mtac meeting november, 2008 mailorder gardening association presented by: camille cimino, mga...
TRANSCRIPT
MTAC Meeting
November, 2008
MailOrder Gardening Association
Presented by: Camille Cimino, MGA Executive Director
Ken Lane, Chair, MGA Freight Committee
Wednesday
November 19, 2008
2MAILORDER GARDENING ASSOCIATION
Foreword
In this presentation we will:
The MGA – Who we are
What we do…Our Mission
Our Members…Why we love Direct Mail
Our Metrics
Review recent Outbound Shipping survey results
How to contact us…
3MAILORDER GARDENING ASSOCIATION
“What’s an MGA member to do in Order to Exist 20 Years From Now?”
Who we are and What we do…
5MAILORDER GARDENING ASSOCIATION
MTAC & the MGA
Who we are…
The Mailorder Gardening Association is a member organization for companies who sell gardening products to the consumer via paper catalogs as well as the internet.
We also represent the grower/wholesale segment of the industry
The 3rd Membership Category is our Allied Membership. This segment is represented by any company that provides a service to the cataloger or wholesaler – such as printing companies, gardening magazines, list management companies, PR consultants, shipping companies, etc.
We are celebrating our 75th Anniversary in 2009. Our headquarter Office is in Elkridge, Maryland. Camille Cimino has been the Executive Director since 1987. There are presently around 200 member companies with the majority being catalogers.
6MAILORDER GARDENING ASSOCIATION
MTAC & the MGA
Some of our member companies…
7MAILORDER GARDENING ASSOCIATION
MTAC & the MGA
What we do…Our Mission
“To Make Mail Order Gardening businesses the most successful they can be.” This is accomplished by:
Promoting its members and the MGA brand
Educating and representing its members
Protecting the integrity of its members
The MGA sponsors 2 conferences annually which provides a forum for networking, education and making new contacts. Convention brochures as well as Membership Literature, has been distributed to everyone here today.
The Association’s website is www.mailordergardening.com. The site serves a dual purpose:
For Consumers – it is a resource for locating garden catalog companies as well as Hardiness Zone information. There are smart tips for consumers on how to purchase mail order garden products and what to look for and do once you receive them.
There is a Member’s Only Section that contains the results of past recent survey results, as well as demographic information on each member company and much more.
8MAILORDER GARDENING ASSOCIATION
** MGA external research. Estimate based on participation rate and mailer provided volumes.
MTAC & the MGA
What we do…we mail Packages!!!
Average MGA company mails is 60,000 packages annually**
Extrapolating this across the membership base provides a range of 1.9mm to 4.0 mm total MGA packages.**
5%
20%
17%
7%
20%
17%
7% 7%
0%
5%
10%
15%
20%
25%
< 1000 1000 -5000
5001 -10,000
10,001 -25,000
25,001 -50,000
50,001 -100,000
100,001 -250,000
> 250,000
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MTAC & the MGA
What we do…Green Thumb Awards
In addition the Education, we also help promote our member companies. In January 1998, we launched the Green Thumb Awards in order to recognize outstanding new garden products available through paper catalog and the Internet.
Winners, chosen by an independent panel of garden writers and editors, are selected based on their unique qualities, technological innovation, ability to solve a gardening problem or provide a gardening opportunity, and their potential appeal to gardeners.
The award winning companies and their products are featured in news releases and the MGA website. Companies may use the Green Thumb logo in recognition of their receiving the Award. Gardening Magazines and local Newspapers are willing to print articles on these products and their companies.
10MAILORDER GARDENING ASSOCIATION
MTAC & the MGA
Why do we love Direct Mail…it Works!!!
"I received my favorite gardening catalogs the day before we got two feet of snow. The gardening Gods were watching over me!”
“I just received my order today, just as your e-mails stated it would. I'm very happy, not only with the service I relieved from you, but with the USPS person who knew to put it where it would be kept dry. I know this my be a small thing, but in today's world, when someone gives this kind of service, we, the customer, really appreciate it."
