells some landscape lighting, and the fact that a contractor did the mental calculation and decided he’d rather spend more money to pick it up at the DropStop than drive to the closest big box retailer showed that the idea was taking root.
“I know that probably seems crazy to a lot of people, but that’s the service I want to give, because I care about that landscaper’s day,” Parkerson says. “If he’s not worried about that light bulb, he can sell some jobs. He can knock on a few more doors, return a few more phone calls and actually do what his job is — which is sell my plants.”
Jobsite delivery pricing ranges from $99 for local delivery to $180 for the farther-flung locations within Lancaster Farms’ delivery zones. There is no minimum order. They’ll ship one tree if the customer pays for it.
A DropStop order is $40. Brown and Parkerson have adjusted the pricing over the years, but the underlying idea is that they can deliver 10 orders to our DropStop for $40 each, and make $400 in two hours. They can’t deliver to 10 customers in two hours using on-site delivery.
The company’s two DropStop locations added up to 15 percent of April sales out of the distribution center.
“We wake up in the morning thinking about the landscape contractor,” Parkerson says. “That’s what turns us on. We love our retailers, we really do, but the top of our hearts is the landscape contractor because their time is money. You can definitely make an impact on the quality of their life and their profitability if you make them more efficient and you save them time.”
Another benefit to the DropStop is that it allows the nursery the opportunity to give that truck driver another task. If that driver was delivering to 10 customers, he or she wouldn’t return to the nursery until the early afternoon. However, if those 10 customers are picking up materials at a DropStop during the limited 7 a.m. to 9 a.m. window, that driver will be back at the farm by 10 a.m. Lancaster Farms utilizes this newfound flexibility by loading up a flatbed with pavers or fireplaces and sending that driver out to deliver hardscape products.
Brown and Parkerson believe the DropStop system can work for certain types of nurseries.
“When you feel like you’re farther from your customer and you’re struggling with the question, ‘Do I need another location?’ think about the fixed costs,” Brown says. “You get hung up on how much a truck and a driver costs, but how much does a brick and mortar location cost? Way more than that one truck driver.”
It also has won the nursery many customers who otherwise would be shopping at the big boxes.
“We hear it all the time, ‘if you weren’t here I wouldn’t be buying from you,” Brown says. “That might be a mow and blow guy who only needs 20 flats of flowers one time a year, and we won’t see him again until fall when he needs his 20 flats of pansies. OK, but we got it.”
For more: www.lancasterfarms.com