December 2019 - 18

DUETS
and eventually start to displace the historic top products. This method makes the
assortment decisions data driven vs. emotional which don't reflect what the
customers really want to buy. The new products can be added based on your
beliefs but once in the assortment you need to use hard data to keep it in the
assortment after three years. Assortment management is the most important task
managers perform to increase profitability of their organization.
Peter: This long-tail approach reminds me of how I used the 80/20 rule to guide
my crop assortment decisions. Twenty percent of one's product offering generates
80% of one's sales. I tried to generate profit from the reciprocal side of the rule
as well by offering some of the other 80% of crop offerings that only contribute
20% of sales knowing that the mass marketers are focused only on the popular,
high-volume items. What's your advice on these two rules side
by side?
Will: That is exactly how to manage the long tail! The key to
success is carefully monitoring the last 20% as they represent
your future winners and profit losers. If a product in the 20%
is increasing by double digits, on a small base, then devote more
effort to turn this into an 80% crop. Each year cut the bottom 10
to 20 products in the 20% group to make way for new products.
Without this aggressive management of the 20% your assortment
can become boring.
Peter: Data driven and aggressive management, got it. Next,
both of us share the position that minimizing shrink in our
operations is a critical part of management. What are your
thoughts on this? How is our industry dealing with it?
Will: We think of shrink all wrong. Shrink is NOT what you
throw away, but rather it is the lost opportunities of not having
the product to sell! I did a study several years ago and looked at
shrink throughout our market channel. Based on the shrink from
seed and liner production to consumer's garden, I estimated that
we shrink by <88%. This means if we produce 100 seeds only 12
plants are in a consumer's garden of those original 100 seeds! To
make it more alarming, vegetative products are even worse!
Peter: To your point, I was the scheduler in my family's
operation. It took discipline to compile seed and vegetative
cutting orders. Teaching certain family members to only plant
what my crop schedules called for was exhausting. It's easy to
look at a half tray of cuttings and say, " Oh, just plant them. "
I remember a regional seminar tour John Gaydos (Proven
Winners), Jack Williams (Paul Ecke Ranch) and I presented for
OFA on new crops in 1999. During a plane ride John and I sat
across the aisle from each other as I worked on my New Guinea
impatiens rooted cutting order for the next season.
My work was on paper back then and involved a complex table
whose rows were cultivars and columns were order/ship dates,
A QUICK START
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December 2019

Table of Contents for the Digital Edition of December 2019
