Smith & Hawken gets into gardening, again

TUCSON, ARIZ. —Renewed growth at Smith & Hawken is expected to come from the rediscovery of its gardening roots under the ownership of Scotts Miracle-Gro and the leadership of a former Wal-Mart executive.

Since Scotts Miracle-Gro bought Smith & Hawken in the fall of 2004 and the upscale brand of lawn and garden products has struggled to grow sales. A deal with Target in the fall of 2005 gave it a national presence and help promote brand awareness, but it was the hiring roughly one year ago of a former senior executive at Wal-Mart that signaled Scott’s has bigger plans for Smith & Hawken.

That’s when Gordon Erickson, the former senior vp/gmm of lawn and garden at Wal-Mart left the mega-retailer after a 10 year career to become ceo of the 58 store division of Scotts. Prior to Wal-Mart, Erickson spent 21 years at Seattle-based Ernst Home and Nursery where he held executive roles in merchandising and operations. During a presentation last month at a University of Arizona retail conference, Erickson discussed how Smith & Hawken plans to achieve growth and outlined strategies eerily similar to those he relied on to drive growth while at Wal-Mart.

“If you lose sight of your customers and quit listening to your associates you lose your business and it happens quickly,” Erickson told conference attendees. “Smith & Hawken is a garden company and we lost sight of that. It had been turned into a furniture company.”

Erickson came to that conclusion his second day on the job while visiting stores and examining the product mix.

Smith & Hawken had drifted from its roots as a garden retailer as ownership of the company that Dave Hawken and Paul Smith founded changed hands several times during the 1990s. Erickson had noticed the change while he was at Wal-Mart and he quit visiting Smith & Hawken stores because they weren’t fun anymore.

“Being a garden company you have to have cool stuff that people want to buy,” Erickson said. You also have to have products that generate frequent customer traffic, something the company wasn’t accomplishing with its $5,000 teak patio sets that were built to last a lifetime and other high-end products such as $35 orchids that appealed to a narrow consumer segment.

“Plants drive foot traffic so the first thing you see when you go in our stores now are plants,” Erickson said. “We needed to create a commodity that would get the customers to come back to our stores. We are selling thousands of $14 orchids each week even though the margins are not great.”

In addition to lower priced orchids, Smith & Hawken has introduced opening price point patio sets that begin at $1,000 and also added Scott Miracle-Gro brand products to the mix.

“We needed customers that came to our stores more than twice a year. We need seven, eight or nine trips a year,” Erickson said.

The company remains a destination for wealthy homeowners who demand the highest quality, but the overall product mix has changed substantially as Erickson indicated half of the 3,000 items found in a typical store were not available a year ago.

Executing such a substantial change to the product mix meant ensuring store managers and district managers understood why the changes were being made, getting them to buy in to the strategy and assigning responsibility to drive accountability. That was the case with the live plant program. The company had been buying plants centrally and sending stores plants that were dead or dying or past bloom. Now, 80% of plants are purchased locally by store managers.

“You have to have buy-in at the store level so they feel empowered and then let them know it is okay to make a mistake,” Erickson said.

Another important aspect of Erickson’s strategy for driving improvement at Smith & Hawken was to push for quick successes in key areas to build confidence. For example, customers who were willing to spend $5,000 for a teak patio set would walk away from the business because it took the company four to six weeks to deliver the product. Supply chain improvements have enabled the company to guarantee delivery within five days.

“You have to have some quick successes because you’ve got to show people you can win,” Erickson said.