Focusing on core strengths

Features - Cover Feature: Top 100 IGCs

A knowledgeable staff and sophisticated software help expand Calloway’s customer base and profit margins.

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September 22, 2015

Since Calloway’s Nursery opened its first four garden centers in 1987, the company’s footprint has grown to span 16 garden centers around Dallas/Fort Worth, and one in Houston that goes by the name of Cornelius Nursery. Over nearly three decades, the company has been building an unmatched selection of premium quality plants, trees, vegetables, shrubs, herbs, flowers, grasses and gardening supplies — as well as the horticultural expertise to back it up.

One of the largest IGCs in the U.S., and the largest in its local market, Calloway’s Nursery encourages its employees to hone their horticultural knowledge and skills by pursuing industry training and certification. In fact, the company employs more than 100 Texas Certified or Master Certified Nursery Professionals — which is more than any other nursery in the state.

“Becoming a TCNP brings professional credibility and prestige, and increases value as an employee,” says President and Chief Operating Officer Marce Ward, who is a member of the Texas Nursery and Landscape Association, where he holds the TMCNP certification and serves as Chair of the TNLA Education Committee.

As a company, Calloway’s actively supports the TNLA and other organizations — including the Texas Agricultural Extension Office, Dallas Arboretum and Fort Worth Botanic Garden — through volunteer hours as well as donations.

Besides having seasoned nursery professionals on staff to assist customers with the garden center’s premium merchandise, Calloway’s has been adding new technologies to make the experience even more exceptional — for both the business and its customers.

One example is the company’s email membership program, referred to as Calloway’s Garden Club. The club has grown to more than 180,000 members who receive “fabulous savings” of up to 50 percent off or more, advance notice of sales, weather alerts and other perks.

While the member benefits are obvious, the email insights available through the program also benefit Calloway’s Nursery.

“The value that’s created for the company from this program is the ability to identify individual customers and to measure and understand their individual behaviors,” Ward says. “This program has helped us acquire new customers, increase the spending of existing customers, improve the natural churn rate of customers, and shift spending to higher margin products.”

To further improve the way the company manages product margins, Calloway’s Nursery installed Epicor Eagle lawn and garden software in early 2014. As a management information system, the software provides tools for inventory management, integrated garden center point-of-sale (POS), and financial management.

“Advances in technology have greatly contributed to the company’s ability to operate profitably,” Ward says. “The software has proven highly beneficial for efficiently managing the company. An example is our centralized merchandise management program, where each of our four product buyers uses the software for formal advance planning of product flow; specification and selection of inventory, logistics and delivery; as well as purchase price negotiations.”

These new tools help Calloway’s Nursery enhance product margins by optimizing how it manages merchandising, inventory and pricing.

Tim Runte, who worked at Calloway’s through college and built his career with the company, says he remembers the “good old days,” when you made buying decisions based on instinct.

“One of the biggest changes I’ve seen in the industry is the analytical part of our business. Fifteen or 20 years ago, you were buying off a route truck, and it was based off gut feeling and the flavor of the day,” says Runte, general merchandise manager for Calloway’s. “Now the systems involved in inventory management are data-driven and much more sophisticated. We’re becoming a more sophisticated, professional industry.”

Although decisions aren’t only based on data, the numbers provide a good starting point, he says.

“It’s helped improve our margins; it’s helped decrease our shrink. It’s made us a healthier company, and ultimately it helps us serve our customer better,” Runte says. “If we’re able to offer our customers what they are looking for when they want it, that’s how we’re most successful. And it’s really hard to do that when you’re just offering what a grower has. There was very little consistency back in the day.”

Other factors that can impact a nursery can’t be managed so easily, so Calloway’s has learned to concentrate on the factors it can control. By focusing on the core strengths of the business — quality plants and products, expert professionals and innovative systems — the company bolsters itself against external challenges like extreme weather.

“Our most recent challenge was the record rainfall and flooding in late April and May,” says Ward, who faced the opposite challenge of dry, drought-like conditions this past year. “Fortunately, we have found that during times of extreme weather, focusing on our core strengths has proven successful. If we strive to provide exceptional service, appropriate product selection and a fun experience — paired with exceptional inventory management, aggressive advertising and expense controls — we perform relatively well in both record drought and record rainfall conditions.”

In any weather, Calloway’s Nursery strives to maintain a standard of excellence throughout its chain of Texas garden centers.

That focus has helped Calloway’s Nursery grow to become one of the largest IGCs in the country, with a long-term growth strategy to continue expanding its geographic market presence by opening new retail stores.

“Stay focused on your core strengths, and work to continually improve in those areas,” Ward says. “Don’t get distracted with any activity that will not drive customers to your stores or encourage them to buy more when they get there.”

 

— Michelle Simakis, Garden Center editor, contributed to this article.