“Hi! I just wanted to tell you I received my catalog today and it is gorgeous!!!!!! The colors remind me of last spring and have me pining for another season in the garden.”
11MAILORDER GARDENING ASSOCIATION
MTAC & the MGA
Did you know…Our Metrics
Source: MailOrder Gardening Association, Zed Marketing
MGA Member Companies “Jump” in 2008 – MGA Member First Generated $743 Million+ in Annual Sales during the 12 month period (Nov. 2007 – Oct. 2008)
Direct Mail and Internet Sales – promotions of seeds, bulbs, nursery stock, gardening aids and outdoor power equipment.
Number of Sales Gross Sales Avg. Order
*2006 6,015,637 $385,121,074 $64.02
2008 6,840,496 $461,801,880 $67.51
Variance 824,859 $ 76,680,806
13.7% 19.9%
* January – December 2006
12MAILORDER GARDENING ASSOCIATION
MTAC & the MGA
Did you know…Our Metrics
Source: MailOrder Gardening Association, Zed Marketing
Publications – magazine subscriptions and book buyers
Number of Sales Gross Sales Avg. Order
*2006 12,903,276 $241,420,296 $18.71
2008 13,284,125 $281,431,110 $21.26
Variance 380,849 $40,010,814
8.2% 22.9%
* January – December 2006
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MTAC & the MGA
MTAC Communication with our members…
Three MGA Representatives on MTAC
Camille Cimino – Mailorder Gardening Association
Andy Lagendyk – K. Van Bourgondien & Sons
Ken Lane – Hathaway & Lane Direct
MTAC Workgroup 119 representation
MTAC updates at two MGA conferences annually as well as email updates during the year.
14MAILORDER GARDENING ASSOCIATION
MTAC & the MGA
What’s important to our members…
Costs…
Printing, paper and postage
Outbound Freight expenses
People costs…
Commissioned Market Research to quantify the MGA in total
Results on the next slides
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Details
21 Wholesale and 110 Regular Member companies were sent survey via email – 58 responses
Web-based to protect anonymity
Three email blasts for survey submission
•June 4, 2007 – All members
•June 26, 2007 - Reminder
•July 17, 2007 – Post Summer Conference Last Chance Reminder
Forty-two questions measuring…
•Type of business
•Usage
•Packaging/Product specs
MGA Outbound Freight Survey
Source: Hathaway & Lane Direct
Section 1: Who are you and what do you ship
18MAILORDER GARDENING ASSOCIATION
Responses
21 Wholesale and 110 Regular Member companies were emailed the survey
•131 total companies surveyed
• 58 responses (2 via paper response)
• Greater than 40% participation (!!!)
Audience…
MGA Outbound Freight Survey
BusinessCataloguer 34Wholesaler 1
Both 21Neither 2
Total 58
Decision Maker?Yes 85%No 15%
• …Survey spoke to the right people at the right companies.
Source: Hathaway & Lane Direct
19MAILORDER GARDENING ASSOCIATION
Survey Questions – Business Channel
Most respondents are Cataloguers or run Catalogue/Wholesale operations
What best describes your Business Channel?
34
1
21
2
0
5
10
15
20
25
30
35
40
Cataloguer Wholesaler Both Neither
# o
f R
es
po
nd
nts
Source: Hathaway & Lane Direct
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Survey Questions – Business Channel
This translates to 95% are in the sweet spot of shipper targets…
5%
95%
Businesses Residences
…and 95% are shipping residences. Again, no surprises..
Cataloguer59%
Wholesaler2%
Both36%
Neither3%
Source: Hathaway & Lane Direct
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Survey Questions – What do you sell ANY of?
There is a diverse mix of what products are shipped…
1
912
1 1 2 1
27
3
16
10
63
1
0
5
10
15
20
25
30
birdh
ouse
s, gif
ts
Books
Bulbs
Cut Flower
s
Food i
tem
s
Gift P
lants
Greenh
ouse
kits
Hard
goods
Irrigat
ion Equ
ipment
Plant
mater
ial
Seeds
Shrubs
Trees
veget
able
plants
Source: Hathaway & Lane Direct
Section 2: Shipping Specs – Volumes, etc
23MAILORDER GARDENING ASSOCIATION
Survey Questions – What do ship in?
Over 80% of respondents are shipping to their customers in BOXES.
1
48
53
1
0
10
20
30
40
50
60
Bags Boxes Bubble Mailers Envelopes Other
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Survey Questions – If BOXES, what SIZE?
Almost 70% of respondents ship in boxes not subject to shipper dimensional weight surcharges.
13
19
9
5
1
0
2
4
6
8
10
12
14
16
18
20
Small (less than10x10x10)
Medium (about10x20x15)
Large (about15x36x20)
XL (greater thanlarge)
Don't know
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Survey Questions – The average weight of a package shipped is:
The predominance of Gardening Hard Goods drives 71% of survey respondent packages above 5 pounds.
Weighted average is: 11.1 pounds per package
5%
24%
35%
24%
12%
Less than 1.0 lbs 1-5 lbs 5-10 lbs 10-25 lbs >25 lbs
Source: Hathaway & Lane Direct
26MAILORDER GARDENING ASSOCIATION
Survey Questions – The amount of packages shipped in 2006 was:
Annual package volumes by respondent vary greatly.
Average per respondent is 60,000
Extrapolating this across the membership base provides a range of 1.9mm to 4.0 mm total MGA packages.**
5%
20%
17%
7%
20%
17%
7% 7%
0%
5%
10%
15%
20%
25%
< 1000 1000 -5000
5001 -10,000
10,001 -25,000
25,001 -50,000
50,001 -100,000
100,001 -250,000
> 250,000
** Estimate based on participation rate and mailer provided volumes.
27MAILORDER GARDENING ASSOCIATION
Survey Questions – The Month most packages shipped in is:
Overall, respondents are Spring shippers…
• …converse to most mailers Q4/Q5 shipping curves
0% 0%
34%
28%
18%
6%4% 4%
2% 2%0%
2%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Section 5: Current Outbound Freight Providers
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Survey Questions – Who do you currently ship most with?
UPS is clearly the current shipper of choice
FedEx growing from prior levels
USPS has opportunity for growth
50%
7%
13%17%
3% 3%7%
0%
10%
20%
30%
40%
50%
60%
UPS USPSPriority Mail
USPS Other FedEx DHL CommonCarrier
Other
UPS USPS Priority Mail USPS Other FedEx DHL Common Carrier Other
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Survey Questions
Do you pay a residential surcharge?
My guess is the IDK =Yes
“Yes” estimate is 93%.
81%
7%
12%
Yes No I don't know
Source: Hathaway & Lane Direct
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Survey Questions
Do you pay a fuel surcharge?
Assume Sometimes/IDK =Yes
“Yes” estimate is 90%.
There is an opportunity to negotiate these on behalf of MGA members.
Yes69%
No10%
Sometimes/IDK21%
Source: Hathaway & Lane Direct
Section 4: Impact on Business Strategy
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Survey Questions
Let’s face it…rates will continue to go up and members will be forced to do things that are not good for their business
This clearly underscores how critical this issue is!
What would you do if your Outbound Freight Expenses increased by 5%-10% next year?
33% 33%
5% 5%8%
15%
0%
5%
10%
15%
20%
25%
30%
35%
34MAILORDER GARDENING ASSOCIATION
MTAC & the MGA
How to Contact us…
MGA Office: 5836 Rockburn Woods Way, Elkridge, MD 21075
410-540-9830 FAX 410-540-9827 www.mailordergardening.com
Thank You…
PO Box 1003 – Litchfield, CT 06759 – (860) 567-5275
www.hathawayandlane.com
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